US Dollar 2000-2017 Elliott Wave Count Review

When I get suspicious that a wave count is starting to act out another script, then this is always a signal to review the larger picture. This is a regular habit that I adapted with stocks when I was looking for all the extensions.  Back at the top in July 2001,  we had 3 tops very close together before the US dollar started to plunge.

The decline that followed sure looks like a 5 wave decline, including an expanded wave 4 correction.  Expanded patterns like this are very common in any asset class, and ignoring or not counting these expanded patterns, will throw any wave count into disarray.  I have worked this decline as a single zigzag and counted this crash as a 5 wave sequence in Primary degree as well. In the end, 5 waves down in Intermediate degree makes a much better fit.

At that 2001-2002 peak, the 5 wave decline matched gold very well, as gold started its bull market at about he same time. Solar cycle #23 also peaked, so we can say that this solar cycle peak, repelled the US dollar. The majority were very bullish towards the US dollar and stocks,  as the stock mania was still in full force in 2000. Gold was a hated asset class and the experts were constantly warning us to stay away from gold as an investment.

Being out by one degree with this set of 5 waves determines if we think that we are in SC degree or still just Cycle degree.  This important 5 wave decline has a location which can fit very well as a “C” wave decline of a flat. A Primary degree flat! All trends come to an end, and by the time we reached 2008, the world was so bearish towards the US dollar that all the experts were screaming to stay in gold as gold was forecast to go to $5000.

I knew the US dollar bear market would end, but as usual we were early. For now I will use this 2008 bottom as a Cycle degree wave 4 and technically we should get 5 waves up in Primary degree. Many times, 5th waves are diagonal wave sequences, which the US dollar has in abundance.

I think there is more downside to come with the US dollar as many contrarian indicators must also show up. What is also very important with that 2008 bottom, is the fact that the solar cycle was also in the process of switching to solar cycle #24. At this point the US dollar was repulsed by a solar cycle low, which was the opposite of what happen at the 2000 peak.  These events seem to alternate, so by the time we reach the end of solar cycle #24, the US dollar could be ready to soar again or just continue to soar.

Since the 2008 bottom a single zigzag could have finished at the 2016 top, putting us into a diagonal wave two in Primary degree. If this is the case, then we have a wild ride ahead of us, as this correction is still far from over. In this case I posted the weakest wave count, so as to eliminate it as soon as possible.

At this time a small degree 5th wave decline should happen, after which another US dollar counter rally should ensue.

I base my US dollar wave counts on a chart going back to 1792 and the Civil War, which I will post below, but without wave positions.

 

The 1985 peak may be a Cycle degree wave 3 position, followed by a flat or a zigzag in Primary degree. 

 

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