Currency Thoughts: Early Stages Of Growing Conviction - Feb 8 10 10:13 EST
TheLFB-Forex.com A Forex Trader Portal
Currency Currents:
Early Stages Of Growing Conviction
We think we have witnessed the successful test phase of the boom-bust cycle and are at the very early stages of the growing conviction stage (in the Elliott Wave world that is often referred to as Wave three, usually the longest wave of the trend), says Jack Crooks from Black Swan Capital.
Long-time readers know we are big fans of the boom-bust theory of price action, as first I saw articulated by George Soros back in 1987 in his book, Alchemy of Finance. (It is by the way the same time I learned of Karl Popper and the black swan; and name our firm accordingly, back in 2003.)
We use the boom-bust construct to help us understand better, but never with anything approaching perfect knowledge (if one can ever approach such a thing), where we might be in the current cycle regarding the dollar.
A written summary, defining the stages:
1. The unrecognized trend; the beginning of a self-reinforcing process
2. The successful test
3. The growing conviction, resulting in a widening divergence between reality and expectations
4. The flaw in perceptions
5. The climax
6. A self-reinforcing process in the opposite direction
As you can see, this boom-bust cycle in a way mirrors the Elliott Wave cycle. Both are grounded solidly in human action, or the way human’s drive price action based on waves of sentiment (fear and greed), I think.
With anything in the financial world, one only never really knows until the gift of hindsight is revealed. Unfortunately we often listen to people who think they know—that is usually a big mistake. Everyone, and their mother, in this dollar cycle, seems to think they know exactly where the dollar is going. Of course as you well know by now, the buck is heading to zero!
We have seen it differently for a while. But only the gift of hindsight will determine if our guess (forecasts are simply guesses wrapped in a better package) is correct.
That said, we think we have witnessed the successful test phase of the boom-bust cycle and are at the very early stages of the growing conviction stage (in the Elliott Wave world that is often referred to as Wave three, usually the longest wave of the trend). Full Article...
Trade Signals and Plans Straight Off The Meta 4 Charts- Get TheLFB Trader Advantage
Provided by TheLFB Trade Team, © 2007-2010 LFB Services, LLC. All rights reserved.
TheLFB Risk Disclaimer
