Disclaimer

I'm not a financial advisor nor a broker/dealer. I neither provide financial advice, nor make investment recommendations. Nothing you read on this website constitutes a solicitation, recommendation, or promotion of any particular security, transaction, or investment.
I may at times discuss trades or trade setups, but this is meant to be purely a discussion point for entertainment and educational purposes only.

Thursday, July 21, 2011

USD path uncertain

The dollar index futures are still off the May lows, but are very close to testing those levels.
This is another situation where we have wildly different outcomes possible within Elliott Wave rules.

My primary count has been based on the assumption that we made a very significant low in May, and since then have a 1-2, 1-2 scenario setting up for a very large third of a third wave rally.  This count had also fit in nicely with a market top in May.  Since then, however, several things have happened to change that outlook.  First, the market averages are looking less like a major top, and more like fourth wave.  The dollar is basically sitting right on top of the supposed wave 1 low, which began on June 3rd, around 73.75 on the /DX.

That analysis is all based on wave form.  One other interesting thing is the momentum indicator on the daily chart, which has been flat throughout the entire downturn from the July highs around 77.17.  This is one of the reasons I've decided to keep the 1-2, 1-2 count as my preferred count for now.  I am waiting to see how it plays out, however, and we should know very soon either way.


Now lets look at the alternate count, which assumes that the rise off the May lows was just a hiccup in the downtrend, and we have at least new 2011 lows coming, if not all time lows.   The alternate count has an (a)-(b)-(c)-((X))-((Y)) setup.  If we take out the June lows of 73.75, this is the preferred count.  If we take out the May lows of 72.86, it is confirmed.

Posted by Waverunner (FractalTrader) at 5:47 PM

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

Notation


Wave DegreeMotiveCorrective
Grand Supercycle((I)) ((II)) ((III)) ((IV)) ((V))((a)) ((b)) ((c))
Supercycle(I) (II) (III) (IV) (V)(a) (b) (c)
CycleI II III IV Va b c
Primary((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))
Intermediate(1) (2) (3) (4) (5)(A) (B) (C)
Minor1 2 3 4 5A B C
Minute((i)) ((ii)) ((iii)) ((iv)) ((v))((a)) ((b)) ((c))
Minuette(i) (ii) (iii) (iv) (v)(a) (b) (c)
Subminuettei ii iii iv va b c
Micro((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))