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FOREX PRO Weekly November 12-16, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Nov 10, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    Monthly chart has not changed much, thus, all issues that we’ve specified previously are still valid. Now it is clear that market has stuck in monthly Confluence resistance area 1.2934-1.3149. In current moment, looking at pullback outside of it, we can suggest that the first challenge was unsuccessful, but will follow the next one? We can’t exclude this absolutely. For instance, some sort of double bottom could be formed, or something like that, we don’t know. I prefer to talk about it stick to the subject, that we do not have yet.
    What is more important for us is that definitely some downward move should come. Since this is monthly time frame, this move could be really significant. Even if we mostly trade on daily and intraday charts, we could get definite direction for long-term perspective. That’s why higher time frames are important.
    Now, pay attention to MACD Predictor. November bar stands very close to it, and by November open price trend has turned bullish. The trend breakeven point for current month is 1.2762. If monthly bar will close below this level we will get bearish stop grabber on monthly chart with minimum target – clearing of 1.2042 low. Since 1.2042 stands below 0.618 target of drawn AB=CD pattern, it’s a high probability that market will proceed to 1.17 area initially – target of AB=CD. 1.17 in turn, stands slightly lower previous long-term 2010 lows. Just imagine what will happen, if market will trigger stops below it. We easily could get achievement of our long term 1.15-1.16 target.
    But let’s pass from one to another gradually. Our first task on monthly is to wait for November close. Let’s get stop grabber first and only after that will discuss other things.

    [​IMG]

    Weekly
    Although weekly chart is most important right now, I suspect that another week of expectation ahead, because none of major patterns were triggered. First, I’ll show you almost the same chart as on previous week – with harmonic swings and bullish flag failure. This is almost the same chart as on previous week. Analysis is also the same since it’s still relevant, so I’ve held most tools as it were on week before. There are still two things that give us assistance in understanding of situation here. First is bullish flag breakout trap two weeks ago flag, second is harmonic swings. That is just one side of the coin. Yes, if all will be smooth and market will continue move inside of channel – we will see 1.16 target. But here is another picture, that I would like to discuss with you.
    [​IMG]
    Take a look at weekly chart with 25x5 DMA, look how nice it holds price action. After each breakout market retests 25x5 from the other side – as in the case of downward breakout as in the case of upward one. But look what we have now – breakout of 25x5 DMA on weekly chart and attempt to retest it. On coming week 25x5 will have 1.2649 value. Still there is a moment that increases importance of this significantly – MACDP and 25x5 come in play in the same point. That is very close to 1.27 extension of our AB-CD pattern at 1.2675 and 3/8 major support level.
    Now put all this stuff in relation to weekly coil area – I’ve marked it by blue horizontal lines on the chart. And, yes, this overall picture looks as “222” buy currently. Other words, market now stands in a very tricky area. I think that it will be safe to enter short only when this potential trap will be resolved by price action. That’s why I’ve said that another week of expectation stands ahead. But this does not mean that we have to stay flat totally – of cause not, but probably we will mostly take a deal with intraday short term patterns.
    [​IMG]
    Daily
    Daily chart hardly will help us to understand what to expect from current support area. Although market stands slightly below K-support area, I think that it is still valid. Price has a free space now till WPS1=1.2641, since it’s not at oversold. WPS1 stands in the same area as weekly 25x5. Another moment that speaks in favor of potential downward continuation is that market has moved below 1.0 extension of AB-CD pattern, hence next destination is 1.27 that is 1.2675, especially if there are no barriers ahead. But how it could happen – will market some bounce as a respect of Confluence support first or just continue move lower – I can’t say. Looks like we will have to keep mind open and catch all potential hints and leads that could appear on intraday charts.
    [​IMG]
    4-hour
    Well, on 4-hour chart we have the pattern that could trigger some bounce. This is bullish wedge, that now is forming right around daily Confluence support area. Wedge is accompanied by bullish divergence as well. So, there are two destination points could be after upward breakout. First is WPP and first fib resistance at 1.2760 area, second, that is more probable is WPR1 and 4-hour Confluence resistance at 1.2805-1.2816 area – it also coincides with classical wedge target estimation as wedge height. Take a look – WPR1 conicides with classical resistance line. Also we now, that when market retracemes within long-term bear trend, it very often retraces to WPR1. After 1.0 AB=CD target there was no significant pullback, so may be it will come from here.
    [​IMG]


    1-hour
    Probably this wedge could be treated as 3-Drive “Buy” pattern as we’ve discussed on Friday. So, as you can see price has found support right at crossing of 1.618 level of 1st drive and 1.272 of 2nd Drive levels. That is very typical for 3-Drive pattern. Second, it accompanied by bullish divergence with MACD. Minimum target is a high of second drive – that’s coincide with Confluence resistance at 1.2805-1.2816 area and gives the same destination as previous retracement – I’ve cloned it and dragged to current price action (blue lines).
    Could this pattern fail? Absolutely. If it will move below 3rd drive low, then probably we might say that market will accelerate lower without any retracements right to level that we’ve specified in analysis of Daily time frame.
    [​IMG]


    Conclusion:
    On longer time frames market still has to give us some clarification about medium-term direction, and nothing is clear yet.
    That’s make specific impact on our analysis and trading style on coming week. Particularly speaking, we probably will mostly deal with intraday patterns inside of tight week, until any solution will come.
    Thus, on Monday some pullback could follow to 1.28-1.2815 area if 3-Drive “Buy” pattern will work accordingly. IF this pattern will fail, then we should be ready to downward move in 1.2640-1.2670 area.

    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, Wed 14, Nov 2012

    Good morning,
    On daily time frame market still stands in area of indecision after hiting of 1.272 extension of AB-CD pattern. This name - "area of indecision" could be applied, since market neither has returned right back inside of weekly coil above 1.2755 nor broken below 1.2640 - 25x5 DMA on weekly time frame. Another moment of indecision is soft and choppy price action slightly below K-support area. That is not looking as breakout, but just standing at support and assessing of it.

    So, that makes impact on our plans. All that we can do is to focus on some short-term intraday patterns (if we will find any) and trade short-term with tight targets.

    On 4-hour chart trend holds bullish with divergence and we see the same wedge and potential destinations - first one is WPP and first K-resistance 1.2784-1.2794 and second is
    WPR1 and second K-resistance. Both of them could be reached, since usually, when retracement up comes, it held by WPR1.

    On hourly chart we see that wedge breakout could be due reverse H&S pattern, that has the target right inside of first K-resistance. But H&S has not formed yet - we need right shoulder to be formed, so some move down to 1.27-1.2688 should happen.
    The failure point is 30-35 pips below the lows of the head.

    That's one potential trading plan. Personally I do not see anything else. May be you will find something, so share with your thoughts on forum.
     

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    #2 Sive Morten, Nov 10, 2012
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 15, Nov 2012

    Good morning,
    market still stands inside of "indecision" area on daily time frame, so here we have nothing new. Again we have to be focused on intraday charts.

    On 4-hour time frame trend holds bullish. Market has achieved our first target - tested WPP and first Confluence resistance around 1.2780. Most important moment of 4-hour time frame is that current swing up is greater than previous swing down. Usually this leads to deeper retracement up. Second is - since this is first swing, market usually shows deep retracement inside of it due previous bearish momentum. That is foundation of our today's trading plan.

    On hourly chart we see, that market almost has reached 1.618 butterfly target and stopped upward move by opposite butterfly Sell. Trend turns bearish. Also current shape reminds small H&S, that may be looks clearer on lower time frame...
    As we've said, we should expect deeper retracement, I suggest that it should be .618 or even 0.786. So the first task is watch for any downward AB-CD's and possible Agreeements. If this will be really the case, the second stage of our plan is to watch possible greater AB-CD up. It is not neccesarily that it should reach 1.0 extension, it could stop at 0.618 as well, but still this might be greater AB-CD. The failure point will be below A point, as yesterday.

    In current sloppy price action I do see nothing more. If you will find any - share with your thoughts on forum.
     

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    #3 Sive Morten, Nov 10, 2012
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 16, Nov 2012

    Good morning,
    most intriguing price action today is on the daily time frame, although it's mostly potentially intriguing. Take a look at blue lines first. I've cloned previous retracement up and drag it on current one. They are very harmonic - as in terms of price as in terms of time.
    So, if market will hold this harmony, it should start move to the downside. But take a look - price is flirting with MACDP, the rate of MACDP is equal to our upper border of "indecision zone". If it will be bearish Stop grabber - it will lead us to the lower border of the same zone. So, major question now is will market keep the harmony or not.

    On lower time frames I do not see anything exciting right now. 4-hour TF shows that theoretically market has achieved target of 3-Drive and wedge right at K-resistance area. Hourly chart shows development in parallel channel. So, probably nearest direction will be linked with this channel. If harmony will hold, then market should show downward breakout of it. If not, then some upward continuation to next resistance - WPR1 and another K-resistance.

    So, currently, since we do not have any patterns, and here is a risk to take wrong position compares to potential daily situation, probably it's better to stay flat and wait some clarification from price action. That's at least, what I indends to do today.

    May be you will find something to trade on lower time frames, but here it's a bit early to dive in action. Although potentially it could be really exciting situation.
     

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    #4 Sive Morten, Nov 10, 2012
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  5. wilsiano

    wilsiano Recruit

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    Thanks Sive, for the masterful analysis of the possible scenarios that could play out. God Bless You!!!
     
  6. MeLasz

    MeLasz Private

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    Great and detailed analysis as always, there is a lot to learn from You, thank You and FPA for allowing this great opportunity for us!
    I like to know Your opinion about this (not so harmonic) butterfly on EUR daily chart:
    eur d1-11-10.
     
  7. fabdona

    fabdona Recruit

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    thanks a lot from a new recruit
     
  8. FreddyFX

    FreddyFX Sergeant

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    Actually it is a SUPER market to trade these days !!!
    Your analysis ALWAYS helps taking the right direction to trade.
     
  9. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi MeLasz,
    Well, I've mentioned this 1.27 extension level, but personally I prefer to call "Butterfy" Sell pattern at bottoms, since it's reversal. But here we have butterfly "Buy" at top. Somebody use it as butterfly...
     
  10. tun13

    tun13 Corporal

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    Hello Sir,thank you so much for your analysis.You have no idea what is means to people like me(IT'S A SCHOOL THAT I CAN'T AFFORD,BUT YOU ARE GIVING IT TO FREE OF CHARGE)may God richly bless you,also FPA thank you so much for creating this avenue,may God bless everyone in FPA!!!!
     

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