Another Important Juncture is Near
by Dan Stinson
October 29/04
Short Term Forecast - The US Dollar broke out of the 4 month contracting
triangle (discussed in the last newsletter) to the downside in a larger
wave [b] pattern. Upside in wave [c] is still due with a reversal in the
USD that is currently in action or due very soon. The USD has been completing
wave C of wave [b] down with the steep downside since the breakout. Gold
and Silver are completing or have just completed the final waves in an
ending diagonal pattern in wave 5 of wave C of wave [b] up. The reversal
will see the USD move higher in wave [c], while the metals will move lower
in wave [c].
There are a couple of possibilities for the contracting triangle breakout
in wave C for the USD. The downside has either completed with 5 waves
down [preferred count] or the recent downside ended as wave 3 down, so
we would see minor upside in a sideways pattern before one more move lower
in wave 5.
The second chart illustrates an ending diagonal pattern for Gold in wave
[b] as a throw-over.
While we have traced the wave (b) count down for the USD, we also have
followed the wave (b) count up for Gold and Silver. The upside for Gold
and Silver in wave (b) appears near completion or complete[preferred].
Conversely, the USD appears ready to move higher in wave [c] to at least
the 92-93 area. Once these [c] waves complete, there will be some excellent
opportunities for Gold and Silver and many stocks that have dropped significantly
since the beginning of this year.
Just as we used the previous contracting triangle charts to confirm the
direction of the breakout in the USD, we can now use these charts to follow
and confirm the reversal. Wave [c] will be impulsive and will move quickly
once it gets underway (The USD and Gold will both be in wave c). We should
also see Gold break through the lower trendline to confirm. If you are
interested in viewing these updated charts on a daily basis, please see
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Happy Trading!!!
Dan Stinson
Elliott Wave Chart
Site
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