I did another Frankenstein style analysis where I combined Scott Carney's
Harmonic Trader chart patterns with Bob Prechter's
Elliot Wave patterns. Historically the huge drop in 2009 of the US dollar index has followed the Elliot Wave 5-3 (12345ABC) model quite nicely as shown in yellow, which includes fractal (sub-waves) development. Also the chart pattern unfolding now in 2010 could also be a Harmonic Trader
Bullish Gartley or
Bullish Bat formation ([X][A][B][C][D]) which has yet to complete at white point [D]?.
To keep it simple I projected 3 target areas, two based on fibs of [X][A] and an ultimate target which is the symmetric extension of Elliot wave a (small yellow a) where yellow
va=bc? (or white [A][B]=[C][D]?
Target 1. .618 [X][A] = 79.73
Target 2. .786 [X][A] = 77.30
Target 3. 1.618 yellow va where va=bc? (or white [A][B]=[C][D]?) = 74.70 by 10/18/2010
Why must yellow wave c terminate ideally at 74.71? Excerpt from Bob Prechter's eBook "How to Call the Market Using Elliot Wave Principle":
I think I screwed up the Elliot Wave nomenclature on labeling lol, learning...
ReplyDeleteFundamentals also favor dollar to go lower, however it remains to be seen if white [C] can hold as the significant lower high or if we need to make a higher high before going lower.
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