Home > Currencies
Opportunity at THREE Degrees of Trend?
Or, why the U.S. dollar is like a movie monster
There's nothing inherently scary about currencies, yet in recent years the U.S. dollar has been like the movie monster that can't be killed. Whenever someone says "It's Dead!!", the dollar reappears with a vengeance.
And if you're the one who had bet against the buck... what happens next is actually pretty scary.
Movie comparisons aside, the financial press really has tried to hold a funeral for the dollar at least three times in the past five years -- late 2004, early 2008, and summer 2009: "Is This the Death of the Dollar?" was the headline in the U.K.'s Telegraph just a few weeks ago.
But here's the thing. The media's gloom and doom toward the dollar in late 2004/early 2008 lined up with several other sentiment indicators, which if added together amounted to one word: extreme. It's what happens when virtually everyone who's going to sell has done so. It marks the turn in the trend and the buyers take over.
Most importantly, the sentiment indicators at that time confirmed the Elliott Wave pattern in the U.S. Dollar Index. That is why the Elliott Wave Financial Forecast alerted subscribers to expect a change in trend.
As for summer 2009, we may indeed be at a similar extreme right now. A key sentiment indicator in July hit a multi-month low, which lines up with a very significant juncture in the Elliott Wave pattern for the U.S. Dollar Index: a turn that is visible at three degrees of trend.
A chart of the U.S. dollar index (complete with the Elliott Wave count) is in the current issue of the
Elliott Wave Financial Forecast, and up-to-the-minute Dollar Index analysis is in the
Short Term Update. Both publications (plus Bob Prechter's
Elliott Wave Theorist) come with a risk-free subscription to the
Financial Forecast Service.
Click here to learn more.
Tags: