Andrews Pitchfork on the US Dollar Index Oct 19

With this morning’s post on the updated Andrew’s Pitchfork tool on the S&P 500, I thought it would also be a good idea to take a look at an Andrews Pitchfork tool of the US Dollar Index (continuous futures contract @DX) for insights.  Let’s take a look.

(Click for full-size chart)

Earlier, I took a look at a possible Elliott Wave Count on the US Dollar index, and this time we’ll take another look at pure (index) price using the Andrews Tool in TradeStation.

Starting with the November 2008 price highs and drawing to the March lows then to the April 2009 highs, we see the following “Pitchfork” grid for the Dollar Index.

I have added the 38.2% and 61.8% Fibonacci numbers to the grid which seem to capture the highs (the 38.2% tine line) of the move down.

Andrews Pitchfork charts help unveil hidden structure, especially in lengthy price advances or declines.

Any move upwards above the 38.2% tine line would be bullish and help argue the case for a potential retracement/reversal up, but until then, price continues to move down in the trend between the 0% and 38.2% Andrews lines.

I cheated a little bit and added the 3/10 Oscillator into what otherwise would have been a pure focus on price alone, but it’s important at least to note the multi-swing positive momentum divergence which has been forming under price under each new index low.

The lengthy divergences adds a bullish flair to the otherwise relentless down-trend.

Again, we’ll keep our eye on any positive push up in the Dollar Index, and until then, this remains the dominant Andrews Pitchfork grid for index prices.

Corey Rosenbloom, CMT
Afraid to Trade.com

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