INDU- Elliott Wave update

I think the battle between bulls and bears begins.

According to this count, the picture  looks like an ending diagonal.

INDU- CFD

          
                                     The negative market reaction after these news is bearish sign.

DXY-Elliott Wave update

     
            I think US Dollar's downtrend is already done for now. According to my EW count we have five clear waves downside  completed, which completes the A,B,C pattern - called "expanded flat" of larger degree (primary). At the bottom the bulls were over 90 %, which was one of the signs of trend reversal. Few weeks ago  i pointed  reversal area- about 74,17, and I was very close, it stuck at 74,23 and bounced up to make it's first impulsive wave up. Correction after the 1st  wave is already  on the way , reaching 76,58 area, will suite my ego. There is one of the Pivot points, which is right in the middle between 38.2% and 50.0% Fibo retracement. Still hasn't reached 38.2 % Fib. 

Exponential VS Log scale

            
             We all live in an exponential world, and many of the market analyzers use that fact  in their analysis.
The main problem comes from fact, that sometimes analyzers use linear, sometimes logarithmic graph.
            You can't use log scale and make linear calculations, and the opposite.
              Have a look at the both graphics bellow:

                            

At first hand they look totally different, and have nothing common. More observant of you have already noticed

that on both is DJ 30.

Here is an interesting example:

 

Let's suppose that you have invested $1000 in General Electric for $8 per share in 1995, it makes 125 shares. For two years the price rises to $16 and you cover the long, taking $8 profit per share in the pocket, which makes 100% profit.

Few years later the price rises to $30, and you decide to buy your favorite instrument again. But this time you spend $1000 to buy only 33 shares. However, the price is going higher, reaching $60 in 2000. Then you decide to sell again, taking profit $30 per share, which is 100% profit again. Visually the spread between the blue lines is four times wider than the red ones. It's easy to make a mistake, that the second trade's profit is four times bigger. It is so, because the graphic is linear.

Here is the same GE logarithmic scale example:

                             

I have calculated GE Fibonacci retracement levels of the move from $8 to $60 in both ways:

Fibo                          38.2%	50%	61.8%
Linear                     38.9	33	27.1
Logarithmic           27.21	21.54	17.05

        If we follow the linear calculating, could make a conclusion that GE's 61.8%Fibo retrace is nearly ($27.10)  of its rising up, and as an ewavers using Fibonacci tool to expect bounce up again.

        The picture is totally different, if we have calculated that correction in logarithmic way. It is obvious, that 61.8% of the correction is nearly $17, and there is more dropping down.

                                                                 Which scale to use?

 If we are daytraders, can use both, because the difference  is very small.

 If we are swing or longer term traders or investors- the linear one.

        P.S. The price now differs , I just use an example graph.  

    

Elliott Wave update

Sorry, no time for text part today.
Probably we'll see the valley from higher.
I changed the count a little.