Please refer our earlier post on Dollar Index. It was published in Jan 2012. I tried to mark both bullish and bearish counts on DI. Right now we are critically poised
between the two possibilities. The reason for this is, we have completed
clear 3 wave move from the bottom formed in DI in first half of 2011
between 73-72 levels. Now as per our bearish counts below we may have
completed the last wave E of {B} of the long forming triangle and may
just be ready to move down, in a thrust from the triangle. This will cause DI to move much lower from current levels, please enlighten me with economic implications in this case.
Alternatively, bullish count on DI, lends itself to a I-II/[1]-[2] wave
count, now as bearish as the chart below is, this count is equally
bullish. All depends upon how DI performs in the near term. If this
current fall in DI is arrested around 81.50-81.00 levels, and the up
move resumes above the 84-85 levels, we may be pretty sure that the
bullish count is in play. But if this fall continues below 79-78 zone,
the bearish count will take precedence.
Again
this analysis is on a very large fractal, so patterns may take
considerable time to form. But till we cross either 84-85 band on the
upside, or 79-78 band on the downside, the bets should be kept small and
for short durations only.
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