Value of Perfect Information

If you have trouble translating a stock chart to Elliott waves I have a little trick you may like. It’s called Renko. Stockcharts.com offers this type of charting free. If you click on the link it will take you directly to the Renko version charting the US dollar. Now if you scroll down there is a field called BOX, which is set at .1
If you want to decrease the resolution of Renko to filter out the next Elliott wave degree you set it higher.
Now, the only drawback to Renko is it only plots the close of the day, so the highs and lows are not seen. But you just want to clarify price patterns right?
My comments on the chart pretty much sum up my view. That diverging RSI is bullish, and I can’t help but think we don’t have far to go before we have a total reversal.
I do think we need a wave 5 to finish. One scenario is the past week of consolidation pattern is a head and shoulders, in which case we may see a strong c wave upward. The second scenario is it is a triangle and coiling up to toss the price down some more. In that case we have an ABC .
Basically the overall drop in the US dollar from it’s highs in March looks to me like a wave C, with it’s components having 5 waves, the 5th being an extended wave. The implications to the markets are not so good.
One more neat trick to using Renko is analyzing the volume for stocks. I don’t have the volume indicator selected for the above chart because $USD doesn’t have volume, but go ahead and change the ticker to SPY and scroll down to select volume…it will be amazing! Come visit my blog to catch other tips.

Good luck trading!
Mark

Content on CEO Trader is opinion only, please trade at your own risk.

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Labels: Elliott wave, Fibonacci, technical analysis, daily, stocks, ETF, chart, indicators, Renko, $USD, dollar, volume

Categories: Charts , Data-Based Indicators , Elliott Wave , Market Indicators