US Dollar Index – August 14, 2023

One of my first teachers had an amazing saying and it’s one that has stuck w/ me for 15+ years. When your trading/investing – you might not realize it – but you truly are playing with giants. The amount of money flowing right now, not even while the NYSE is open is mind boggling. And here we sit, w/ our mouse at the ready and, basically, playing Cowboys and Indians as we click to enter here and then click to put the stop in … bang bang, you’re dead! LOLOLOL … man, wonder if the kids and even play that now? For those of you in the late 40’s to mid-50’s club – we had the LAST real childhood. Shoot, I STILL have my bigwheel scar on my knee. what a WRECK that was and one of my best friends, David R actually went UNDER a car as it was driving. Not a scratch … anyway, I digress.

So, I use PATTERNS to look for inflection points and then try and manage risk and put a position on …that’s my version of Cowboy’s and Indian’s …

But what Mr. Dinapoli said was “when you enter the markets you enter the world of huge gigantic gorilla’s … pause … and they are locked in a cage w/ you …pause…and they are carrying dynamite …pause …and they dynamite is LIT.

Below is my interpretation of Gorilla’s, in our cage (locked OBTW), carryingy lit dynamite:

And we can also make note that China is DUMPING our bonds and blah blah blah. This is the backdrop folks. Until we have a PATTERN (remember: work or fail) then this is all just conjecture … but the USD is on the verge of a breakout that could get it soaring. I can see why it stopped today and I would like a nice orderly pullback to get short some EURO but I really don’t know if that will come.

I don’t think one billionaire is reading this blog right now (if you are, we could use some donations for the next SUP Vet retreat if you’re out there) so it’s mostly just you and I (Joe Retail) playing Cowboy’s and Indian’s.

Either way … might be time to tighten stops, ask yourself how much you want to be drawn down in your 401K and make some adjustments.

Or … not.

US Dollar Index – July 26, 2023

Well, we are hearing (once again) about the death of the dollar as the worlds reserve currency and all that … that will probably happen but not just yet.

Either way, we have hit a VERY important support level on the USD. Measured moves make the world go around … we hit the measured move, the long term polarity trend line and a butterfly buy. Exactly.

So, little bit of a judgment day for the US Dollar. I find it hard to “see” that the down more is over simply based on “balance, form and proportion” BUT this could be a MAJOR low in the USD. Go figure …

I’ll wait for the first BUY PATTERN to emerge and see how the dollar reacts to that …

For now, watch the downtrend line from the old high .. a breakout (daily close) above that trend line will be a good hint that probability is shifting to a big dollar low.

For now – the patterns worked – but I’m going to watch and see how this plays out.

I’m currently LONG the USDJPY via an ETF so a strong dollar doesn’t necessarily fit the USDJPY narrative I’m working w/ .. even though the USDJPY is only 14% of the USD Index (majority weighted in EURO) it still has more weighting that the USDCHF and the GBPUSD. So, this is an interesting one – for sure.

S&P 500 – April 09, 2023

Last post on S&P 500:

All eyes remain on the USD. we have a large target looming a little lower.

That being said, we are approaching a very critical time from a cyclic perspective. We have also completed a “valid” SELL pattern on the SPX. So, we either start down early this week or we blast thru the pattern higher into more targets.

Either way, I DO NOT think that the market is done going down. We have more waves lower … the timing will be dependent on the US DOLLAR and the PATTERNS present.

US Dollar Index and Euro … come to papa!

here is the EUR vs USD. note, a pretty wide band of target zones and when working w/ FX that’s just too much risk …

so, a majority of the USD Index is made of Euro so what is the USD doing and we can use that as a mirror image …man, what a target zone on the USD!

FX Currency update

last post on US Dollar Index:

well, it’s certainly getting interesting.

watch the levels shown on the GBP and the EURO and USD Index to get a feel for what might be coming this week.

IF we hold these levels then expect dollar strength .. EURO and POUND weak.

IF we FAIL on these sell patterns for the EURO and the POUND then the dollar will take a pounding and go right into the level we have been waiting for what seems like a LONG LONG time … stay tuned tonight.

personally, WAITING and have a “hunch” that the levels will fail (USD weakness) and go forth and attack the lower level shown on the USD Index which is the SAME level equal to EVERY move lower in the USD in the past 30+ years. worth waiting for … don’t you think?

USD Index – close to a BIG move UP?

if you have been following my blog, you’ll remember the big measured moves that were around when the dollar was carving out THE low. they have appeared/are appearing again. w/ a wrinkle … using “basic” monthly cycle tools you can see that we have a BIG cycle coming in this month which lines up w/ the measured move target zone a little lower in the index. this could be a BIG DOLLAR MOVE higher ….

below you’ll find the chart that started the dollar bears growling and stopped the dollar bull in it’s track. the form, proportion and balance are amazing and exact. take time to study this chart

the time and price symmetry of the latest high on the USD Index

since then, the USD Index has basically been carving out what looks like a flat correction and then higher … you can read prior posts to see if this was an A-B-C correction or 1,2,3,4 (in work/finishing) and then higher in a big 5th wave. we are getting a little below the end of wave 1 which breaks a rule if your a purist but it sure looks like we are bottoming. then, the last chart is an intraday chart showing a possible mathematical derivation of wave length based on fibo relationships that could get us into the target zone … so, stand by, as this is a BIG level coming up on the USD.

notice the dashed black and blue arrows, they are exact measured moves and then note the long term cycle that is hitting this month

2 hour intraday chart showing wave relationships that could get us down into the target zone .. used equality of wave 1 and 1.618 wave 1 to project.

the USD Index

One of my favorite pastimes is to look at everything in the context of the circle of life – fixed income, equities, commodities and FX.  By far the largest and most liquid, the FX market is the real “elephant in the corner”  and drives a significant share of the moves we see w/in the entire trading universe.  

Attached is the dollar index and a possible count showing the high at 84.76 finishing a 5 wave sequence. The “a” “b” “c” correction unfolding is, still, a bullish correction and one that should find support in the 78.72-80.15 region. The key w/ this chart is the blue “measured move” correction w/ regards to time.  Technically, we still have to next week where time and price would be equal. That level is 79.34. Additionally, once we have completed this 5 wave sequence, the corrective move is usually down to the beginning of the 4th wave of a lesser degree. 

The only issue that I can see w/ this count is the extended third wave (green). One of the rules of Elliott is wave 4 cannot overlap wave 1 and you can see w/in the fractal of the wave 3 (green) we do have some slight overlap of 4 and 1 (white).  In the FX world,  I consider this negligible and the subsequent 5 wave rally is orderly and nice.

Last point – I’m seeing the top in/around the 84.76 area as 1 of 5 to come ….stay tuned, if this count is correct the dollar will take off.  

August 20 2013 US Dollar

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