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Below we can see VIX chart. This is a volatility index of the S&P500; actually measures an “investor’s fear” in current market conditions. The greater the fear is, the higher the VIX level will be. If the fear decreasing in the market than you will see VIX falling; like in our case. The results of course, are higher stock prices; higher S&P500. VIX is at very low price right now, and S&P 500 is very high, so we can say that trade is “overcrowded”, because there is no fear in the market and a lot of investors are buying it. But as you know, usually when something is overcrowded the opposite reaction follows. In our case this would be on the upside. From a technical perspective, we can see a triangle on VIX chart before market fell into a new low. But since the VIX is in a downtrend we know that triangle can be placed only in wave 4, because triangle can never appear in wave 2. And here is the next important fact from an Elliott Wave perspective: “triangles unfold just prior to the final move in the larger pattern”. So, wave 5 must be a final move as shown on our chart, which means that reversal from the lows should follow in the near term; at least into a higher correction, because after every five waves temporary change in trend occurs! So, if we are on the right track here, then top on the S&P500 is also near. Market is currently testing 13000 psychological level… In 2008, before the stock market collapsed VIX hit the lows around 16. If you need more Elliott Wave forecast, especially on the intra-day basis, please visit our website and check Video Tour of Our Products here.

Against all expectations the Q2 GDP figures for the UK economy demonstrated a growth of a remarkable 1.1%, one of the highest figures found anywhere amongst the emerging economies. Whilst political parties on both sides of the House debated as to who should receive the credit for such a boost, the real results were being felt across the markets. As the figures were released, unsurprisingly, sterling took a bounce against both the dollar and the euro. This hike wasn’t solely the result of the good GDP figures for the UK, but also on the back of fears that the stress-testing of euro banks would reveal that some banks weren’t quite up to scratch. These fears were later born out, and sterling looks set to rise further across the coming week. Economic experts in the UK predicted rather gloomily that the 1.1% growth would be as a good as it gets, pointing to the growth provided by the building and construction sector as a one-off due to catching up on the backlog left behind after the particularly bad weather of the winter. There is, however, another problem in the long run for the UK economy and that’s the fact that as long as it continues to perform well (or, more accurately, outperform the eurozone) sterling growing stronger is not actually going to be that much of an assistance to the recovery. The UK’s largest trading partner by far is Europe, and the government really needs a weaker pound against the euro to bring in extra trade to the UK and further drive the recovery. Of course, on current evidence, that simply isn’t going to happen, or not for any time soon, leaving the UK without a major region to export to (a problem that isn’t unique to Britain by any stretch)…