"Any moment now I think we're going to break lower," Elliott told "Europe Tonight."

"I expect this to be possibly before the end of November or very early December, I mean we're almost on our way now and it's just a question of how far down do we go," she said.

The Dow managed to close above its October low of 8,175.77 on Tuesday, but slipped below that level during the trading session. Market watchers are divided on whether the recent lows mark a base from which to rally, or a pit stop on the way lower.

"This is not a base at all, we're nowhere near bottom yet," Elliott said.

After the initial sharp slump the index could fall further, but in a more gradual decline, according to Elliott.

(Watch the video above to hear Elliott's views on the euro versus the yen and the Australian Dollar versus the greenback.)

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Yen Set to Sink

The yen will tumble further against the euro as banks continue to unwind risky currency-based strategies, Elliot said.

"I would expect this one to go all the way back down to 90 yen per euro … that is the all-time low from October 2000, in other words we are going back all the way down to where we started in the post-Asia crisis," she said.

A fall to 90 yen per euro would a decline of over 30 yen from Tuesday's closing price.

The carry trade, which involves using the differential between two currencies' interest rates to make a profit, is being shunned by investors as the economic turmoil continues, Elliot said.

"There is no money in the banking system and so anything peripheral is just sold," Elliot said referring to the carry trade.