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pg2................

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Any Comments ?

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Hi All,
Hope everyone had a superb weekend.

Glad to see the board is getting more active with capable participants.

Here's my weekly dollar.

Trade Well,
Yellowlion

After you log in, click on daily analytics and you'll see these things under Technical Alerts

Check out the daily technicals for updated wave counts and strategy at http://www.dailyfx.com/story/dailyfx...045397174.html

Well we certainly got the anticipated volatility as Friday approached and we did get the break below 82.00 which should send us on our way and we did get the close above 82.57 which strongly supports the alternate count. Unless you are now in the September contract which printed a Friday high of....82.57.
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The DX rally was fueled mainly by the European currencies and did not have broad participation. The break early in the week also saw select participation.
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With a selloff in the global equity markets, a selloff in gold, a selloff in bonds, a selloff in oil, and a lightly sponsored rally in the dollar, where did the money go or where will the money go?
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Pretty quiet G8 summit.
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Now that Treasuries have taken the limelight I expect the current decline to end and have covered my 5/15 entry.
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Certainly fundamentals such as current money supply and credit expansion favor higher interest rates, and I clearly see higher prices everywhere in my daily purchases. But the gears tend to grind slowly, and that supports my technical outlook for a lower dollar this summer.
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Needless to say I'm taking a neutral stance with a soft dollar bias until the dust of this past week settles. I don't expect to have to wait very long.
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But since I'm currently all cash and only 10 minutes by bicycle to a popular Orange County, CA beach, I may just have to take a little time to check out the latest fashion in swimwear and work on my bi-directional tan.

All The Best,
Yellowlion

The US Dollar seems to have found a nice base that should propel it towards 90 by the end of the year. A measured objective one year out is 93.51, which is where wave C would equal wave A. Forecasting a dollar rally of this magnitude probably sounds crazy but accurate forecasts always sound crazy. Tops and bottoms occur when the majority of market participants are wrong. With the majority of market participants expecting the dollar decline to continue, conditions are perfect for a significant bottom to form (most likely already in place). I expect a rally towards 87.29 (1.2482 in EURUSD) at the least.

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There are 5 waves down from the top (.7637), which indicates additional bearish potential. Kiwi reversed at .7540 early this morning, which is the previous 4th wave. It is certainly possible that a correction extends higher but as long as .7637 is intact, the structure is bearish. The 161.8% extension of wave 1 is at .7284 is a target.

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For those that are unwaware, I post Techical Strategy every morning. The link to the technicals are under the daily section (the daily section is under the picture of Boris). There is a lot of EW analysis.

Short term EURUSD shorts should be careful here. The bearish structure is intact but price has stalled at the 100% of 1.3680-1.3392/1.3552 at 1.3264. A rally through 1.3391 would suggest that the entire decline was just an a-b-c. I prefer the larger bearish interpretation that has the decline from 1.3552 extending towards the 161.8% extension near 1.3086 before a correction takes place. very short term resistance is at 1.3315 and 1.3373.

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Kiwi is tracing out a clear short term pattern. The 5 wave decline from .7637 to .7465 suggests that at least one more leg lower will occur. An irregular flat correction may be unfolding from .7465. Potential reversal points are .7551 and .7571 (the 50% and 61.8% of .7637-.7465). In summary, we are looking for a spike above .7540 before price reverses and heads lower.

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Jamie,

I've been following all your recent reports on wave analysis. I must say that even though i struggle to keep up, i am learning a lot.
I've read this in one of your report that i can't find anymore, but read the same comment on another website.

"break of 1.3364 cluster support (38.2% retracement of 1.2865 to 1.3681 at 1.3369) was a significant development as it's now confirmed that rise from 1.2865 has ended at 1.3681 already"

could you be so kind to illustrate that confirmation ? Does it mean that a whole wave pattern completed at 1.3681 ?

Thanks for your help.
Serge

Serge,

In Elliott, there is always more than one possible outcome. In other words, multiple wave counts that satisfy the rules of Elliott. The rally from 1.2482 (October 2006 low) could have been an impulse wave IF price would have rallied to a new high (above 1.3680) before dropping below 1.3367 (which is the black horizontal line). The drop below 1.3367 confirms the top because the odds are high that there are just 3 waves up now from 1.2482. This means that we have a double zigzag correction from the 1.1638 November 2005 low. It is still possible that an ending diagonal is forming from the 1.2482 low. This is the alternate count and its labels are on the bottom of the chart. The favored view has a primary degree top at 1.3680 with price dropping close to 1.1638 within the next 12 months. The alternate count is a new high. Risk can be limited to 1.3552. In order to fully understand EW, you should read The Elliott Wave Principle, by Frost and Prechter

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Hi All,

This week could very well set the tone for the the intermediate term dollar.

For the week the September dollar gained 0.17 to close at 82.60.

I was sitting in front of of a daily chart of pit DX and for the life of me I just couldn't see an impulsive move. My weekly technicals, although not causing trouble, lacked real form. Jamie's count was looking more probable but that really wasn't working for me either.

So I just created a blank daily chart and was looking at the last two advances searching for alternation to support my thought that this was a currently a corrective move (see my previous DX postings). What I saw in my perceived wave ii and iv was that they were strikingly similiar in form.

Here's what I found:

The prior advance from low to high is 36 days long.
The current advance is 33 days long.

The prior advance rally from the low after the gap to the high is 7 days.
The current advance rally from the low after the gap is 7 days.

Both gap rallies are 3 white candles, a spinning top, and three white candles.

I was hoping that the gap in the prior rally occurred during options expiration week like the current one, but it occurred on 01/02/07. There may be event similarity that I'm missing.

The low after the first gap is..82.59 (recall my near and dear 82.57 level.)

Fibonacci analysis reveals that the current advance, gap low, and post gap rally is strongly proportional in both time and price ratio to, and was predicted by, the prior full advance.

Through further analysis I have revised my outlook for the US Dollar Index.

For my primary count, I'm still looking for a final low to be put in for the dollar, although I have raised my target level to a band of 80.25 - 80.75. The decline could very well be swift with the bottom in as early as the second week in July but evidence of an August bottom does exist. This would signal the completion of wave c / B and from there, wave C of the next largest degree should develop.

Jamie's count remains my alternate and price firmly above 83.50 will put that into play.

All the Best,
Yellowlion