Elliott Wave 5.0 "Reboot"

Sunday, December 20, 2015

US Dollar & Euro Cycle Degree Elliott Wave Count Review: 2008-2015

I have mentioned that I will be using a Cycle degree wave 3 as a bottom for 2008.  I have tried this several times before including every other Intermediate, SC and GSC degree wave count created on planet earth! I have spent many years doing the SC and GSC degree thing and frankly it sucks! 
The higher the degree the more wave degrees are left hidden. Big and tall moves are not big and tall degree levels, as these moves are extended small degree levels. 

All wave counting applied to the US dollar, I have to flip the EWP upside down, or invert it to make any sense at all. Most all other wave counters do not do this, because they give little clues by counting waves in a normal fashion. When they do this, it stands out like a sore thumb to me, but it's oblivious wave counting to the majority. 

What this does is that every bullish phase no matter how big is always a bear market rally with the US dollar index, and that this big bear market rally will eventually come to an end with some type of a 5 wave decline.  The majority of watchers, players and analysts never know that a bullish phase or bearish phase is set to start because all we have to do is go back in history to the 2008 bottom, and look at all the experts that were telling us to get out of the US dollar and into gold or silver. 

What a great bear trap that was, which at the same time brought in a great gold bull trap and a correction.  All contrarian indicators at that time indicated an extreme US dollar bear condition, and the contrarians also knew that a reversal was imminent.  Remember, that the EWP is a contrarian look at the markets, and it should never allow the wave counter to fall into a trap. It is also a good idea to talk about, a major turning early on in the game, because it takes time to mentally change course.  You don't stop a speeding truck on a dime and expect there to be no damages.  

This is where the EWP fails time and time again as many wave counters will never  spend the time to tell you about a major trend change, and you will be left out in the cold as a bull market roars away on you while you are still in a short position. Bragging about any big short plays with EWP means little as it only applies to a small minority of traders. Also, it would be insane to stay short with futures, from say the SP500 top in 2007 to the 2009 bottom. 

In short the big degree wave counters are looking for another US market depression, so where do you think the US dollar traveled in the last depression?  The US dollar roared, making all things cheaper in its buying power.  This has not happened yet, except for commodities general imploding. This has more to do with stock mania than any impending depression that may happen.  Sure, we will get recessions which can be about 10 years apart. 

    Any labeling I use in a US dollar Cycle degree bull market must never go above Primary degree in letters and my largest impulse degree is only a Minor degree run. This would be in a perfect Cycle degree triangle.  If I fudge or cheat or temporarily increase my degree I must eventually come back down and join the sequence. 

 When I see an impulse wave count in Intermediate degree, then I already know that this analyst is in a SC or higher degree wave count. 

I did not fill in all the other 2015 wave counts, as on Friday we are still not clear if a big drop is going to happen. It is a toss up between the last 5th wave up or an "E" wave crash down. 

Either way both moves will have limits and hopefully we can catch these early enough to see it happen.  If the US dollar drops like a rock to the 92 price level then we could see a reversal that will shock us, otherwise one more leg up can happen. My favorite would be an "E" wave crash, ending on my 4th wave in Minor degree.  After this big move which started in 2011 is completed, then we should see a three wave Intermediate degree decline, which may blast right through the bottom trend line.                
This is an Idealized inverted triangle that I use with the US dollar and I will leave it to you to figure out where we may be arriving at. 


The Euro is much the same except the 2012-2014 bump is far more extreme. I see that the Euro has about the same wave count as the US dollar, but this is where we flip the EWP back on its normal side. At this time it sure looks like we can be in a wave 4 triangle and we may blast up to an "E" wave.  If we are really lucky it may resolve itself this year, but I'm not holding my breath waiting for that to happen.  

We are waiting for the squiggles of a Minute degree wave to complete to help confirm a part of a wave count that started way back in 2008. 2008 plus 13 years would give us a potential bear market ending in 2021. Just in time for solar cycle #25 to crank up! Asset classes alternate in repelling and attracting from solar cycle tops and bottoms. In the case of the Euro it seems the solar cycle going down drags down the Euro as well.