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FOREX PRO Weekly March 05 - 09, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Mar 3, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    On monthly time frame market shows absolutely normal and logical price action. Particularly, after reaching of 0.618 AB-CD extension target it has shown 0.382 retracement. Actually, even market will stuck inside 1.3505-1.3707 monthly Confluence resistance area – this also will be normal. Major risk however for dollar is breakout of that zone. Because, as we’ve previously said, breakout of K-resistance after hitting just 0.618 target is not common practice.
    Trend holds bearish and we do not have any directional patterns here, hence our context on monthly chart holds bearish. Currently there is no reason to suggest that our long-term expectation of 1.16 falls under question.
    Unfortunately we can’t say will market continue move a bit higher or not by monthly chart. All that we can say is that market has reached major 3/8 resistance during previous month and now is showing some pullback from it.

    As a conclusion here we can point that overall context holds bearish and market shows absolutely normal and logical price action after reaching minor extension target. Major task is try to estimate will market show deeper retracement to may be 1.37 level or just continue move lower.
    [​IMG]

    Weekly
    Here trend holds bullish, market is not at overbought, but at the same time we have some bearish signs. First is perfect bearish engulfing pattern that has formed right under strong K-resistance level. We can’t treat it either as W&R (of what?) or RRT – that’s why this is just engulfing. But here we still can apply the same rules of minimum target of this pattern – length of the bars to the downside. This is an area of 0.618 support at 1.2950.
    Second is, take a look how market has behaved with recent monthly pivot resistance level. When take a look at it, I’ve thought about PR1 penetration – can we tell that this is normal or not. Then I’ve found akin situation sometime ago – I’ve marked it with circle. Take a look – PR1 holds retracement in the same manner and lets it to show some penetration of the level. You clearly see what has happened after that. This moment has pushed me to the thought, that current price action and its relation to PR1 could mean the same – it could mean the end of upward retracement. Is it true or not – we’ll see, but It looks important and I just share with you with this moment.
    Third moment is that market has closed below monthly pivot. Although there is a pretty much room till the end of the month and everything could change, currently this is definitely not a bullish sign.
    So, how we can use these moments? For long-term traders it will be better to wait of trend shifting to bearish and then use nearest upward retracement to enter short. This is just safer, because currently we still can’t exclude some deeper retracement up on weekly time frame. For daily traders and intraday traders there is another possibility exist – trade this bearish engulfing pattern, because that we clearly see it’s failure point – top at 1.3488. If it will work we will get huge advantage, since we will know the direction of the market for 1-2 weeks, until it will hit the target. On lower time frames we will focus on this possibility.
    [​IMG]

    Daily
    So how we will trade this engulfing pattern? Daily chart seems as great assistant here. First of all, yesterday market has confirmed bear trend by close price and destroyed any hope of possible Stop Grabber pattern. Second is, as we’ve previously said, if market will move below 1.3265 area then it will continue move to daily K-support at 1.3160-1.3170. It’s probably obvious that market will reach it since currently there is no barriers between current price and this level.
    Since K-support is significant area, we can count on upward retracement from here. Such kind of retracement is very common for engulfing patterns after its initial completion. Usually retracement reaches 0.382-0.5 area, but could be deeper, although this is unwelcome scenario. So, the trading plan is simple – to wait this retracement and based on intraday charts estimate where to enter short. This probably will be done somewhere on Tue or Wed on next week.
    Today we can only try to make some assumption about possible retracement destination, based on intraday charts analysis.
    [​IMG]

    4-hour
    Trend is bearish here, but in current environment this is not so important. We have not bad thrust down here that could become context for directional trade – B&B or DRPO. I dare to suggest that since 1.3170 is K-support at daily, then DRPO looks as more probable. 4-hour chart shows perfect picture, that we always would like to see but it very rare works perfectly unfortunately. This is K-resistance area accurately around weekly pivot 1.3294 and that is at the same time perfect area to enter short with weekly engulfing pattern. Some of you, who want to take more risk – also could try to trade DiNapoli Directional pattern, if it will appear of cause…
    [​IMG]



    15min – yesterday trading plan blamestorming
    I do not like to make a rearview mirror analysis by telling what we had have to do, but today I’ve decided to do it, because particularly this example seems quite interesting. Here is how I’ve traded this butterfly. I’ve made two entries. First enter with 0.2 lot was at 1.27 of butterfly 1.3267, second entry - at 1.3245 1.618 level with 0.4 lots. So, my average position was 0.6 lots at 1.3257. Initial stop was place according to rules that we’ve written in our Forex Military School. I use EUR harmonic number and place stop 17 pips lower of Butterfly completion point.
    Perfect trade assumes move stop at breakeven, when market has shown upward pullback from 1.618 level, but I didn’t do this (was busy with other job). When I’ve taken a look at price action – market was forming DRPO “Buy” pattern – that was absolutely in a row with expectation. Then it has turned to DRPO “Failure” that is also direction pattern but of opposite value. I reverse (close previous and sell) my position with 1.0 lot to the downside at “Sell” area. Now it probably stands at breakeven, or may be with some profit. That is not so important here.
    If you, conversely to me, have entered only at 1.618 level – you had even better opportunity, since you were able to exit at breakeven from butterfly (or even with some profit) and enter short by DRPO “Failure” pattern. I see the major conclusion from this example and particularly from intraday trading – why it seems difficult to positional trading:
    1. You have to switch your mind in opposite direction, when some 100% patterns are appearing on market.
    2. You have to do it fast.
    3. Fine tuning of your entry/stops levels and conditions when and where you will move your stops and by what reason give you solid help, when your trade is underway.
    [​IMG]

    Conclusion:
    Long-term bias holds bearish, but weekly time frame does not exclude some upward continuation. So, for positional traders will be safer to enter short, when and if weekly trend will turn bearish. Long-term target still stands at 1.16 area
    On short-term perspective we have weekly bearish engulfing pattern, that probably could traded. We expect some downward continuation to 1.3160-1.3170 K-support area and then upward retracement that could be used for short entry. It will be perfect if this retracement will stop around weekly pivot point.


    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 06, March 2012

    Good morning,

    Looks like today is a last time of using CQG. Although I have Bloomberg, but they do not have DiNapoli Indicators and I will have to switch to MT4 for FPA purposes...


    On daily TF is not much to comment. As we've expected market has touched daily K-support and now is standing above it, trying to show some pullback.

    On 4-hour TF is happening what I would like to see - potential DRPO "Buy". The first part of it already has completed. If it will be direct pattern, then we can count on retracement to 13280-1.33 area and according to our weekly analysis (bearish engulfing) we should search for sell opportunities there.

    If it will be opposite pattern - DRPO "Failure", than downward move could start without any retracement. Market hardly will show second W&R, because there are no reasons for that - stops already have been grabbed yesterday.
     

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    #2 Sive Morten, Mar 3, 2012
    Last edited: Mar 6, 2012
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 07, 2012

    Good morning,
    Although market has tried to respect daily K-support, it has not quite done this and has not reached even 0.382 retracement level. Probably this is sign of bears' strength. Now market stands below this level, slightly above pivot support 1.
    Trend holds solidly bearish, there is no oversold on market, so in fact it has no strong barriers to continue move down further.

    On 4 hour time frame trend just turned on bullish side, so, if market will close below 1.3119 this will be the chance for SG, that could lead not even to new lows but also to downward continuation. Also you can see that price has reached 1.618 extension support level of previous retracement.

    Hourly trend is bullish. Here you can see multiple bullish divergence with MACD. I've marked by blue lines K-resistance areas just to hold chart clear. I do not see any patterns right now, so, all that we can do is to try ride the daily trend. For that purpose we need:
    1. Wait, when market will reach some resistance level on hourly chart.
    2. If market will start move down - wait when hourly trend will shift bearish - in the same direction as daily one;
    3. Drop time frame to 5-15 min chart and use nearset upward retracement from that new pullback from the level to enter short.

    If market will break first K-resistance, then obviously we will not enter short and wait the next level, until daily trend holds bearish.
    In general bullish hourly trend suggests that market could show deeper retracement.
     

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    #3 Sive Morten, Mar 3, 2012
    Last edited: Mar 7, 2012
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 08, March, 2012

    Hello everybody,
    On daily TF is not much price action again. Since intraday trends hold bullish, we've said that deeper upward retracement is possible. Now it is happening.
    Today may be will be the first possibility to join daily trend, since market is approaching First K-resistance area on 4-hour chart.

    On 4-hour TF trend holds bullish, also there is small bullish divergence with MACD. Now price stands slightly lower 1.3185-1.3195 K-resistance level. Next K-resistance stands at 1.3244-1.3255.
    Another thought about 4-hour TF... Here could be 3-Drive Buy pattern. Most recent low stands at 1.618 extension of previous retracement and it could turn that it was 2nd Drive. So, if market will pullback down from 1.3185-1.3195 it might become 3-Drive. Divergence is also very often appears with this pattern.

    On hourly chart trend holds bullish. We have two extensions. First one is from the bottom AB-CD that gives us 1.618 extension target inside of K-area. Another one is most recent AB-CD with 1.0 extension slightly higher of K-area.
    Also take a look, that this AB-CD gives another Agreement at next K-resistance.

    So, today's plan is the same. Watch for price action around K-area after hitting of 1.0 extension target. There two ways to do it.
    1. Drop your time frame to 5-min chart-15 min and watch for reversal patterns. If you will get any - you can based your short entry on them.
    2. Just watch pullback from this K-area, wait when hourly trend will turn bearish, and use nearest Fib retracement to enter short. One this that you need to see - nice attempt of down move, it usually looks like solid thrust on 5-15 min chart.

    If market will not show this price action at nearest K-resistance, then probably the same procedure we will need to apply at next one.
     

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    #4 Sive Morten, Mar 3, 2012
    Last edited: Mar 8, 2012
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 09, March, 2012

    Good morning,
    finally we've got what we've expected - market has reached 0.382 resistance on daily and weekly pivot. I want to remember that this was our prefferable level of retracement's finish. If this will indeed so - then this will be just perfect.
    Today we have couple of possibilities to trade. First one is for scalpers, its on buy side, second one is a continuation of our talk that we are in during the whole week - riding the trend start point.

    On 4-hour chart we see not bad possibility for B&B "Buy" pattern. My experience tells that on EUR B&B's mostly starts from 50% suport level of such swings. So, 0.382-0.5 support level is what to watch for scalpers.

    Speaking about our expectations to join daily trend, looks like time has come. Take a look at hourly chart. Trend finally has turned bearish right after touching pivot and second K-area on 4-hour TF. Thrusting move down looks nice. All that we will have to do is to wait first retracement up - that probably will come by 4-hour B&B, then enter short at 0.5-0.618 resistance level, i.e. at B&B target.
    Stop could be placed above swing high, this will be about 40-50 pips risk. THe reason is simple. If we will be right, then the target is 1.29-12930 area on daily by weekly engulfing pattern. If we will be wrong and market move higher - then probably it will proceed at least to next resistance on daily, hourly trend will shift bullish again and we do not want it.
    Probably it's not neccesary to remind that it will not be bad idea to move s/l at b/e when market will pass 40-60 pips in our favor.
     

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    #5 Sive Morten, Mar 3, 2012
    Last edited: Mar 9, 2012
  6. ochills

    ochills Master Sergeant

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    Good work Sive.
    Thanks for your prompt analysis.
    Wish U and Ur family Beautiful weekend.
     
  7. ochills

    ochills Master Sergeant

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    Pls Sive just to clear my thoughts.
    1.On the 15M chart.Do u enter short after the piercing bearish candle on 1.272 or @ retracement to 1.272. to me I will prefer to short @ 1.3282 @ d retracement(100%) of the bearish on engulfing pattern.Do U think that my decision make sense?
    2. I thought what gave U Clear confidence with ur 2nd trade @ 1.3245 is bcos of the Double Repo failure
    3. Last time U said SG is a change in momentum but pls can U define it condition of Occurence in the market possibly with example.
    thanks Commander in Pips.
     
    #7 ochills, Mar 3, 2012
    Last edited: Mar 4, 2012
  8. LaurensDeGraff

    LaurensDeGraff Private

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    Excellent Sive,

    Perfect analysis, very insightful and appreciated.
    Why the market was moving up and down inexplicably is not certain.
    Seems as though Greek rescue could drive these uncertainties.

    Good to see you keep providing genius analysis for members.

    Thanks very much.

    Laurens
     
  9. Kennedy Assante

    Kennedy Assante Recruit

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    Hi Sive,

    good Job. I always appreciate your comments and Advices. Thank you so much. I learn a lot of Forex Trading here. Im happy that im a Member of FPA.

    Tom
     
  10. georgeta

    georgeta Sergeant

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    Gbp

    Hello Mr. Morten!
    If you have a moment, please take a look at Gbp. I think that we have a good signal:
    1. W&R on Weekly
    2. Butterfly on Daily
    3. Bearish Divergence on Daily
    What do you think about the target?
    Thank you!
     

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    #10 georgeta, Mar 4, 2012
    Last edited: Mar 4, 2012

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