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FOREX PRO Weekly December 12-16, 2011

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Dec 10, 2011.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    December candle remains almost the same, so there is nothing to add on monthly chart and I’ve left analysis intact. Our long-term forecast, that assumes possible move to 1.15 area still holds. Monthly trend is bearish, and, in general, we can see downward move during November. Market stands neither at oversold nor at overbought, next support area is 1.2905-1.3040. Pay attention that as this target as next one around 1.15 area stands below previous lows. It means that these lows hardly will hold if market will reach them, of cause.

    [​IMG]

    Weekly
    Here we see another inside week – it does not add much action on the chart. Weekly trend is bearish. Our major focus in medium-term perspective is most recent AB=CD pattern with target at 1.2830 and weekly oversold – very close to monthly Agreement. Monthly and weekly analysis tell that market should continue move to the downside, at least to 1.28-1.30 area – both trends are bearish, no oversold and absence of any solid support levels below the market. Currently we just see some kind of tight consolidation that probably could be treated as pennant. From classical approach, if market will show downward breakout, then move should be equal to mast of pennant – this is about 1000 pips till 1.22 area.
    [​IMG]

    Daily
    Finally daily time frame gives us at least possible scenarios for near future. Since trend still holds bullish, it tells that deeper upward retracement is still possible. Although market has closed below pivot point – this is not tells much, since market trades inside the triangle pattern, or weekly pennant. So what are two possible ways of development? First one is a classical downward breakout of triangle. Usually market ping-pong inside triangle with 5 waves – we see that 3 waves have been completed already. The 4th wave should be to the upside, during 5th wave market should break triangle. Also additional bearish sign is if 4th wave will not be able to reach upper border of triangle. If you take a look at AB-CD pattern inside the triangle, you’ll see that 4th wave could stop at 0.618 extension around 1.3484.
    Second possible pattern is Gartley “222” if market will break triangle to upside. Then AB=CD creates Agreement with daily K-resistance area around 1.3605-1.3630.

    That situation allows as create a trading plan. First, trend holds bullish, and both scenarios assume some upward move but to different targets. So, if you are bearish you should wait of 1.3484 or 1.3630 area. Bulls have no context to trade on daily time frame now, since weekly trend is bearish, only those who trade on intraday charts - let’s take a look at them.
    [​IMG]

    4-hour
    This time frame gives us some more details and they confirm potential upward continuation. First, 4-hour trend is bullish. Appearing of strong candles in opposite direction right near the low border of triangle points on momentum shifting in market behavior. Also pay attention that current pivot at 1.3380 coincides with classical support/resistance level inside the triangle, and now market has returned above it again. A bit later we see some kind of bullish stop grabber, may be it will work. It’s target at minimum 1.3447 high. Another important beacon is 1.3484 level. This is 0.618 target of daily AB-CD, that we’ve just discussed, also this is AB-CD target of recent pattern on 4-hour time frame, and what is more important – this is weekly pivot resistance 1 at 1.3478. This forces us to pay more attention to that level. As we’ve said when market holds in some bear trend and turns to retracement – this retracement usually to weekly pivot resistance 1. So, retracement should stop there and turn to triangle breakout. If market will move and hold above it, then 1.36-1.3630 becomes very probable.
    [​IMG]

    Hourly
    Hourly chart in general supports previous analysis. Trend holds bullish, there is another bullish stop grabber that suggests reaching of 1.3447 at minimum, but here price behavior with MACDP line looks much more attractive from bullish perspective. Since market has shown 0.618 retracement already next retracement probably will happen only after reaching 1.3434 0.618 target. But if it will come before that, those who trade intraday charts could try to enter long at nearest Fib support level around pivot point 1.3380
    [​IMG]

    Conclusion:
    Long-term bias holds bearish. It makes sense to hold long-term bearish positions.
    Daily chart is forming potentially bearish patterns. Currently they could be either Triangle or “222” Sell pattern. If you’re bullish and trade daily – you have to sit on your hands, since weekly trend is bearish and you have no context to enter long. If you’re bearish – wait at least 1.3480 area to search for sell signals, or, if it will be “222” – 1.36-1.3630 area.
    Intraday charts have bullish context, since all trend are bullish. Nearest target, I suppose is 1.3478-1.3485.



    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. asif faryad

    asif faryad Sergeant

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    Thank you Dear Sive,

    Have studied next weeks Plan and adjusted my trading accordingly.

    I wanted to also ask that with December upon us when would you trade up to date wise please? as most of big guns start slowing for the Christmas holidays.

    Thank you have as always a lovely weekend.

    Asif
     
  3. BackSpace

    BackSpace Private, 1st Class

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    Thank Sive,

    I have the same question as Asif.
    What is your advice with regards to trading around/during the Holidays ?

    Kind regards, BackSpace
     
  4. onenikos

    onenikos Corporal

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    Dear Sive and All
    I would like to add to your excellent as always weekly analysis (my favorite) some thoughts on the recent developments in EU which support both the overall bearish view and the short term possibility of some gains which I view as excellent opportunities for establishing short positions. The following are my personal beliefs and as such can be easily argued or dismissed altogether. The EUzone leaders have failed in recognizing the nature of the EU crisis and thus have failed in taking the steps necessary to avert EUzones disintegration. Europes crisis is not a Dept crisis. The crisis is threefold in nature with the concurrent and harmonious addressing of all three issues by re-directing existing EU facilities being the only possible solution to avert EUzone disintegration. We have the Sovereign Debt that cannot be sustained at present growth levels, we have the Banking sector which is almost insolvent (and I do not mean the peripheral banks but also French and German giants) and in addition to the above two we have the situation of large private capital that has no where to be placed.
    The current effort for re-capitalization at national levels cannot be done. This should be done centrally by EFSF. The ECB should take also start borrowing money by issuance of ECB bonds, while the EIB (European Investment Bank)can embark on a massive development programs from the many that exists in their drawers through the issuance of Eurobonds. I do not intend to write a complete analysis on why the above is the only plausible solution to EUZ disintegration, besides this has been fro almost a year been campaigned and even presented to the European parliament under the name of "Modest Proposal" by Varoufakis and Holland. What I want to note though is that as long as this or some other proposal involving the ECB and the EIB is yet to be presented, the current moves not only will not solve problems but in fact expedite catastrophe. No wonder the medium to long term outlook is bearish and will remain so unless we can be convinced that the EU leaders are (a) capable to recognize the nature of the current problematic situation and (b) apt for the proper moves towards its solution. The up to now experience has shown that they cannot. Fortunately in democracies leaders can change and hopefully the present policies will too. For the moment money players will push hopes (and prices) up for gains and better short positions based on an induced (false) euphoria. Be on the alert though as this will not last long.
    Have a nice weekend
     
  5. Triantus Shango

    Triantus Shango Sergeant Major

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    as always, a big thank you sive. your crystal clear analysis is definitely making my thinking clearer and clearer. most useful is how you make apparent the story that price action tells. and i really want to emphasize this point: price action tells a story. grasp the story and you are one step closer to profits. whereas in the beginning, and i think that probably applies to most beginner traders, i focused only on technical signals on shorter time frames never seeing the bigger story and the result was: mr market would take me to the cleaners.

    for those reading this who are also beginners, i highly recommend reading van tharp's book: 'trade your way to freedom' which will help you understand the most important thing about trading and that is: proper risk management.

    let's have a pipped-up week! :cool:
     
  6. asif faryad

    asif faryad Sergeant

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    Thats good to hear Triantus from you like this as your thinking is the most important change that has to happen for success to happen.

    Otherwise if you keep doing the same thing and expect a different result this is called INSANITY!!!!

    Also as you mentioned a book may i also recommend to you and any one else interested in long term success a book by Mark Douglas called Trading in the Zone.........

    This one for me did it!!!!!!!!! i have read this 4 times and us my bible as everyday i read chapters in the mind training and my results are very consistent know!!!!

    I wish you Triantus and everyone else lots of pips!!!!

    Best

    Asif
     
  7. Triantus Shango

    Triantus Shango Sergeant Major

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    good point. i read that book too and would encourage anyone who is struggling to get a hold of it and process the info therein, meaning read and re-read it. it's basic psychology but it's KEY.

    even so, risk management and understanding proper leverage is the other key. now when i see brokers offering up to 500:1 leverage with only USD 1,000 minimum in the beginner trader's account, i understand how wrong i was to get excited by such offers. that kind of leverage with only USD 1,000 is suicide. anyway, probably all the regulars on this forum know that. but if you are a newbie, try to understand it and you'll save yourselves a lot of pain.

    anyways... good luck all.
     
  8. Triantus Shango

    Triantus Shango Sergeant Major

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    sive

    here is a question for you. i just read in the telegraph the following:

    'The European banking sector's problems are being exacerbated by a wave of asset sales as lenders look to dramatically shrink their balance sheets. UBS estimates eurozone banks could sell off between €3.7 trillion and €4.5 trillion of assets in the next three years.'


    is that what is meant by 'fund repatriation'? european banks selling assets translates into 'EUR buy' and thus EUR up over the next couple months?

    if it's going to be 3.7 to 4.5 trillions, that sounds like a hube number, easily market moving.

    do i understand this correctly?

    source: Eurozone banking system on the edge of collapse - Telegraph
     
  9. Triantus Shango

    Triantus Shango Sergeant Major

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    Soros's bet on EZ not collapsing

    and what about this news? if Soros doesn't believe it, then maybe ...

    'Investor George Soros's family fund bought about $2bn of European bonds formerly owned by MF Global Holdings.... Soros' Italian-debt purchase is significant because it indicates that an investor considered to be one of the world's savviest has confidence that the country won't default on its debts, at least by the time these bonds mature in December 2012.

    It is also something of a wager that a wider collapse of euro-zone finances will be averted. Italy has emerged as the centre of the financial storm engulfing Europe because, following bailouts of Greece and other nations, Italy is widely considered too big to save should it run out of funds to service its debts, though some on Wall Street view pessimism surrounding the country's finances as overdone.'

    source: Corzine's loss may be Soros's gain
     
  10. mrgummo

    mrgummo Corporal

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    Sive,

    Thank you for sharing your expertise with us! Originally, I traded forex in 2003, and blew out my account (as did my friends) on faulty advice from "experts" whose seminars showed audiences how to use one small piece of technical analysis, and use that to "get rich quick". I decided to try Forex again, only this time with a very disciplined mind set, and test the advice from experts before going live. Long story short, your advice is "Golden"! After spending a number of months with practice accounts, I am now using a small ($1000) account, which I doubled in 5 weeks. You are the first source I go to when plannning my trading strategies for the day /week. I am very grateful!

    In appreciation.
    Ron
     

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