USD update

The USD has already approached a critical juncture in its bull market. The wave pattern from the 1985 all time high still looks bearish. And the pattern from the secondary 2001 high could be counted as long term bearish as well. Until 92.63 the 2005 high, is significantly exceeded, there is a potential for a failure and the end of the recent one year bull market. When one reviews the OEW patterns from 1998 we observe a three year decline then a one year rally, followed by another three year decline and one year rally. The two three year declines contained exactly the same wave structure, a quadruple zigzag. (see page 11, 6th chart down in the link below). This is why is was not too difficult to identify the March 2008 bottom in the USD. Now we are again at a similar crossroads, as the one year patterns also contain the exact same wave structure of their own, (same page same chart). In fact, negative divergences formed at the recent high, just like in 2005, and the USD has already started downtrending. Finally the USD started to selloff a couple of weeks after the last G-20 meeting, (see page 11, 5th chart down). The next G-20 meeting is scheduled for April 2nd.
There has also been some talk that the IMF will begin to play a bigger role in international monetary affairs. Also, that their currency – Special Drawing Rights – may take the place of the USD as the worlds reserve currency. Plans are often made and then modified as events unfold. OEW, however, suggests the USD is quickly approaching a critical juncture in its wave pattern. Plus the actions by the FED/Treasury over the past two years have certainly dramatically increased the number of dollars in circulation worldwide.
Based upon the wave structure already noted on the charts. Plus, the noise coming out of the pre-G 20 meeting, and rhetoric leading up to the April 2nd meeting. It does appear the USD may have ended its bull market. We placed an X at the recent high to suggest that another three year ABC downleg is likely to follow. This could have long term implications on Consumer purchasing power in the US, Currencies worldwide, Gold, and eventually Bonds.

About tony caldaro

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90 Responses to USD update

  1. Viral says:

    Thanks Tony…i really appreciate it n keep up the good workregards,Viral


  2. tony says:

    Hi Viral,Praveen handles the Sensex, and he had noted that possibility.Waiting for him to get back to me on his findings.


  3. Aureliano says:

    I wonder if they would have had a time machine at Dubai World so I could go trade 1938…


  4. Chrys says:

    S2 – here\’s another: The 1938 market recession mirrored onto today\’s decline is eerily accurate so far.


  5. Impulsive says:

    Chrys, I guess I could use 1440.24 as the beginning of the move as the substitute for this chart? TIA.


  6. Aureliano says:

    huh, missed my stop by .01. Still own \’em.


  7. S2 says:

    If SPX stays in the 813-822 area into the close, there will be a 3rd setup since March 6th for a gap/drop down at the next market open. I\’m looking at my 15min RSI (55) stting narrowly above 50 with other indicators trying to rollover again. A solid break of RSI 50 usually indicates a C/3 wave. The first 2 cases failed bouncing off RSI 50ish for continued rallies, but 2-3 bounces are typical in strong trends. Below 810-813 into the close would likely be continued Monday.


  8. Aureliano says:

    I can\’t believe I\’m going to get chased out of TIP on a no-trend signal as well…. flat for the weekend


  9. S2 says:

    Thanks Chrys! I assume you are relating this to my 200dSMA analysis where 1938 was the only real exception. The 5-wave, nearly 50% drop from 1937 offers some intriguing similarity. I\’ll study it more at some point but there\’s a lot of room up to the 200dSMA in any case…assuming the next big drop holds up at or above 734-789…whenever that big drop may be.


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