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October 27, 2004

Elliott Wave Analysis on the USD: Another Important Juncture is Near
by Dan Stinson

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 the registration details below.

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To learn more on the status of Gold, Silver, HUI, XAU, and the USD, please visit the link below for registration details.

The commentary and forecasts are updated daily, including intraday commentary and chart updates. Fibonacci pivot dates and cycle analysis is also included. The indices covered are the NASDAQ, DOW, S&P 500, Gold, Silver, HUI and the XAU. Additional charts cover the Nikkei, US Dollar (USD), 10 Year Treasury Note (TNX), IBM, Nortel, Microsoft, Ballard Power, Celestica, ATI Technologies, Biovail, Bema Gold, Newmont Mining and Agnico Eagle Mines. Registration Details

Happy Trading!!!

Dan Stinson
Elliott Wave Chart Site
ewavecharts.com

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