The third up wave in the U.S. Dollar Index is a very non-proportional 4.236 wave caused directly by the Federal Reserve's "new idea" to hike interest rates to control inflation. The three-day chart of the U.S. Dollar Index Futures is below. I have observed the Federal Reserve when they made me pay as much as 15% for a home mortgage (no kidding, under Volcker), and I have observed the FED when they allowed some people to pay only 3.25% for a mortgage just within the last two years. I have observed the FED when a 3 + 2 home with a garage cost $100,000 in a nice neighborhood, and when a similar house now costs $550,00 in a similar neighborhood.
Their activity can only be described as insanity. It is useless. It is needless. It keeps all the financial markets on edge. It amounts to constant over-correcting. There must be a better way to help stem boom-bust cycles.
With a Fibonacci 144 candles on the chart, the Elliott Wave Oscillator has made a peak and is currently on some lower highs. As of this time, the wave is not travelling in a strict parallel but rather an expanding pattern.
If the wave we are in now is a Minor B wave, then it might be time to start looking for signs of at least a corrective wave that alternates with wave Intermediate (2). The reason the chart is counted this way is that every internal correction can be counted shorter in price and time than Intermediate (2).
There can be no guarantees, but a 4.236 wave is nothing to sniffle at. Unlike some other Elliott analysts, I do not dismiss the activity of the FED from moving financial markets, regardless of my opinion of the utility of the FED.
Have an excellent start to the evening,
TraderJoe
thank you, DXY has suddenly become a very popular topic and I do think a pullback comes soon.
ReplyDeleteUSD - A supplemental view -
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Hi TJ,
ReplyDeleteWanted to ask why recent peak would not qualify as Wave 5 ? Latest correction is larger than Wave 2, which Waves 4 usually are, also stopped at exactly 23.6% ret. from Wave 2 .
Thanks,
Sam
Hi Simon - It's not that it doesn't or can't. That would be a great 'alternate'. But as per The Eight Fold Path Method (the Featured Post in the upper right hand corner of the main blog page), with ~140 candles on the chart, the Elliott Wave Oscillator should be allowed to retest the zero line of the indicator, and possibly make a divergent high. If it does this, then we would have 'higher confidence' of a (5th) wave at the higher high. It's all probabilities, but The Eight Fold Path Method is the one I have found to provide the 'highest' probabilities consistently. Keep that alternate in mind, tho.
DeleteTJ
Thanks TJ
DeleteSPY (30m) Yesterday's reg div (hidden) has reached conservative target -
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SPY 5-min: IFF we are making an impulse upward, then since the retrace was less than 38.2%, then wave three 'should be' shorter than wave one. So far so good. However, if equality is passed in this wave, without a notable wave four, then perhaps the up count is a-b-c.
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Very short term stuff here. Stay tuned.
TJ
DX futures - daily - here is the exterior retrace on the U.S. Dollar Index futures as of this morning. Spot on 1.382, and 'typical of a B wave', so far.
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TJ
SPX - Stocks above 50ma
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SPY 5-min: there is downward overlap on the shorter iii, allowing this to potentially be a fourth wave, iv.
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The count provides alternation in shape between iv, and ii, and a longer fourth wave in time than a second wave. Further, there could be a v < iii, up, tomorrow.
TJ
SPX & A/D Line - A tale of two lines -
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ES - dly- Double close key reversal day.
ReplyDeleteAll - good morning - just be aware FED Chair Powell is speaking this morning @ 09:00 ET according to the economic calendar.
ReplyDeletehttps://www.youtube.com/watch?v=fVSmA30qWu0
TJ
SPY 5-min: this slight alternate follows the guideline for an extended first wave xi, as we were working on yesterday. Powell's talk appears to have kicked off a correction of some type. Everything is being chopped to bits. Be careful.
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TJ
A new post is started for the next day.
ReplyDeleteTJ