US Dollar Index Gets the Impulse

In our post of 8 January 2022 (which you can revisit at this LINK) we suggested that there was a way that the U.S. Dollar Index could fully develop an impulse upward. That impulse did occur, as per the updated weekly chart below.

US Dollar Index Futures (DX) - 1 Week - Intermediate Impulse

At the time of the January analysis, we used the Elliott Wave Oscillator on the two-day chart and The Eight-Fold Path Method to indicate that as long as tentative wave Minor 4 did not overlap, then one more five-wave push higher could result in an impulse. It did. Although wave 4 did head a bit lower, it did not overlap.

At the present time, the five-waves up are being labeled as an Intermediate wave (A), up. It is likely the Intermediate (B) wave, down, has now begun. As always, the nature of a (B) wave in Elliott Wave can be "any three", including zigzag, multiple zigzags, flat, combination, or triangle. And if wave (B) should become a flat, there could be additional higher highs. Still, one might try drawing a line from ((i)) to 3 and putting a parallel on wave ((ii)), to see if the lower limits of such a parallel are tested.

Please note that this 'impulse' up is currently in contradistinction to the dollar alarmists who suggested that the dollar was about to collapse. Also note that this rise in the US Dollar occurred simultaneous with a rise in Crude Oil prices, again in contradistinction to those who base their views on the correlation of markets - who always suggest that a rising dollar means falling crude oil prices because oil is priced in dollars. That simply didn't happen this time. Why? We could suggest numerous mechanisms, but they are not the point.

The point is that we always count markets independently of each other. 

Sometimes counting markets is frustrating, boring, time-consuming, mind-twisting and a little like doing a crossword puzzle or completing a Sudoku. But unlike these last two exercises, which are also fun, there is little dollar profit to be enjoyed. Wave counting can be different.

Have an excellent rest of the weekend.

TraderJoe