dollar index update 17 jan 2010

8/14/2019 Dollar Index Update 17 Jan 2010

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Dollar Index (Daily)

The move higher that began in 2008 was not an “impulsive” pattern--it was a corrective

intermediate (A) Wave. The model presented here has been my preferred count for a

few months now. It looks like there is finally a completed wave down from 89.62. The

move best counts out as a “complex correction.” This suggests that we’re in the

middle of an Intermediate (B) Wave triangle that still has two more waves before

completion. Once the (B) is complete, it should set the stage for a powerful (C).

Andy’s Technical Commentary__________________________________________________________________________________________________

“a”

“b”89.62

( A )

-a-

-b-

x

-c-

w -a-

-b-

-c-

y

x

-a-

-b-

(1)

(3)(5)

-c-

z of “c”

(4)(2)

-a-

-b-

“d”

“e”

( B )

REPRINTED 12/15/2009



Dollar Index (Daily) Wave “c” has ended and we’re are now in the middle of wave “d” of a

larger triangle. A good target for the “d” would be 81.70, which is

61.8% of the “b” wave. (As with most triangles, the alternating legs

will be related by a Fibonacci number.)


77.69

“a”

“b”89.62

( A )

-a-

-b-

x

-c-

w

-a-

-b-

-c-

y

x

-a-

-b-

74.33

-c-

z of “c”

w/a

x/b

“d”

“e”

( B )

81.70



Dollar Index (Daily) ~ Log Scale

In order to be certain of a reversal, we must see a “counter-trend” move that is more powerful than

anything witnessed on the decline from 89.62. The rectangle box from April of this year was the

strongest countertrend move witnessed. This currently rally must exceed that rally, which was a 5.1%move over 22 trading days. We’re currently on track to match that achievement, which would require a

move over 78.15 sometime before the first week of next year. Interestingly, that’s a level that aligns

VERY well with the 23.6% retrace of the entire decline.


89.62

74.33

78.15

A break of 78.15 in the next few weeks would CONFIRM that a

major bottom is in place and much higher prices are ahead.

REPRINTED 12/15/2009



Dollar Index (Daily) ~ Log Scale

The rally from the early December lows was the most impressive we’ve seen since the 89.62 high,

which is very strong evidence in support of a “c”-wave conclusion at 74.33. One can see that the

dashed rectangular box around the most advance is much more severe and powerful than any of theother counter-trend rallies.


89.62

74.33

78.45



Dollar Index (90 minute) ~ A Five Wave Move Up? Probably Not…

This is a look at the move from the late Nov/early Dec lows. The most bullish case

for the DXY would be that the move up was an “impulse” of some kind because that

would imply more impulsive moves to come (i.e. Wave-3 or c-wave). Unfortunately,

it’s difficult to count out an “impulse” higher. It just doesn’t “fit.” The counting here ishow I can “force” an impulsive count. This would be a fifth extension five wave

model. There are a few flaws: a) The Wave -2- retraced too deeply; b) the Wave -4-

and Wave -2- are of similar duration; c) The Wave -5- was not 161.8% of the next

longest Wave -3-. If the move began from 74.17, it would look more like the next

pages


74.17

(4)

[2]

-3-

[4]

(1)

[3]

-1-

-5-(5)

(2)

[1]

(3)

[5]

74.33

-2-

-4-



Dollar Index (90 minute) ~ A Triple Combination

If the move actually began at 74.17, then model presented here would be my

preferred count. What this implies is that we will see a b-wave that corrects 60-80%

of the advance, which would take the DXY back to the 75 76 zone before

resuming the bullish trend. Because of the way the market turned so sharply at

74.33, it’s actually more likely that the count looks something like next page.


74.17

-x-

-w-(c)

(a)

(a)

a-x-

(b)

-y-(c)

74.33

(b)

-x-



Dollar Index (120 minute)

This is my preferred model. The move from 74.33 to 78.45 was a simple “zig-zag” where the -b-

wave was a ‘running triangle.’ These sorts of triangles create large ‘thrusts,’ which explains thestrong move after the triangle completed (261.8% of the widest leg). The move down from 78.45 is

clearly ‘corrective’ in nature. If 76.60 completed the entirety of the correction, then it was an x-

wave and we should see another -abc- advance that will take out the recent highs. If, however,

this correction lasts longer and corrects deeper, then we’ll be dealing with a b-wave, which will

open up the possibility of a more powerful c-wave that should take the DXY to 81.70.


74.17

-x-?

(a)

(b)

-y-

b

74.33

Move Begins

-a-

(a)

(b)

(c)

(d)

(e)

-b-

(1)

(2)

(3)

(4)

a or w-c-(5)

78.45

Running Triangle(c)

(d)

76.60

(e)

-w-?alt: x

It would take a break of this (b)-(d) line

to prove that the correction is over.



DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of any kind. This report is technical

commentary only. The author is NOT representing himself as a CTA or CFA or Investment/TradingAdvisor of any kind. This merely reflects the author’s interpretation of technical analysis. The

author may or may not trade in the markets discussed. The author may hold positions opposite of

what may by inferred by this report. The information contained in this commentary is taken from

sources the author believes to be reliable, but it is not guaranteed by the author as to the accuracy

or completeness thereof and is sent to you for information purposes only. Commodity trading

involves risk and is not for everyone.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading:

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND

RISKY BUSINESS. Before you invest any money in futures or options contracts, you should

consider your financial experience, goals and financial resources, and know how much you can

afford to lose above and beyond your initial payment to a broker. You should understand commodity

futures and options contracts and your obligations in entering into those contracts. You should

understand your exposure to risk and other aspects of trading by thoroughly reviewing the riskdisclosure documents your broker is required to give you.

dollar index update 17 jan 2010

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