Tag Archives: USD Elliott Wave

US Dollar Daily Chart: Still Heading North!

 

The recent rally in the US dollar could be just Submiuette degree but it is enough to question any bearish wave counts I was working. At least in the short-term. I looked at last weeks USD COT report, and they are about as bearish as I have ever seen them. 25:1 is what we have right now, while the speculators are doing the exact opposite.

The speculators only have a 6.68:1 net long position, but they are the ones that always get into a trap in one direction or another.  The thing is, the traders in the Euro do not support such a bullish outlook just yet. As I was counting out the Euro at the intraday level, it sure looked like a small triangle has completed. Invert the Euro and we see the same thing with the US dollar.

The US dollar rally will sure keep the lid on gold prices, which may change on a month to month basis.  Even a “Head” is forming, which you will see if we draw an invisible angle line.

Any small correction can still happen but otherwise, I would need a complete set of 5 waves in Minute degree.  The 2008 bottom of the US dollar was a Cycle degree wave 4, so there is no chance the US dollar is on some manipulated path to kill any gold rally. The future threat is not inflation but it’s deflation and this FED rate increase is still fighting inflation.  Even at these elevated price levels, the USD has no room to make a long decline, so that also keeps the US dollar in a long-term bull market. Inflation has nothing to do with how much they print, but it’s all got to do with the “Velocity” of any money in the economy.

It’s the demographic age shift of the “Boomer” generation that will slow down future velocity. Since 2011, 10,000 “boomers” are retiring every single day, which will last until about 2030.  It’s not rocketing science folks as all those boomers will need to cash in their RRSPs and downsize as we become non-productive, leaving the workforce in droves. I’m still very productive, as my little mouse finger does all the heavy lifting. 🙂

I will keep this update short for now, as I may have to make changes, but it may last until the end of this month before, clearer picture forms.

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US Dollar Daily Chart Bear Market Update

For the last 7 months, the US dollar has been in a bearish phase. The USD is now fast approaching that magic 92 price level where we may get a bounce. I would love to see the US dollar take out that 92 price level, as that would help to confirm that the bigger bearish trend is still in effect. Any counter rally could happen so fast we would be left scratching our head, figuring out what just happened.

Longer term I’m bearish on the US dollar. If the rally from the 2008 bottom was one big fake, then a 100%  US dollar retracement to early 2008 levels, would still have to happen.   Many may be thinking that the US dollar is still in a bull market and if so, they would be looking for the next bullish phase to new record highs. That scenario will never happen if the bullish phase to the 2017 peak was actually a fake.

Incidentally, for the entire US dollar bear market, stocks kept right on charging north. This has also happened before, back in the 2002-2007 bull market. There should still be more downside left, but the longer in time, and deeper this present spike gets,  the sooner a reversal may be getting close.

The commercial traders closed off about 3500 contracts of their short positions and if this keeps up, then we could see a net even position sooner or later. It would still take a strong shift to the net long position before we need to be concerned. Commercial interests are not speculators, as they are hedgers and have different reasons why they open or close positions.

It is the speculators that hold all the risk, but both groups are about 3000 contracts from being even. When it comes to any COT numbers I don’t like to see anything even, but rather they should be skewed one way or the other. COT reports work best when there are extreme readings, as even numbers offer little potential future direction.

The mainstream media would also have to come aboard the US dollar bear wagon, where they flood the internet about how bad the US dollar is crashing. 

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US Dollar Intraday Bullish Phase Review

Recently the US dollar has been in a bullish phase. What it sure looks like is that we are in a diagonal, with exact coordinates still unknown. One thing is certain, that once a 4th wave rally exceeds the wave 2 top, the wave count must be thrown out and a reboot initiated. The US dollar could drop, but then another small degree “C” bullish wave can happen.  

A new bear market low should eventually form to help confirm that this US dollar rally is still a bear market rally. Even if we are at a potential 4th wave top, it could all lead into a new wave 1-2.  The resistance line is the maximum I can let this run go too, so it won’t take that long before I have to put this wave count back into storage.  One thing about diagonal 4th waves, is once they dip into the previous wave 2, under no circumstances can it go above the start of wave 2. Diagonal 4th wave rallies have to come to a screeching halt inside wave two, as 4th waves also point to the diagonal wave 1-2 as well. 

There was not that much action last week regarding the net short positions that the commercial traders hold.  When the commercials become net long again, then it is time for a major review of any bearish decline we have. 

Gold has suffered under this US dollar rally, so any decline in the US dollar would be beneficial for gold and silver. 

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US Dollar Intraday Bear Market Review

So far the US dollar has been cooperating and has been making continuous lower lows. This is what helps to drive gold higher as gold is on a real tear, heading north. Diagonals are linked together with “B” waves so this could be the last run to a potential wave 4 in Minute degree. The decline after the late May top sure can work as a diagonal as well, so we have to be aware that any further decline can be very choppy, but it may look much like an impulse decline.

From here on we could get unexpected violent reversals which are next to impossible to catch beforehand, but I keep trying just the same. Sometimes we get lucky as  the patterns seemed to bunch up just before a violent reversal. For now I remain bearish towards the US dollar as the bear market has a long way to go. I no longer get the Market Vane Report, then this makes checking the commercial traders positions more important.

At this time the commercial traders are still net short the US dollar by a margin well over 2:1. It is when the commercials become net long is when we have to take notice, as a bigger bear rally may then have a good chance of forming. 

The speculators or trend chasers are doing the exact opposite, as they are still net long by about the same ratio. 

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US Dollar Bear Market Review

The US dollar has taken a pretty good hit so far, but last week it had started to rally.  I dropped my degree levels down by one,  as I think we would still be too early for any Minute degree wave 1 to be completed.  Besides that late April and early May rally looks too much like an expanded flat, which connects the zig and the zag together. Connecting zigzags is the name of the game when the markets move in a diagonal pattern.  Many times it can take a long time to figure out where in this diagonal wave structure,  we may actually be at.

Being on a wave 3-4 location, could take a little longer to play out, but I like to keep the options open, that the US dollar can resume its decline at any time.  Any single zigzag will always have alternating patterns between the A5 wave and the C5 wave, while the B3 wave can contain just about any simple or complex corrective waves.  Complex patterns are all part of the correction  process, but a single diagonal is part of the 5 wave impulse sequence.

A very smart wave analyst asked me at a face to face meeting,  if a wave 2 can be a diagonal? I didn’t have a good explanation at that time, but if I was asked the same question again, I would say, “No Way”. You can’t have a diagonal wave as a wave 2 correction. Wave 2 corrections require 3 wave patterns not a single 5 wave pattern, as diagonals are part of the 5 wave impulse wave structure.  

The little blue book makes this very clear, but what they only show us, is the ending diagonal. Every diagonal should be labeled, ABC1, ABC2, ABC3, ABC4, and ABC5, so to make it very clear that it is identified as a separate wave structure.

Diagonals cannot always be labeled like this, mainly due to space limitations at these small degree levels. A person could even get away with labeling diagonals with, W, X, Y, X and Z waves, but then the “W” wave must always start as a zigzag.  We can’t have a flat in the wave “W” position, just like we can’t have a flat in the first wave of a diagonal.  

 

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US Dollar Intraday Review: Not a New Bull Market!

 

The US dollar  is soaring and is doing what I hoped it would. The US dollar doesn’t need much more upside, before it will close off that big gap you see.  With a bit more of an extension, this should complete by the end of the week or even sooner.  Any price level above 99.750 should do it, but there is never any guarantee that there is more momentum to the US dollar than meets the eye. 

The fact that it has gone vertical helps, because these vertical types of moves can never be maintained.   I changed the wave count to a potential 4th wave rally, but I always have to stress that they are diagonal moves, with impulse waves being very small runs.  The rally  that has started on the 7th of May sure fits into an impulse very well, but It is still part of a potential “C” wave. 

The main thing is, that it would be nice to see this US dollar gap starting to get closed off, as if it is left open, the gap creates too much uncertainty as a future surprise rally could always happen.

I’m sure we will see more gaps in the future, but at this time we are staring at one of the biggest holes in the charts. 

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US Dollar Intraday Review: Will The Top Hold?

 

 

This US dollar rally may have topped out on the 9th, which was followed by a pretty good looking impulse decline so far.  Technically, we want to see this decline continue if the rally was just another fake.   Diagonals should still be part of the bigger picture, but so far the US dollar fits into an impulse just as well.  If the wave 2 top in Minute degree holds, then there will be no support except for short duration counter rallies only.

A move below the wave 1 bottom is what we need, to confirm that this rally was a fake bullish phase. There will still be many fake rallies to come, and some of them can be pretty good surprises. 

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US Dollar, A Look At The Daily Chart.

 

It is important to always look back to see if the present pattern still makes sense. Spending too much time at the intraday levels can distort things pretty easily, so we have to step back, and look at the patterns from the daily chart perspective.  First thing in 2017 the US dollar bull market ended, and I believe that the inverted wave 1-2 in Minor degree has completed,  and we could be close to the completion of wave 2 in Minute degree. 

First waves are always the shortest waves, but if you think we have a long wave 1 then chances are good it is just an “A”.   Any support will be nonexistent as bear markets only give us temporary support at best.  The “D” wave top in Primary degree is still holding, and the further the US dollar declines, the less of a chance we have of the “D” wave being dislodged from its position.   Any ‘D” wave top usually retraces its entire bullish cycle, as it would eventually have to crash down to an “E” wave in Primary degree location.  It would take an Intermediate degree zigzag to get us to the “E” wave bottom.  The “E” wave bottom would also land on a potential Cycle degree 4th wave, so until then the US dollar is in a bear market which is  now just a bit over 3 months old. 

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US Dollar Intraday Rally Review

 

I mention that we could get a violent reversal, and we most certainly did. It closed the gap with little effort and now we have an extreme spike as well.  I would love to see this reverse and then head south, creating new US dollar bear market lows in the process.   Any Minute degree wave “1 or A” is still ahead of us, so there is a lot more downside to go.  In the long run, we need to confirm an Intermediate degree zigzag,  and then break all time new record lows below that 70 price level.

Sooner or later the majority will figure out that the US dollar is in a bear market,  and then they will get serious in jumping on the gold bandwagon as well. Of course, when that happens, chances are good the gold bull market will come to an end, and then it will implode as well.  

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US Dollar Intraday Bear Market Review

 

Since early 2017 the US dollar has been in a bear market that still will take a very long time and price distance to go.  Of course, how deep the US dollar goes, or how long it will take, all depends on our personal opinion.  Due to the big choppy bull market starting in 2008, this gives us an Elliott Wave clue that the entire bull market to the 2017 top, is a fake.  One big bear market rally, which can always get retraced by 100% or more. 

This translates into a “D” wave top in Primary degree, which all wave analyst counted as an impulse most of the time. I tried, but that fell apart rather quickly as well.   Any “D” wave can give us very bullish fundamental news, but contrarian indicators tell us that a huge correction was coming, or the downright end, to the US dollar bull market. Just two indicators were enough, to convince me that a bigger bear market was going to happen. 

The type of pattern should be another zigzag decline in Intermediate degree, which wave, 2 up in Minor degree, may have already been completed. 

We would need two sets of 5 waves in Minor degree, with a huge counter rally thrown at us to keep us very confused. 

I hate drawing trend lines, but when I do, I only draw them in parallel to each other.   Any kid with a ruler can draw trend lines, and it is one of the most abused technical tools used by all the Technical analysts. After such abuse, trend lines have little meaning when we see many wedge like lines drawn on the charts.  

At this time I will work this as a potential impulse decline, but may have to adjust later if the 4th wave does not materialize. It could be a very violent reaction, and over before we know what hit us.   

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Crash Of The US Dollar Intraday Review.

Impressive crash that the US dollar has been in. Of course I love to see the US dollar finally going the way I think it should. So far it has retraced well over half of the February bullish phase.  Another new record low, to retrace all of the February bullish phases would be nice, but the diagonal wave will keep us guessing in the short term.  If the wave 2 top in Minor degree is in, then we have a long way to go before any potential wave 3 bottom in Minor degree may arrive.

To fill any Minor degree wave three declines, we need 5 waves in Minute degree, and chances are good they will be diagonals.  We could get one single long zigzag heading down, where we will never see or even count 5 waves in Minute degree.  This would show up as a single bump somewhere in the middle of wave three, and it only makes sense when we look at it from a diagonal pattern perspective.

Once this USD bear market becomes more obvious, then we can expect the occasional bigger drops, as more fearful traders panic to get out of the US dollar.  Longer term I’m very bearish on the US dollar as the entire US dollar bull market since 2008,  could have been a “D” wave in Primary degree.

Near  this “D” wave top, the Market Vane Report,  registered 91% bulls.  This  leaves no room for a new herd of Dollar bulls to come in.

In the short term any rally can suddenly explode and travel much further back up than expected, but in a bear market,  those moves will always get retraced.

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US Dollar Daily Chart Review: Mini Bear Trap?

 

The speed of the recent drop in the US dollar, makes me suspicious as to what is going to happen next in the short term. There is a real probability that the US dollar landed on a  “B” wave bottom, as an expanded pattern.  If this is true, then the USD should roar again and head up to a potential double top. Even just a penny higher will work to confirm this potential move. If this plays out, then my “D” wave in Primary degree will have to be moved as well.  

This could create short term volatility in gold stocks again, so be prepared to get bucked off.  This is my least favorite option right now, and may not work if my other wave count can still happen.  Either way,  a crash to new record lows will help to confirm, that the bearish trend is still alive and well.  

Many times the wave count can be the clearest just before it makes another violent reversal, so this is the best time to go over any wave count we may think we have.  When it comes to a potential expanded  “B” wave pattern I can’t ignore them, as I know how powerful “C” waves can be. When we miss them, they can screw up any wave count for all of Elliott Wave financial history.

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US Dollar Intraday Wave 3 Decline Update.

 

 

At this time I will stick with the Minor degree wave two locations, until such a time when the markets completely trash it. Even though we had a nice decline which can work as a bad impulse, our present rally can then work as another inverted wave 2.  Any inverted patterns can get retraced, depending on the degree we are in. 

We would still be too early if I was counting out the next Minute degree already. Besides the Minute degree I would need, could be another great zigzag, that looks more like an elbow joint in our arms.  Then we would be really scratching our heads trying to place this lonely wave pattern. I’ve seen them before and I just read them like zigzags in the middle of a wave 3!  

In the short term this can backfire as it looks like one more leg up can also happen. 

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Quick US Dollar Update

 

 

So far the US dollar has repelled from its top in great style. Diagonals are in force and the US dollar has to give much more before we know the next Minute degree position.  At close to the end of any trading day, the markets can still make some wild moves so, we could be early in calling and potential rally.  I like to look over the COT reports on the weekends, but they have been pretty boring lately where nothing really stands out.

What is good to know is that this Tuesdays Market Vane Report showed a high of 78-79% bulls present. This is still pretty close to the extreme of 91% bullish at a 24 month high. The US dollar is on its trip down from this extreme sentiment reading, so the amount of  bulls present should get much smaller in the years ahead.  

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US Dollar Intraday Potential Wave 2 Update

 

 

Since the early February bottom, the US dollar has been on a very bullish run. The million dollar question is, “is it a fake or the real thing”. My bet is that a potential fake bull market is being played out.  I can count this out as a low quality impulse to my leading “A” wave, which is extended. Zigzags are hardly ever even, so it would stand to reason that the last “C” wave would be, the shorter wave. 

We may still see more upside, but any double top or a bit higher would work just fine. Minor degree is my largest degree and I only used 3 degree levels to subdivide wave 2. If this is a true bearish rally, then a 100% retracement or more will confirm it. Every bear rally eventually has to get completely retraced.  The opposite happens in a bull market.

A very bearish move by the US dollar, sure will help the price of gold, as stock investors may be running out of patience. All it takes is some guy yell “fire”,  and then the fire sale in stocks will start.  

 

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US Dollar Intraday Bullish Phase Reveiw

 

 

The US dollar sure has been on bullish phase that has carried on taking longer than anticipated, but the time factor is now long enough to fit into a wave 1-2 rally in minor degree.  It would be nice for the US dollar to pop up and make another high, but then I would also like to see it nosedive after that.  This rally has taken about 5 weeks so far, so that time is also my rough guideline how long wave 4 may last. Using good old Fibonacci we may get an 8 week 4th wave correction. Violent moves can shorten any time move so we have to be prepared for that as well.

The worst scenario would be for the US dollar to hit a new record high, as that would force a “D” wave, review.

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US Dollar Intraday Review: Last Chance

 

 

The US dollar has rallied a bit further than I would like, and this is a signal to review the wave count again.  There may be a desperate attempt to break to new highs, and this wave count would allow it to do just that.   The idea that the USD can still falter in the next few days is never thrown out, as in this case two wave counts are in effect. I make my intraday charts fresh every day, and like to keep one wave count on one chart. 

Most of the time there are always two wave counts in the running, and it is only at the last minute that any wave count, gets down to only one choice. 

We are about three trading days away from the full moon this Sunday, so that may provide us with another turning time period. Full moons are usually bullish for stocks, but I have seen the markets charge right through the new moon and the following full moon as well.

Only time will tell if this top will hold, as it may take the rest of the week to find out.  

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US Dollar Intraday Bearish Review

 

 

The US dollar has come of its bullish cycle, but if it has the power to go higher remains to be seen. I believe a wave 2 top in Minor degree could have completed, so we have to keep looking for the bearish wave counts to materialize. In a bearish situation every rally will run out of steam.  Even if we have no clue how high it might go we have to watch for inverted zigzags or even flats. Eventually, it is the us dollar bear market that will really help to drive the gold price, so keeping a wave count going on the with the US dollar is critical. 

If this wave 2 top is real or just imaginary, I always have the idealized 5 wave script ready in memory, and I want to know at the earliest moment when the US dollar refuses to act out of character. By  constantly review to make sure it all fits together very well is the key. If a Minor degree blows its position, then this is a signal that our wave counts do have a serious flaw. 

The funny part is that, “ALL” wave counts have flaws in them as soon as the electronic ink dries.  As long as they keep counting diagonals with impulse wave positions, they will always miss the 3 wave patterns. I don’t think investors have really noticed the USD bear market yet, but when they do, it may be on the 5th wave of this sequence.  

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US Dollar Intraday Late Night Review

 

 

The US dollar cash, futures chart, is still on the go during the night, but has started to correct. This time I still have Minor degree wave 1 down at the left side bottom. I also have a good alternate as well.  This wave count must not break out to new record highs. It can get very close  to a major double top, but that would be pushing it to the max. The best scenario is that we are heading up to a Minor degree wave 2 position, but we have a bit to go.

The start of late February sure can fit into a 1-2, 1-2 wave count, which instantly tells us that wave 3, must be one of the extended waves. On a daily chart the USD looks like it was going vertical already, but the count is not finished yet.  

If we are heading up to a wave two, then we already know, what pattern we should be expecting once wave 2 tops out. Until the USD tops out gold and gold stocks could remain in a funk.   It is the markets job, to aggressively kick off or shake off, any riders that think they can get a free and easy bull ride. 

Market Vane readings last week, with the US dollar were already at 76%. This is getting up there again, but down from an extreme reading of 91%, bullish on the US dollar.  If the USD were destined to new record highs, then Market Vane would also have to go above 91% again.  This would make it a double top in sentiment readings, which I have never ever witnessed. This just means that the chances are good that the wave 2 scenario is still true at this point in time.  

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US Dollar Intraday Rocket Ride Bullish Move Review

 

 

Down on the left, I’m using a a wave bottom in Minute degree with square brackets. There will no longer be any double parentheses  and any degree group that calls for a circle. The important ones will be Primary, Minute and Micro degree levels. Stock Mania has still been at work  as stocks and the USD need to rally together for that to happen.  In this case gold also reacted by slumping in the last days or so. A triangle fits pretty well at this time but, we need to be open to the fact that something else is afoot. 

Since the 24th bottom the USD also cranked up supporting the stock bull attach we’ve been having. If this inverted zig zag holds, then the US dollar should eventually retrace its entire vertical spike.  The same goes for the entire hypothetical triangle, as we basically have 5 inverted zigzags, which all need to get retraced.

Very few wave analysts understand the power of  moves that run in a 3 wave fashion. There is rarely a time when this 3 wave move does not get completely retraced, except inside a triangle, but then all 5 will get retraced eventually. I am also being specific to the degree.  In the case of the US dollars big bullish rally since 2008, and it was a 3 wave move, then it will also get completely retraced.  

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US Dollar Intraday Review

 

 

I will be honest with my readers, that I don’t like to use color on the intraday charts because it slows me down and for now I sure will not label every little wave. Until I get up to speed and be able to switch the colors from memory.  Right now about the only wave I can count this out is a type of impulse and the double top we had would be the “A” wave in Minute degree.  Following that “A” wave top the decline may look like an impulse, but it’s not. Even though I have been counting  for 20 years, the charts still present a reading challenge at the intraday levels.

Most of the time it means that I’m off base, and I have to go back and constantly review the chart history.  At this time the “D” wave top in Primary degree is holding, so we have to wait and see what this week will bring. 

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US Dollar Daily Chart Review

 

 

I consider it extremely important to always check from where we are counting from. All the wave counting in the world just ends up being cosmetic wave changes, if we are too lazy to go back 30-40 years. The US dollar has a history much longer than since the 70’s. Records going back much further are extremely hard to find, which can give us a completely different perspective.   On January the 1st by this chart, the US dollar topped out which I believe was a “D” wave top in Primary degree, and that we are now in an “E” wave decline, where we need a 5-3-5  wave pattern. 

I build my wave counts fresh everyday so there is no need to constantly create the wave positions for the last two years.  I made a small cosmetic change after the 4th wave bottom in Minor degree, so this justifies another wave count from that Minor degree bottom.  The “C”  wave that followed was also part of a diagonal 5th wave, and I skipped one set of waves for that wave count. 

Now we have to see if the Minute degree decline does what I want it to do, then this will help to get us to a potential wave 1 in Minor degree. 

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US Dollar Intraday Decline Review

 

 

The entire January decline just rolled along, but many of the critical waves overlapped where we can’t call them impulse waves, except for a few short runs.  In the beginning of February this decline stopped, and started to reverse. Trying to identify what type of wave it was, helps in figuring out the location as well. 

Printing out the charts is always the best way, and it certainly gives us the time to stare at it and walk through many scenarios.  The one that fits the best, is the triangle which ended with a spike on the 15th of February.  This peak would have to hold, if my first “A” wave is correct, as it is rather small. 

Next week the US dollar still could soar in the first few days, but hopefully the top is in and we have the next decline to count out. We should get one more zigzag decline that may not revel a great looking counter rally, but it should break to new bear market lows, well below the 99.200 price levels.

 At this time I’m working 5 waves down in Minute degree, which technically should terminate at a wave 1 in Minor degree.  This is all part of a potential  Primary degree “E” wave bear market, so we have a long way to go.  Due to the fact that stocks are still being pushed to the extreme, this makes the majority still oblivious to a potential big US dollar bear market.   

So far the pattern looks great when we look at it from the daily chart perspective, so there is no need to make any high degree changes at this time.  The markets will always force a change on us, if we are too far off base. You can tell if any wave analyst is way off track, when all the higher degree levels get constantly moved around.  Moving just one high degree around instantly makes the entire wave count obsolete and useless. 

 I call it cosmetic wave counting which the majority of wave analysts practice.  All those intricate, detailed wave counting methods are useless, if we keep missing major turnings, and only use the EWP for trade setups.  

I look for turnings that force the majority of traders to switch directions, as I know that the majority of traders/investors cannot handle the draw down that even a Minute degree counter rally in Futures or Forex will produce.

 

 

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US Dollar Intraday Bull Run Review

 

 

Since the US dollar has gained a bit more than I would like.Just the fact that we had a zigzag decline for the last month, so it could work as a correction in the “D” wave I have been working.  Hopefully it will be proven wrong, as I think we just finished a running triangle, but as it sits, it could also work as an ending diagonal. 

We have a nice vertical push which always helps to anticipate another potential turning as well. It may take the rest of the week before we know more. We know gold crashed today at the intraday level, which inversely matches this USD spike.  

Any correction can fall back below the 100.600 price level, but if the US dollar declines in a diagonal fashion, then this wave count will get tossed as far as we can throw it.  

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US Dollar Rally Review

 

 

As usual the US dollar is trying its best to breakout from a small double top.   I had to go back and work some alternate wave counts, which is nothing new. I will be doing that constantly as we try and jockey for the best positions and degree levels.  We have some very strong overlapping waves which means I have to look for the diagonal zigzag connections.  The February bottom ended with a 5 wave sequence,  bigger zigzag may have already been completed.  

This US dollar rally is the cause of gold’s decline which may have ended already. I believe that the US dollar is in a major bear market, which still could take years to play out.   A bear market does not turn on a dime and by a miracle suddenly switch to a major bull market, unless many other indicators fall into place as well. None of those indicators I may use have shown up on the radar screen, so this rally in the USD is just another fake bullish phase.  

We are going to get many of these false rallies, until the entire planet has a consensus bearish opinion about the US dollar.  Consensus means they are voting with the opinion of others.  Consensus forecasts or consensus science is always wrong, and the contrarians know this.     

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US Dollar Intraday Bear Market Review

 

 

Since the January peak the US dollar has been in what I call a bear market.  The majority will not call it a bear market until the USD has declined much further, or the majority becomes very bearish.  It all depends on where we are counting from and what the 8 year bull market in the US dollar actually was. 

All my long term readers know the frustration I had in trying to make the USD bull market fit into a true impulse. This failed many times, so it also tells us that the entire US dollar bull market was one big fake bullish move. This bullish move ended on a potential “D” wave top in Primary degree, and if this is true, then the entire US dollar bull market will eventually get completely retraced. A complete retracement would happen when the US dollar index crosses the 70-71 price level again.

Any pattern that resembles another zigzag will work just fine, which could take until 2021 to play out. Technically, it would be an “E” waves crash in Intermediate degree.

Where we are in the first stages of this pattern will be a challenge to figure out, but we know Rome was not built in a day, nor can we expect the next zigzag to happen over night.

The above intraday chart is 90 minutes, with 500 bars. The more consistent and I keep this the better, so hopefully by the time the “D” wave disappears, we have another sequence we can work with.

I may be too early, but I think there is still more downside to go, before another great counter rally will be starting to get set up.   Any counter rally can be very violent as a few in the past have shown us. If my bear market scenario is true, then all rallies will be fake rallies and should not be mistaken for a start to a new bull market phase.  

From this point on, the moves are going to get more difficult to forecast as those pesky expanded patterns, can throw a monkey wrench into any wave count, especially when we are dealing with diagonal wave structures.     

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US Dollar Quick Daily Chart Review

 

 

It is always good to review where we came from to make sure it still fits into a Cycle degree perspective.  The “D” wave of a Cycle degree triangle that has been going on for more than 30 years. “D” wave tops are false bull markets and they are all considered bull traps with the EWP, (Elliott Wave Principle).  The majority will never understand this as they see any move up as a potential bull market, how it gets there is irrelevant to them.

With the EWP how it gets there is the most important aspect, because it is the difference between a real bull market and a fake. Fake bull markets always have the power in them to completely retrace the entire bull market, which in the case of the US dollar would be about the 71 price level.

I believe we have already started this trip down and this morning we were in a downside breakout position. If another zigzag is to form, may still be in the works, but we are also coming up to a small gap that may bring in a reversal, which could be rather violent.

We have a long way to go,  for the US dollar bear market  to fully play out, as it will not happen over night. Many have not even clued in that the US dollar could be in a bear market, which gives wave counters an added advantage, if we get it right.

In the long run I’m very bearish towards the US dollar, until the majority joins in. After that happens then chances are good I will have to turn bullish at least in the shorter term.

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US Dollar Intraday Review

 

 

From my Cycle degree perspective an asset class is no longer in a bull market when it stops going up. Not only that it has to finish on a reasonable wave count that supports the end of a bull market.  Since the 2008 beginning, the USD started with a good impulse looking move, but after that it began to break down, and since about 2011 has turned extremely choppy. 

This is the big clue that the entire US dollar bull market was a fake bull market, which in the end must be entirely retraced. 

We have a long way to go before that happens, but so the US dollar decline has been acting the part of a diagonal 5  wave script.   We should get one more lower low, which may not happen until next month.  After the next major low, then any rallies should start to get bigger, but also some of them could get much smaller, as they still should get joined via zigzag, like patterns.  This is also when I may increase my wave degree by one level, which could last 1 or 2 months.

I’m very bearish on the US dollar in the long term, until the USD falls below 70. If this takes the next 4 years to do so be it,  as it sure is not going to happen overnight. By 2021 or so the new solar cycle #25 should be starting and that is when all bearish bets on the US dollar will be off the table. This is when climate change will switch back to global warming like the solar cycles have done since the beginning of time. 

 

 

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US Dollar Intraday Bear Market Review

 

 

Since early 2017 the US dollar has been in a bear market already, just under a month long.  Many, may not even have clued in that the US dollar is destined for much bigger declines.  Gold has already been in a bullish phase since late 2015, and should continue, with corrections thrown in to keep us guessing.  I’m not compelled to increase my degree levels at this time, as the next major bottom could give us another 4th wave rally.  Once that set of 5 diagonal waves are completed a new set will start again, Which would be 5 waves in Minute degree.  This is when I may need to change degree levels, once it gets reviewed on the daily charts. 

The important thing is that the early January peak wave positions, will keep holding and not forced to be changed again. In the last few years not too many high degree peaks have been changed in most wave positions that I’m working, while others are still tossing big degree tops and bottoms around.  Constantly reviewing the bigger picture helps to catch problems before they get out of control. 

The USD is already back above the 100 price level, which can end at anytime. 

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US Dollar Intraday Bear Market Review

 

 

Since December 3, 2017 the US dollar has entered what will be known as a bear market.   Some are still denying this fact, which is very normal. The strong US dollar has kept the stock mania bull market alive, but that should come to an end as this morning opening has demonstrated.  

With Diagonal waves the logic of the impulse falls apart very quickly as waves overlap at critical turnings. I would love to see a 4th wave rally and then still break well below the 100 price level. In the big picture I would need a zigzag, so for the foreseeable future we need to see 5 waves down in Minor degree after which we should get a substantial rally, that will stun the gold bulls when it happens. We are still far away from that being set up, so short term this trend should stay in place. 

I have many other asset classes that I want to cover, so these postings will be shorter in general.

 

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