Sive Morten
Special Consultant to the FPA
- Messages
- 18,732
Monthly
So, fellow traders, what we have on monthly chart? What was that from technical standpoint? Market is failing around previous swing high that is also 50% monthly resistance. It means that it will hardly proceed to 1.3830 area at the same single breath. Market was not able to reach significant resistance with current swing, so we should be ready for deeper move down. Currently it’s better count only on retracement, but not downward reversal yet, because trend here sill holds bullish and price action as well – not bad at all. This move up could become an AB leg of greater AB=CD pattern, why not? But how deep BC leg could be?
Well, as first destination, I probably could point Yearly Pivot Point that has not been touched yet. Second thought – take a look, this could be reverse H&S pattern. The left shoulder and the head are based on perfect 1.618 Butterfly “Buy” on weekly chart. So, to reach the same ratio in relation to head low, market should show retracement to 1.2750-1.29 area. These levels are a bit extended and we do not trade on monthly time frame, but we have to keep in mind major destination, because sooner or later it will become very significant. If market will fail there as well – that could become continuation of long-term bear trend. Still, major conclusion for us here – market probably will move lower, and we have direction of trading for 1-2 weeks ahead.
Weekly
Weekly time frame becomes rather significant for our analysis. First of all, let’s discuss major points – when to be bullish or bearish. That will help us better undertsand what steps to take depending on different situation. Although we have bullish trend by MACD here, we have solid bearish engulfing pattern as well, and my thought is – until market will not take its highs and erase this pattern, I will not be bullish and will try to take position in agreement with engulfing pattern. The fact, that on previous week market has shown upward retracement inside of this pattern and then has returned right back gives me additional confidence. That was not an attempt to continue move up – that was just ordinary retracement after engulfing has been formed. This retracements usually take place in 80% of cases.
Thus, we’re bearish, but how far this pattern could lead us? Well, engulfing pattern itself gives us target at weekly K-support area – 1.3062-1.3073. If we will take a look at harmonic swings – I’ve found only single previous retracement down, it points on MPS1 = 1.3184. Let’s will not be greedy and focus on first level initially – 1.3184.
And finally, two other moments that could become interesting. First is – take a look, market has not triggered yet this engulfing pattern, since it has not closed below it’s low. The major move down still stands ahead. Second is – keep an eye on MACDP, on coming week price will deal with it and we will monitor appearing of stop grabber, as usual. You may argue – you just talk about short entry and now tell us to watch for bullish pattern? Yes. Our task is not to create flawless and infinite analsys, but correctly and fast react on new events that could appear on the market. Stop grabber could appear and we will have to take it into cosnideration if this will happen. But currently it is not at place yet, thus we have no other components of analysis and these components tell us that context is bearish so far.
Daily
Daily trend holds bearish, price action is bearish. Here we can see a kind of H&S pattern is forming. Although weekly chart shows rather greater potential down – here we can’t look farer than 1.3185-1.32 area yet. Since in a tight range there are too many constraints – K-support, AB-CD target and daily oversold.
4-hour
Here we see that trend is ready to turn bullish, market shows bullish divergence with MACD, since market stands at support of trend line and 0.618 Fib extension of daily AB-CD pattern. Some retracement up could follow and we can use it for short entry. There are two levels to watch for – first is WPP and Fib resistance at 1.3410 and second is K-resistance 1.3460-1.3472 + WPR1.
But based on price action on hourly time frame, achievement of second level looks more probable.
30-min
If we will treat this formation here as Double Bottom, then its target points on 1.3455 area and we have bullish stop grabbers that point of further upward continuation.
Conclusion:
On long-term perspective the probability of down move is increasing. Currently is not clear yet – will it become reversal and continuation of monthly trend down, or just a kind of BC leg of greater AB=CD upward pattern. Weekly price action confirms possible deeper move down. Until market will not erase weekly bearish engulfing pattern, it’s difficult to find any reason to take long position.
In shorter-term perspective all weekly targets stand beyond daily oversold and, hence not very topical now. Market is a bit caught by solid support cluster that includes daily K-support, oversold, AB-CD target and MPS1 and WPS1. Still within 1-2 days it is possible to take short position at some rally and exit around this support.
The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
So, fellow traders, what we have on monthly chart? What was that from technical standpoint? Market is failing around previous swing high that is also 50% monthly resistance. It means that it will hardly proceed to 1.3830 area at the same single breath. Market was not able to reach significant resistance with current swing, so we should be ready for deeper move down. Currently it’s better count only on retracement, but not downward reversal yet, because trend here sill holds bullish and price action as well – not bad at all. This move up could become an AB leg of greater AB=CD pattern, why not? But how deep BC leg could be?
Well, as first destination, I probably could point Yearly Pivot Point that has not been touched yet. Second thought – take a look, this could be reverse H&S pattern. The left shoulder and the head are based on perfect 1.618 Butterfly “Buy” on weekly chart. So, to reach the same ratio in relation to head low, market should show retracement to 1.2750-1.29 area. These levels are a bit extended and we do not trade on monthly time frame, but we have to keep in mind major destination, because sooner or later it will become very significant. If market will fail there as well – that could become continuation of long-term bear trend. Still, major conclusion for us here – market probably will move lower, and we have direction of trading for 1-2 weeks ahead.
Weekly
Weekly time frame becomes rather significant for our analysis. First of all, let’s discuss major points – when to be bullish or bearish. That will help us better undertsand what steps to take depending on different situation. Although we have bullish trend by MACD here, we have solid bearish engulfing pattern as well, and my thought is – until market will not take its highs and erase this pattern, I will not be bullish and will try to take position in agreement with engulfing pattern. The fact, that on previous week market has shown upward retracement inside of this pattern and then has returned right back gives me additional confidence. That was not an attempt to continue move up – that was just ordinary retracement after engulfing has been formed. This retracements usually take place in 80% of cases.
Thus, we’re bearish, but how far this pattern could lead us? Well, engulfing pattern itself gives us target at weekly K-support area – 1.3062-1.3073. If we will take a look at harmonic swings – I’ve found only single previous retracement down, it points on MPS1 = 1.3184. Let’s will not be greedy and focus on first level initially – 1.3184.
And finally, two other moments that could become interesting. First is – take a look, market has not triggered yet this engulfing pattern, since it has not closed below it’s low. The major move down still stands ahead. Second is – keep an eye on MACDP, on coming week price will deal with it and we will monitor appearing of stop grabber, as usual. You may argue – you just talk about short entry and now tell us to watch for bullish pattern? Yes. Our task is not to create flawless and infinite analsys, but correctly and fast react on new events that could appear on the market. Stop grabber could appear and we will have to take it into cosnideration if this will happen. But currently it is not at place yet, thus we have no other components of analysis and these components tell us that context is bearish so far.
Daily
Daily trend holds bearish, price action is bearish. Here we can see a kind of H&S pattern is forming. Although weekly chart shows rather greater potential down – here we can’t look farer than 1.3185-1.32 area yet. Since in a tight range there are too many constraints – K-support, AB-CD target and daily oversold.
4-hour
Here we see that trend is ready to turn bullish, market shows bullish divergence with MACD, since market stands at support of trend line and 0.618 Fib extension of daily AB-CD pattern. Some retracement up could follow and we can use it for short entry. There are two levels to watch for – first is WPP and Fib resistance at 1.3410 and second is K-resistance 1.3460-1.3472 + WPR1.
But based on price action on hourly time frame, achievement of second level looks more probable.
30-min
If we will treat this formation here as Double Bottom, then its target points on 1.3455 area and we have bullish stop grabbers that point of further upward continuation.
Conclusion:
On long-term perspective the probability of down move is increasing. Currently is not clear yet – will it become reversal and continuation of monthly trend down, or just a kind of BC leg of greater AB=CD upward pattern. Weekly price action confirms possible deeper move down. Until market will not erase weekly bearish engulfing pattern, it’s difficult to find any reason to take long position.
In shorter-term perspective all weekly targets stand beyond daily oversold and, hence not very topical now. Market is a bit caught by solid support cluster that includes daily K-support, oversold, AB-CD target and MPS1 and WPS1. Still within 1-2 days it is possible to take short position at some rally and exit around this support.
The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
