Bullish Elliott Wave Fractals on the US Dollar Index Oct 18

There’s very interesting internal wave counts on the US Dollar Index shaping up right here.  Let’s take a quick look at a potential Elliott Wave daily count on the US Dollar Index:

What interests me about this count is the internal divisions or fractals of each larger-scale wave.  This is just a fractal of the larger picture, but follow price’s 5-wave move down from the 2009 highs shown here to the recent lows.

Not only do we see a blue 5-wave decline, but I’m showing the fractals that comprise each of the blue waves… and the most recent fractals have their own internal five wave patterns.

The quick implication is that we need to keep watching the US Dollar Index very closely for any signs of life to clue us in that the 5-wave fractal move may be complete.  A break above $78 would be a confirming variable that could occur soon.

Also, notice the lengthy multi-swing positive momentum divergence that has set-up under the price action, which serves as a momentum non-confirmation of the lower prices.

This chart, and deeper analysis, is pulled from this week’s “Weekly Intermarket Technical Report” which is a 22 page multi-market, multi-timeframe analysis of the 10-Year Note, S&P 500, Gold, Crude Oil, and US Dollar Indexes.

I mentioned in the report that we’re seeing a distinct battle between the basic/introductory technical analysis vs the intermediate/advanced level analysis - more specifically from “the trend” (clearly bearish) vs a 5-wave fractal decline into a lengthy positive momentum divergence (hinting bullish or at least a non-confirm of the downtrend).

Fascinating cross-roads.  Let’s watch this development very closely in the weeks ahead.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade