Wednesday, May 4, 2011

5/4 9:00am

The dollar is in a wave 4 rectangle, poised to descend to final low.  This means a probable rally in gold/silver during the decline.  It also means upward pressure on stocks.  SP futures have come back up to the 30-minute M/A for the second time. There is another target beyond the 30-minute M/A which will probably be reached without rallying beyond the 30-minute M/A envelope.  The hourly M/A is right at the wave iv top of 1357 which is where I want to short.

This is equivalent to cash SPX 1360, the cash wave iv top.  This is expected behavior, although wave 2's often have bigger retracements.  The cash SPX counts 5 down for wave (i) and we are in wave (ii).

1 comment:

  1. Good morning, Steve.

    Do you have a target for the dollar drop that you're expecting? And how about time frame, the rectangle looks to be about 5 days wide, so how many days would you expect the dollar to drop once it begins its descent?