what a week in the FX markets … amazing. if you have been following along, I have been a DOLLAR BULL the past couple weeks awaiting for what I THINK is the end of a correction that is going to set up a pretty large and powerful rally in the US Dollar.
that being said, one of the key components that everyone involved in the FX watched is the USD vs the Swiss Franc (AKA the SWISSY)
what I saw was an “ending diagonal” that was nicely showing us 5 waves down and that would have represented the end of a somewhat “flat” correction that started in July 2012. Yes, it’s been 1 year and 5 months since the high….and, think about it, it’s ONLY retraced right in/around .382.
as I followed this last move down I naturally thought we would get a bounce in/around the pattern called a zig-zag/ab=cd/equality of moves/etc. In fact as you can see, it did bounce rather strongly in/around that level (to be exact) however, the wave count wasn’t complete. so, we did one more wave down and hit exactly at 1.05946*a = c. With that level being hit, we have a weekly signal reversal and, additionally, we are selling off rather nicely w/ the Euro and the Dollar Index appears to have bottomed. Also, note the TIME component. IF we have the PRICE w/ a 1.05946 component THEN we have 27 weekly bars in the ab move so 1.0594*27=29 and that give us an PRICE and TIME equality.
as we have seen this past couple weeks the musical note ratio’s are doing some nice work in the markets. I have a small 5×7 card w/ the ratio’s and, now, they are basically memorized. recommend you do the same – they make great stop placement levels. (see GOOG 1.68179 extension target) If those of you want the why – check out this website – http://www.brooksdesign-ps.net/Reginald_Brooks/Code/Html/Gomas/gomas09.htm
if we get below .8832 then all of this is jibberish ….