Traders' Library

What The Dollar’s Doing—and Why it’s So Important

By Jeff Greenblatt 

 

Those of you who are familiar with my work know I’m a serious proponent of the time element of technical analysis. In the past few months we’ve done some serious work with the US Dollar. Since the movement of the Dollar is so vital to the movement of the stock market, it makes good sense to really understand what the Dollar is doing.

 

Since the crash, the Dollar and equities have been moving in an inverse fashion. It hasn’t always been that way and at some point in the future it won’t be that way again. But in the past few months the relationship has started to decouple. On any given day, the Dollar will still be up as the stock market is down. But if you’ve noticed both are higher since November. But as I’m writing this, the Dollar is up on a day the market is down.

 

So why is it the market is so frightened of a strong Dollar? In simple terms, the market fears deflation. One of the conditions necessary for a serious deflation is a huge debt burden. As a country, we have it but as consumers we also racked up billions in what became known as the sub prime mess.  The problem is that much of the real estate debt that was put on the books materialized between late 2003 and 2007. As we know it was an easy money era where the Dollar steadily depreciated and was trading in an approximate range of 90 to 81 during that time.

It also turns out that the 90 handle is the 38% retracement of that bear. I’ve done a presentation in Chicago which became my Harnessing Explosive Moves DVD where I did a study of 38% retracements (among others) dating back to the Great Depression. What I found was that in any time frame, once the action takes out 38%, the probability greatly increases for a move up to 61%. In the case of the Dollar that would be 102. It stands to reason that if you financed your house with easy Dollars, it’s going to be much harder to pay it back with a hard Dollar that’s trading over 90.

Why the Market Refuses to Have a Serious Correction

by Jeff Greenblatt, author of Breakthrough Strategies for Predicting Any Market

We have a very interesting market, which is all over the map. It has mostly been up as this is a market that refuses to have a serious correction. Why? It is simply because the US Dollar refuses to stay up. In October, the Greenback had its very best chance to stay up as it even surged beyond the upper descending channel line which normally indicates a larger move is in the cards. But the Dollar spent 3 days retesting the channel line from the north side during the first week of November before faltering. By the time this article was turned in, the Dollar was once again beyond the channel line.

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Review of Jeff Greenblatt's Breakthrough Strategies for Predicting Any Market

Enjoy reading this review from Seeking Alpha contributor Radu Haraga about our author Jeff Greenblatt's book, Breakthrough Strategies for Predicting Any Market: Charting Elliott Wave, Lucas, Fibonacci, and Time for Profit. This was one of my first editorial projects here at Marketplace Books and one of my proudest accomplishments. I hope you pick up a copy and check it out yourself.

http://seekingalpha.com/instablog/375714-radu-haraga/26456-a-book-review-jeff-greenblatt-s-breakthrough-strategies-to-predicting-any-market

*Keep in mind that we do not solicit reviews from Seeking Alpha. Their contributors ask us for review copies and we send them out. What they write after that is completely up to them.... Thanks!!

Is it a 4th Wave? What do Jeff Greenblatt and history say...

by Jeff Greenblatt, author of Breakthrough Strategies for Predicting Any Market and several ground-breaking DVD courses. His website is www.LucasWaveInternational.com.

Tech is beyond the 50% retracement. I thought it would be time to take a short look at history and see what has materialized after past debacles. I’m purposely leaving out instances that were new bull markets; after all, we do have the luxury of hindsight. We know the period after the 2002 bottom led to new highs. But I thought we’d go back to the late 20th century and look at the end of other important bear markets and see what happened.

Examining August with Fibonacci, Gann, and Lucas Numbers

by Jeff Greenblatt, of Lucas Wave International

August can be a pivotal month in the year. In 2004 and 2007, it produced important lows. Granted, the one in 2004 was more important. In 2000 and 2008 the highs which materialized led to significant sell offs. We should not forget the big top high in August 1987 which needs no introduction. But here’s a significant statistic I’m sure you didn’t know. The bottom in March is 1125 weeks off that 1987 top. The 1125 figure is a half of an important Gann angle (22.5) which is half of the all important 45 degree angle. This is another key factor in determining how important the March low really is.

Meet Technical Trader Jeff Greenblatt

Jeff Greenblatt author of Breakthrough Strategies for Predicting Any Market

How long have you been trading?

I’ve been trading since 1999.

What do you trade in your account?

I used to trade a portfolio of stocks but I was introduced to trading the Futures market on the NASDAQ. I got hooked on it and now trade Emini exclusively. I trade intraday on the NQ (NASDAQ) and YM (Dow).   It works much better in this environment than waiting for swing trades that don’t seem to want to materialize.

Who is the professional trader (or traders) you admire most?

I began my career as an Elliottician but discovered Steve Nison’s work. I think he is one of the best technicians in the world.

Is there any particular book that really changed your mind about trading?

I recommend any of Nison’s candlestick books. Years ago I took his advanced training and learned how support and resistance zones really work.  Aside from my timing work, he has influenced me more than any other trader/technician. I think it is a lot more accurate than Elliott and eliminates much of the subjectivity. 

Fundamental vs technical—which is better for today’s markets?

I believe that anything you want to know about a market can be found on the price chart. The price chart encompasses fear and greed as well as supply and demand. The fundamental picture may be good to direct you towards a sector or stock to trade but the precision people are looking for can always be found on a price chart. Back in December, the US Dollar made a pivot on an excellent price and time cluster and then had an inverse relationship to the stock market.  The next day an Obama rumor surfaced about his appointment for the Treasury Secretary and the market recovered.  Many people think that was the catalyst but without that Dollar setup, I doubt the move would have happened.

What type of music do you like best?

I’m an old rock and roller at heart. I listen to Zeppelin, The Who and most of the bands from that era. There have been a handful of bands that have come along over the years but they are few and far between.

Do you have any trading resolutions ?

To be more patient. This year I’ve started working with some really advanced Fibonacci calculations.  The initial results have been positive and now I’m striving for consistency with it in changing environments. This is helping me stay with better quality setups longer.

It's all about the Dollar!

<<New Post from author and trader Jeff Greenblatt! thank you Fibonacciman!>

As usual, it’s all about the Dollar. Come to think of it, we are coming to the first anniversary since it’s been all about the Dollar. The middle of the month is the point in time where the Dollar came off the bottom which was July 15, 2008. You may recall that was also the day a huge banking rally started as the SEC placed a moratorium on shorting financial stocks and the BKX virtually doubled in the next 8 weeks. But that was the end of the illusion and the Dollar developed an inverse relationship with the stock market that lasted throughout the crisis and still exists to this day.

A New Look at Elliott Waves from Jeff Greenblatt

Happy 4th of July!! Got to love the holiday weekends!!

The following excerpt was taken from Jeff Greenblatt’s best-selling book, Breakthrough Strategies for Predicting Any Market: Charting Elliott Wave, Fibonacci, Lucas and Time for Profit. The section that follows is a brief introduction to his timing methodology. A prominent speaker, a regular contributor to Futures magazine, and the editor of the Fibonacci Forecaster, Greenblatt is making a large impact in the international technical analysis community.

From Chapter 2, A New Look at the Language of Elliott Waves

This chapter is designed to show you how to work with wave counts based on the time dimension. We know that Elliott is very subjective. The best part of working with these time relationships is that they are easier to recognize than counting the waves. Wave counts are difficult pattern-recognition systems because they evolve over a period of time.

When we track the time element, we follow repeatable tendencies that are simple to recognize when we know what to look for. In this chapter, I will teach you how to confirm a wave count using the time bars.... Let’s look at our first example. Figure 2.1 illustrates a 5-wave impulse pattern in Motorola. The first thing to note is the look. Elliott and others stressed repeatedly that a pattern has to have the correct look. We do have a textbook 5-wave sequence, where 3 is not the smallest wave, and 4 doesn’t overlap the price territory of wave 1.

Those are your basics. Now, let’s look at all of the relationships inside of this pattern. In Figure 2.1, the first thing to note is how the first wave tops in 38 hours: a crucial time bar because 38.2 is a Fibonacci retracement level as the square root of .618. When we are dealing with time cycles, any Fibonacci or Lucas relationship is fair game for a turn in whatever degree of trend we happen to be observing. We followed up the 38-hour wave with an 11- hour correction. Not only is 11 a Lucas number, but when we divide 11 by 38, we get 28.9 percent. In terms of time, this means that we had a Lucas 29-percent time retracement. From that low, the third wave came close to a common 1.618 extension of the first wave. It’s not perfect, but the time relationship sheds more light on why the third wave ended where it did. Going back to the first wave, we know we topped on hour 38 and bottomed for the second wave on hour 48. The third wave topped on hour 147, which is a 99-hour wave. When we divide the time relationship between the first and third waves (99/38), we get a calculation of 2.605 or just a hair off a common 2.618 Fibonacci relationship.