Time to regain the longer term perspective

It’s a sign to stop trading frequently when I start having to correct my Elliott wave counts so often. I think now it’s time to regain a longer term perspective.

Gold experienced the biggest correction in a week today.  I had regretted a bit when it touched 1250 only after I booked profit, but now feeling better. Of course, I have not changed my bullish view, and after this black 4 (a.k.a. “take profit” phase), I will plan to establish a long position towards $1260.

I always come back to US dollar index when I try to figure out where the forex market is going in the mid to long term.

After looking the dollar is only accelerating the rally, I started to think we are the most powerful phase of the bull market: Wave 3 (or purple .III in the chart below)

We are about to be finishing black I of purple .III in my current view, and it should see some correction in later May or June, then take off again even stronger. I am aiming over 96.00 as the final target of the index.

I am thinking to add US dollar bullish ETF such as UUP in my portfolio after this correction for the mid-term position. To be honest, the performance on the short-term trading, has not been what I hoped for despite my correct prediction of the fall of the Euro since last fall. So, I feel the necessity of mixing short & mid-term positions I’m thinking this mid-term position would help me avoiding to be impatient when my short-term trade is missing entry opportunities. The biggest questions are what size and when I am going to enter the long position. I think I will apply my short-term trading rule based on Elliott wave except that the time spam I am looking at is daily chart like below. I will keep the clear loss cut line as I always do for the short-term trading, and keep the potential loss size in control.

After analyzing US dollar index, I tweaked my Elliott wave count to EURUSD. Here is the 720min chart, and I would not short EURUSD from here because of the red line (low of Oct 28, 2008), it’s a huge chart point, and we probably see a big rebound at least once. It’s good to step back and see the whole woods even when you are cutting a single tree.

Here is the 180min chart. Although I am short term bullish for the reason above, I would wait until 1.28 line to be overcome before deciding whether I trade long EURUSD.

I am going to travel for the weekend and come back on Monday. So no trading until Tuesday for me.

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"","","","","$29,058.30","","","","","","","","","","","","","","","","","","","","41.95%","","","2.00%","","","","","","","","","","","","","","","","","","","","","","","","","","","",""
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