Wednesday, August 8, 2012

Dollar Index critically poised!

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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