Friday, March 13, 2015

[UUP] - dollar mania near reversal. Read this now!

The strength of the dollar bull has surprised pretty much everyone and as a result commodities, gold and silver have gotten whacked.  But the dollar chart has now clearly gone exponential and is heading almost straight up.  Back in Oct 2013, complete fools like Jim Cramer were saying that the dollar is dead, get into gold.  Why they give that fool a TV show I will never know.  He does not realize that he is caught up in the mood of the herd.  All those bells and whistles and loud talk and sound effects attract the weak minded who have not figured out the scam yet.

Conversely, my dollar breakout call was made on May 9th of 2014 within pennies of the exact bottom.  This is the difference between emotion based investing and system based market timing using Elliott waves to massively increase your odds against the other players who are trying to take your money from you.  Never forget it is a zero sum game!  For every winner there is a loser.  Trading shares does not create value, it merely transfers it from the losers to the winners.

In any case we are very, very near a significant top and the best case scenario is that this pulls back to the level of the prior 4th.  It could also head a bit further down to the 38.2 fib.  Assuming, for the sake of being conservative since I plan to play against the dollar using commodities and the miners of them, that this peak is not a C but a 3 (meaning one more move higher after the 4th wave dip), the 4th wave should move very quickly.  Why?  Because of EW alternation.  Two was sideways and complex and therefore the odds favor 4 being a rapid pullback.  Just think what that will do for JNUG folks...  JNUG is options based and options like fast moves over short time spans.

There are many ways this can pull back.  The typical EW analyst will draw parallel lines and then assume a pullback.  However, I have yet another proprietary guideline that falls into the same category as Wx and that is something I refer to as pointers.   Pointers are not part of the EW principle and nobody else I know is using them formally like I do.  They are simple once you see them in action.   I have never discussed this on my blog before but now that I am considering doing a paid charting service I think it is time to expose a bit more of what years of charting have taught me.  Remember, none of these concepts are rules.  They are part of a set of guidelines which can be used to improve odds of seeing the next place that the herd is heading well in advance.

My concept of pointers simply refers to the trend line formed by a double bottom.  If Feb of 2011, we had a slightly inclining double bottom that was likely forgotten by most people as the dollar rallied into May of 2012.  But those pointers were printed on the chart and they have significance forever.  Look how they pointed almost to the exact bottom of 2014 (green arrow).  This happens quite often.  So now look where the recent inclining double bottom points to:  FAR lower than a parallel with the upper rail and that suggests to me that wave 4 could retrace much more deeply than people think.  It could even turn into an expanding wedge where wave 4 overlaps wave 1!  Time will tell if it plays out this time but I will be keeping it in the back of my head as these waves play out.

There are multiple ways to count these waves but all of them converge on the fact that the dollar is very near an important peak.  One way is to step way back and count per the above chart.  But if we zoom in we can get two other obvious counts like this one:

as well as the one below (which will end up being my favorite if the current wave does end up being a rising wedge as it now appears will be the case).

No comments:

Twitter Delicious Facebook Digg Stumbleupon Favorites More