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FOREX PRO Weekly October 01-05, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Sep 29, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    So, we have rather difficult trading week, mostly by decision making procedure. In the beginning of research I would like to make light comments on Spain austerity plan and France budget economy. Shortly speaking I think that Spain will call for aid within 2 weeks of October. Until that will happen, ECB hands are tight and it can’t cooperate with reducing debt cost for Spain. If Spain will ask EU help – ECB will start buyout Spain debt, by holding its rate at low levels, while Spain could start borrowing at low cost. I think that this is unavoidable. If the will not do this – by rising taxes, freezing wages and saving on social policy Spain will reduce economic activity and GDP. As a result, they will able to safe spending in very short-term, but in a bit longer perspective, tighten tax loop they will make a barrier for economic activity – although tax rate will be higher, but taxation object will fall significantly and that will not give any tangible result.
    Now about the France - the major thing here is wealth taxation. Now rich people will have to pay more taxes. I’m not sure, may be I’m wrong, but I suggest that this will lead to significant capital outflow and changing place of domicile of private companies, other methods of concealment of income. May be in a bit other circumstances that could not happen. But now people understand that they will have to pay not only for France, but for other trouble countries. That adds some other colors in France social policy and not everybody I suppose, will be happy to accept it. So, Thursday euphoria was too early, I suppose.
    From these two events, particularly when Spain will call for aid, take a look at gold. It was mentioned that on US QE I gold has shown 30% growth, on QEII – 15%. Now we have QE III in US, but we also will have unlimited QE from ECB, that not has been launched yet at full throttle.
    Now is about technical analysis. September is finished. On monthly chart we see how market response on monthly Confluence resistance area. And now just imagine, what could be if we have no idea about its existence. It’s few that we can add to strategic picture. We are at monthly resistance and now in a stage of market’s respect of it. So, mostly we will talk about tactic in current research.

    [​IMG]

    Weekly
    Well, most detailed comments about Stretch pattern I’ve made in previous research, so if you want to recall it – read weekly part there. Here I just will remind you major moments. Market has shown solid upward bullish swing, right in respect of Butterfly “Buy” completement pattern. But now price has two different forces that press on it. First is a bearish momentum of the trend that has started in March 2011 and lasts more than a year already. Second is combination of weekly major 3/8 Fib resistance and weekly overbought – that is a Stretch pattern per se. Here we can’t say anything definitely and have no choice but just dealing with odds. They suggest that such combination of factors should lead to deep retracement, and I still keep this thought. In most cases, after first bullish swing on market, price shows AB=CD retracement. That stands in a row with theoretical way of Stretch trading – it’s target usually is zero level of Detrended Oscillator - approximately around 1.25 area. But this is also 5/8 Fib support, i.e. potential deep retracement target.
    Another important moment here is new monthly pivot levels. Take a look that market will open right at MPP=1.2844. MPS1 stands at 1.2517 – presicely around DOSC zero level and Fib support. Currently it is difficult to say will it be AB=CD or market will show downward continuation right to 1.25. But I suppose that more gradual AB=CD is more probable. That’s why I still hope to see BC leg – the pullback up on daily. This move we can use to trade on Long side, and then try to take position in favor of this weekly AB=CD to 1.25 area. Also keep in mind that trend is bullish on weekly time frame, hence this expected downmove currently is treated as just retracement. We can’t exclude that by this move to 1.25 we can get later greater upward AB=CD to 1.3830 target.

    [​IMG]
    Daily
    It is difficult to speak about daily time frame now, particularly about B&B and other stuff – we hashed this question interminably within whole week. Definitely we can’t call it as B&B any more, since it demands fulfillment of particular conditions that were already broken. All that we could discuss currently is whether bullish momentum will make some impact on current market or not. With relation to weekly analysis we could a bit re-phrase it: will we see AB=CD retracement, particularly BC leg or not. Odds suggest that it should.
    Speaking about B&B, I suppose we still underestimate the value of weekly overbought. It appears greater impact on daily. Although we’ve discussed it often on previous week, still, this was insufficient, since market has returned right back to 1.2840 area.
    Well, on daily chart bullish engulfing still holds, since market has not taken its low. Market definitely feels some support at 50% of upward swing, since it has turned to overlapping bars after downward move. Price is not at oversold on daily now. So, we have to understand chances of upward move. Also make note of new weekly pivots.
    [​IMG]
    But before we will turn to intraday analysis, I would like to show you GBP daily chart:
    [​IMG]
    What do you think about it now? Will bounce up on EUR happen or not? This picture makes analysis very sophisticated, hasn’t it? Very difficult to join potential confirmed DRPO “Sell” and W&R on Cable with bounce up on EUR. If, of cause, we will get DRPO “Failure” pattern, otherwise this will lead GBP to 1.6030 at minimum.
    4-hour
    Here we have interesting picture, and even by solid move down, I can’t tell at 100% that upward move has been cancelled. We see that downward trend has shifted to range price action and we’ve got a rectangle. Upper border is 3/8 Fib resistance and WPR1, WPP stands precisely in the middle of it. Trend holds bullish and take a look – we have bullish stop grabber pattern. Another important factor is that price has left previous lows intact. The one negative moment for upward perpsectives is a way how downward moves happen – much faster move than upward retracement. Unfortunately, I do not see any other patterns, except stop grabber. Scalptraders probably can try to trade it with stops right below it, but that is more an add-on, rather than determinating pattern.
    [​IMG]

    1-hour
    This chart does not add much. One thing that probably is worthy to note here – keep eyes open on appearing some reversal pattern here. One of them could be double bottom that could lead to upward breakout of rectangle. In this case target of Double bottom will be slightly higher than 1.3040 – major 5/8 Fib resistance.
    [​IMG]



    Conclusion:
    I still think that in medium term perspective we should see deep retracement, at least to 1.25 area. At least currently I do not see any action that suggests opposite. So, strategic picture is relatively clear, but we can’t tell the same about tactics.
    In short-term perspective situation is blur. We have some hints here and there, but nothing that allows us to say “upward move has started”. Situation seems even more complex due contradictive directional pattern on GBP. All that we can do in such circumstances is to wait clear patterns. All that we have currently is – support, sideways action, 4-hour stop grabber and some action on hourly chart that does not contradict with Double Bottom possibility. That’s all.
    Just as small add-on – we’ve said already couple words about gold. Also take a look at 4-hour NASDAQ, you will find there clear H&S pattern, that makes possible to look at EUR/USD with another angle.

    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 02, October 2012

    Good morning,
    Probably it's better to not tell anything more about potential pullback, when and where it should start and will it start at all. I just say that market has hit Agreement around 50% and finally has reached 100% target of intraday AB=CD pattern. Also price has shifted to sideways coiling with overlapping bars around this support. I do not know, may be weekly overbought will push it even to K-support area, but still current level is also suitable.
    Another important moment on daily is that price stands above WPP and MPP.

    By looking at 4-hour chart, pay attention that market still forms lower top/bottoms. That tendency has not been broken yet. Trend turns bullish here. Although we see nice respect of support, and shallow retracement after it - I prefer to see greater swing up and higher high to be formed to say that probably we will get 1.3030 resistance target.

    hourly chart shows AB=CD pattern that gives Agreement with 1.3030 5/8 resistance.

    But anyway, I suppose that will be just retracement and market will show move to 1.25 area later.
    Especially, if we will get DRPO "Sell" on Gold and we already have some perspectives for that - W&R. And again - H&S on NASDAQ could trigger significant move on shares. Here I just can repeat my previous thought - I do not like shares currently. Companies do not show impressive results in weak economy. This growth by my thought is mostly artificial, due huge money supply. Situation on NASDAQ and weekly S&P does not exclude possibility of horrible plunge to 1100 by S&P. I suppose that most attractive investments currently on long term is Gold and Junk bonds emerging markets funds + Pacific-Asia region.

    So keep an eye on current situation. It might be interesting. Even if we will skip upward pullback, we will try to catch second leg down.
     

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    #2 Sive Morten, Sep 29, 2012
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 03, October 2012

    Good morning,
    It's few to add currently. Market continue to coiling inside of some range. That's why I suppose that probably 1.2790 low is significant for us. Usually, when market shows price action with a lot of overlapping bars, it shows acceleration after breakout in one or other direction.
    So, if breakout will be to the downside, it will be hard to expect upward retracement. Until this will happen, price still has some chances to reach 1.3030 area.

    By looking at 4-hour chart, we could get this AB=CD and Agreement. Pay attention, that here we could get Stop Grabber in nearest hours as well. If this will happen - probability of AB=CD will increase.
    Perfect AB=CD shows, that BC leg should stop around 1.2865 area.

    On hourly chart we see that this is 5/8 Fib support. So, significant level to watch here is 1.2850-1.2866. If market will find support there (or even before it, at WPP for example), we still could get our upward AB=CD

    That's being said - two levels to watch for: 1.2850-1.2866 that could give chance to AB=CD. If market will move lower - keep an eye on 1.2790 lows.
     

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    #3 Sive Morten, Sep 29, 2012
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 04, October 2012

    Good morning,
    On daily time frame market has not taken 1.2790 low, retested WPP and returned back above it. That is shallow price action, but nevertheless it is positive for bullish perspectives.
    Still, most interesting for us is intraday picture.

    On 4-hour chart trend is bullish, and take a look - we've got our stop grabber. It is treated as valid, till market will not take out its low - that has not happened. Also, here is an example of bullish dynamic pressure, when trend has turned bearish after Stop grabber has been formed - look, price action remained bullish. Although that was very shot-term period, just 4 bars on 4-hour chart, but still this points on hidden bullish power. Now trend again is bullish.
    So, with this just 5 bars on 4-hour chart we've got a lot of important information. It suggests that could expect taking out of previous highs at minimum. Or, even move to 1.3030 resistance.
    Speaking about AB=CD pattern, current it develops rather harmonically, so move to 1.3030 looks possible by now.

    On hourly chart we also see that our 5/8 support around 1.2866 holds. Trend is bullish as well here. Also we have another pattern - batterfly "Sell". Beekay and Quinch already discussed it here. Its 1.618 extension target stands precisely in the same area as AB=CD and daily 1.3030 resistance.
    Recall that in medium term we expect deeper move to 1.25-1.26 area, so this butterfly could become a pattern, that will point an end of BC leg on daily time frame and start CD leg to 1.25.
     

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    #4 Sive Morten, Sep 29, 2012
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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 05, October 2012

    Hello everybody,
    so, finally we've got our retracement to 1.3030 that we've expected almost for 2 weeks. It should been started earlier, but was postponed by overbought on weekly chart. Now first part of our medium-term trading plan is completed. What next?

    We have almost the same situation on weekly chart but in opposite direction - 1.5 year bear trend and first upward pullback that hit overbought. Let's return to our Stretch pattern. We have 5/8 retracement on daily, some patterns that accomplished around it. It tells about deep move down on daily chart, I suppose somewhere around 1.25-1.2650 area, depending on how downward move will develop. But how to enter?

    Most conservative approach is to wait when this move down will start, then enter on some retracement. There is a solid distance to 1.26, so there will be a lot of time to join the party.

    Agressive strategies assume sticking with current 4-hour AB=CD or hourly Butterfly "Sell".
    First pay attention that AB=CD has not been quite completed. I prefer to see another shallow splash up to 1.3040 area. So, if you do not want to wait it -place your stop above this level, prefferably around 1.3070-1.3080 to let market breeth.

    Since market at resistance and two reversal patterns create an Agreement with 1.3030 level - price should show some respect of it, even if this will not be reversal to 1.26. So, odds on the bearish side. If market will show pullback even to 3/8 hourly support 1.2970 or 1.2940 - that will allow to take profit or move stop to breakeven.

    So, all choices right in front of you - choose your poison by yourself. Whether it will be conservative, agressive or mixed enter, may be scale in or even some other way.
     

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    #5 Sive Morten, Sep 29, 2012
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  6. dkami

    dkami Sergeant

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    Thanks Sive for your EU analysis I'll have to sit on sideline until I see nice short entry,also good to see your GU chart and hear your thoughts

    I'm short on GU friday and will be looking to add to that position on monday for 1st TP around my support 1.6005 and 2nd TP around 200EMA(pink)
    GU1.
     
    #6 dkami, Sep 30, 2012
    Last edited: Sep 30, 2012
  7. Synchronicity

    Synchronicity Sergeant

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    GBPUSDH420120930.

    But also a Flag on GBPUSD H4 which would hint at further upward movement and therefore DRPO failure.

    I'll be waiting for the market to decide but have a feeling that the flag may fake a breakout the wrong direction first.:confused:

    All the best

    Michael
     
  8. Synchronicity

    Synchronicity Sergeant

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    Its all in the mind...

    I've had a bad month. Lots of the bad habits I thought were recognised surfaced again and I made lots of the old mistakes. The end result was 2% gain for the month of August when it could have been a lot more.

    But...

    I checked out the projectfx website and saw that of the 54 live accounts that the show only 15 made a profit in August - I was number 14.

    In the 5 months since I 'restarted' my trading I have had one month with a 5% drawdown. All others have been profitable with a running total of 25%

    My results are actually very good and if kept consistent would give a nice steadily rising equity curve and the basis for a good income.

    So, I am faced with the choice of feeling a failure for all the mistakes I made or feeling a success because in comparison to most traders - and my previous trading results I am a success.

    The more I believe the success the easier it will be to avoid the mistakes.

    I'm off to read Trading in the Zone - again!

    All the best

    Michael
     
  9. asif faryad

    asif faryad Sergeant

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    Excellent your a success buddy :)) Keep reading that bible!
     
  10. Aldo Colombo

    Aldo Colombo Corporal

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    Gbpusd

    Am I too wrong or this should be 1.6300 (vs. 1.6030)?
     

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