Tuesday, September 22, 2009

Dollar Story (2): Bottom is Imminent


[update: first chart is updated version of the second one]
Dan just updated his count. haha...... did he read my blog?! :)
My primary count: the green (i)(ii)(iii)(iv) will be followed by a small green (v) to finish 5 of (C)
My alternative count: the pink (i)(ii)...... play out to lower target $74

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Let me use Daneric's $USD daily chart to show you why I am saying dollar's reversal is imminent. The primary black [2] correction wave has 3 intermediate subwaves, red (A), (B) and (C). Once intermediate wave (C) finishes, so does the primary wave [2], and then we will start a upside primary wave black [3].

We are in the final stage of minor 5 of (C), blue 5 in chart. The minor 4 is a symmetrical triangle, green [a]...[e]. I explained how to calculate targets for the symmetrical triangle breakout.

Conservative target price
= 78 - 0.66 * ([a] - [b]) = 78 - 0.66*4 = $75.36
Check my "Gold and US dollar" post for details

Today's low is $76.00, and we can easily reach $75.36 this week considering we had a gap down this morning on UUP (Dollar ETF), which opens a more down room for next few trading sessions.

My primary count:
Dollar is going to reach $75.36 target and maybe a little lower this week, or early next week, to finish minor 5 of (C), and then starts to go up. The major reasons for this count are: (1) we have seen 3% dollar bulls since last week, bears are too crowd; (2) minimum down target is met; (3) the minor wave 5 of (c) may be completed, or very close to end. You can count 5 minute impulsive waves down inside this minor 5 of (C) wave: start from green [e], you can see one black OHLC bar for minute wave [2] bounce up and 3 bars for minute wave [3] retrace up, where Dan has (ii) for his count.

My alternative count:
Minor 5 of (C) wave will decline lower to reach normal symmetrical triangle breakout target:
Target price = 78 - ([a] - [b]) = 78 - 4 = $74.00
You can see $74 is also a long term support price, green line in chart.

Conclusion: dollar's bottom is imminent with target range $74 - $75.50. Keep in mind bullish US dollar is not good for stock market.

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