US Dollar Index and insomnia

Major moves in Forex markets occur in the wee hours of the morning (after midnight) of Pacific Time. The choppy action in the US Dollar Index since 11 AM PST (7-13-10) has been frustrating. Numerous profit opportunity have been missed already in search of 83.5 target which is elusive so far. The trade drags on; draining a lot of emotional and physical energy.

A lot of patience and stamina is needed. Similar to "The old man and the sea". I am most certain that if "The old man" was a trader, he would have been a great one. Perhaps amongst the very top ones!

I for one, need to wait for 83.5 to hit in the next 2 hours. That area is getting pretty close to the correction target. I am not sure if the green back starts to rally from there or it just chops around for a couple of more weeks and then levitate towards 88. Currently the broad market seems to jubilant over Intel's numbers and looks like an opening gap. Is the market getting ready for a last hurrah and then chop lower? It will be known in the coming weeks.

In any case, the greenback is more likely to find its bottom with the market top!

USD

I got to add my conspiracy theory to the mix here! Otherwise life is not much fun.

The "surprise " strength in USD is going to bring the house of commodities tumbling down.

Sorry gold bugs, the time is not ripe as yet.

That in turn is going to bring the equities down.

That means we will have the plunge everyone and their granny is talking about.
And we shall live happily ever after that.

At that point, who would have thunk (well well well..) that the Buck will turn out to be Achilles Heal for the Bulls.

Dollar bottoms up

With all the doom and gloom about the "fiat" currency, US Dollar, it is hard not to get on the trash train and call out for an "alternate global currency". Well, now I know what "they" are smoking or they will need to when they awake from their self inflicted bold illusion.

Lets see the daily chart for US Dollar Index futures. It is obviously bearish for now but I am counting on to a bounce at $75.943 or so. Whether that bounce is just "another" upward correction or the reversal is yet to be seen. But I will dare to be bullish at that level until the market smacks me.

Why? I can count a 5 wave decline that is ending at $75.943 - $75.602. The lower target is achieved by counting by measuring from the real body of the candle. I am assuming here that wave (v) will be equal to wave (i). It the guideline of equality since wave (iii) is longer. Although wave (iii) is not shorter than 1.618 of wave (i). But still the structure looks fine.

Also, notice the jump in volume. Are the minority bulls finally throwing in the towel or it is accumulation? Jump in volume at price extreme is often a sign of price reversal.

BTW, where are the all the Fundamental Analysis folks that proclaimed that since US led the world to recession, US will lead it out! So why USD is so weak. Oh, the printing press theory. Well, it is happening all over the world, especially Europe. Why is cable so strong now?

That is why it pays not to put too much stock (sic) in the popular theories of cause and effect propagated by the Financial gurus.

75.943 is my level and I can count to 5!