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FOREX PRO Weekly May 23-27, 2011

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, May 22, 2011.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi Guys,
    I have some problems with files upload on FPA server, so I've post charts as attachements in the bottom of the research. FPA will fix it as soon as possible. Sorry for any inconvenience


    Monthly
    Here market just slightly moved higher, so analysis that we’ve made on previous week remains valid.
    Here we can see all importance of monthly overbought. Finally market has fallen into retracement that was awaited by positional traders and shown solid plunge.
    As we said some times already - the first area to watch is 1.4140 – previous highs and nearest Fib support – market has hit it and holds here for the second week already. Overall current look is frightening. If market will close as it is – it will turn to huge bearish engulfing pattern. Although we can’t exclude that it could be canceled by the market but more probable seems the perspective of continuation at least till monthly Confluence support at 1.3655-1.3760. This possibility also implicitly confirms with market overbought. Usual retracement target during overbought is zero point of Detrended Oscillator and this level stands around monthly Confluence support. Also its worth to note here that trend will remain bullish, even if market will reach 1.37 area. Still, if market will hold on first Fib support, this will be much better for current bullish bias and Butterfly pattern. Currently we still can’t say – will this level hold market or not. All that we can say for now is that market still holds above it.
    Nearest target stands at 1.5272, but potentially it could turn to butterfly “Sell” pattern. The target of this pattern is 1.27 extension at 1.6027. Also it almost coincides with 1.27 target of recent bullish AB-CD at 1.5925.

    [​IMG]

    Weekly
    This time frame remains as most important for us currently. Our expectations are linked to potential B&B “Buy” trade due to previous upside momentum. So, market usually tries to continue previous move mechanically, i.e. because of momentum. This very often leads to deep retracement up right after initial plunge. That’s what we waiting for. But this retracement usually starts from some solid support and not later than 1-3 closes below 3x3 SMA. Previously we’ve noted that this momentum trade could start either from 1.4140 (it’s where we’re now) or from weekly Confluence support at 1.3655-1.3760, but looks like we have to abandon the second area, because market has shown three closes below green line already. So, it should start on coming week. If it will not happen, then probably it will not happen at all. 1.4140 is not just Monthly 0.382 Fib support, it is also Weekly Confluence from minor reaction points and previous highs. The circle has been closed – thrust, 3 closes below 3x3 DMA and strong support. If market will continue move to monthly potential target 1.3650-1.3760 – this will be too deep, compares to weekly thrust, so it we will not be able to treat it as B&B. This will be just move down to target due monthly overbought.
    If market has closed at the highs of previous week (as it was on Thursday) – then it could give us more confidence, because we could get excellent bullish engulfing on weekly and all that we will have to do is to wait for some retracement on coming week to enter long. But, as usual, market does not give us simple tasks. White candle of passed week is not enough to speak about solid confirmation of support. We need something else.
    Second important moment is that weekly trend has turned bearish and we didn’t get MACD failure pattern. Hence, we have weekly bearish trend and daily bearish trend – as a result, our daily context has shifted to bearish, and we can’t treat daily moves as retracement any more, at least currently.
    Speaking about monthly/weekly context – here is a bit different situation. Since monthly trend is bullish but weekly is bearish, we can treat current move on weekly as retracement, but we can count on deeper retracement.

    [​IMG]



    Daily
    Daily time frame analysis currently is very thin. And the reason for that is in difficulty to understand was turned to momentum shifting or it was just retracement in down trend. Those of you how familiar with pivot trading know that during bear trend market moves as “pivot touch and go”. When it turns to retracement in bear trend – it retraces to weekly pivot resistance 1. So that has happened. 1.4345 is a pivot resistance 1 for previous week. Now we have to estimate – was it just retracement and we will not see B&B “Buy” on weekly or not. Current trend is bearish, market neither oversold nor overbought. All that we have below the market is a strong support area that has led to some bounce from in during passed week. But, if you remember, we’ve spoken about piercing in the cloud pattern that still holds. Second – we’ve waited for deep retracement – we’ve got it on Friday, possibly this was it. Also take a note – current retracement up has not reached even 0.382 Fib resistance level, so those who hold shorts still there. Let’s try to find out something on intraday charts.

    [​IMG]

    4-hour
    Trend is also bearish here. Only thing that looks important is 1.4040 area – this is a coincidence of weekly pivot support 1, 4-hour oversold and upper border of channel. It will be nice if it will turn to “Kiss goodbye” for channel’s border. Second moment – If market intends to move at all – it should not break pivot support 1. Otherwise it will mean this was just a bounce due support impact and we have to tune ourselves to move to 1.37 area.

    [​IMG]



    Hourly
    Hourly trend is bearish. Let’s start our analysis from Butterfly that was the trigger of Friday’s sell-off. The target of this pattern is 1.618 extension of the whole butterfly’s move – 1.4116. This is between 0.618 and 0.786 Fib support from the overall upside retracement. That’s an area to watch for initially, how market will behave there.
    Second, since all trends are bearish – weekly, daily, 4-hour and hourly – I prefer to see some nice thrusting move on hourly chart, turning shift to bullish and market move above the pivot at 1.4192. There is no untouched support levels around, so this move could happen only due momentum shifting and reaching of butterfly’s target. It will be the proof that current sell-off is retracement after solid 2-week plunge.
    Third important moment the same as in 4-hour section – weekly pivot support 1 stands right at previous lows around 1.4040. Market should not break it and accelerate down. If it will happen – then probably there will not be any B&B Buy on weekly.

    [​IMG]

    Conclusion:
    Position traders:
    No signs to buy yet. Wait for clear signals on daily time frame.

    Intraday traders:
    We have to be sure that this is not just a bounce due support. Before entering long we will have to get some confirmations from the market about shifting in short-term momentum to upside.
    1. We do not want to see that market will accelerate below 1.4040 area. If this is a real reverse point – market should not take out weekly pivot support 1, strong weekly support area.
    2. We want to see market move above pivot point at 1.4145 and shifting of hourly and 4-hour trend to bullish
    3. Also it will be nice if we will see thrusting move up on intraday charts – this will confirm momentum shifting.
    4. I will not demur if will see some clear and solid reverse patterns on intraday charts around 1.4040 or 1.41 area of butterfly target 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.
     

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    #1 Sive Morten, May 22, 2011
    Lasted edited by : May 23, 2011
  2. Jyotiprakash Pal

    Jyotiprakash Pal Sergeant

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    :) Thanks for ur Precious time .. great analysis ..

    sir .. please check my chart ..did u do wrong ..
    due too slow legs .. it will hit 100% and go up .. will it be also count as a AB=CD????
     

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    #2 Jyotiprakash Pal, May 22, 2011
    Last edited: May 22, 2011
  3. Lolly Tripathy

    Lolly Tripathy Master Sergeant

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    Thank you very much

    AS USUAL YOU ARE BESTTTT ..

    Thank you for your kind help...
     
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi Jyotiprakash

    Your AB-CD is valid. BTW, it gives the same target as 1.618 from the major high and shallow BC leg. That we've discussed during previous week. So, it is possible.
     
  5. Xenofanes

    Xenofanes Private

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    Thanks

    Thank you for analysis. It is very nice of you to teach us trading forex.
     
  6. ibolya

    ibolya Recruit

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    Thanks!

    Thank you Sive for your effort to teach us how to trade! My problem is that I still don't know what expressions like B&B “Buy”, "kiss ggodbye", and others mean. Where can I find the explanations? Note: I am fairly new to this, trading for about 6 months but subscribed to your analitics for about 2 months. Thank you for your help!
    Ibolya
     
  7. jimmy.wibisono

    jimmy.wibisono Private

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    Hi Mr jyo ..

    I wanted to ask, at the time when point A is above? And when at point A is on the bottom? Cause i'm newbie in here, so i wanna learn from other people as much as i can :)
     
  8. Jyotiprakash Pal

    Jyotiprakash Pal Sergeant

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    Oppss very sorry just reading my Post .. that was a big typo ..extremly sorry

    I mean too say " Did I Do wrong " not "Did U Do wrong " sorry for the typo sir!
     
  9. Jyotiprakash Pal

    Jyotiprakash Pal Sergeant

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    didn't get you sir !!! but attaching a picture .. which can speak lots of words
     

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  10. jimmy.wibisono

    jimmy.wibisono Private

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    ok, what if we want to make buying position?
     

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