Sive Morten
Special Consultant to the FPA
- Messages
- 18,564
Monthly
On previous week many forum members have asked why we still have not entered with long positions, since market has hit our targets and reached significant support level. It seems logical to think that since market has accomplished all predefined issues – it is a time to enter long, right? Not quite, because there is such issue exists as “disrespect of significant level” and this issue happens quite often. Now we have tough task to do – find confirmation of disrespect or conversely that this respect should happen. Also I have to remind you that our long-term target, according to quarterly analysis of Dollar Index is 1.15-1.16 area. So, here we have expected just some retracement on monthly time frame, but not a reversal. Still this retracement if it could happen – could be significant on daily time frame. And I have to say that on Dollar Index chart situation is developing as it was expected.
So, what do we see at monthly picture – trend is bearish, market is not at oversold. Our Agreement area of 0.618 major support and 0.618 Fib extension target is 1.2905-1.3039 was deeply penetrated by the market. Besides, here we do not see any respect of it. January bar currently shows just solid bearish momentum – opens at high and now stands at low. Next support is 0.786 at 1.2527 and our long term targets looks like is 1.1657 that corresponds with dollar index quarterly one. Although current price action looks extremely bearish, there is one bullish possibility still exists, at least pure theoretically – butterfly “Sell”, if market will turn to upward move from 1.2527 support. Although now it is not quite clear why it can happen and by which reason – here I just want to show you all possible issues and appearing of Butterfly “Sell” is just one of them. Still, at least now I also hardly believe that it will happen, especially by keeping in mind dollar index action.
That’s being said on monthly chart we do not see any respect of predefined level. Next support is 1.25 area. So if we will not find any hints of retracement at lower time frames – probably market will proceed to 1.25.
Weekly
Trend holds bearish well. Market is not at oversold. On previous week we also have discussed MACD Histogram divergence that could point on some slow down in downward momentum. This divergence still exists, but becomes weaker. Besides, it has not been completed yet, since MACD has not shown line cross.
On bearish side is the shape of CD leg in our AB-CD pattern. This is quite strong move down – no solid retracements, strong candles to the downside. Second fact is market passed through solid support at monthly chart and below AB-CD target.
Still there is one detail here that probably is not so obvious. If you remember, we’ve discussed the possibility of some drawdown below 1.2870 low (in circle) if market will trigger stops that probably been placed there. We said that by this action market could move a bit lower and reach 1.618 extension at 1.2750. So market has done this and now stands around this support. Also this is monthly support 1. This fact gives us some chances finally to see some retracement. Although chances are not solid and facts that in favor of bears are much greater than bulls’ ones.
Daily
Daily trend holds bearish. Market is not at oversold. During three recent trading sessions market shows solid move down. As we’ve said higher – market has hit 1.618 extension of weekly time frame and monthly pivot support1. The single pattern that has not failed totally yet and that still could lead to upward retracement is 3-Drive “Buy”. Yes, market has passed slightly below 1.618 extension of 3rd Drive, but not miserably yet, I suppose. Also, take a look that daily action holds in some downward parallel channel. It is obvious that for retracement takes place – market should break this channel to upside. Also, before enter at any trade in opposite direction to long-term trend we have to get two things – first one is reversal pattern, second – trend in our favor. Until this will happen, it is better sit on the hands or at least do not enter in counter trend trades.
4-hour
Here trend is bearish. We just see two additional intraday targets – AB=CD pattern and 1.618 extension of previous swing up. Recent thrust down probably could be suitable for intraday directional pattern – as DRPO “Buy” as DRPO “Sell”, although it is not perfect.
Conclusion:
Long-term bias holds bearish. It makes sense to hold long-term bearish positions. Although market has not shown yet any signs of possible retracement that was suggested by normal price action, price has not passed too deep to totally destroy this possibility.
Current price action tells that there are only two moments that we can monitor to catch possible upward retracement – breakout of daily parallel channel to upside and shifting daily trend to bullish.
On intraday charts market shows nothing interesting, except achieving of some intraday targets and context for scalp directional trades – B&B or DRPO. But they do not have any determining value.
As a result, we have to state the obvious that we do not see any reversal patterns, despite the fact that market has not passed too deep from targets that we’ve discussed and at least theoretically has chances on retracement still.
I dare to suggest that if market will start some reversal, it has to start it from current levels – 1.27-1.2750. Otherwise, if it will proceed to 1.26, then probably chances on retracement disappear.
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.
On previous week many forum members have asked why we still have not entered with long positions, since market has hit our targets and reached significant support level. It seems logical to think that since market has accomplished all predefined issues – it is a time to enter long, right? Not quite, because there is such issue exists as “disrespect of significant level” and this issue happens quite often. Now we have tough task to do – find confirmation of disrespect or conversely that this respect should happen. Also I have to remind you that our long-term target, according to quarterly analysis of Dollar Index is 1.15-1.16 area. So, here we have expected just some retracement on monthly time frame, but not a reversal. Still this retracement if it could happen – could be significant on daily time frame. And I have to say that on Dollar Index chart situation is developing as it was expected.
So, what do we see at monthly picture – trend is bearish, market is not at oversold. Our Agreement area of 0.618 major support and 0.618 Fib extension target is 1.2905-1.3039 was deeply penetrated by the market. Besides, here we do not see any respect of it. January bar currently shows just solid bearish momentum – opens at high and now stands at low. Next support is 0.786 at 1.2527 and our long term targets looks like is 1.1657 that corresponds with dollar index quarterly one. Although current price action looks extremely bearish, there is one bullish possibility still exists, at least pure theoretically – butterfly “Sell”, if market will turn to upward move from 1.2527 support. Although now it is not quite clear why it can happen and by which reason – here I just want to show you all possible issues and appearing of Butterfly “Sell” is just one of them. Still, at least now I also hardly believe that it will happen, especially by keeping in mind dollar index action.
That’s being said on monthly chart we do not see any respect of predefined level. Next support is 1.25 area. So if we will not find any hints of retracement at lower time frames – probably market will proceed to 1.25.
Weekly
Trend holds bearish well. Market is not at oversold. On previous week we also have discussed MACD Histogram divergence that could point on some slow down in downward momentum. This divergence still exists, but becomes weaker. Besides, it has not been completed yet, since MACD has not shown line cross.
On bearish side is the shape of CD leg in our AB-CD pattern. This is quite strong move down – no solid retracements, strong candles to the downside. Second fact is market passed through solid support at monthly chart and below AB-CD target.
Still there is one detail here that probably is not so obvious. If you remember, we’ve discussed the possibility of some drawdown below 1.2870 low (in circle) if market will trigger stops that probably been placed there. We said that by this action market could move a bit lower and reach 1.618 extension at 1.2750. So market has done this and now stands around this support. Also this is monthly support 1. This fact gives us some chances finally to see some retracement. Although chances are not solid and facts that in favor of bears are much greater than bulls’ ones.
Daily
Daily trend holds bearish. Market is not at oversold. During three recent trading sessions market shows solid move down. As we’ve said higher – market has hit 1.618 extension of weekly time frame and monthly pivot support1. The single pattern that has not failed totally yet and that still could lead to upward retracement is 3-Drive “Buy”. Yes, market has passed slightly below 1.618 extension of 3rd Drive, but not miserably yet, I suppose. Also, take a look that daily action holds in some downward parallel channel. It is obvious that for retracement takes place – market should break this channel to upside. Also, before enter at any trade in opposite direction to long-term trend we have to get two things – first one is reversal pattern, second – trend in our favor. Until this will happen, it is better sit on the hands or at least do not enter in counter trend trades.
4-hour
Here trend is bearish. We just see two additional intraday targets – AB=CD pattern and 1.618 extension of previous swing up. Recent thrust down probably could be suitable for intraday directional pattern – as DRPO “Buy” as DRPO “Sell”, although it is not perfect.
Conclusion:
Long-term bias holds bearish. It makes sense to hold long-term bearish positions. Although market has not shown yet any signs of possible retracement that was suggested by normal price action, price has not passed too deep to totally destroy this possibility.
Current price action tells that there are only two moments that we can monitor to catch possible upward retracement – breakout of daily parallel channel to upside and shifting daily trend to bullish.
On intraday charts market shows nothing interesting, except achieving of some intraday targets and context for scalp directional trades – B&B or DRPO. But they do not have any determining value.
As a result, we have to state the obvious that we do not see any reversal patterns, despite the fact that market has not passed too deep from targets that we’ve discussed and at least theoretically has chances on retracement still.
I dare to suggest that if market will start some reversal, it has to start it from current levels – 1.27-1.2750. Otherwise, if it will proceed to 1.26, then probably chances on retracement disappear.
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.