Tuesday, September 14, 2010

US Dollar in Deep Doo-Doo by Elliot Wave Price and Time Symmetry

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":