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FOREX PRO Weekly January 30-February 03, 2012

Discussion in 'Sive Morten- Currencies, Gold, Bitcoin Daily Video' started by Sive Morten, Jan 28, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    Trend is strongly bearish, market is not at oversold. We see now some pullback to the upside. Personally, I a bit confused how to treat it – still as a respect of Agreement area or as pullback from 0.786 support. Was it too deep penetration of Agreement area – decide by yourself. Still, if you will treat area between 0.768 and 0.618 as some support zone, then we might say that market has found some support here, and may be we will see some notable retracement. There are two significant levels of resistance at monthly chart that are mostly close to current price action – 1.3296 as 0.382 resistance from solid thrust bar down and 1.3505 – major 0.382 resistance level. Also current price action looks as solid hammer pattern. From its perspective, we can say that downward move has continued only if price will take out its low 1.2627. Based on monthly chart we still can’t estimate potential depth of this retracement.

    Conclusion from monthly chart is as follows – market has found some support and now under way to respect it by solid bullish hammer pattern. Breakout of 1.2627 can be as indicator of reestablishing downward trend, while to the upside nearest resistances are 1.3296 and 1.3505
    [​IMG]

    Weekly
    On previous week we’ve noted this almost perfect morning star candle pattern and said that probably market could proceed higher. First resistance level has bit hit – 1.3244 level. Next area is stronger one – Confluence resistance 1.3505-1.3624. But here is another level exists that could become also significant – monthly pivot resistance 1 at 1.3389. Although there are two days till the end of the month, still, it might be significant, since market has closed above pivot. Pivot resistance could tell us – is it just retracement or we should expect stronger move to upside, depending on how market will behave around it. Usually pivot resistance holds retracement up during long solid bear trends.
    Second thought is about trend and potential stop grabber. The point is that market has tried to shift trend to bullish, but close precisely at MACD level – 1.3207. So we can’t treat it as pure stop grabber. We can’t even estimate trend, since close price equals MACD level. That’s why I offer you to focus on another possibility.
    Since this is first pullback after solid move down – it can’t last forever, even more - it should turn to deep retracement – 0.618 at minimum, now this is 1.2860. This is nice context for DiNapoli B&B “Sell” – good thrust down, close above 3x3 DMA and reaching significant resistance level. One problem though, is that B&B could start from some higher level, since it might be 1-3 closes above 3x3 DMA, while we have just first close. Anyway solution should be on lower time frames.
    [​IMG]

    Daily
    Trend is strongly bullish, actually we have nice thrust that might be suitable as for DRPO “Sell” as for “B&B” Buy. (I hope you are not confused by potential simultaneous existence of opposite B&B’s on weekly and daily. In fact, there is no contradiction). Although we do not have any of them yet, but this is just a note – be ready if they will appear. This might be good possibility with reasonable risk.
    Market stands at daily K-resistance area and has accomplished, at least theoretically, minimum target of daily 3-Drive “Buy” pattern. Market has reached and slightly exceeded top between 2nd and 3rd lows. Although some continuation could happen – market at K-resistance and we stand in potential point of weekly B&B directional pattern. This is not the time to enter long. In the beginning of the week we must be careful to any possible Sell patterns that could be formed in this area. If market will still proceed higher, then next level to watch as solid resistance is 1.3380-1.34 as monthly resistance and daily overbought.
    [​IMG]

    On second chart we can see support levels. Colored lines are pivot points, nearest Fib support at 1.3004 that is close to pivot support 1. As we’ve said, if B&B will start on weekly chart, its target is 1.2860
    [​IMG]

    4-hour
    Here we have bullish trend and, unfortunately no hint on reversal pattern. Our 3-Drive has been cancelled as we’ve specified conditions for that on Friday (although it could shift to another 3-Drive, since market is forming drives side-by-side). But we have upward channel. This is obvious that any reversal pattern that could trigger B&B on weekly chart should show downward breakout of this channel. Also we have this recent AB=CD with target around weekly pivot resistance 1. Anyway, even if you would like to enter long, it is probably reasonable to wait a pullback at least to lower border, nearest Fib support and weekly point.
    [​IMG]

    1-hour
    Trend is bullish hear. Well, we have this pattern – Butterfly “Sell” at 1.3253 completion point, but still this is just hint, some possible scenario and so on. Will it be particular pattern that we wait as B&B “sell” triggering point or not – we will see, but deep retracement down should happen soon.
    [​IMG]


    Conclusion:
    Long-term bias still holds bearish, but market now turning to some pause with nice hammer pattern. Probably this is respect of the area that we’ve discussed previously. We can speak about downward continuation only if market will take low at 1.2627.
    Weekly time frame is most important in current days, since it has context for directional pattern with excellent trading potential. Our major task is to catch triggering reversal pattern on daily or may be on 4-hour time frame for two reasons. First, estimate the starting point of B&B, second determine where to enter and where to place stop. One problem still is that if market will proceed higher – this will not cancel B&B, since theoretically there could be even 2 weeks more before it will be triggered.
    On daily time frame market stands and K-resistance, so even if you would like to enter long, and we assume that market will proceed higher – it’s better to wait a pullback. It could start by Butterfly “Sell” on hourly time frame. Also market stands in upward channel on 4-hour time frame. Probably, breakout of this channel should happen as a sign of B&B “sell” start and move to 1.2860.

    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. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Tue 31, January 2012

    Good morning, Guys,
    yesterday market has shown pullback right to pivot point, as we've discussed in our trading plan. I find current situation extremely interesting from perspective for today's trading session that it provides.

    On Daily time frame we have excellent "Dark Cloud Cover" pattern right at daily K-resistance and weekly 0.382 resistance level. It does not look impressive until we will take a look at 4-hour chart. But even as it is - it gives very useful level - 1.3237 - the top of this pattern. It is useful, because it separates bullish continuation from bearish move down. Because if market will take this high - it will probably lead to further continuation. Until this will happen, short-term bearish scenario is probable. Second attractive moment is that market now stands just 30 pips lower than this crucial level.

    On 4-hour chart you might see, why It is look important. Market is forming H&S pattern here that based on 1.27 ratio. We know that H&S fails often on intraday charts, but here we have a sign that gives us more confidence with it - take a look at MACD. It holds bear trend at right shoulder. This is very typical for H&S patterns. I do not even mention a divergence that also is here.
    So, if this pattern will work it could lead to two possible targets. Minimum is 1.3050 area, since this is Agreement of H&S AB=CD at 4-hour Confluence support. BTW, this is excellent possibility for DiNapoli H&S failure directional pattern. But this we will discuss tomorrow if market will reach it.
    Second, this H&S might become a triggering pattern for weekly B&B that has target at 1.2860. How to manage this position is up to you. One thing that we will probably have to do is to move stop to b/e, if market will start to accelerate down.

    On hourly chart (probably 30-min will be even more suitable) we see that market stands at 0.786 resistance that is important for our H&S pattern, since it is based on 1.27 ratio. We have nice thrust up, that could lead to DiNapoli DRPO "Sell", or may be to butterfly "sell" on 15-min chart. Anyway some pattern could become a triggering one, that will allow you to enter short, if you want.

    So, what do we have?
    Bulls - sit on the hands, wait take out of 1.3237 high and 4-hour bull trend.
    Bears - keep an eye on 15-30 min charts for potential bearish pattern for enter short. Place stop somewhere above 1.3237 or based on pattern that will trigger you in,
    min target 1.3050. Move stop to b/e if market will start move down.
     

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    #2 Sive Morten, Jan 28, 2012
    Last edited: Jan 31, 2012
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 01, February 2012

    Hi everybody,
    looks like yesterday's trading plan has worked well. The way how it has worked gives us more confidence on downward continuation to 1.2960-1.30 area. Here is why.

    Take a look at daily time frame. We have a context for B&B or DRPO patterns. If it will be B&B market should reach first an area that I've said. If it will be DRPO - market should not reach significant Fib support and reestablish upward move. But, based on intraday charts, I suppose that first scenario has more odds to happen.
    Why 1.2960-1.30? - It includes major 0.382 support level, monthly pivot and weekly pivot support1. Also it includes 1.618 target of AB=CD pattern that we've discussed yesterday.

    On 4-hour chart trend is bearish, market has achieved nearest target at 1.3050 area that we've specified. Here you can see, why I suppose that this will be B&B on daily TF. Look at the legs of AB and CD. CD is just a total collapse, its much steeper than AB, market has reached 1.0 extension by single candle. This very often leads to continuation to 1.618 target at 1.2959 after some retracement. And retracement will probably happen at nearest hours, since we are at Agreement and 4-hour Confluence support.

    On hourly chart I dare to suggest that retacement should reach 1.3110 level - target of small AB=CD pattern, weekly pivot and 0.382 resistance level. Also this is a previous swing low inside the channel. Although this will not be a tragedy if market will show deeper retracement, even to 0.618 resistance, but in current environment, I suspect that move to just 1.3110 is more probable.

    So short-term bias is bearish - market below pivot, channel was broken down.
    Potential bullish sign and breaking of bearish bias could be move back above lower border of the channel. Until this will happen, it will be quite unsafe try to enter long.

    This example is also very informative to understand link between different time frames. Try to combine weekly B&B "Sell" with daily B&B "Buy" and intraday charts. This is really fascinating procedure.
     

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    #3 Sive Morten, Jan 28, 2012
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 02, February 2012

    Good morning,
    yesterday our analysis was vanished by news from Greece - it has come to agreement with private creditors of write-off 70% of debt. That was really positive news that pushed EUR/USD higher. Although market did attempt to proceed lower, it has reversed fast and didn't reach our level 1.2960-1.30

    Due to this price action the picture on daily time frame has changed. Mostly, because market has not shown even single close below 3x3 during two days where it potantially has chances to do this. Second is because market has not quite reached 1.30 support level.
    That's why now it seems to me more as just flag pattern that is forming as a respect of daily Confluence resistance at 1.3240. Flag is potentially bullish pattern here, daily trend is also bullish, market is not at overbought and one barrier for upside move is 1.3240 K-resistance that has been tested once already. Also market can't turn to forming of DiNapoli patterns.

    On 4-hour time frame we can see things that, as we've discussed yesterday, carry problems for bears. Trend has solidly turned to bullish and market is trying to return back above lower border of parallel channel. What is also important - we have hidden bullish divergence with MACD and triangle consolidation right below the crossing of border of the flag and channel.

    Houlry time frame shows this triangle. Here we have bullish dynamic pressure - trend has turned bearish, but price action stands flat by triangle.

    Based on these thoughts I suggest that odds on bullish side. Although currently it is difficult to say how far upward move could happen...

    We can return back to discussion of bearish scenario only if market will show downward breakout of this flag. Uward breakout action is our focus for today's trading session, I suppose.
     

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    #4 Sive Morten, Jan 28, 2012
    Last edited: Feb 2, 2012
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 03, 2012

    Good morning,
    yesterday was a bit drammatic price action since market has not confirmed my bullish expectations. At the same time we could say that price was not going anywhere - close price was very near to open one. This is very often could be seen, when market ping-pong inside some tight range, as flag pattern.

    On daily time frame market has shown close below 3x3 yesterday. More probable scenario from DiNapoli ones is DRPO "Sell" pattern. Taking in consideration Forex cunning and my prefferable scenario, I dare to suggest that we will see some upward move to 1.33 area at least. And there will be the moment of truth. If market will show W&R of current high at 1.3237 and will return right back in flag body - this will be as Flag failure breakout - "Bull trap" as excellent DRPO "Sell" context. Potential target is 1.2860 area - weekly B&B "Sell".

    If market will proceed above 1.33 then this will be real breakout and upward continuation to next solid resistance. Intraday charts give us more confidence to watch for these levels:

    On 4 hour chart we see Butterfly "Sell" with 1.27 at 1.3290 with inner AB=CD at 1.3280.
    1.618 stands at 1.3373.
    If you will take a look at hourly chart - you will see butterflies compounding, since right wing of 4-hour butterfly is another butterfly on houlry time frame. Take a look that 1.618 of smaller one and 1.27 of larger one coincide in the same area. That 's why it worthy to be monitored as potential reversal point. This is good chance also to anticipate DRPO and enter according to butterfly trading for those of you who ready to take this risk.

    Also be aware of deeper AB=CD move to 1.3054 inside of 4-hour butterfly. This move could erase small butterfly, but 4-hour butterfly will hold. I can't say that it will 100% happen, but we can't exclude this.

    So, if you trade on daily time frame, then there is not much that you can do. On intraday charts there are a lot of possibilities - trade small butterfly, trade large butterfly by trying to anticipate it, if market will reach 1.33 area - attempt to sale and so on. The choice is up to you, since this is very personal and relate to your trading plan. I just want to share with you possibilities that I see.
     

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    #5 Sive Morten, Jan 28, 2012
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  6. Venelin

    Venelin Master Sergeant

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    Thanks Sive! I have been following you since the beginning of your contribution to FPA and I must say your influence on improving my trading is immense! Now I am at the point that I see exactly my thoughts about next week possibilities and your analysis exactly matches my own! Thank you once again!
     
    #6 Venelin, Jan 28, 2012
    Last edited: Jan 28, 2012
  7. JankoS

    JankoS Recruit

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    Thanks Sive, always very insightful!
     
  8. Q-Rick

    Q-Rick Private, 1st Class

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    ab cd 012712.

    Sive, as usual I express my many thanks for you very generously sharing your incite and research. I closed my short positions early last week as discussed and I'm certainly glad I did. Now, I'm looking to short again.
    As you know, we do have a (tight) lightning bolt, AB CD on the 1H that terminates @ the 38.2 from the most recent swing high. Also, as you know this price point area is in agreement with the area of resistance you outlined last week. We may get some respect from this point.
    I'm looking to short a gap up open, move stop to break-even as soon as possible, and hope to enjoy the video. Of course I will not hold the positions very long, if market moves against me. I too like the BF @ the slightly higher level. Maybe we get both. - Thanks again
     
  9. hazli

    hazli Recruit

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    Ban spammers

    What nonsense is this??? I hope FPA can prevent spammers and scammers from distracting us...:mad:
     
  10. asif faryad

    asif faryad Sergeant

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    Sive as always THANK YOU
    Also my thoughts are same as Hazli
    Can you please get this IDIOT!!!! OF THIS FORUM FROM FPA .....

    Thank you
     

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