The Buck and Yields Up On Fed Talk But Will It Last?

The S&P 500 rallied this week just barely making a new high above the March 7th high in what appears so far to be a counter corrective move. Back at the March 7th high, the index completed a Minuette pink five wave series from the June 2013 low, which in turn completed a Minute blue 5th wave of a larger degree Minor green wave 3. The S&P made its new high on Friday which appears so far to be part of a counter corrective move from the March 7th high. Even though it is still too early to tell, giving the size of the move in price and time, the move so far is proportionally too small to be part of an A-B series of a flat wave 4 structure. If the move turns out to be a 4th wave flat at Minor green degree than the move from the March 7th high should be the A-B Minuette pink legs of the Minute blue A leg of the larger flat structure. However unlikely, if the recent March 14 low turns out to be a wave 2 of a lager extending Minuette pink 5th wave, then the move up from the recent lows would be a 1-2-1-2 series of a Minute blue wave 3.

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Unlike the S&P, the Dow has yet to make a new high above its Minor green wave 3 top it put in on Jan 21st. Note that this top is the result of a truncated Minuette pink 5th wave off the move up from the Oct 2013 low. The move from the Minuette pink 3rd wave can only be counted as a three wave corrective. And the Minuette pink 5th wave can be counted as a five on the 15 minute. This leaves the index in a flat wave sequence from the Minor green wave 3, which has yet to make its final minute blue C wave move to complete its Minor green wave 4.

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Janet Yellen’s talk of tapering and raising interest rates in 2015 helped push the US Dollar Index and the 10 Yr. Yield up a bit. The US 10 Yr. moved up from the March14th 2.61 low to the 2.78 on Thursday. Friday the Yield pulled back 3 basis points to close at 2.50. Note that the 10 Yr. did not take out the 2.83 high it put in on March 10th. The 10 Yr. has been in a sideways consolidation since the Feb 4th bottom, and given that it failed to take out the 2.83 top, the current sideways action still holds as a counter correction of a larger zigzag move down to about the 2.31.

On the back of the hawkish talk out of the Fed, the buck also moved up a bit off of its 79.27 low. On the one hour the move up is a complete five wave sequence. On Friday the index pulled back from the 80.35 top it put in on Thursday to close at 80.10. So far the retracement is shallow and should move down to about the 79.72 to 79.69 area. The EUR/USD could have put in a top at the March 13th high. (EUR/USD Alt. count) Although rare, the move up from the July 2012 low appears to be a leading diagonal sequence for an A wave at Minute degree—circle blue A. If so then we can expect the EUR/USD to break down to about the 1.2777 in three Subminuette pink waves of a zigzag sequence for a Minor blue degree B wave.

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Gold and silver could be finished their correctives Minor green wave 4s. Gold finalized a five wave Minuette pink wave sequence from the Dec 31st 2013 low to complete a running flat sequence for its minor degree green 4. The move from the March 16th top has completed five waves at Subminuette black degree. The Yellow metal should correct up to about the 1355 to 1364 before heading down in a wave 3 at Subminuette degree. If these corrections are complete, then silver has just finished a double three series at the Feb 24th high and has since put in a 1-2-1-2 series of its Minor green wave 5. Silver should move up on a counter corrective Subminuette wave 2 to near the 21.00 before heading down in five waves to about 18 Bucks.

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