I had called for just a correction in a bullish phase, but the small April pattern looks very impulse to the downside already. The US dollar is doing the same thing, except it is heading in the opposite direction. We now have 3 huge peaks to connect, all showing a downward bias. We had two huge H&S patterns which both proved to be very bearish as the right shoulder refused to push higher. It is obvious that the Euro is in a bear market, but putting a wave count to it, is not so obvious. One main reason is that it’s a diagonal decline, where wave patterns can and do go wild with regularity.
The Euro would not necessarily need another zigzag, but we would definitely have to keep a look out for a wandering impulse. The previous 4th wave low I have will not hold the Euro as this dip could be much larger than we think.
This picture looks very bearish as it sits right now, and we might have a Minute degree start already. A Minute degree or Minor degree start, that does not fit a bigger bullish move, instantly forces a review.
Ideally, there should be little to no lag time in forcing us to go back to find a better fit. Yes, I’m guilty of cosmetic wave counting at times, but we always pay for that in the long run, by missing bear or bull markets. I don’t like to miss any bull or bear market as it reverberates across all asset classes, especially gold!
The faster we recognize the fact that we are wrong or in the wrong position, the faster we will come up with a better fitting wave count. There is a very high probability that the Euro has already completed a Cycle degree wave 3 top in 2008 which matches the crude oil peak of 2008. Oil also fits well with a wave 3 in Cycle degree. Gold is off by about 3 years, but we should find more Cycle degree wave three peaks as time goes on. I will work on a small list of Cycle degree peaks in the commodities I cover, but it will not be all of them as I don’t have time to cover fringe commodities.
The dark red lines show short positions by the commercials, which makes chasing bullish wave counts a rather futile effort.