Tuesday, August 30, 2016

Potential Triangle Update and US Dollar Index

Here is the S&P500 hourly chart updated for the potential triangle count. First, we want to note that all gaps, but one (shown with red circle) are currently filled.

S&P 500 Index Hourly - Potential Triangle Count

Second, we have not ruled out that the (b) wave of minute-d (circle-d) can't go lower, just that the timing of the potential triangle favors that it is likely over.

Third, in order of preference we have these scenarios and the rationale.

  1. Triangle - still working out as expected.
  2. Impulse - Nothing rules out 1, up to 15 Aug, then 2 down to 26 Aug
  3. Truncation - insufficient downward movement as of this point in time.
Lastly, we take note of a US Dollar Index which may have started a wave 3, upward, after it's 61.8% downward correction. It may head at least to the upper Bollinger Band before a retrace, or even higher depending on the employment data. This may give oil and gold some headwinds.

Daily US Dollar Index - May be Headed into a Wave 3, upward.

The Dollar has all of it's gaps wide-open at this point in time. Still caution is needed as volume remains "summer light" in many instruments.

We wish you the best in the summer choppiness.


  1. Thanks TJ. If this is a running triangle then it favors more upside for the market?

    1. Yes. IF a running triangle completes properly then, it would likely have a target which is the width of the triangle. Just be aware that we can see scenarios - some of which we have outlined - where the triangle does not complete properly.

  2. TJ, can you give me any info on the live chat room?

    1. Hi Steve. Send me an email at Elliott_Trader@yahoo.com and I will forward you the details. Thanks.