Short Term Trading Member Forum

[techcharter]

Euro Starts Multi-month Wave 3


The long term e-wave count has December 2009 as the all-time high in the Euro. Since then multi-month Wave 1 down ended in June 2010. Wave 2 corrective move ended last week. The debate is open for alt count WAVE 5 ending last week, truncating at 2 degrees, AND ending diagonal at 2 degrees of trend. Both arguments agree the Euro is going to drop substantially over the next year.

http://stockcharts.com/h-sc/ui?s=$XEU&p=D&yr=3&mn=0&dy=0&id=p13907114122

The wave count for the Euro Index shows that from early May 2011 highs to early August 2011 lows a triangle formed. A triangle is a high confidence pattern that only one more wave follows it in the larger degree. The rest of August 2011 was an ending diagonal. Initial confirmation of the top will be when the Euro falls below the 140.90 level. I'm counting the last day or so as the start of a significant bear market in the Euro.

http://stockcharts.com/h-sc/ui?s=$XEU&p=D&yr=0&mn=6&dy=0&id=p76434643972

In my readings this weekend, I came across the answer to the USD- Treasury yield paradox: How can the yield make a huge drop, but the dollar index remain flat as European countries and companies make huge deposits in US banks? The Answer - as I suspected, SWAPS. Using swaps prevents an instant unravelling of the Yen carry trade. Guess What? It's gonna unravel!