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FOREX PRO Weekly June 11-15, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Jun 9, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    Monthly trend holds strongly bearish. Market is not at oversold although has hit minor 0.886 support area. Currently I do not see any significant patterns, although downward momentum is solid and currently I do not see any reasons to speak about possible reversal. Although you can ask about solid black recent candle and treat it as Marubozu, but by looking back – it is not very good idea to rely on it. Take a look, how often market has shown strong opposite move after huge candles as upside as downside. Although it supports our confidence of south continuation, still better do not rely on it solely.
    Nearest resistances are 1.2745 and 1.3028-1.3087 K-resistance.

    [​IMG]

    Weekly
    Although we have clarity on monthly chart, weekly one gives us real difficulty. Here we have to decide what to expect – downward continuation or deeper upward retracement. I will share with you by facts as in favor of the former as the latter and then give you my thought. You will have to thing independently and make your own choice. So, market could show deeper retracement, because:
    - It has hit weekly level oversold and usual retracement target is minimum the middle between bands of Oscillator Predictor;
    - It has reached minor 0.886 support level;
    - Also it has achieved as 0.618 target of most recent AB=CD pattern as 100% extension target of former long-term AB=CD;
    - MPP was not tested yet. Usually, when market retraces in long-term solid trend it does it either to PP or PR1;
    - We see hint on bullish divergence (unconfirmed pattern).
    Market could, probably continue move down, because:
    - Now it stands not quite at oversold, so this condition was slightly corrected;
    - If we will take a look at yellow ellipse then we’ll see that market could just creep with oversold lower and lower and react only by reaching some target (this was 1.618 extension target);
    - Now if we will drag this situation on current moment, then will see, that slightly lower – around 1.1950-1.20 stands 1.618 Extension of previous AB=CD pattern (drawn on the chart) right near MPS1. So, market probably could reach it first, as it was in situation with yellow ellipse on chart.
    This discussion gives us potential targets. If retracement up will continue most probable target is 1.2745 Fib resistance and next is 1.30, that includes K-resistance and MPR1.
    If market will continue move down, then it will be area of 1.19-1.20 – 1.618 extension target and MPS1.
    So, what is your thought?
    After some time I’ve come to conclusion that we have to keep an eye on 2 levels. First one is previous low at 1.2287 and second is MPP 1.2661-1.2745 area. Why? Since market has reached significant targets, support and oversold – it has as no reasons, as no other targets slightly lower that could gravitate it. Hence, if price has real intention to continue north it should not take out previous low. If it will happen - then we can search possibility for short entry with confidence.
    From the other side, if market will move above MPP – it will confirm divergence, shift monthly sentiment to bullish side and move above previous swing low. In this case, since market retraces to MPR1 – that will be our next target. Till market will flirt inside of 1.23-1.26 long term traders should stay flat. But again – if market will stand here too long - for 3 weeks or more and will not go up, then it makes sense enter short, because oversold pressure will become week and market indecision will be on bears’ side.
    [​IMG]
    Daily
    So, since we have found some reasonable arguments for long-term positions, now let’s turn to our day-by-day work. First – our bearish “Stretch” pattern has hit target and even moved 20 pips lower, but, anyway it is not valid anymore. Market is not at overbought, trend is bullish and we have no bearish directional patterns. In the beginning of the week, we, as usual, should be careful to price action around WPP that is 1.2509 for coming week. Major rule tells “Don’t stand against the Pivot”. Also we see that if market will form AB=CD pattern, then it’s 1.618 target stands precisely at MPR1 1.2987 and weekly K-resistance zone.
    Daily chart also gives us intermediate target as 1.0 extension of potential AB=CD pattern at 1.2775. 1.2620-1.2670 area is still strong resistance, since it includes all the same levels that were on previous week, except, may be, overbought, since it will drift higher on Monday.

    [​IMG]
    4-hour
    It’s a very important time frame for Monday trading session. Trend holds bearish, hence we need to wait some signs of stabilization and turning to upside before even thinking about it. Pivot point will become great helpers here. First, since market will open very close to WPP – keep an eye on it. If market will move down, next level to watch is WPS1 and 1.2416 Fib support. Here is also could be downward AB=CD pattern that could create an Agreement, who knows…
    Logic is simple here. We have to check upward continuation on daily TF. Hence, on 4 hour chart this should be only retracement. Even deep retracement should (theoretically) hold WPS1 and major 0.618 Support. If this will not happen, then AB=CD start on daily time frame will be under question, at least on Monday. Take a look that both ultimate Butterfly targets (1.272 and 1.618) stand lower. I’m afraid that in the beginning of the week we will have watch mostly but not to trade. Still, this is a part of the business.
    [​IMG]

    Hourly
    Here is another help for us – potential H&S pattern, although it is a bit skewed, but head stands precisely at 1.618 of left shoulder that is very typical for H&S. If market will break through 1.2552 resistance and will fail to form this pattern – this will be the sign of upward continuation. Another way is if market will form H&S but will fail to pass through WPS1. Trend is bullish here.
    [​IMG]



    Conclusion:
    Long-term traders should wait of breakout either 1.23 or 1.2660. Also, there could be a sign of weakness, if market will just stay inside of 1.23-1.2660 area for 3 weeks or more.

    On short-term perspective our task is to get either confirmation of upward continuation or be ready for downward breakout. On Monday we should keep an eye on 2 major things – pivots and trend. If market will move below WPS1 then upward continuation will decrease probability to come, at least on Monday. If price will hold above WPP and preferably destroy H&S on hourly chart, then upward continuation will become probable.



    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 12, June 2012

    Good morning,
    Although we've suggested that market will gravitate to MPP and has solid probability to touch it, personaly I didn't suppose that it will happen so fast. By yesterday gap open, market has given us another bearish "Stretch" that also has reached target already.
    Currently I have a feeling that market has more chances to continue move down rather than up, but unfortunately there are no clear signs of it, just some hints. Market stands below both pivots and shows signs of exhausting on intraday charts around daily K-resitance level.
    Now we've stuck abit with context. Daily trend holds bullish and we have no bearish directional pattern, so currently we can't enter short.
    At the same time 4-hour trend is bearish, and, as I said, we have signs of exhausting right under daily K-resistance. So, on current week, we have to keep an eye on WPS1 level. We know that if market retraces during bull trend, it retraces to WPS1. So, breakout of this level tells us that probably retracement is over and it's time to search for Short entry. May be daily trend will turn bearish as well by this time.

    Although we have nothing to trade on daily basis, on hourly we have nice thrust down. Here could apear DRPO "Buy" or DRPO Failure. Those of you who trade intraday could try this one.
     

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    #2 Sive Morten, Jun 9, 2012
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 13, June 2012

    Good morning,
    it's a bit difficult to comment just a small candle of yesterday's trading session on daily chart, so comments here are the same as yesterday.

    Still on intraday charts I would like to share with you by some thoughts. It seems to me that market shows bearish hints. Besides of divergence, today we see that market is coiling right below WPP and forming some kind of flag pattern right above lower border of broadening triangle pattern (if we can call it this way). Following to classical school of tech. analysis, this is bearish sign.
    Also, take a look - after filling the gap, market has not made even attempt to move up, retracement has not quite reached even 0.382 resistance. This is hardly common to market that has bullish power.
    On houlry chart, although trend holds bullish, price action within the flag, has, to my view, mostly downward direction.

    It means, that probably we will depend on this flag pattern, precisely from direction of it breakout.
    If breakout will happen to the upside, then it will probably confirm hourly trend and shift 4-hour trend on bullish side. So all trends will become bullish. At the same time, price will break hourly K-resistance and stand above WPP. This will give us bullish sentiment.
    But, be aware of failure breakout - market could reach 1.2545 area as AB=CD target and then return right back inside of flag's body. This will be bearish sign.

    If market will break it downside, then nearest target is 1.24-1.2410 area. Classical approach to target estimation will give us 1.23. That is also very close to AB=CD pattern 1.0 extension.

    That's being said - keep an eye on this flag.
     

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    #3 Sive Morten, Jun 9, 2012
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 14, June 2012

    Good morning,
    by yesterday flag upward breakout situation partially has been resolved. On daily time frame trend is bullish and we can talk about next target - AB=CD 1.0 extension point at 1.2775. It creates an Agreement with next K-resistance 1.2745-1.2770 area. Although it stands slightly beyond overbought - it will be corrected if market will proceed move up.

    So, today situation significantly different. We have daily and 4 hour bullish trends and price above WPP. Current K-resistance has been tested twice already, so it has become weaker. Also it is not acompanied by overbought any more.

    On 4 hour chart I've drawn just an idea how it could turn. Exsitence of WPR1 slightly above the market tells, that butterfly is not absolutely impossible here. What is even more intriguing, is that if it will be really butterfly, then its targets will stand around next K-resistance area 1.2745-1.2770. This will be perfect final point of retacement.

    Still, currently we have short-term bullish context and have to search possibility to enter long. On hourly chart market has hit 1.618 target and is showing retracement by now. If it will be gradual and soft AB=CD pattern, then 1.2530-1.2550 appears nice to search for long entry possibility.
    One thing that we want escape is plunge down and long black candles. If it will be that way - it's better to skip it and wait for further clarification.
    Another scenario is if market will hit WPR1 first and show retracement second. In this case, it could be in form of Butterfly "Sell" on hourly chart or H&S or something. Since WPR1 stands at 1.27 extension of current retracement down on houlry chart. Anyway, this will not change overall picture. Major - is to not get fast downward move. Be careful.
     

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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 15, June 2012

    Good morning,
    today is very few to comment, at least from technical point of view. Market has hit our target - reached WPR1 and 0.618 Fib extension on houlry chart. That is also daily K-resistance, it's still valid and has not been broken totally.
    But most important today is a fundamental issue - Greece elections during weekend. EU worry that if radical party will take governing of Greece, it could lead to exiting from EU. That's why today I expect profit taking action and downward retracement. Also, think twice before holding any of positions through weekend. Nobody will take responsibility to predict how market will open on Monday. Tehcnically it looks like upward move should continue after some retracement, but this could drastically change in a blink of an eye.
    I even do not know currently how to prepare weekly research by this reason.

    Best decision today is to take profit from Longs, then take some rest and spend time with family, friends and your dear ones. We've made two nice trades within couple of last days, so this is very good for retracement week.

    Currently I do not see any nice patterns to stick with, ignoring trend. If nothing outstanding will happen, market probably will be lazy and calm.
    Since tehcnically we still have bullish context but stand at resistance - this is not the time to enter Long, while we also do not have context to enter short as by trend as by any directional patterns.
     

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    #5 Sive Morten, Jun 9, 2012
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  6. Lolly Tripathy

    Lolly Tripathy Master Sergeant

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    Thank you very much for ur valuable and kind help..
    Wish you and Ur Family a colorful weekend..
    God Bless you Sive sir
    Trading Forex is not easy as it seems,but personally i feel dat you make it easy
    and so clear by sharing ur trading plan.And as always it works..
    You are the true FOREX ROCK STAR.. :)
    We all forum member wish you A World Of GoodLuck..
     
  7. Marky$

    Marky$ Private, 1st Class

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    Hi Sive,

    I'm newbie in the forex and this forum and I read carrefully your posts. But I can't understand some acronyms you use. Because I haven't found them in FAQ nor Glossary, so I'd like to ask some naive questions. What does mean the acronyms: K- resistance, WPP, WPS1, MPR1, MPP, TF. I know that PP stays for Pivot Point, but what does M mean - Monthly? R1 is for first resistance, but MPR1? Maybe that acronyms should be placed in Glossary?
    Thanks for your analysis. And further explanations, I hope :)
     
  8. asif faryad

    asif faryad Sergeant

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    Your Comment Lolly ON Forex is not easy but Sive makes it easy...I just wanted to add if i may Again you have to change this way of thinking as again look at FOREX AS BUSINESS IN OTHER BUSINESS YOU WOULD HAVE TO BUY STOCK HIRE EMPLOYEES PAY TAXES ETC ETC ..... And then try and make a profit :( SUCKS!!!

    This is the easiest business in the world NO EMPLOYEES NO STOCK TO WORRY ABOUT ETC ETC ....... YET THE HARDEST TO OVERCOME FOR SOME WHY??

    Because we stand in the way and on a sub conscioness way self sabotage our plan when we start to have a good results as the brian is not conditioned to accept this way of making money hence only a few of us achieve professional trader status.


    Your new belief system SHOULD BE . THAT FOREX IS THE BEST AND EASIEST BUSINESS IN THE WORLD AND SIVE AND FELIX (OUR EDGE) ARE A ROCK-STARS FOR HELPING US WITH OUR DIFFERENT TRADING EDGES ACHIVE THIS... :))))))))

    BEST

    A
     
  9. cercamon

    cercamon Private, 1st Class

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    Hi Sive, what's your view on the 100 billion bailout over spanish banking system just approved?

    Imho it might add pressure to the upside on Monday session, and therefore it would avoid 1h H&S completion and could push forward Daily AB-CD towards 1.27 area.
     
  10. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi Marky, welcome aboard.
    Yes, PP is Pivot point, hence W and M stand for Weekly and Monthy, as well as S and R stand for support and Resistance. For instance MPR1 is Monthly Pivot Resistance 1. TF means Time Frame.
    About Confluence or K-area - this is a bit larger topic, try to pass through our Forex Military School, particulary chapter, dedicated to Fibonacci.

    Hi Cercamon,
    As I know this new is not quite "New". Even month ago I saw info that states of neccesary approx 60 Bln. for Spain Banking sector. THis already was 2 times greater of previous estimation and and 3-4 times greater of Spain's calculation. Approvement could lead to just short-term splash as a reaction on fact that EU is doing at least something. But in general, this will mean more printing. Also, in Spain many banks belong to (I do not remember how it calls in Spain) Lands - Catalonia, Tarragona ets. It means, that soon municipal of Spain will come to difficult situation with their debts. And when all Provinces have debt problems - whole country also is. In long-term austerity plan for Spain difficult to judge as positive moment. In long-term perspective this is just a part of terrible EU puzzle.
     

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