Tag: DX

the post below is from February 13, 2014 and I believe it’s important to rehash the most recent moves in the US Dollar. Believe this move has room to go, however,  we need to patiently wait for a corrective pattern to form.

this move in the dollar is real so try to get long in the most risk adverse manner possible.  as you can see from the post below as the 79 level was repeatedly getting tested I did, admittedly, start to question my strong dollar scenario.  that was surely one ugly level for a while but I do think the dollar will strengthen into the low 90’s target that we have been calling for.

take your time and go thru the post below …some AMAZING geometry. Also, remember, ALL of my charts are REAL TIME w/ no backward look .. they are as I saw it.

Bart

February 13, 2014

Early in my career I had the wonderful opportunity to get training from Joe Di Napoli (www.fibnodes.com)  Highly recommend learning some of his techniques but, most importantly, his understanding of the market structure and the players in the game.  One of his favorite sayings is we must realize that “you are entering into a world where the market is truly a caged gorilla juggling dynamite and – the dynamite is lit!”

Additionally, if you have been reading this blog you’ll realize it’s focused 1) 100% on PATTERNS and 2) it’s unique value is tying PATTERNS into the circle of life (fixed income, equities, commodities, FX).  W/in the context of the circle, the gorilla is the Foreign Currency Market.  According to the Bank for International Settlements – the preliminary global results from the 2013 Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets Activity show that trading in foreign exchange markets averaged $5.3 trillion per day in April 2013.

The Dollar Index is somewhat important as it represents a basket of 9 currencies – the Euro representing a vast majority of it at 58%.

For all intensive purposes – it’s been “stuck” in a 4 cent range but PATTERNS suggest we are “prepping” for a big move … so, in order to get a “feel” for where we MIGHT be let’s go back to the “beginning” at 71 ish and work thru to present…

CLIFF NOTES: the BULLISH thesis is that after the 5 waves down from 121, a 3 wave (at a minimum) corrective pattern should ensue (A-B-C) and therefore the bounce has farther to travel.  Additionally, it could mark a MAJOR low and we are starting back up for 5 waves.  The BULLISH consensus for the US DOLLAR is that this move UP is not complete.  Please see this chart below … and, notice the EXACT move up from the PATTERN shown above at the “2 or B” level.

so where are we now? Without showing an “elaborate” count, we can see by the chart below that we smacked right into a “big picture” .618 price projection that had it’s genesis from the 71 price low.

here’s the possible bullish count from the “2 or B” low that shows a POTENTIAL 3rd wave underway. IF the count is correct, then the 79 level has to hold and is very crucial as it suggest that the 3rd wave should begin …soon and UP we go.

now, we need to drill down one more time frame – that of the 240 minute chart to see what we have going on.  YES, we have a BULLISH PATTERN on the US Dollar at 80.05-80.08.  In order for this entire thesis to be correct, then I believe this pattern needs to hold for the strength in the US Dollar to begin…

PATTERNS fail …they are an EDGE and over time they have been statistically proven to give us an edge.  But, what if this pattern does fail? Take a close look at the following two charts … I have not shown this before, but we need to take into account the 5 wave move down from 121 and the .618 price projection — they are starting to form a huge B wave triangle.  The 5 wave move into the low is a BIG BIG A and then current structure is forming a BEARISH TRIANGLE w/ the ‘c’ portion just completing (due to the exact nature of the .618 price projection) and ‘d’ and ‘e’ to come …also note the purple trend lines.  One forms a head and shoulders and the other is showing the support for the US Dollar since the ‘b’ wave low …

here’s one last thing to consider …. take note of the measured move UP move from the past and what happened after it completed … a bearish omen?

CLIFF NOTES:

• w/ the deflationary forces present, the dollar SHOULD strengthen.  A well formed count supports that and a PATTERN very very close also holds that thesis as correct and positive. The first is the once completing at 80.05 on a shorter time frame and then 79.53 on the daily.  They need to hold – w/ the 79.53 as the major pattern if the bullish thesis is correct.  Remember, w/ our rules we could go all the way down to 79 again so, for all intensive purposes the 79 level is the line in the sand.  We have two symmetrical BUY patterns present …
• HOWEVER, if we lose the 79.53 level THEN it will open up some serious selling.  PATTERNS will then shift to the B wave triangle thesis …
• Last, we have MAJOR patterns complete across the indices and they are “acting” like the double tops that formed in 2000 and 2007. We have the Dow Jones Transports finishing a pattern from the late 1800’s, we have a potential generational low in interest rates complete and PATTERNS suggest one more wave lower in the commodities …

It’s all coming together and one of the circle of life gorilla’s is going to drop their stick of dynamite and big old explosion is going to occur …

Early in my career I had the wonderful opportunity to get training from Joe Di Napoli (www.fibnodes.com)  Highly recommend learning some of his techniques but, most importantly, his understanding of the market structure and the players in the game.  One of his favorite sayings is we must realize that “you are entering into a world where the market is truly a caged gorilla juggling dynamite and – the dynamite is lit!”

Additionally, if you have been reading this blog you’ll realize it’s focused 1) 100% on PATTERNS and 2) it’s unique value is tying PATTERNS into the circle of life (fixed income, equities, commodities, FX).  W/in the context of the circle, the gorilla is the Foreign Currency Market.  According to the Bank for International Settlements – the preliminary global results from the 2013 Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets Activity show that trading in foreign exchange markets averaged $5.3 trillion per day in April 2013.

The Dollar Index is somewhat important as it represents a basket of 9 currencies – the Euro representing a vast majority of it at 58%.

For all intensive purposes – it’s been “stuck” in a 4 cent range but PATTERNS suggest we are “prepping” for a big move … so, in order to get a “feel” for where we MIGHT be let’s go back to the “beginning” at 71 ish and work thru to present…

CLIFF NOTES: the BULLISH thesis is that after the 5 waves down from 121, a 3 wave (at a minimum) corrective pattern should ensue (A-B-C) and therefore the bounce has farther to travel.  Additionally, it could mark a MAJOR low and we are starting back up for 5 waves.  The BULLISH consensus for the US DOLLAR is that this move UP is not complete.  Please see this chart below … and, notice the EXACT move up from the PATTERN shown above at the “2 or B” level.

so where are we now? Without showing an “elaborate” count, we can see by the chart below that we smacked right into a “big picture” .618 price projection that had it’s genesis from the 71 price low.

here’s the possible bullish count from the “2 or B” low that shows a POTENTIAL 3rd wave underway. IF the count is correct, then the 79 level has to hold and is very crucial as it suggest that the 3rd wave should begin …soon and UP we go.

now, we need to drill down one more time frame – that of the 240 minute chart to see what we have going on.  YES, we have a BULLISH PATTERN on the US Dollar at 80.05-80.08.  In order for this entire thesis to be correct, then I believe this pattern needs to hold for the strength in the US Dollar to begin…

PATTERNS fail …they are an EDGE and over time they have been statistically proven to give us an edge.  But, what if this pattern does fail? Take a close look at the following two charts … I have not shown this before, but we need to take into account the 5 wave move down from 121 and the .618 price projection — they are starting to form a huge B wave triangle.  The 5 wave move into the low is a BIG BIG A and then current structure is forming a BEARISH TRIANGLE w/ the ‘c’ portion just completing (due to the exact nature of the .618 price projection) and ‘d’ and ‘e’ to come …also note the purple trend lines.  One forms a head and shoulders and the other is showing the support for the US Dollar since the ‘b’ wave low …

here’s one last thing to consider …. take note of the measured move UP move from the past and what happened after it completed … a bearish omen?

CLIFF NOTES:

• w/ the deflationary forces present, the dollar SHOULD strengthen.  A well formed count supports that and a PATTERN very very close also holds that thesis as correct and positive. The first is the once completing at 80.05 on a shorter time frame and then 79.53 on the daily.  They need to hold – w/ the 79.53 as the major pattern if the bullish thesis is correct.  Remember, w/ our rules we could go all the way down to 79 again so, for all intensive purposes the 79 level is the line in the sand.  We have two symmetrical BUY patterns present …
• HOWEVER, if we lose the 79.53 level THEN it will open up some serious selling.  PATTERNS will then shift to the B wave triangle thesis …
• Last, we have MAJOR patterns complete across the indices and they are “acting” like the double tops that formed in 2000 and 2007. We have the Dow Jones Transports finishing a pattern from the late 1800’s, we have a potential generational low in interest rates complete and PATTERNS suggest one more wave lower in the commodities …

It’s all coming together and one of the circle of life gorilla’s is going to drop their stick of dynamite and big old explosion is going to occur …