EUR USD contd.

Three clear waves:

15145 to 141.9 -- 950 pips

145.7 to 135.8 -- 1000 pips (not over yet?)

Wave 1 *1.318

950 *1.318 = 1252.1

There may be at least 250 more pips to the downside on the EURUSD, before Wave 3 is done. This means a target of 133.3

Wave 1*1.5

950*1.5 = 1425. This means 425 more pips on in Wave 3. This means a target of 131.8.

However, Wave 3 of 3 may be over - evidenced by three things: 1) we have touched the lower trend line of the declining EURUSD channel and 2) we broke through the 38.2% retrace levels on the dollar. 3) Daily RSI is so oversold and has been so oversold for so long.

Or it may not. We may yet get a crash in the next week.

But I am almost certain that we will have some sort of a bounce on Monday.

If Wave 3 or 3 is over, it makes sense that Wave 5 of 3 will take us down to 133.3 or 131.8.

this move will pause (may pause) at the 50% retrace of the earlier dollar fall at $82 on the dollar.

However, it is NOT necessary that weakness in the Euro will mean terrible weakness in U.S. equities. Risk trends are turning, and should continue to turn. US Equities should, in my opinion, at some point, return to 950 or even lower. But the public didn't get a chance to get invested in the March rally. And the FXI has completed 5 waves down. And there is record bearishness in the Euro.

(Just like the $, the FXI should make at least 50% retrace of the March to November rally. This may come with the dollar.)

BTW, at least for the last 9 months or so, the FXI has almost a perfect inverse correlation with the US $. You could use it as a proxy for the dollar, if you don't want to use currency pairs.

Conclusion: I am almost certain that we will get a bounce in equities and the Euro of sorts on Monday. I am just as sure that the Euro will, after a bounce, proceed lower.

Finally, I am just as sure that we are now in a longer-term bull. Watch the SEMIs and the NAZ.

Conclusions:

1. U.S. equities are a buy here for the intermediate (or medium) term, with a certain percent of your overall holdings.

2. The EURO has not bottomed.

3. U.S. equities may have had an intermediate (or medium) term bottom last Friday.