Yesterday I mentioned the “Dollar was remotely in control” and was testing key support. (see post here)
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Above is an update to yesterdays key support test in the Dollar. A bullish wick at support is a little more pronounced at this time this morning, than the same time yesterday morning at (1).
The decline in the Dollar over the past few weeks has fueled a rally in some of the commodity and stocks arenas. The 23% level was resistance for MONTHS and now is being tested as support.
I suspect some Elliott wave experts and fans could label the rally up to the 38% level as wave (1) and the decline to the 23% level as wave (2). If this would happen to be correct, a wave (3) rally to the upside in the Dollar would be about to take place. If this EW pattern/read does come true, holy cow batman….risk assets are in trouble!
What a difference a day makes. The Good, the Bad, and the Unchanged all appear to be breaking out, and support on the Dollar appears to have given out.
@Alex –
Yes, the 3rd wave would be a higher high than wave 2. Wave 3 is also typically the longest wave. Elliotwave.com has some good reference material for free if you register on their site…
This is a very interesting combo setting up. S&P peeking over resistance, dollar sitting on support, and silver near the end of a flag pattern (and looks to possibly be breaking out to the upside). Per your Good, Bad, and Unchanged post, XRT is back down close to resistance, IYM looks like it’s trying to break out, and the aforementioned S&P looks like it’s trying to break out. The next few days should be very interesting, but I would say has more to do with the patterns than the news. Of course, the media won’t report it that way 😉
Hey Chris, exactly my thoughts on the $. I am no Wave guy, so pls enlighten me, my basic knowledge is that Wave 3 will have a higher high than the peak in wave 2, is that what you expect too?