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This has been my model for several months now and so far there is nothing to suggest

Dollar Index (Weekly) anything different. The “b”-wave lasted 54 trading days, so an 80+ day “d” wave might be
nice “alternation.” So far, we’re only half way there, so perhaps this “d” wave persists until
early April. The minimum objective of this pattern would be 81.70, for 61.8% of “b.” A
decisive break of 81.70 would open the door to 83.71, the 78.6% of “b” target. Interestingly,
“b” the 61.8% retrace of “c” comes in at 83.78, so we may not see any strong selling until 83.70’s
89.62

(A)

“d”
Z
81.70 or 83.71?

y
x

w
x
x
w
77.69 “e”
“a” x (B)
y

74.33
z of “c”

There is compelling evidence that we’re in the tail end of a triangle (B)-Wave. The “a”-wave was an “elongated
flat.” These patterns exclusively show up as legs in a triangle. The “c”-wave is VERY difficult to classify as a “five,”
therefore it must be a correction, which supports a triangle idea. Lastly, the “c” was almost exactly 138.2% of “a”-
wave, which is a nice Fibonacci relationship required in a triangle.

Andy’s Technical Commentary__________________________________________________________________________________________________


Dollar Index Mar Futures (Daily)
I had to use the “futures” on this chart vs. the
$DXY because of a problem with the $DXY y
candlestick on Friday. -c-

w
-c- -a-

y
-b-
w

All three legs of -b-


wave were corrective.

-a- x
-b-

The initial move up, the w-wave, is difficult to describe as anything other than a three wave
advance, thus it must be corrective. Because the subsequent correction did not retrace
more than 60%, it must be an x-wave. This is why I’m obliged to stick with this count. The
market is getting close to the top of a potential trend channel now, so some sort of
congestion, or pullback, should be expected. This idea of imminent congestion is give some
credence by the late Commitment of Traders for the Euro (see next page).
Move
Begins

Andy’s Technical Commentary__________________________________________________________________________________________________


When speculators decide to get “out” of market, they don’t waste much time. Observe the mass exodus out of Euro the last few months.
Speculators are now holding their largest net short position in the last several years. It almost looks like a “five wave” move down! The
takeaway from this chart is that sentiment has clearly reversed, and has done so very quickly. This sort of quick “rush to the exits” will
usually lead to some sort of countertrend rally or “dead-cat bounce.”

200000

Net Speculative Length of Euro


(CME Futures Contracts)
150000

100000

50000

-50000

-100000

7/7/2008
1/7/2003
4/7/2003
7/7/2003
10/7/2003
1/7/2004
4/7/2004
7/7/2004
10/7/2004
1/7/2005
4/7/2005
7/7/2005
10/7/2005
1/7/2006
4/7/2006
7/7/2006
10/7/2006
1/7/2007
4/7/2007
7/7/2007
10/7/2007
1/7/2008
4/7/2008

10/7/2008
1/7/2009
4/7/2009
7/7/2009
10/7/2009
1/7/2010
Andy’s Technical Commentary__________________________________________________________________________________________________
y?
Dollar Index (180 minute) ~ “Alternative unorthodox model” -g-

Since the lows in mid-January, EVERY leg of this market has been “corrective” in nature. I
cannot easily count anyone of them as an “impulse.” When I see these sorts of things
develop, I’m forced to open my mind up to some of Neely’s concepts on “diametrics,” seven
legged corrective waves. If this is the pattern at hand, we should expect a 4-5 day f-wave -e-?
[19]
correction followed by a 4-5 g-wave concluding wave.

-c-
[32]
-f-

-a-
[17]

[19]
-d-

[21]
-b-

Some of the “rules” around Diametrics:


1) Every wave is a correction;
2) The various legs take a similar amount of time, though one leg is usually a little short
76.94 while another leg is a little longer. The numbers in brackets above represent number of
x periods each wave occupied;
3) The g-wave will be shorter than the e-wave if the -c- was shorter than -a-, and vice-
versa.

Andy’s Technical Commentary__________________________________________________________________________________________________


Dollar Index (Daily)

The move higher that began in 2008 was not an “impulsive” pattern--it was a corrective
intermediate (A) Wave. The model presented here has been my preferred count for a
“b” few months now. It looks like there is finally a completed wave down from 89.62. The
89.62
move best counts out as a “complex correction.” This suggests that we’re in the
(A) middle of an Intermediate (B) Wave triangle that still has two more waves before
completion. Once the (B) is complete, it should set the stage for a powerful (C).

-b-

REPRINTED 12/15/2009
“d”

-a-
x

-b-

-c- x “e”
w -b- (B)
“a” -a-
-a-
(2)
(4) -b-
-c-
y
-a- (1)
(5)
(3)
-c-
z of “c”
Andy’s Technical Commentary__________________________________________________________________________________________________
Dollar Index (Daily) Wave “c” has ended and we’re are now in the middle of wave “d” of a
larger triangle. A good target for the “d” would be 81.70, which is
61.8% of the “b” wave. (As with most triangles, the alternating legs
will be related by a Fibonacci number.)
“b”
89.62

(A)
-b-

“d”
-a- 81.70
x

-b-
w/a

-c- -a- x
77.69 w -b-
“a” “e”
-c- x/b (B)
y -a-
74.33
-c-
REPRINTED 1/17/2009 z of “c”

Andy’s Technical Commentary__________________________________________________________________________________________________


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