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FOREX PRO Weekly December 26-30, 2011

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Dec 24, 2011.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    December month gradually comes to an end, and currently we see solid bearish price action by this month. Monthly trend holds bearish, market is not at oversold. So, long-term bearish bias still holds intact. Meantime, the most important information for us on monthly time frame is Agreement support level of 1.2905-1.3040. Since market has reached it – this is not the time currently think about increasing short position on lower time frames. Although we all know that anything could happen, market could just absolutely disrespect this level by some emergency event from EU, but we have to act according to current situation. Now, what we do see is that market at monthly Agreement. Probability suggests that commonly it leads to some retracement – either deep or small.

    Another important moment is that weekly/daily AB=CD target that we are trading currently stands slightly lower that Agreement level. It could happen so, that retracement will start when market will pierce a bit monthly Agreement just to reach weekly AB=CD, because 100 pips move on monthly is a very small difference – it could be even seen on the chart. Currently puzzle is collecting – first, we see strong support at monthly, then we see AB=CD target at the same level on weekly, and, as we’ve discussed yesterday, there is a hint that probably on daily we will see 3-Drive “Buy”. All lower charts confirm monthly. So, this gives more confidence to this assumption.
    [​IMG]

    Weekly
    Trend holds bearish well. Market is not at oversold. Passed week was inside one for previous solid move down. From that point of view we do not see any development. Here you can just better see AB=CD pattern and its target. By the way, take a note that target stands slightly lower than previous significant 1.2870 low, so market could proceed slightly lower, fueled by stop triggering. In this case it can trigger 1.618 extension of different AB-CD at 1.2750 as well.
    Here again I have to warn you that market in nearest days will have to struggle against monthly support. It might look as deeper retracements, pullbacks more choppiness on intraday charts and so on. So, if you’re long-term trader and want to increase position – it’s better to wait when this pullback will start or when there will be some clear signs that it will not happen at all. Otherwise, you may get to very desirable entry and even less desirable pullback after that. But still - the decision is yours.
    [​IMG]

    Daily
    As previous two time frames are not so interesting as daily time frame contains a lot of intriguing stuff. On the first chart we see patterns that we’ve partially discussed on Friday. We know that market stands at monthly Agreement, second, 100 pips below market around 1.28 stand two weekly targets – 1.0 AB-CD and 1.618 of another Extension. Here is also 1.618 of daily AB-CD pattern. Since we know it, we have to expect possible pattern that could trigger retracement up. Although we all know that anything possible, our analysis should be based on probability and logic. To expect here reversal pattern is logical due the reasons that we’ve just discussed. So, let’s pass to their discussion.
    Once, in our Forex Military School we’ve discussed 3-Drive pattern compounding and said that from time to time, rather often, it could consist of side-by-side butterflies (on chart #5):
    http://www.forexpeacearmy.com/forex-forum/chapter-17/17337-chapter-17-part-iv-3-drive-pattern-harmony-classical-patterns.html
    Current price action makes me think that this is very probable on daily time frame. Take a look, first butterfly was 1.618 one – that was a second drive. IF market will create another 1.618 butterfly, then its target will be around 1.28 – the same area as other targets. May be it even could be used as a triggering pattern to enter long. IF this will really happen – this will complete 1.618 3-Drive “Buy” pattern with minimum target 1.32-1.3250.
    Another important moment is MACD Histogram. If you will take a look at simple MACD, you will not see any divergence. Histogram is showing divergence, but this one is another kind – it shows market’s momentum, and we see that momentum of most recent low (potential 2nd drive) become weaker. That is very common, when 3-Drive pattern is forming.
    [​IMG]

    On second chart we see that although daily trend holds bullish, market does not quite support this. Previous couple of days was inside trading sessions that is not a surprise before Christmas. In fact market holds in a range of our stop grabber pattern that is still valid. Normal price action suggests downward continuation to targets that we’ve specified above.
    Also pay attention that since market action was tight – pivot point stands very close to current price action. Our crucial level is still the same – 1.3224 stop grabber’s high. Market should not take it, otherwise stronger move up could happen.
    [​IMG]

    4-hour
    Since market stands tight, this is the same picture as on Friday. 1.3093 is a pivot point for next week. Although trend holds bearish, this is not very informative, since market stands flat. Still there is one thing that tells, that probably market could show upward move, because current price action reminds bullish dynamic pressure – when trend has held bearish, price action stands flat. Potential areas that market could reach are 1.31 and 1.3189 – 0.618 extension of large AB-CD pattern. Both of them are suitable for potential butterfly.
    [​IMG]

    1-hour
    Trend holds bearish. Most important for us here are lower trend line and C point at 1.3029. If market will break it to the downside, then probably it will mean that downward move has been reestablished. Probably that already has happened – as 4-hour as hourly trend has turned bearish. Also we have upper resistance line, so we do not want to see deep penetration of it. Still we can’t exclude possible reaching of any of levels – 1.31-1.3120, 1.3150 or 1.3190 – that will not break and idea of butterfly on 4-hour time frame.
    [​IMG]

    Conclusion:
    Long-term bias holds bearish. It makes sense to hold long-term bearish positions. Still do not be to hurry to add more. Odds suggest that some retracement could happen. Probably it will be better to add more when it will happen.
    On daily time frame we expect completing of reversal pattern, so here we have to keep an eye on it’s development. If something will go wrong then we have to sit on our hands and wait for clear signs to understand what we might expect.
    Since we have inside week and 2 inside days, market is building energy - as we already know this usually happens, before any breakout. Current price action tells that it should happen to the downside.
    On intraday charts we have to keep an eye on two levels. First one is crucial for short-term perspective – high 1.3224 of stop grabber pattern. Second – lower trend line and C point at 1.3029. If market will break the line and take this low, probability of downward continuation will significantly increase.

    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. Venelin

    Venelin Master Sergeant

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    Hey Sive,
    thanks for the analysis as always! On 30 min. chart I see a potential butterfly sell @1.3145/1.3180 , that coincides with larger butterfly sell on 4H. It `ll be interesting week! Merry Christmas to you and Happy New Year!
    View attachment 4534
     
  3. tadinda

    tadinda Private, 1st Class

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    Hi Sive,

    Ernest here. Just want to thank you and all at FPA for this wonderful year of great analysis and education.
    May I also wish you all and your families a merry Christmas and a prosperous new year.

    Ernest
     
  4. rashidin5178

    rashidin5178 Sergeant

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    Hi Sive,
    I have 2 reasons to write here right now. First, I would like to wish you and your family Merry Christmas and Happy New Year. Second, I don't know how can I express my sincere appreciation to you and FPA of your superb analysis and most importantly your dedication to assist us. Although tomorrow is christmas, but still you don't forget to post your weekly analysis without delaying it.
    Thanks and Best Regards.
     
    #4 rashidin5178, Dec 24, 2011
    Last edited: Dec 24, 2011
  5. Triantus Shango

    Triantus Shango Sergeant Major

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    Fibonacci channel on H4

    guys, take a look at this H4 chart. the bottom yellow line and light blue lines define a fibonacci channel. the red and dark blue lines are just regular trend lines. price seems to be crawling up the bottom of the fib channel. interesting or what? :cool:
     

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  6. RahmanSL

    RahmanSL Major

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    Hi Triantus, so you really can't resist trading too;yah! ;)

    I have been monitoring EUR/USD since start of trading....very little liquidity in the market...but I did managed to closed a couple of my still opened positions left over from last friday (which is the main reason I am trading today as my broker has reduced my leverage and I have to keep watch on my account due to those still opened positions).

    Ok, seems like it has a problem at 1.3061 which form a pretty strong resistance. 1.3061 is also where I need the price to penetrate so that I can close out one more position.
    Based on Eliotte Wave principal and on M1chart, the pair seems to be on an upward trend..

    Latest news...yup, the pair just went up past my 1.3061 and I have closed one more position ;)
    ....but I have absolutely no idea how high is high;yah!!!

    AUD/USD too is on an uptrend....and again, I have absolutely no idea about the high!!....But I am closing as many opened positions as I can as I don't want to risk my account due to the huge reduction of leverage (1:100 from 1:500) by my broker.
     
  7. Triantus Shango

    Triantus Shango Sergeant Major

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    hey rahman, like i say to my wife, the market is my mistress ;-) am totally obsessed with it.

    i don't know about upward trend, doesn't look like a trend to me yet, more like ranging with a slight slant upwards. what concerns me is that price is still stuck under weekly pivot and daily RSST 2 on H4 and we haven't cleared the high of the previous drop from 3092 which is right under the monthly pivot. i'll feel much more comfortable once we clear the monthly pivot. then there is hope to revisit the 3190-3200 level.

    btw, which broker is that?
     
  8. RahmanSL

    RahmanSL Major

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    Yes, you are very correct....it's not a trend at all, but just ranging.
    Hope it will "range" further up past the monthly pivot as I am still stuck with some long positions :(

    So froex is your mistress;huh?? ;) ....well, at least you have the passion, and the desire, for it then;)

    The broker I am referring to is FxOpen...it is the only one of my 3 Live accounts (Pepperstone & Exness) which have left over opened positions from last Friday and hence my presence here as I want to close out (not trade) as many opened positions as possible to increase my available margin which stood at 222.10% as of now. It was at 825.75% last Friday closing. Leverage reduction for their ECN account is even worst at 1:33
    Besides reduction in leverage, their spreads have also been increased 3 times which makes trading almost suicidal.

    Are you carrying out any actual trading today???
     
  9. Triantus Shango

    Triantus Shango Sergeant Major

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    yes i am. i've a long position on.... waiting for the 3200 level :)

    i saw the ads for fxopen... never inspired confidence but of course i could be wrong. i tried pepperstone's mobile app on my ipad... the spreads, feed, and execution speed on demo seemed alright. as far as a mobile apps goes, they have the best UI but it's still very primitive. how is their execution speed on the desktop? variable spreads?

    i remember checking out exness briefly last year... but also found it not inspiring... i have a tendency not to trust new kids on the block, if you know what i mean. so i usually choose brokers that got high reviews in barron's and/or have been in business for a long time doing this with stocks, options and futures before forex was open to the retail investors, or are swiss ;-) since it still seems that the swiss are more serious about regulating their financial market players than the americans are (maybe more professional ethics in the alpine region).

    if you are keeping an eye open for another good broker, i'd recommend MBTrading--execution is near instantaneous and they even give you positive slippage at times of high volatility (i got 40+ pips once when the price gapped over my T/P) and customer service, although not perfect, is very good once you get them to listen to you ;-) . i also heard FinFX, another ECN (they use integral on the backend) but i haven't had any direct experience with them. and FXAll is supposed to be great but they don't cater to retail investors--i think you need at least USD 500K to be able to open an account and be registered as an institutional investor. but if you can, liquidity pool is probably even better.
     
  10. RahmanSL

    RahmanSL Major

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    Don's tell me you have a position at 1.3190 too???? :p... My highest position is right up there and so 1.3200 would be just nice to close out all my EUR/USD positions and I will be able to get some good night sleep.


    I have Demo traded with MBTrading for ages, but somehow, I never got to using them for any Live account and I cannot remember why!
    Another broker I Demo traded for a while is Tadawul, but since getting USD1,079,939.88 in losses on a USD3k account, I completely struck them off my list. Imagine getting that figure in arrears in a Live trading account!

    Pepperstone have some persistent problems with their platform servers causing them to have delayed trade execution and completely freezing up. Their Technical dept informed that they will have that fixed soon and hence I carry out very little trades in my account until they have got that problem sorted out.

    I am still uncertain about EXNESS as I have been with them for just over a month. It will take time for me to form an opinion on them, but their platform speed and execution has been quite okay...not that great, but tradable. I went Live with them mainly because of their ease of funding and withdrawal which can be carried out within minutes (if not seconds) via Credit Cards, MoneyBookers (and other e-purse), and with one of my local bank.

    Yes, Swiss brokers are without a doubt the best, and I am thinking of Dukascopy...but, if I really want to go with them, I will have to find the time to learn how to use their platform....which I am not too crazy about right now!


    Well, checking back on the charts, it looks like the market is hardly moving at all.....
     

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