Black Candlesticks in the Euro and Pound say the Dollar is Alive and Well
Monday, October 26, 2009 | William Kurtz Is this Spam?Don’t believe the predictions about the “Death of the Dollar.” It is doing just fine against the Canadian Dollar and the Yen, thank you; and tall black Candlestick patterns in the Euro and in the Pound are the first evidence of long declines which, in turn, will elevate the Dollar Index to levels which we have not seen in more than a year.
It has been fashionable to decry the decline in the value of the Dollar over the past several months; and the lower it has traded, the louder has become the negativism as the opinion of naysayers has recirculated and reinforced itself while the size of the Dollar-bear baying herd has grown. It is axiomatic, of course, that when “expert” opinion accelerates in one direction to the point at which nearly all participants are of a single mind, their opinion is probably wrong.
That is precisely what has occurred in the case of the US Dollar. In Elliott Wave terminology, the Dollar Index had declined ever closer to completion of a major fifth (and last) Wave Down, so in our view it was just a question of time before the bottom was marked and the Index turned about and began to rise.
The Dollar was already low as against the Canadian Dollar and the Yen, so we kept an eye on those two as probably the first to “break.” The Pound was due for a rebound before it were to fall in a substantial manner, so we determined simply to wait it out until the Pound were to find its own top, and then reverse. The Euro was high, but our Indicators told us that a turn was coming soon.
Here is what has happened: The US Dollar has, in fact, advanced very nicely as against the Canadian and as against the Yen, and those advances continue apace. The Pound did make its top, as forecast, showing a bearish tall black Candlestick, and has turned strongly down; and the Euro has now topped and reversed to the downside, also as forecast, also in a strong bearish black Candlestick.
The upshot, of course, is that the Dollar Index is making a strong recovery, while displaying bullish tall white Candlesticks. We expect to see the Dollar Index at 85 or better.
We knew it was coming. We knew it all the time.
William Kurtz
October 26, 2009
http://www.candlewave.com
