FOREX PRO Weekly June 27 - July 01, 2011

[Sive Morten]

EUR/USD Daily Update, Tue 28, June 2011

Good morning,
Current situation on market is skewed by news. From the one point of view, market has already shown retracement on daily time frame, after it has hit 0.618 target from big AB=CD and now should continue move down.
But it suddenly stops and turns into consolidation.
One of the reasons for that is a long nasty black candle on daily time frame. Very often, when such days appears - market stands in the range of that day fo some time. That is currently happens. That's from technical point of view.
From fundamental point of view it tells, that market is indecision.
And we could see some different scenarios:
1. Butterfly buy 1.3940;
2. Gartley "222" 1.4430.

Let's speak first about Butterfly.
Just above the market is 1.4340 area. This area is extremely important for us. Because this is weekly pivot resistance 1, 0.786 Fib resistance and 1.618 target of AB-CD on houlry chart.
But mostly because this is a breakeven point for daily trend. If market will pass through it, then daily trend will turn bullish and more probable will become "222" pattern.
Also 0.786 level is very typical for Butterflies. So, first and primary task for us today is to watch for 1.4340. I think that it will be hit, if take in account strength of momentum on hourly chart.

Second, if market still will pass it. Then, the next target is Agreement at 1.4440 - that will be also Gartley "222".
It's imossible to predict something with more precise right now. That's why I offer you to follow the market tactics and not run ahead of it. What does it mean?
For instance market has hit 1.4340 level. Do not just jump in. Wait reversal, and acceleration down, 4-hour and hourly trend turns bearish, market will move below pivot again - and only after that enter on some retracement.
Otherwise, you can become great loss catcher.

 

[Sive Morten]

Hello everybody. Sive, first of all i'd like to thank you for your analysis. This week you warned us to be extra careful because very probably market would be driven by news and, as usual, you were right.
In the intraday section of the weekly review, you marked 1.4172-1.4175 as the (first) confluence area where we could open short positions. Today market estabilished lower lows, so i updated that confluence in my hourly chart (i've attached it). Here is my question: did you go short in that area? How did you take the decision to go/not to go short here? I'm asking you because you are teaching me well how to identify these areas (mainly using fibonacci retracement, fibonacci expansion and pivot point), but i find difficult to decide when it's a good idea entering the market and when it's better to stay out. Could you please explain us what signal you look for in lower timeframes? Maybe it could be useful for me and for other forumers to see some lower time frame charts of both type (where you entered the market and where you didn't entered the market).
Excuse me for bothering you and thank you in advance.

Hi Papao,
There is no need to apologize. This is right question. Usually I look at some things, besides of levels themselves:
1. The nature of move to that level. In our case - this is resistance. If market shows pushes with strong bars or some kind of thrusting move in this direction - probably I'll skip it. Because I want to see retracement - choppy gradual move.
2. I prefer to enter from Agreement + Confluence level. Because this is safer.
Sometimes it happens that market just drasctically reverse and accelerates form it. Probably I miss such enter, just because will not be hasty enough to catch it. But more often I drop to 5-min chart and search for some sell patterns there - DRPO "Sell" Butterfly Sell, 3-Drive, H&S, W&R even candlestick patterns that could tell me where to enter and where to place stop. Other words, I need to see the strength of the level and that market is really turning here.
3.But what if you do not see that stuff? Then trend is your major assistant. If you want to enter short, daily trend is bearish, but you was not able to catch the entry signal on hourly chart. Then wait when hourly trend will turn bearish and enter at nearest 3/8 resistance.

Sive,

This may be part of your update tomorrow, but can you tell me if we have a butterfly sell still valid from 2 weeks ago? it looks like potential CD move will have a target of 1.4531 on spot, or 1.4499 on futures. Being that this market is choppy waiting for the vote. and possibly to see how successful the strike is tomorrow, I am unsure. It would have to go through the 3x3 DMA and the MACDP to make it. I assume if it does penetrate the MACDP on the daily timeframe 1.4499/1.4531 is a logical resistance afterwards. I can not post a chart because in thinkorswim it looks like spaghetti. maybe someone else can draw it.

Thanks in advance.

Hi Joshnix. Butterfly "Sell" is becoming less and less possible. Although it has not cancelled totally, but prespectives are shallow.
Concerning all other stuff - read an update. I've written about it.

 

[papao]

Hi Papao,
There is no need to apologize. This is right question. Usually I look at some things, besides of levels themselves:
1. The nature of move to that level. In our case - this is resistance. If market shows pushes with strong bars or some kind of thrusting move in this direction - probably I'll skip it. Because I want to see retracement - choppy gradual move.
2. I prefer to enter from Agreement + Confluence level. Because this is safer.
Sometimes it happens that market just drasctically reverse and accelerates form it. Probably I miss such enter, just because will not be hasty enough to catch it. But more often I drop to 5-min chart and search for some sell patterns there - DRPO "Sell" Butterfly Sell, 3-Drive, H&S, W&R even candlestick patterns that could tell me where to enter and where to place stop. Other words, I need to see the strength of the level and that market is really turning here.
3.But what if you do not see that stuff? Then trend is your major assistant. If you want to enter short, daily trend is bearish, but you was not able to catch the entry signal on hourly chart. Then wait when hourly trend will turn bearish and enter at nearest 3/8 resistance.

Thank you Sive for your kindness

 

[fxmig]

What chart software do you recommend for analysis?

Mr. Morten,

I respect your analysis very much and have been following for the past 8 months. I want to begin forming my own daily analysis and comparing to your daily videos and weekly postings so I can improve my analysis techniques. I am currently reading Joe Dinapoli's Book What chart software do you recommend? . I am currently trying Esignal but I want to be able to label my pivot points like you do in your videos (A,B,C,D) and also have the fib nodes displayed as you do. Please let me know what you recommend, what else to look into, and what else you recommend I read.

Thank you,

MigFX

 

[Allen Bailey]

Thank you Sive for your great analysis.

AB

 

[drebg]

Dear drebg, please reduce the size of the attached image, the forum becomes hardly usable for those having lower resolution displays (my laptop has a WUXGA resolution and it is still annoying). Thanks.

Stag-

Sorry- I've since fixed the image. Thanks!

 

[Sive Morten]

Mr. Morten,

I respect your analysis very much and have been following for the past 8 months. I want to begin forming my own daily analysis and comparing to your daily videos and weekly postings so I can improve my analysis techniques. I am currently reading Joe Dinapoli's Book What chart software do you recommend? . I am currently trying Esignal but I want to be able to label my pivot points like you do in your videos (A,B,C,D) and also have the fib nodes displayed as you do. Please let me know what you recommend, what else to look into, and what else you recommend I read.

Thank you,

MigFX

Hi Mig,
It's difficult to recommend something, because of high price. As usual, something good costs much...
Speaking about DiNapoli levels there is no much software that allows to do that in such manner. I use CQG, also DiNapoli FibNodes software do this, and Genesis Trade Navigator. May be some else.
All of these soft. are not cheap.
About books... You may try Pessavento, Jouflas "Trade what you see" not bad book about Harmonic Patterns. It's very small, but contains all necessary information.

 

[Sive Morten]

EUR/USD Daily Update, Wed 29, June 2011

Hello everybody,
market still stands in the range of nasty black bar on daily, but intraday price action makes me think that we will see 1.4440 and get AB=CD move.

If we take a look at 4-hour chart. Trend is bullish. Market shows strong white candles right to 1.4340 area, that we've discussed yesterday. This is a sign of strength. Looks like we will have to keep an eye on 1.4440 Agreement area.

If you're bullish, probably you may try to make a scalp trade with that target.
If you're bearish - wait when market will hit it. Be aware of possible W&R, because this target stands just above previous highs. If that will happen - it will be your signal to enter short. Anyway we can count on some respect of that resistance, since there is Agreement and another smaller AB=CD target of 4-hour chart.

On hourly chart we can see, that market accelerates to 1.4340 and shows bullish dynamic pressure. This gives us more confidence with further upward continuation.

 

[TraderBob]

Work in this field of study

Sive, how does one end up finding work in this field of study. I find this work fascinating and would like to make a career out of it. I have an engineering degree and an MBA. How did you end up finding your career.

 

[Sive Morten]

Sive, how does one end up finding work in this field of study. I find this work fascinating and would like to make a career out of it. I have an engineering degree and an MBA. How did you end up finding your career.

Hi Bob,
Well, my case is not a perfect example, it has a lot from ocasion though.
The major problem - that technical analysis is such sphere where a lot of pretenders are.
Usually, you need to know not only technical analysis. But also fundamental analysis (valuation), option theory, intermarket analysis and others. And not only on Forex.
So when investment branch in our bank has started to develop, I was shifted there.