October 29 2008 The upwave in the dollar has ended for the moment. Traders will be out or short. Investors should be watching for the downwave. We don’t really give lessons in these posts, but investors should be aware that upwaves are followed by downwaves, which when exhausted serve as basing points for stops. Trend followers do not attempt to jump in and out of the issue. The stop is 5% under the consolidation in October. Markets in general are so squirrely right now that all analysis is subject to second guessing by long experience. Nonetheless we think right now that the correction in the relationship of the dollar to world currencies has begun and will be long lasting.
The signal is the long black downbar followed by a gap. We should see anything from several days to 10 days of downwave. (Wild guess.)