Circular Trendlines

Thanks for your input, 1.0000 is a very strong possibility in my opinion as well towards April - May of 2012

Not agree.

thx Kabooj... yeah.. but in the meantime we need short squeeze.

Possible scenario

Here is the view,

We might see some slight approach towards the 2780 region again, but it all depends on how we break upwards above 2740 to do this. If the break is very hard, we probably will be going upwards towards the 2850 region.

But the break upwards should be quite hard to accomplish this, since we dont have much time left for a pole bounce off the black circle to show itself as a authentic pole bounce, price action might decide to do other wise.

The more time that is spent with no hard bounces off the black circle, will imply that price action is shifting its attention to a pole break of the black circle or a shift in direction around the perimeter of the black circle going down.

In such a event we will dip to 2630 and after that we are looking at 2480-2515 as support area.

[...]

Friday was the day the market finally broke its New Year’s resolution to be pleasant and polite. However, the late day strong bounce in US stocks off the lows highlighted the single-minded willingness to buy the dip , that has gripped investors over the last fortnight. Many are now calling for a pause in the stock rally. I have subscribed to that camp.
The trouble with aggressive stock market sell offs(crashes) is that they never happen when you look for them. However , given all the super bullish investor sentiment indicators , the positioning indicators (very low readings of net shorts on NYSE) and the breadth indicators (very low volume rallies), and the layered resistance levels we have reached in S&P, then stocks may have reached a short term zenith. Will GS on Wednesday scare the Financials further after tepid JPM? Will the big USD rally batter corporate profits,and so earnings? 33% of current corporate profits in the USA are from abroad.
I have always been a follower of VIX. It hasn’t always served well, but last April/May , we bottomed at 14%, when the S&P made multi year highs around 1372. We are now at 21(having reached high 40′s over several days in H2 11), despite the incredible headline risk we sit through daily. To me, the difference between the state of the world today and last April is worth a lot more in the VIX , and taking the current low level , with the bounce off the lows in stocks on Friday , highlights how complacent and comfortable the market has become with its positive vibes.
With the USD, I spent nearly all of last year bullish on the USD, even when it was going down. At these levels , I’m not involved. I’m even paying attention to the matters I was ignoring last year in my one way bullish view: super dovish FED, fiscal woes, trade deficits. Most importantly, I’m paying huge attention to the fact that a huge section of the market is now bullish USD and invested in it. Many of these early last year were calling an end to the USD as the world’s reserve currency and that EURUSD would hit 1.70 and that the CNY was going to trump the USD very soon.
One currency that could have a huge swing this week is the AUD. Chinese GDP (Tuesday) and domestic AUD employment (Thursday) will be huge influences .It was so odd to see AUD fly on that bigger Chinese trade surplus print, bearing in mind that it was due to a huge drop in Chinese imports…ie China don’t want your goods anymore. Indeed, the terms of trade(a favoured indicator of the RBA) have moved further away from Australia’s favour.This has been compounded by AUD being given safe haven status vs the EUR woes. The RBA should address this matter next month and the market will continue pricing more AUD rate cuts till the terms of trade are better for Down Under. Still, a couple of robust numbers and it’s all go and we lose the Chinese slowdown story for a while.
Finally Europe. The witch hunt is now on pause. The Sword of Damocles that was hanging over the Nations has now been removed after these downgrades have finally been carried out. Yes, it’s grave and it’s ugly and it’s probably going to cost them more. Oh, and Greece is a mess too. But now , for a while, they will just get on with it and fuddle along in their slow growth , austerity infested , politically inept enviroment. The EUR has come off a fairly long way and all these problems were there many big figures higher, but the market didn’t trash it quickly then (much to my chagrin). There may be a pause or slowdown in the drop here, now that the downgrades are out of the way. There are enough aggrieved countries (including the Germanic Austrians) to turn their media machines back onto the couple of suits at S&P headquarters. Who grades the graders?
I have to be true to my views of reversals. If the market has bought S&P and bought the USD so far this year , then I have to believe, that if the S&P did reverse( and it is an if), then so would the USD on this occasion , due to the knock on positioning liquidation effects. But I will not short the USD, I prefer to sell AUD vs a few currencies instead.
On European fixed income: Naturally, if we get a stock sell off , then the immense flattening will continue. However, i still believe that the 2yr area of Germany is in a bit of a precarious position around 13/15bp . Euribors are tarding on vapour as liquidity measures take a grip on all fixings from EONIA to 3m Euribor. I still think the ECB will not cut next month (ceteris paribus) and will wait until after 29 February LTRO before considering a further refi rate cut. Don Draghi speaks on Monday evening for further clues.
So, there’s enough data and event risk this week to really turn this market whichever way. The upshot, to me , is that the VIX seems too low.

http://www.etfdigest.com/commentary/....html#comments

Its hard to say whether we are going into expansion mode now, but if that is the case then I will be looking at hesitation at the 2800 region. If hesitation does not occur then this time we really have to dip strong and fast.

Overall the behaviour within the 2800-2600 zone on the H4 chart is still pointing to a rewind for a hard drop. The bow is pulling back for a strong arrow downwards.

Dollar is now ready to continue higher within a five wave structure for wave C red. Ratios within wave A red of wave (3) aqua are: wave iii plum has no adequate Fibonacci ratio to wave i plum and wave v plum is .04 longer than wave i plum.
There is no adequate Fibonacci ratio within wave B red for wave c plum with wave a plum.
The trend channel is constructed about wave (3) aqua by making use of Elliott’s channeling technique by connecting the start of wave A red to the end of wave B red and placing a parallel copy at the end of wave A red. We may see wave C red complete at the upper trend line.
At 82.18 wave (3) aqua would reach 1.618 the length of wave (1) aqua and at 82.51 wave C red within wave (3) aqua would reach equality with wave A red. This provides us with a high probability target where we may see wave (3) aqua complete.
Movement below 80.53 would invalidate this wave count as no second wave correction within wave C red may move beyond the start of the first wave.

its all cool but where is the ellipses/circles?


the concept of thread is to use circular s/r not elliot waves. no offence meant - but try to follow Kambooj's subject mate

If dollar starts to decline it means Ben will jump into the game soon. Smarts and smalls made a huge shopping of dollar for this time saving their capital from a major damage in Euro, but if Ben and EU start a silent QE3 capital held in dollar will lose it’s value. Inflating this huge volume of dollar what Ben has now will definitely push Euro higher, also commodities will get further power upside. Also a great business for US to inflate and bust equity market as T-bonds will deliver negative net return, what is again, a great business for Ben. I feel things start to click… We just need to wait for further confirmations and better entries.
Question is when will Ben sow up? Maybe on OPEX day pushing dollar down making a nice bear trap for short-sellers. Today is OPEX wednesday, so price reactions will tell a lot. Surprise again.

ok!

Here is the view...
Up to 2950

Here is my point of view on the USDX....

Daily
This pair failed to break the pole of the blue circle downwards, so it will probably go backup towards 5650/5700 region, where the curved resistance of the black circle is located, and then try to do another pole break of the blue circle. towards 4250

H4
Momentairly resistance could be observed at 5550 region with a bounce back to 5450, but movement will go upwards till 5550. If 5550 breaks then we will be travelling to the pole of the black circle at 5700 zone. For now the straight blue trendline is creating some resistance, which will be overcome soon.

Here is a different view from the hourly chart...

Possible reversal at 2980-3000 Level

Here is the view for M1, to keep eyes on, in case reversal happens sooner than expected.

Price pushing lower to 2860.
Break downwards is happening sooner than expected.

see ellipses/circles? . thank you.

btw: Kambooj gr8 calls as always. GW m8!