Sive Morten
Special Consultant to the FPA
- Messages
- 18,564
Monthly
So, on Friday, we’ve got really discourage price action, that has given up weekly stop grabber pattern. Another unpleasant moment for bulls is that yesterday’s low erases a possibility for upward harmonic pattern. So, in such difficult environment we have a tough task – to decide what to do next.
Although on monthly chart trend still holds bullish, for 3-4 consecutive months price is coiling inside of K-resistance area. Two weeks ago it seemed that probably market is ready for upward acceleration, an dynamic was really not bad, but yesterday it has appeared that not all things as good as they look. As a potential bullish scenario we’ve mentioned possible lightning bolt AB-CD right to 1.38 Agreement.
Also we’ve asked – “but what are the risks?” Currently only one – if K-area will hold price action. In this case market should form solid black candle. If simultaneously trend will shift bearish again – this will be a kind of 2-period stop grabber and strong bearish signal. And it seems that we can’t denied this possibility totally yet.
Also recall Yen’s chart that we’ve looked two weeks ago. On that moment it was not quite clear how they move together, but now it everything comes full circle possibly…Recall previous week monthly S&P 500 bullish stop grabber as well. Looks like some growing demand for USD is coming…
Weekly
Although Friday price action looks scaring, I suppose, that everything is possible, while price still stands inside of weekly range, marked by blue lines. This chart is a bit overloaded with details, since I’ve tried to put both scenarios on it.
What we have on the bearish side:
- Market was not able to complete weekly stop grabber pattern, and has not even challenged previous highs;
- We have bearish engulfing week, that also looks like shooting star pattern;
- Price action has stopped right at MPR1, and we know – when market retraces in long-term bear trend, it usually retraces to Pivot Resistance1;
- As we said on monthly chart price has stuck in K-resistance area.
On the bullish side we also have some ruffs:
- Trend still bullish on weekly and monthly time frame, and there is still a possibility for another stop grabber will be formed here;
- Nobody can cancel previous nice thrust up and just shallow 3/8 retracement, i.e. “222” pattern still could work;
- Market already has shown failure downward breakout of the blue-lined range;
- If market will hold above previous low, for example at MPS1 – it could be the chance for Butterfly pattern
That’s why I think, that until market stands inside of weekly range – anything could happen. But to be absolutely honest, I suppose that bears have a bit better chances – JPY chart is riveted in my mind. So, what we can do when we have contradictive moments on both sides? Probably just one solution exists. Drastical changes will come only if market will break in one or another side. Until that will happen and until we stand inside of weekly range, we can be relatively calm in trading of lower time frame patterns that could appear inside of it.
Daily
Let’s see, what we can find on daily now… Well, probably two patterns could appear in nearest time. First one is B&B “Buy” LAL (Look-alike) – it could be perfect, if there was no 3/8 retracement during the thrust up (recall that we also have traded it as B&B). All other conditions are perfect – no close below 3x3 DMA within the thrust up, this is second day of close below it when market has reached significant support – 50% and MPP. New Pivot point stands around 1.2975 – above the market, that relatively suggests possible retracement to it. Trend has turned bearish with excellent angle.
Second pattern that could be triggered by this B&B is Head& Shoulders, but it will better looking on lower time frame…
4-hour
Honestly, I’m looks sceptically on intraday H&S patterns, since my experience tells that they oftener fail rather than work. But here we have nice foundation with it in terms of B&B and solid move down, so, may be it will work.
Currently it looks potentially perfect – top stands right at 1.618 of left shoulder, pattern could be easily identified, nice harmony. Also it gives a clue how to enter with daily B&B LAL. Look – previous move up has started from the same level by bullish engulfing pattern. Here we have it again. The advantage of this pattern is it’s invalidation point right below its lows – it gives us tight stop and nice risk/reward from possible B&B. That is for those who search possibility to enter long.
Others, who indends to sell will have to deal with H&S, probably. Better moment to enter is around 1.3030 area. Drop your time frame and search for reversal or exhausting patterns around it, such as on left shoulder’s top – it was butterfly “Sell”. The target will be around 1.2680-1.27 – right around previous lows on daily. If, of cause, this H&S works. So, our plan is twofold – try to take pips from B&B “Buy” and later reverse position around it’s target – 1.3030 to try possess ourselves with H&S pattern.
Conclusion:
Looks like market challenges our patience. That’s fine. Until it stands in weekly’s range – we will trade daily and lower patterns. Fortunately we will not be bored, at least in the beginning of the week, since we already have 2 patterns to keep an eye on – B&B “Buy” and 4-hour H&S.
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, on Friday, we’ve got really discourage price action, that has given up weekly stop grabber pattern. Another unpleasant moment for bulls is that yesterday’s low erases a possibility for upward harmonic pattern. So, in such difficult environment we have a tough task – to decide what to do next.
Although on monthly chart trend still holds bullish, for 3-4 consecutive months price is coiling inside of K-resistance area. Two weeks ago it seemed that probably market is ready for upward acceleration, an dynamic was really not bad, but yesterday it has appeared that not all things as good as they look. As a potential bullish scenario we’ve mentioned possible lightning bolt AB-CD right to 1.38 Agreement.
Also we’ve asked – “but what are the risks?” Currently only one – if K-area will hold price action. In this case market should form solid black candle. If simultaneously trend will shift bearish again – this will be a kind of 2-period stop grabber and strong bearish signal. And it seems that we can’t denied this possibility totally yet.
Also recall Yen’s chart that we’ve looked two weeks ago. On that moment it was not quite clear how they move together, but now it everything comes full circle possibly…Recall previous week monthly S&P 500 bullish stop grabber as well. Looks like some growing demand for USD is coming…
Weekly
Although Friday price action looks scaring, I suppose, that everything is possible, while price still stands inside of weekly range, marked by blue lines. This chart is a bit overloaded with details, since I’ve tried to put both scenarios on it.
What we have on the bearish side:
- Market was not able to complete weekly stop grabber pattern, and has not even challenged previous highs;
- We have bearish engulfing week, that also looks like shooting star pattern;
- Price action has stopped right at MPR1, and we know – when market retraces in long-term bear trend, it usually retraces to Pivot Resistance1;
- As we said on monthly chart price has stuck in K-resistance area.
On the bullish side we also have some ruffs:
- Trend still bullish on weekly and monthly time frame, and there is still a possibility for another stop grabber will be formed here;
- Nobody can cancel previous nice thrust up and just shallow 3/8 retracement, i.e. “222” pattern still could work;
- Market already has shown failure downward breakout of the blue-lined range;
- If market will hold above previous low, for example at MPS1 – it could be the chance for Butterfly pattern
That’s why I think, that until market stands inside of weekly range – anything could happen. But to be absolutely honest, I suppose that bears have a bit better chances – JPY chart is riveted in my mind. So, what we can do when we have contradictive moments on both sides? Probably just one solution exists. Drastical changes will come only if market will break in one or another side. Until that will happen and until we stand inside of weekly range, we can be relatively calm in trading of lower time frame patterns that could appear inside of it.
Daily
Let’s see, what we can find on daily now… Well, probably two patterns could appear in nearest time. First one is B&B “Buy” LAL (Look-alike) – it could be perfect, if there was no 3/8 retracement during the thrust up (recall that we also have traded it as B&B). All other conditions are perfect – no close below 3x3 DMA within the thrust up, this is second day of close below it when market has reached significant support – 50% and MPP. New Pivot point stands around 1.2975 – above the market, that relatively suggests possible retracement to it. Trend has turned bearish with excellent angle.
Second pattern that could be triggered by this B&B is Head& Shoulders, but it will better looking on lower time frame…
4-hour
Honestly, I’m looks sceptically on intraday H&S patterns, since my experience tells that they oftener fail rather than work. But here we have nice foundation with it in terms of B&B and solid move down, so, may be it will work.
Currently it looks potentially perfect – top stands right at 1.618 of left shoulder, pattern could be easily identified, nice harmony. Also it gives a clue how to enter with daily B&B LAL. Look – previous move up has started from the same level by bullish engulfing pattern. Here we have it again. The advantage of this pattern is it’s invalidation point right below its lows – it gives us tight stop and nice risk/reward from possible B&B. That is for those who search possibility to enter long.
Others, who indends to sell will have to deal with H&S, probably. Better moment to enter is around 1.3030 area. Drop your time frame and search for reversal or exhausting patterns around it, such as on left shoulder’s top – it was butterfly “Sell”. The target will be around 1.2680-1.27 – right around previous lows on daily. If, of cause, this H&S works. So, our plan is twofold – try to take pips from B&B “Buy” and later reverse position around it’s target – 1.3030 to try possess ourselves with H&S pattern.
Conclusion:
Looks like market challenges our patience. That’s fine. Until it stands in weekly’s range – we will trade daily and lower patterns. Fortunately we will not be bored, at least in the beginning of the week, since we already have 2 patterns to keep an eye on – B&B “Buy” and 4-hour H&S.
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.