Stag
Sergeant
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Hi guys, we can hardly find anybody talking about the bullish scenario on the Internet, so let me now represent the opposite side, just to give you a contrary view based on the larger pic, what sort of telltale signs I can see, which may result in a surprising turn that the majority may not see or consider at the moment.
To sum it up, the decline from 1.1815 has an overlapping wave structure, consecutive waves of the drop became shorter with a waning momentum all the way down, and prices are trending above the midline of our base channel if we apply the KCT technique properly. We know furthermore that wave 3 must not be shortest by price when compared with waves 1 and 5 of the drop from 1.1815. These can be signs of the fifth wave within an impulsive decline off 1.2556 (but also can be an unfolding wave 1 from 1.1815, who knows).
So, what does it mean in practice and what to look for to avoid a bear trap?
If prices brake 1.1300 decisively and you see prices falling like a stone, it's fine. Forget my comments above, just trail your stop and enjoy the freefall towards 1.118. However, if prices just make a poke below 1.1300 or get muted at nearby levels, it can be the sign of a reversal and the decline from 1.1815 sets the stage for a rally attempt that should start preferably from not much below 1.1300 (though it is allowed to go lower under this scenario). If it is a correction of the impulsive decline from 1.2556, it should be the largest since the Euro peaked at 1.2556.
Again, that does not mean that will be the case. Just have a plan and be ready for the unexpected.
Greetings guys, let me show you two similar interpretation of the pattern we see unfolding off the low at 1.1215. Both can be considered as a corrective rally as long as prices stay below 1.1500.
In the first case we can say the top is already in. Once prices break through the key level at 1.1321, the drop should accelerate towards the next structural key level at 1.1253 and beyond. Simple like that.
The second is a tricky one. This scenario may lead to an explosive price action if prices find support at 1.1320 - 1.1300.
Good luck.