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FOREX PRO Weekly April 30-May 04, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Apr 29, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly

    On monthly chart trend holds bearish. Almost 4th month in a row market stands in consolidation after hitting of Agreement around 1.2950-1.30 area. Since Agreement is stronger area than just simple Fib level we have suggested that market could show some deeper retracement up and retest 1.37-1.38 level. Current price action on weekly chart shows that this indeed could happen. In general, we can say, that market is locked between Agreement support and Confluence resistance area.
    Recall that our long term expectation is dollar appreciation to 1.16 level and move to 1.37 will be treated just as retracement in a bearish monthly trend. Overall price action looks so, that does not care any hidden hazard for bearish sentiment. Price stands in a tight range after significant thrust down. This is very common and nice situation for bears.
    From bearish perspective 1.37 K-level has extreme importance as holding barrier. We can accept reaching of 1.37 from long-term bearish view, but we anyhow can’t justify move through it. If it will really happen, I mean breakout through 1.37, then it will put under question overall bearish view on long-term charts.


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    Weekly
    I’m sure that you remember this chart well, since we discuss it again and again every week. By today’s research we just notify that bullish sentiment on weekly chart holds. It confirms by following issues:
    - trend – it holds bullish;
    - Potential Gartley’s “222” Buy pattern. Small retracement, just to 50% support of initial move up also adds confidence with bullish strength.
    As a result, we can count on upward AB=CD move, that, as we’ve suggested, will become deeper retracement on monthly time frame. This pattern has two potential targets. First one stands at 1.3525-1.3530 area. This is 0.618 extension and it also creates an Agreement with weekly Confluence resistance area. This will be really tough resistance zone.
    If market will pass through it, next target stands at 1.3855-1.3860 area that also creates an Agreement with 1.3814 Fib resistance level. That level is also crucial from monthly perspectives. Since we treat this AB=CD potential move as retracement in long-term bearish picture, we assume that this weekly AB=CD should finish either on first target or on second. If this will not happen, then we will have to reassess our view on long-term picture.
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    Daily
    This chart is full of riddles for me and reason for that is bearish wedge pattern that has not been broken yet by market in any direction. Another reason is that I still keep in mind downward AB=CD pattern with target at 1.2850-1.29 area. Once we’ve thought that probably this pattern has been completed since market has turned up after hitting just 0.618 AB=CD target. But take a look how it has turned up – by bearish wedge pattern. So, the riddle is as follows. Is current move up starting motion to upward or just retracement after hitting of support and we will see first downward breakout, may be even 1.2850-1.29 and only after that real move up will start?
    There are points on both sides of the riddle. On the bullish side we see upward trend and break of daily Confluence resistance level, that is not very typical for weak market. Also take a look – market finally left the range of previous Friday thrusting bar.
    On bearish side we have wedge pattern itself, way of price action – it definitely has retracement nature, since we do not see any thrusting attempts, but only choppy and sloppy price action inside of wedge. Also, at least theoretically downward AB=CD pattern has not been canceled yet. The most frustrating issue is that based on current picture we can’t resolve this riddle. We need more hints, may be even breakout of the wedge to tell where market might be going.
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    4-hour
    Here we see the same chart as during the whole previous week and we will continue to do magic with this bearish wedge. Although this picture is the same, there are new nuances has appeared that could help as in the beginning of the next week. They are Weekly Pivots. Take a look that WPP stands at 1.3206 right at nearest Fib support, while WPS1 stands slightly lower 4-hour 1.3165 Confluence support. That is our chance. What possible scenarios could happen? First is and most simple – upward breakout of the wedge and move above WPR1 1.3308. In this case we can say: “Yes, probably weekly AB=CD move to 1.3520 has started”. I mean true breakout, of cause.
    The more tricky way is popping and jumping on supports levels. First support coincides with lower body of the wedge. If market will hold there they will simultaneously hold as bullish sentiment (since it will remain above WPP) as potential for upper breakout. But major level to watch is Confluence support and WPS1. Downward breakout will lead to further acceleration, because breaking WPS1 usually indicates appearing of the trend and this could be some clue for daily riddle solution.
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    Hourly
    You know, guys, I like this stuff, I mean harmonic numbers. Once we have already discussed them partially when talked about side-by-side butterflies. Tops stand at 1.27 and 1.618 ratios. Harmony is very helpful, when you want to catch the finish moment of the move and usually finish point coincide with breaking of harmony. Take a look at chart. First, I want to note that market has reached classical resistance level as well, that was the neckline of Double Top pattern. Second, take a look at blue and lime lines. I’ve cloned them, so that they have the same angle and length. Then I’ve dragged and dropped them on market swings. I think you’ve got the point – all swings are very similar. Once market will break this similarity and this will be the first bell of possible drastic changes on price behavior.
    [​IMG]


    Conclusion:
    Long-term traders should sit on hands and wait when weekly AB=CD retracement will be over to enter short, or at least market will shift trend to bearish on weekly.
    Recall that weekly context is bullish, market has turned to compounding AB=CD patterns.

    On short-term chart we do not have absolutely clear picture, mostly because of wedge consolidation and some contradictive moments in price behavior. So our major task in the beginning of the week will be monitor support levels at 4-hour time frame (as it was explained above) and harmonic swings on hourly chart. I hope that it will help us to catch market intention early – as soon as any signs will appear.



    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.
     
  2. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Tue 01, May 2012

    Good morning,
    Actually there is not much to comment, since charts are almost the same as yesterday. On daily time frame we have greater triangle that in general agrees with our expectation of upward move on weekly and wedge inside of it. BTW, this is 5th wave inside of triangle and as usual breakout should happen right at 5th wave.
    Anyway I still hold the same opinion - better to wait breakout and then enter at retracement. Although I suspect upward move, mostly based on the fact that market has passed through daily K-resistance and this is not quite natural for wedge pattern and in general for weak market. But this is just a suspicion.

    On 4-hour chart we've seen already retracement to first of our levels - pivot +nearest Fib support. Coiling inside of wedge is continuing.

    May be hourly chart will be more useful today - according to harmonic lines market should reach 1.33-1.3320 level. That is also 0.618 Fib resistance and WPR1 at daily time frame. If it will not able to do that and show significant plunge, it could lead to domination of bearish scenario. So, let's watch...
     

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    #2 Sive Morten, Apr 29, 2012
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 02, May 2012

    Hello everybody,
    Actually there is no additional details on market - just take a look at the chart. So, current update will be poor.
    On daily time frame there is only one moment that is worthy of attention. Market stands in tight range and forms high waves patterns. This indicates that market is indecision. I suspect that it could lead to significant splash on Friday during NFP release. At least if nothing extraordinary will happen.

    On 4 hour chart picture is the same - bearish trend with divergences, levels are the same.

    On hourly chart we probably see breaking of harmonic swings. Market was not able to complete its move to 1.3310 area, trend turns bearish and price has shown solid plunge bar. Also, the way how this move up is developed, is not quite the same as previous moves.
    So, for me it looks like weaken of bullish power. Still I support my previous thought - it will be safer to wait thrusting move before pull the trigger. Because entry now has some common signs with gambling.
     

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    #3 Sive Morten, Apr 29, 2012
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 03, May 2012

    Good morning,
    market has broken harmonic swings on hourly time frame - that was the first hint on potential bearish breakout, that has come a bit later...

    So, on daily time frame we still have bullish trend and uncofirmed bearish. I would like to get it before enter short. Also, it will be very wonderful picture, if market will form Butterfly "Buy" pattern on daily TF. It's reversal point will be precise at 5/8 Fib support and AB=CD target of daily pattern. Besides, it will get us confidence on upward AB=CD continuation on weekly. But this is just a wish.

    On 4-hour chart trend holds bearish, market has hit WPS1, broken our K-support and already retested it from the other side. If market will show some retracement, this will be good for us - we need some time to get daily bear trend and we need some rally to sell.

    On houlry TF trend is bullish. Market has hit 1.618 AB=CD target at WPS1 and now shows some pullback. Nice area is 1.3185-1.3190 - K-resistance and Agreement, if market will show AB=CD retracement. That will give us also "222" Sell pattern.

    If you trade at lower TF and use as context 4-hour trend, then you can search possibility to short right now. For others, who use as context daily TF, this is time to wait still.
     

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    #4 Sive Morten, Apr 29, 2012
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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 04, May 2012

    Good morning,
    We've got confirmed bear trend on daily time frame. Since we do not have any bullish Directional patterns, our context for trading is bearish.

    On 4-hour chart we see that market has hit Classical target of the wedge right at 0.618 Fib support and turned to retracement. Trend holds bullish but price action stands flat.
    One thing to watch on 4 hour time frame is will market show bearish dynamic pressure or not. If it will - you may enter short with confidence.

    On hourly chart trend holds bullish as well, after yesterday's butterfly market has reached our K-resistance level that we treat as nice area to enter short. Currenty we have small stop grabber pattern, that could lead to second test of K-resistance. That is the chance to try enter short. If market will break K-area and hold bullish trend, then it will be better to wait for more bearish signs and patterns, since bullish trend on intraday charts suggests deeper upward retracement.
     

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    #5 Sive Morten, Apr 29, 2012
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  6. FullFlight

    FullFlight Recruit

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    I have been following Sive's analysis for some time now, and find them objective, thorough and extremely reasonable. Thanks, and keep up the high standard of analysis.

    John
     
  7. vgjune

    vgjune Recruit

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    Sive are you able to share the MT4 pivot indicator that you use and the fibonnaci tool that is different than the one provided with the MT4 platform? Thanks
     
  8. FreddyFX

    FreddyFX Sergeant

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    Sive is the best in the business.

    If I EVER start my own bank, I will hire him IMMEDIATELY if he wants to change employer.
     
  9. Lolly Tripathy

    Lolly Tripathy Master Sergeant

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    A hearty Thanks for your support..:)
     
  10. Lolly Tripathy

    Lolly Tripathy Master Sergeant

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    thats the Fib Expansion i think...!!
     

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