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FOREX PRO Weekly October 08-12, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Oct 6, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    On monthly chart trend holds bullish. After first pullback from K-resistance area, price again has entered inside this range. In general, October just yet is an inside month for September price action. Since previous week we do not have much new information. All that we can see here is that market stands at long-term strong resistance. So, again, our major focus probably will be more on tactics on lower time frames, rather than on strategy.

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    Weekly
    Speaking about weekly chart, it makes sense to re-read previous comments. All our suggestions are based on thought that currently we have first bullish swing up. But on Friday I had some doubts about it. Is it really so? This is very important for medium term perspective. Take a look – if we will treat as last swing down just small swing down from 1.2750, then our assumption is correct. But what if we have to treat as recent swing down whole butterfly move? This suspicion has come to me, because it was too small retracement on a way down before 1.2750 top. In this case we do not have bullish reversal swing. Hence we will not get deep retracement to 1.25. If market indeed is reversing up – it should show upward reversal swing, but it should be higher than 1.35 – the starting point of butterfly swing down. From the other side, if market will not reverse, we should get downward continuation, since from that swing calculation we just have next lower high in long term bear trend.
    Speaking simply, if we were wrong by treating current swing up as reversal, we could get upward continuation and our thought about downward AB=CD on daily will be wrong. If this is not a reversal swing, then donward move will start, but it will not stop around 1.25 and continue futher, although this is is not very important for us currently.
    Weekly chart can’t assist us much. All that we see is bullish trend, price stands above MPP. One thing that somehow points on possible deeper retracement is Stretch pattern, but it is very tricky and unstable. It suggests pullback from overbought area but where this pullback will stop difficult to say. This situation puts on us significant responsibility and sensitivity to what market will show us in nearest couple of weeks.

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    Daily
    Fortunately on daily time frame we have some tool, that may be will not protect us from wrong decision, but at least will tell us when we will wrong. That is MACD Predictor. You can see that price action stands very close to it. I prefer to get bearish stop grabber here to be absolutely confident with possible AB=CD pattern. Besides, this pattern will let us enter short and place tight stop based on it. Conversely, if trend will shift bullish, that will force us stay on hold. It might be upward continuation.
    Speaking directly about AB=CD, then it creates an Agreement with Confluence Support at daily oversold. Very often higher time frame overbought could push prices to lower time-frame oversold. Reaction is equal to counter-reaction. That is by the way, another moment that gives some chances to AB=CD pattern reach the target.
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    4-hour
    Here is continuation of Friday’s discussion. As you can see, price has hit AB=CD target by upward continuation. So, price stands at Agreement. It probably could not be necessary reversal, as we suggest, but some respect of this area should happen. Since we do not know will we get deeper retracement down – this Agreement could be our chance to take position.
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    1-hour
    Here we have some signs of market exhausting right at Agreement area. Market has hit 1.618 extension of previous retracement, accompanied by bearish divergence with MACD. Trend has turned bearish as well. If we suggest that this will be just respect of Agreement area and retracement, then most probable destination point is hourly Confluence support at 1.2950-1.2970 and WPP=1.2970. May be it will be something like H&S pattern...
    [​IMG]



    Conclusion:
    I hope that current week will give us some clarification on medium-term perspectives. Since we have comfort combination of intraday resistance and daily trend breakeven point, we could try short entry, and move stop order to breakeven after market will proceed to WPP. Then all that we could do is just wait – either downward AB=CD development on daily time frame, or upward breakout and continuation up (if we were wrong with swings on weekly).

    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 09, October 2012

    Good morning,
    Currently market has nice short-term bearish context. Our bet on respect of 1.3030 resistance was approved. Daily trend holds bearish. First nearest target here is 1.2740 Confluence support area and Agreement.

    on 4 hour chart trend holds bearish as well. Market is forming bearish pennant, that theoretically bearish continuation pattern as well. If it will be so, then we will get downward AB-CD with target right at WPS1.

    Hourly chart shows typical upward AB-CD retracement and we can get "222" Sell pattern from 0.382 or 0.5 resistance level. Prefferably is 0.5, since that is also previous swing low.

    So above is a description of nicely looking bearish development. But it does not mean that all will happen as described. Now we have respect of 1.3030 resistance. Still we have to keep an eye on any deviations that could appear. For example, if pennant will be broken to the upside - this will be really worry sign for bearish perspective. Although market now at 3/8 daily support and WPP and current bounce looks reasonable, moving too far up will be suspicios.
    Second moment - do not forget about Gold. There we have confirmed DRPO "Sell". If it will turn to failure - on EUR we also will not see probably completement of AB=CD on daily chart.

    That's being said - currently all looks nice, but in nearest 1-2 days situation demands close monitoring.
     

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    #2 Sive Morten, Oct 6, 2012
    Last edited: Oct 9, 2012
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 10, October 2012

    Good morning,
    looks like our analysis of weekly/daily TF and assumption about possible AB=CD pattern starts to materialize. Looking at daily chart, two thoughts come to my mind.

    1. If market will start some upward retracement from that area and will not take previous low - we could get, at least theoretically Butterfly "Sell" Pattern. Hurry to say here, that I look at this possibility with some doubt. But still, I have to give this idea, since theoretically this possibility exists;
    2. Or, we can get Butterfly "Buy", if market will show retracement up, but not take high around 1.3040. In this case, target will be the same - daily K-support and Oversold, since 1.27 extension of upward retracement stands precisely in the same area.
    3. Final scenario is breakout of previous 1.28 low and completement of AB=CD pattern.
    So, 2 and 3rd scenarios are interesting for us currently.

    By looking at 4-hour chart, we see fast acceleration right to the 1.27 extension of Ligthning Bolt AB-CD pattern, and take a look - below WPS1. I suppose that this is also probably 0.88 Fib support. This ratio is typical for Butterflies.
    Why I think that butterfly has small chances to appear? Mostly because the speed of downmove. Fast acceleration right to 100% extension after pennant-shape 3/8 retracement, breaking hourly K-support without any respect usually suggests continuation to 1.618 target. Especially if we will take a look at NASDAQ and Gold again. Moving are on all battle lines. Trend holds bearish here as well. Anyway we currently meet risk of profit decreasing - so do what you're usually doing in this case. Nice solution could be to take profit on half of position and move stop loss to breakeven on the rest of the half. May be you will invent something better.

    Hourly chart I post mostly for education purposes - take a look how market retests broken without any respect former K-support area. This is useful tool, since if you know it in advance, you may use it for scale-in or entry.
     

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    #3 Sive Morten, Oct 6, 2012
    Last edited: Oct 10, 2012
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 11, October 2012

    Good morning,
    yesterday we are not just ocasionally have told about profit protection. On daily time frame market has hit minor 0.618 target of AB=CD move at 0.88 support of swing up. Until market will not take previous low around 1.28 - possibility as for butterfly "Buy" as for Butterfly "Sell" is open.
    In case of any butterfly market should fulfill two conditions: hold current low and show upward retracement.

    On 4-hour chart we see consolidation around WPS1. To see some upward retracement is normal, when market has reached at single move 1.27 extension target. Usually market shows 0.618 retracement after that and then continues move to 1.618 target.

    On hourly chart we see potential for Double Bottom (DB) pattern with absolutely classical shape - take a look second bottom is some sort of W&R of first bottom. Classical approach shows the target right around 1.2980 0.618 resistance area, that is also WPP.

    So three point to watch, situation is very tricky and thoughts about profit protection are still actual, as you can see.
    First point is 1.28 low. If market will take it - both batterflies will be cancelled and all that we will have - just AB=CD downward pattern.
    Second point is current low of DB pattern. To keep some chances on upward retracement market should hold them. If not - then downward move probably will continue, since we already have W&R, there is no reasons for another one.
    And third moment - 1.2980 resistance. If market will stop retracement there, then probably we will get move to 1.2740 K-support on daily time frame and Butterfly "Buy".
    IF not, if market will break it up - then probabilty will skew in favor of upward continuaion.
     

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    #4 Sive Morten, Oct 6, 2012
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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 12, October 2012

    Hi everybody,
    well, most thoughts were announced yesterday and today is some sort of continuation day, since market has not reached our destination point yet.

    There is nothing new to add on daily time frame.

    On 4-hour chart we see two bullish moments - breakout of K-resistance area and forming of bullish pennant. Trend holds bullish, between broken K-resistance and our destination 1.2970-1.2980 area is a free area - no resistance.

    On hourly chart we can better see pennant pattern, that takes here the form of triangle. Also this is bullish dynamic pressure - MACD shows bear trend, but price is forming higher lows and does not support it. This suggests upward continuation. Also, if you drop time frame even more - you'll see that triangle could shift to butterfly "sell" and it's 1.618 target stands precisely at 1.2970. That's another idea for scalpers - you can get tough day...
    If you have long position - think about moving stop right below the neck of DB pattern. Protect profit...

    Also, if market will reach 1.2970-1.2980 think about taking chips off the table.

    So, what else to add? All other major thoughts we've discussed yesterday. Now just watch how situation on hourly chart will develop and how market will behave around 1.2970-1.2980
     

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    #5 Sive Morten, Oct 6, 2012
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  6. rashidin5178

    rashidin5178 Sergeant

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    Hi Sive,
    Any chance that market will try to test previous high on Monday?
    Have a good weekend and very thanks to your helpful analysis as usual.
    Thanks and Best Regards
     
  7. ertore

    ertore Private

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  8. Lolly Tripathy

    Lolly Tripathy Master Sergeant

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    Thanks for the great analysis sive sir...
    if we will break (2800-2770 area) the blue trend-line everything will turn to bearish side..
    becoz dat is the long term bullish trend
    trend line.
    Wish you a great weekend
    God bless you
     
  9. FreddyFX

    FreddyFX Sergeant

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    One thing we should NOT forget, this action on EU is not totally caused by this pair, but as other pairs are not discussed here, I won't go into that.

    Couple of matters:

    We all know that forex and the total financial industry is nowadays HEAVILY manipulated by a handful of Big Boys.

    EZ cannot get itself out of this mess EVER, so the EU will come down, whatever they try and mess around. It has simply to do with politics.


    Personally I feel that the past days EVERYBODY is getting fooled to point the nose up, thus go for longs.
    DO NOT be surprised when the BBs think enough SHEEP are pointed that direction, they suddenly pull the plug and EU will fall like a rock.

    Does NOT mean that Sive is not right, he ALWAYS is, as he evaluates EU from a pure mathematical point of view and those basically master ALL that happens !!

    So I am staying short orientated.
     
  10. Mahen Ganhewa

    Mahen Ganhewa Recruit

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    Sive Thanks once again for your time. Minor correction..On the monthly chart trend hold bearish correct? Not bullish as stated?
     

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