FOREX PRO Weekly, February 07-11, 2011

[Sive Morten]

Hi Sive-
Thanks as usual for your effort.

I have a question regarding the DRepo target... You have mentioned in your analysis "Usually, the potential target of DRPO is 100% expansion from ABC pattern of its tops. But currently we can’t do that, because the second top is higher." . However, I understand from Dinapoli that the targets are COP,OP, and XOP for that ABC swing (even if C is higher than A). Also, in many cases in your analysis, you have done that.

Can you please explain it further?

Hi Ahmed,
well, in fact, it could be done, but, first, I do not use it in many cases, as you've said, I use it quite rare.
You can do it, but C point should be reasonably higher or lower than A point. If C point is not very close to A (that is the case) that I suppose that it can't be used for target calculation.
Well, personally, I use one rule - if you calculate targets, then C point should be inside AB swing. If you canclulate support/resistance levels, then C point could be outside the AB swing. THis is one of the possible views on ABC's application.
Although DiNapoli shows such possibility in the book and tell that this is not neccesary at all that C-point stands in AB swing range, but:

DRPO is directional signal, that assumes strong move. So, i think, that OP target that you'll get from ABC currently is not suitable for strong move, because it has been achieved right on confirmation bar.

So, in fact it's personal. This is no any rules of thumb. It could be used, the question is in result of this trade.
Because this is my view on the market, so I just tell what I think. It's very good that you do not follow me blindly and have your own view and make your own decisions. You're absolutely right with it.

 

[Sive Morten]

Thank you Sive for putting in such a perfect analysis. Props to you!

However, I have been following your calls for a while and advice... and I am very intrigued about one thing, you don't have to answer it if you don't want to - If you work for a major bank as advertised, how do your superiors/bosses see the fact that you post in a public forum your analysis, as I presume they are the same ones provided to the bank.

Retail traders (us) and banks always played a Cat & Mouse's game, so hope you understand where I am coming from.

Anyway, thanks for your hard work and accuracy and taking the time to post in this brilliant forum.

Maluco
This is just a question of technology - how it could be done! We know some...
But this is a copyright protected approach to cooperation

Guys, the major task of this forum is an education, it contains a lot of interesting information that you can't find somewhere else, but you're always interested in some things that are underwater and do not link with purposes of the forum. Why? Just use it, ok?

 

[Maluco]

Maluco
This is just a question of technology - how it could be done! We know some...
But this is a copyright protected approach to cooperation

Guys, the major task of this forum is an education, it contains a lot of interesting information that you can't find somewhere else, but you're always interested in some things that are underwater and do not link with purposes of the forum. Why? Just use it, ok?

No problem Sive... well said.

Thanks!

 

[georgeta]

H1 reversed H&S

Hello Mr. Morten!
Do you think this is a reversed H&S on H1 EURUSD? The 161.8 fib expansion target coincides with 0.618 fib retracement of the whole swing down.
Or should we treat it just like ABC. It is preaty harmonic. (I do not know how to attach chart from my MT4. will learn)
Thank you!

 

[Sive Morten]

EUR/USD Daily Update, Tue 08, February 2011

Good morning,
I think that daily DRPO is still in play. 3x3 DMA holds recent price action well, there is no acceleration to the upside still. I think that we can possess ourselves still on the short side, but only with fulfillment of follows conditions:

1. Take a look at hourly chart now. We see clear ABCD pattern that makes an Agreement with weekly pivot and 4-hour confluence resistance. This is the first area to watch

2. At the same time, BC leg is very shallow so, it makes me think that we can't exclude the possibility of extention even to 1.618. This target creates another agreement with 1.3720 Fib resistance. This is the second area.

So what we should to do, how to choose an area?

I think that the proper way to act here is like this:
1. Wait, when market will reach the area (no matter which one).
2. Wait when hourly MACD will confirm bear trend after reaching the area. So, daily and hourly trends turns bearish
3. wait for first 0.382 retracement after that on hourly chart and enter. Be sure that during this retracement hourly bear trend holds.

I think that this could happen either at 1.3660 or 1.3720.

 

[ochills]

Hi Sive
Pls what do you think about butterfly sell that formed last week on GBP/USD.
also what do you think about this USD/CHF FOR NOW, to me I Think bearish butterfly is in the making, though it is not a perfect/nice butterfly.
do check the chart below
Thanks Greatly for your indepth analysis.

 

[Sive Morten]

Hi Sive
Pls what do you think about butterfly sell that formed last week on GBP/USD.
also what do you think about this USD/CHF FOR NOW, to me I Think bearish butterfly is in the making, though it is not a perfect/nice butterfly.
do check the chart below
Thanks Greatly for your indepth analysis.

Hi Ochills,
GBP Butterfly is OK, besides, this is the same pattern that we've closely discussed in our video research and in previous weekly thread. It has finished with 4-hour DRPO "Sell", if you remember.

Second pattern seems nice, if initial swing down holds recent price action - i.e. no new lows after that

 

[Sive Morten]

EUR

Hourly:
Looks like market has formed 3-Drive "Sell" pattern, trend turns bearish. So, possibly this is what we've talked about in the morning...

 

[Sive Morten]

EUR/USD Daily Update, Wed 09, February 2011

Good morning,
recent price action was rather choppy, but here is some things that worry me:
1. On 4-hour chart we see clear bull trend and the nearest 0.618 Fib target at 1.3718. We've talked about this level previously, as about possible second target of upside retracement.

2. On hourly chart - yes, market has shown pullback from strong resistance (This is normal price action), but I do not see any solid thrust or impulse to the downside, market just coiling below pivot. This makes me think, that possibly we can see another swing up. Anyway, this is not typical for development of bearish move. Looks like market just has shown respection to resistance and indends to test it once again

3. The major solution, I think on 15-min. chart. See, 100% target precisely at weekly pivot, 1.618 - below the previous highs. So, if these highs will not hold, and market will stands above pivot and above these highs - don't be short.
At the same time be aware of W&R of these highs. This also could happen...

 

[Sive Morten]

EUR/USD Daily Update, Thu 10, February 2011

Good morning,
market still stands below 0.618 Fib resistance at 1.3721 and this holds bearish daily bias intact.

Today crucial level is 1.3650 on 4-hour chart. If market will hold there - then we can possess ourselves on long side with target 1.3780, that is 0.786 Fib resistance 100% Fib expansion target and weekly pivot resistance1

If not - wait when market will move below 1.36 and then enter on retracement on the short side, with the target 1.3520 or 1.3460.