Market Update, 2009.08.18 (UUP)

18. August 2009
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UUP Daily: (Bullish Dollar Index) Prompted by reading some articles about how Robert Prechter (Elliot Wave guru) is becoming bullish on the dollar (when everyone else seems to be bearish), below are a few charts.

Wave 3 came in exactly at the 1.272 fib projection of Wave 1.  Wave 4 was exactly 0.786 of Wave 1 (which is also a 0.382 retracement of Wave 2).  Sometimes when Wave 2 is "complicated and larger" it implies that Wave 4 will be "simple and smaller".  This is exactly what we are seeing here.  As we hit new lows for Wave 5, we saw divergence on the 3/10 Oscillator (red lines). This implies the down move may be ending.

 
 
Wave 5 was very close to the 1.272 fib projection of Wave 3.  The AGET Osc (5,35) also showed divergence. as Wave 5 came in.  Is is also very obvious that the Wave 5 movement has lost a lot of the momentum it had when putting in Wave 3 due to the angle and speed of the downward movement.  This implies the bears are losing steam.
 
 
 
Based on the charts above, this would imply a rally from here. So far, we had a pop off lows and a 50% retracement, which is now nearing the near-term target.  However, a further rise to 24.80+ may not be out of the question.
 
 
 
 

Market Update

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