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Monday, May 24, 2010

Elliott Wave Update ~ 24 May [Update 8PM]

[Update 8PM: There are only so many ways to count the dollar.  I'm open to other possibilities as its unfolds.  So using base channels and acceleration channels, it is starting to take shape.

However one perhaps important thing I thought about since this weekend is that since we suppose the dollar is in a primary wave [3] higher, then, as I mentioned this weekend concerning the stock market, the first Intermediate wave (1) of [3] would be to reach a new price high over the previous Primary [1] peak.  It seems to be headed that way.
Long term I only say that if the market can go back to 1984 stock prices, than the dollar is capable of going to its 1984 price too.  At the very least, the 2001 high certainly seems reasonable.

[Update 5:30PM: Possible variation on a triangle which means today's highs would stay intact regardless. The e-minis don't support this as they are breaking further down as I type.]

The high today maintained within the rules of a contracting triangle.  So the primary count that this is a wave (iv) or iv, is intact.  A wave five should be less intense than wave threes, so if new lows are achieved under these conditions then expect a sharp rally. The 200 DMA and/or the gap above could be a rally target. But that might be getting ahead of things.. 
If the market makes new lows under 1055, we would look for less intense downside market internals (expected since it was so intense on Thursday) and most likely some positive divergences in a lot of indicators including the NYMO to confirm a wave five of some degree is occurring. Then a retrace up of the entire 5 waves down from 1173 high should be next.

If in fact any selling matches Thursday's downside intensity, then something else may be going on.

So we are looking for a new low under 1055 prior to any higher high above 1095 (if that were to occur).
The e-minis is channeling nicely. The wave (iii) down also breaks down nicely into a 5 wave internal structure. Just need that one more low...
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