Sive Morten
Special Consultant to the FPA
- Messages
- 18,754
Monthly
Well, that was not an easy week to trade – upward breakout, that has shifted to W&R then and potential H&S on intraday charts. But why I like to take a look at long term charts – they show you core result of the week. And now by monthly chart we see that price has closed slightly higher than on previous week.
At the same time August candle remains rather shy and small, although stands right under upper border of the flag. Thus, it is hard to add something valuable to former analysis here, since all that has been said still valid. Since market stands in tight consolidation further direction will mostly depend on breakout. As a result, we could get either AB=CD down in area of yearly pivot support 1 or significant upward continuation. Yes, we have some bullish signs here – trend holds bullish, market has bounced up after testing yearly pivot point and that was not deep retracement after first challenge of 50% resistance, market has shown greater swing up, that has started in July 2012. All these moments are true, but direction will still depend on breakout, and it has failed on passed week. It means that we should be ready for some move inside the body of flag. As I’ve mentioned bullish signs here, I would like to point on single but significant bearish moment that could happen here. Usually when market shows reversal swing, it shows deeper retracement either, as a rule it takes a shape of some AB=CD. Thus, AB-CD action to the downside doesn’t seem unreal at all.
Speaking about larget picture, previously we have discussed in details possible scenarios and why current price location is very important. At first glance it could be seen that here is nothing special and no big deal around, but in reality the oposite is true – it is a big deal around current level. Direction of real breakout of the flag pattern could set the direction of the market in long-term perspective. It is probably rather milestone sign that market is forming indecision pattern right around breakeven point of long-term sentiment, I mean yearly pivot point. It is very simbolical at current moment. Now we do not tell that we can estimate further direction from current messy action and do not even try to do this. We just want to indicate the current condition - action is really indecisive in big meaning of this word around yearly pivot, that itself is a breakeven of yearly sentiment.
Weekly
Trend is bullish on weekly. We do not see any consequenses of failure breakout here yet. Market has passed through major 5/8 resistance and that is bullish sign. Honestly speaking, I do not see significant and owful bearish moments here at all. Take a look, trend is bullish, market stands strong above MPP and gradually approaching to MPR1. The pattern that market had chances to create, I mean H&S on weekly has failed. Yes, on daily time frame the attempt to pass through previous highs has failed and in nearest perspective it probably could lead to some bounce down. But on weekly chart nothing terrible has happened. This bounce could be slightly seen at all here. Next significant resistance is crossing of MPR1 and 76,8% Fib resistance. Price is not at oversold, thus, there is no significant barriers for market, since it already has passed through 5/8 resistance as we’ve said.
Still, the process of searching traps and bearish signs has forced me to watch on larger weekly time frame, and I have founded something, that I would like to discuss with you. This is not some pattern or some clear setup that lets us just pull the trigger. Conversely this is just a shape of price motion that for me looks similar to those that was in 2010. You will understand probably better, if take a look at next picture:
Mostly we’re interested in two red rectangles, price extensions and retracements. Take a look at 2010 rectangle first. Initally market has created fast AB-CD pattern, then shown 50% retracement and after that acceleration to 1.618 extension.
Now let’s take a look at current action. We also have AB-CD and 50% retracement then. Yes, current action slower than in 2010 – as thrust up as current retracement. Also market has created reversal swing up. After reversal swing been formed, retracement could be deeper and/or longer. And take a look, market stubbornly holds above 50% support. I do not know guys, what do you think about this stuff, but for me it looks bullish in medium-term perspective. Although this cares a little for trading on coming week. Generally speaking, on weekly time frame we can make the same conclusion as on monthly. We will be able to speak about real trend continuation only when market will leave consolidation in any direciton. But by far situation here is more bullish rather than bearish.
Daily
Now we’re shifting to most interesting and useful part of research for short-term trading. In recent time market action is curious, blur and tricky. I will show you my opinion and explanation here, while you decide – whether to agree or disagree. I’m not pretending on absolute opinion. Shortly speaking, I think that we have bearish context. May be market in reality as bullish as never, but I have not found any setups or patterns that could confirm this. We can sense whatever we want, but trading is based on clear setups and patterns. I see bearish ones but do not see any bullish. Thus, for me market could take chance to be bullish again only if it will return right back above current highs.
Now, what bearish moments do we see here? First is a trend and it’s bearish. Second, we have two bearish stop grabbers. Two days stop grabber that simultaneously is a W&R of previous highs and Friday’s stop grabber. That are bearish patterns, but they have a bit different targets. Former has a target around WPS1=1.33, while latter assumes deeper move to 1.3190-1.32. Around both patterns Fib levels stand, giving an additional support. As we have bearish patterns here, we have their invalidation points – the tops of corresponding bars. Thus, we have clear patterns and they are bearish. Personally I do not want to go against them. Whether to trade them or not – this is different question.
4-hour
Here we see as first stop grabber as most recent one are the parts of 4-hour H&S pattern. Friday’s stop grabber, in fact is a right shoulder of this pattern. And that gives us huge assistance. First is because we can place tight reasonable stop – right above the top of right shoulder. Second is – if market will move above the top of shoulder this will lead not only to failure of this pattern, but tell us that second pattern will fail probably also. At least the chances of failure will be significant. Why? Because it is also the part of H&S. If market will move above right shoulder and erase it – it at the same time destroy H&S pattern and probably will vanish daily stop grabber. Thus, by single point we can capture both patterns. What pattern to trade – that is personal choice. Also, as usual take close look to WPP. If market will pass through it on Monday, that will increase chances on downward continuation.
60-min
Here we have AB-CD Agreement right at 5/8 Fib resistance and if we will be right and our plan will work, market should start move down somewhere form current level. That, actually could give us “222” Sell pattern that also will be a part of H&S.
Conclusion:
In long term perspective, although there are more bullish signs than bearish, especially on weekly time frame, market mostly still stands indecision, because is coiling around long-term sentiment breakeven point – yearly pivot. To point on direction price has to show break – out from current range. Until this will happen we can’t take sequence of trades in any direction. All that we can do in such environment is to search short-term clear setups and trade them fast. Although we can’t miss existence of slow but gradual move to the upside.
In short-term perspective market shows some bearish patterns that point of possible deeper retracement on daily time frame.
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.
Well, that was not an easy week to trade – upward breakout, that has shifted to W&R then and potential H&S on intraday charts. But why I like to take a look at long term charts – they show you core result of the week. And now by monthly chart we see that price has closed slightly higher than on previous week.
At the same time August candle remains rather shy and small, although stands right under upper border of the flag. Thus, it is hard to add something valuable to former analysis here, since all that has been said still valid. Since market stands in tight consolidation further direction will mostly depend on breakout. As a result, we could get either AB=CD down in area of yearly pivot support 1 or significant upward continuation. Yes, we have some bullish signs here – trend holds bullish, market has bounced up after testing yearly pivot point and that was not deep retracement after first challenge of 50% resistance, market has shown greater swing up, that has started in July 2012. All these moments are true, but direction will still depend on breakout, and it has failed on passed week. It means that we should be ready for some move inside the body of flag. As I’ve mentioned bullish signs here, I would like to point on single but significant bearish moment that could happen here. Usually when market shows reversal swing, it shows deeper retracement either, as a rule it takes a shape of some AB=CD. Thus, AB-CD action to the downside doesn’t seem unreal at all.
Speaking about larget picture, previously we have discussed in details possible scenarios and why current price location is very important. At first glance it could be seen that here is nothing special and no big deal around, but in reality the oposite is true – it is a big deal around current level. Direction of real breakout of the flag pattern could set the direction of the market in long-term perspective. It is probably rather milestone sign that market is forming indecision pattern right around breakeven point of long-term sentiment, I mean yearly pivot point. It is very simbolical at current moment. Now we do not tell that we can estimate further direction from current messy action and do not even try to do this. We just want to indicate the current condition - action is really indecisive in big meaning of this word around yearly pivot, that itself is a breakeven of yearly sentiment.
Weekly
Trend is bullish on weekly. We do not see any consequenses of failure breakout here yet. Market has passed through major 5/8 resistance and that is bullish sign. Honestly speaking, I do not see significant and owful bearish moments here at all. Take a look, trend is bullish, market stands strong above MPP and gradually approaching to MPR1. The pattern that market had chances to create, I mean H&S on weekly has failed. Yes, on daily time frame the attempt to pass through previous highs has failed and in nearest perspective it probably could lead to some bounce down. But on weekly chart nothing terrible has happened. This bounce could be slightly seen at all here. Next significant resistance is crossing of MPR1 and 76,8% Fib resistance. Price is not at oversold, thus, there is no significant barriers for market, since it already has passed through 5/8 resistance as we’ve said.
Still, the process of searching traps and bearish signs has forced me to watch on larger weekly time frame, and I have founded something, that I would like to discuss with you. This is not some pattern or some clear setup that lets us just pull the trigger. Conversely this is just a shape of price motion that for me looks similar to those that was in 2010. You will understand probably better, if take a look at next picture:
Mostly we’re interested in two red rectangles, price extensions and retracements. Take a look at 2010 rectangle first. Initally market has created fast AB-CD pattern, then shown 50% retracement and after that acceleration to 1.618 extension.
Now let’s take a look at current action. We also have AB-CD and 50% retracement then. Yes, current action slower than in 2010 – as thrust up as current retracement. Also market has created reversal swing up. After reversal swing been formed, retracement could be deeper and/or longer. And take a look, market stubbornly holds above 50% support. I do not know guys, what do you think about this stuff, but for me it looks bullish in medium-term perspective. Although this cares a little for trading on coming week. Generally speaking, on weekly time frame we can make the same conclusion as on monthly. We will be able to speak about real trend continuation only when market will leave consolidation in any direciton. But by far situation here is more bullish rather than bearish.
Daily
Now we’re shifting to most interesting and useful part of research for short-term trading. In recent time market action is curious, blur and tricky. I will show you my opinion and explanation here, while you decide – whether to agree or disagree. I’m not pretending on absolute opinion. Shortly speaking, I think that we have bearish context. May be market in reality as bullish as never, but I have not found any setups or patterns that could confirm this. We can sense whatever we want, but trading is based on clear setups and patterns. I see bearish ones but do not see any bullish. Thus, for me market could take chance to be bullish again only if it will return right back above current highs.
Now, what bearish moments do we see here? First is a trend and it’s bearish. Second, we have two bearish stop grabbers. Two days stop grabber that simultaneously is a W&R of previous highs and Friday’s stop grabber. That are bearish patterns, but they have a bit different targets. Former has a target around WPS1=1.33, while latter assumes deeper move to 1.3190-1.32. Around both patterns Fib levels stand, giving an additional support. As we have bearish patterns here, we have their invalidation points – the tops of corresponding bars. Thus, we have clear patterns and they are bearish. Personally I do not want to go against them. Whether to trade them or not – this is different question.
4-hour
Here we see as first stop grabber as most recent one are the parts of 4-hour H&S pattern. Friday’s stop grabber, in fact is a right shoulder of this pattern. And that gives us huge assistance. First is because we can place tight reasonable stop – right above the top of right shoulder. Second is – if market will move above the top of shoulder this will lead not only to failure of this pattern, but tell us that second pattern will fail probably also. At least the chances of failure will be significant. Why? Because it is also the part of H&S. If market will move above right shoulder and erase it – it at the same time destroy H&S pattern and probably will vanish daily stop grabber. Thus, by single point we can capture both patterns. What pattern to trade – that is personal choice. Also, as usual take close look to WPP. If market will pass through it on Monday, that will increase chances on downward continuation.
60-min
Here we have AB-CD Agreement right at 5/8 Fib resistance and if we will be right and our plan will work, market should start move down somewhere form current level. That, actually could give us “222” Sell pattern that also will be a part of H&S.
Conclusion:
In long term perspective, although there are more bullish signs than bearish, especially on weekly time frame, market mostly still stands indecision, because is coiling around long-term sentiment breakeven point – yearly pivot. To point on direction price has to show break – out from current range. Until this will happen we can’t take sequence of trades in any direction. All that we can do in such environment is to search short-term clear setups and trade them fast. Although we can’t miss existence of slow but gradual move to the upside.
In short-term perspective market shows some bearish patterns that point of possible deeper retracement on daily time frame.
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.
