Tuesday, July 19, 2011

Dollar Index (DX) Ascending Triangle 7/19

To the left is a daily chart of the Dollar Index (DX). I decided to do a second post to Dolemite's because we get different continuation charts based on the software we use, so sometimes different viewpoints can be seen. After reaching our lows @72.86, we seem to have been forming a strong ascending triangle. Each rally has rejected the lowest fib retracement (shown in purple) of the prior down move and every move down has made a higher low, creating a strong trend line (shown in yellow). Usually these resistance / support areas attract the price and it looks like we might see the dollar get down to the 74.9 area over the next couple days, but in the end I feel this type of formation breaks towards the upside and we will see a dollar rally that can actually break the 38% retracement level around 76.25 and hold it.


  1. Don't mean to disagree with your ending analysis, but my 2 cents:

    -USD tends to move in ABCs
    -move down was not impulsive and likely was A
    -triangle would be B up, followed by C down.

    I know it's not an EW blog, just my interpretation. Keep up the great work.

  2. Thanks for your postings

    What happend to you guys? Taking a summer back? Would appreciate if you can post what trading ideas are front and center of your mind...

  3. Blister,

    disagree all you want, there are lots of views when it comes to technical signals and is probably the reason some people end up saying they are BS. I've tried working with EWs but felt like I think many do that I was always able to come up with a different count each time i looked at the chart again.

    For instance when looking at the dollar index, I do not see the ABC, as I always understood the ABC as a corrective to the 1-5 wave count. I would see a 1-5 wave count down starting with 1 being june-aug 2010, 2 peaking late aug, 3 peaking late oct, 4 peaking nov-dec, and 5 just ending in early may. With that said I would think we would currently be in an ABC corrective with 76 high being an A peak, currently hitting B and would expect a rise to C above 76.

    So yeah, dunno, this is why I stick with what I feel like I can consistently see in a chart with fib levels, divergence, and candelstick patterns but appreciate the comments.