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US Dollar Index

US Dollar Index

Aug 122015

The video clip below contains highlights from my Weekly “Counts” webinar from three days ago (August 9, 2015).  Included are portions of my analysis of the Dow Jones Industrial average, GDX, and the US Dollar Index.  ALL of the calls in this video were contrarian against the so-called “consensus trades”, like long dollar, and short gold and the miners.  Maybe that’s why they worked so well.  (-:

Please join me for my Weekly “Counts” Webinar, where I go over all of my Elliott Wave counts and associated Fibonacci price targets for many of the world’s major stocks markets, commodities, currencies, and bonds.  Hurst cycle analysis is considered on almost all items.  A link to the recording of the webinar is emailed to all “Counts” webinar subscribers immediately afterwards, whether they were able to attend “live” or not.  Alternatively, my EWP ScreenShots service provides updated multi-timeframe analysis of the SPX, DAX, Gold, Oil, TLT, US$ (DX), & EUR/USD currency pair twice each week.  All “Counts” webinar subscribers receive EWP ScreenShots as a free bonus.  Many traders and investors have found my analysis quite profitable over the years.

Sid Norris

Elliott Wave Analysis of Caterpillar Inc. (CAT) by Sid from

 Copper, Dow Jones Industrial Average, Individual Stocks, US Dollar Index  Comments Off on Elliott Wave Analysis of Caterpillar Inc. (CAT) by Sid from
Mar 282015

Elliott Wave Analysis of Caterpillar Inc. (CAT) by Sid from  Click on the charts twice to enlarge.

This continues my series on individual Dow 30 components.

CAT monthly 3-27-15

In my main count of the Dow Jones Industrial Average, 1978 marked the end of a cycle (teal) degree wave 4, but in CAT, the sideways movement from the 1970’s continued all the way through to 1984.  From that 1984 low, (shown on the monthly chart above), its easy to see 5 waves up into 2007.  I’ve labeled that rise from 1984-2007 in Caterpillar as cycle (teal) wave 5, and therefore the end of supercycle (olive) wave 3.

CAT weekly 3-27-15

Then, as shown on the weekly chart above, CAT carved out an expanded flat from July 2007 through March 2009.  I’ve labeled the March 2009 low as Cycle (teal) degree wave A.  That labeling was supported by the fact that the following rise into May 2011 stopped going up at just slightly beyond a 1.382 relationship with wave A (teal), a very common relationship between wave B and wave A within an expanded flat.  And until there eventually was a slight new high in February 2012, it appeared very likely that cycle (teal) wave B had ended in May 2011.  That slight new high in 2012 was a big deal though, because it indicated that cycle (teal) wave B was still underway.  Also, because the pattern from the 2009 low into the 2012 all-time high does not constitute a completed Elliott Wave pattern, it appears likely that cycle (teal) wave B remains incomplete to this day.

The slight new high in Feb 2012 also indicated that while the drop from May 2011 through October 2011 appeared at first to form as a 5-wave impulse, that simply cannot be the case.  So I’ve labeled the drop May through October 2011 drop as an intermediate (black) wave A in the form of an blue ABC zigzag.  (It also could have been labeled as blue WXYXZ.)  That was followed by over 3 years of complex sideways movement that I’ve labeled an intermediate (black) wave B triangle, ending in November 2014.  The strong downward movement in CAT since November 2014 appears to be a terminal thrust from that triangle.  That downward movement should finish as a 5-wave impulse, and appears to be incomplete, although downward momentum is currently waning.

CAT daily 3-28-15

As shown on the daily chart above, downward movement from the November 21, 2014 high is interesting because it may have a wave 3 (blue) inside of it that is shorter than blue wave 1 was.  Wave 3 of a five-wave impulse cannot be the shortest of waves 1, 3, and 5, so this may be indicating that wave 5 must be shorter that wave 3 was.  If my blue wave 3 label is placed correctly, blue wave 5 cannot end below 69.69.  Also, notice the possible bullish divergence already showing on the daily MACD.  Downward momentum has definitely been slowing since late January.

So why would Caterpillar stock bottom soon, and rally to new all-time highs over the next few quarters?  Compare the correlation between CAT stock and the price of copper in recent years by comparing the weekly copper chart (below) with the weekly CAT chart shown earlier in this post:

Copper weekly 3-28-15

Both CAT and Copper carved out expanded flats into their late 2008/early 2009 lows, and then rallied to large (primary-degree) tops in the first half of 2011.  Subsequent downward movement in both has been corrective.  It also appears that copper put in an important 18-month Hurst cycle low in late January.  Also note that the rise from late 2008 in copper through early 2011 was in 5-waves.  5-wave upward impulses during that exact period also appeared in several other highly correlated items, including AUD/USD, Hang Seng, Kospi, and Platinum.  That 5-waves up was followed in all those items by a multi-year partial retracement, dropping into very recent 18-month cycle troughs in all, suggesting that many commodities and commodity related items (like CAT stock) may very well be set for a push back into all-time highs over the next several quarters.

If that is to occur, “king dollar” may very well be finished going up, and inflation may be in the every early stages of rearing its head, as the following long-term Elliott Wave interpretation of the US Dollar Index (DX) suggests.  Especially significant (and outlined in red on the chart) is the 3-waves down from the 2001 high into the 2008 low.  Generational trends don’t end with 3-wave moves into a major low, unless it is the 5th wave of an ending diagonal.  If a down-slanting contracting ending diagonal started at the 1985 all-time high in the US Dollar Index, the 2008 low can only have been the end of wave 3 within that diagonal.  Wave 5 to the downside may have started last week.

US$ DX monthly 3-28-15

What does all of this suggest for the US stocks market moving forward?  How about Gold and Silver?  The German DAX?  Oil?  Currencies?  Bonds??  What can or will the FED do about all of this?

Please join me for my weekly “Counts” webinar, where I go over all of my multi-time frame, main and alternate Elliot Wave counts and associated Fibonacci price targets for many of the world’s major stock markets, commodities, currencies, and bonds.  Hurst cycle analysis is considered on almost all items.  A recording of the webinar is automatically made available to all subscribers immediately afterwards, whether in attendance “live” or not.  Also, all “Counts” webinar subscribers receive my EWP Screenshots (muti-timeframe screenshots of SPX, DAX, Gold, Oil, Bonds (TLT), the US$ (DX) and the EUR/USD currency pair) on Sundays, and again on Wednesdays that week.


Elliott Wave & Hurst Cycle Analysis of the U.S. Dollar Index (DX) by Sid from

 US Dollar Index  Comments Off on Elliott Wave & Hurst Cycle Analysis of the U.S. Dollar Index (DX) by Sid from
Jan 052015

Elliott Wave & Hurst Cycle Analysis of the U.S. Dollar Index (DX) by Sid from  Click on the charts twice to enlarge.

US$ DX monthly 1-5-15

US$ DX weekly 1-5-15

US$ DX daily 1-5-15

Using a combination of Elliott Wave and Hurst Cycle analysis sometimes provides expectations that are not widely accepted.  For instance, if my interpretation of the narrowing sideways chop in the US Dollar Index from January 2012 through July 2014 is correct as an Elliott Wave triangle, the strong, relentless upshot in the US Dollar over the past 6 months is a terminal thrust.  Thrusts from triangles are almost always destined to be completely retraced.  To say that this view is not widely held at this juncture is an understatement!  The financial media has propped up one talking head after another for months on end now, almost all jawboning about how to best position portfolios for a relentlessly strengthening dollar.  The attached charts show that based on my unique form of technical analysis (combining Elliott Wave with Hurst cycle analysis), I cannot agree with that expectation, especially now that the thrust from the triangle is nearing several important targets.

Elliott Wave includes a method for estimating how long the thrust from a triangle will be.   I’ve shown that methodology on the attached weekly chart.  Notice that the triangle boundary line connecting pink waves A and C of the triangle is extended backward, as is the line connecting waves B and C (pink) of the triangle.  Then, at the start of wave A (pink) of the triangle, I’ve measured the distance between those two lines as 1284 ticks (shown in red on the chart).  1284 ticks is the expected distance that the thrust from the triangle will travel.  (This technique has produced amazingly accurate results many, many times, although it is not considered an Elliott Wave rule.)   I made a copy of the 1284-tick measuring tool, and placed it at the end of the triangle., starting at the blue B (pink e), end-of-triangle low.  This leaves a thrust target in the US Dollar Index of about 92.58 (shown best on the attached daily chart).

There are two additional price targets very near the 92.58 thrust target.  One is at 92.63, the extreme of wave 4 at one lesser degree.  (In this case, the November 2005 high, as shown on the monthly chart).  Also, within the thrust from the triangle (starting July 1, 2014), there are 5 clear internal waves (1 through 5 pink).  Many times, wave 5 within a thrust from a triangle is extended, and extended 5th waves are most often equal to the net traveled by waves 1 though 3.  Pink wave 5 equaled the net traveled by pink waves 1 though 3 at 91.48.  That target was reached today.

Additional evidence of an imminent top in the U.S. Dollar is provided by Hurst cycle analysis via Sentient Trader software.  Utilizing an analysis commencing at the November 2005 high, the current 21.1-week cycle was due to crest (top out) between Nov 24 and Dec 30.  We are just slightly past that expected topping window now.  Also, today’s price action featured an  opening gap higher, followed by a strong upward continuation, but then an equally strong retracement back to the opening level.  On the daily chart, this created a long-wick doji candle.  Hmmm . .

Sid Norris

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