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FOREX PRO Weekly October 22-26, 2012

Discussion in 'Sive Morten- Currencies, Gold, Bitcoin Daily Video' started by Sive Morten, Oct 20, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    Although market has shown some deeper invasion inside of monthly Confluence resistance overall picture has not changed much since previous week. Probably in today’s research we again will be focused on lower time frame analysis.
    On monthly chart trend holds bearish. After first pullback from K-resistance area, price again has entered inside this range. After two weeks passed October is still an inside month for September bar. All that we can see here is that market stands at long-term strong resistance.

    [​IMG]

    Weekly
    If you let me, I hold some text from previous research for some time, since this looks important for me. If you remember this discussion – you can skip reading this and move right to current weeks ovbservation:
    “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. 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.”
    On previous week we’ve discussed perspectives of potential breakout of flag pattern on weekly time frame. In fact, we have nothing except this pattern, so whether we want it or not, all that we can do is just base our analysis on it. Theoretically, flag, as you know is bullish pattern, but mostly it will depend how market will out from it. Looking at price action on previous week makes me worry about its bullishness, since price action reminds bullish trap. If price breaks upward border of the flag (or pennant) it should not return back inside of it. Here price still holds above upper border, but overall price action looks queerly – possible bearish breakout of bullish pattern tells much about potential perspective. Probably I shouldn’t worry much about it if other markets will not show such price action. Take a look:

    [​IMG]
    Not usual price action before US election, doesn’t it?
    That’s why I probably will not hurry to enter long. As I’ve said in videos, I still think that enter after taking out of previous high will be much safer. At least by this action market will convince me with seriousnes of its intentions.
    Althgough, as I’ve said, price formally holds above flag yet (but we will check it additionally on daily chart), I have solid suspicions that we will see downward action on next week.

    [​IMG]
    Daily
    Since on previous week price action was relatively tight, there is nothing that I can add today to previous daily comments. Again we will be focused on two possible scenarios. First one is called “222 Sell”, since it based on cognominal harmonic pattern. It once again returns to life mostly due unimpressive bullish price action. If this scenario will be realized, we should see price around 1.2750 area - daily Confluence support, “222” target and daily oversold. But if it will really happen, it will mean that market will show failure breakout of flag on weekly chart. Thus, I will not be surprised if we will see further move down in medium term.
    [​IMG]

    Next scenario is Butterfly “Sell” pattern. We might see that price still holds above upper border of the flag/pennant, so this move down might be just retesting of it as support and move up could continue. In this case, we can get reaching of 1.3270 area or even higher to 1.618 target. But as you can see there are two solid barriers ahead – MPR1 at 1.3187 and daily overbought. Unfortunately daily chart does not give us a clue what scenario will prevail. So, let’s try to find it out on intraday charts, or, at least, create some reasonable trading plan.
    [​IMG]
    4-hour
    Take a look where we are stand. If you remember we where focused on retracement to 1.3020 area within couple of previous trading sessions. This suggestion was based on resistance and Agreement of 0.88 resistance and AB=CD upward pattern. So, this move has happen. Current level is great assistance for us, because this is new WPP=1.3018, 4-hour Confluence support and border of the flag. If market still have bullish ambitions, price should hold above this area, because retracement to major 3/8 support after hitting of AB=CD target looks quite enough move. What we will get, if market will not hold here? Moving below WPP will shift sentiment on bearish side, falling of the price below flag border will tell us, that that is probably failure upward breakout and, finally, breakout of 4-hour Confluence support will confirm shor-term bearish strength. So, keep eyes open on this area. It is a key level for whole coming week, I suppose. And don’t be decieved by possible upward bounce on first touch of this area, market could show small retracement. To speak about upward continuation we need see acceleration, some upward thrusting motion.
    [​IMG]

    1-hour
    Here we do not have much add-on. Hourly chart shows particularly the level with which we had a deal on previous week – hourly Confluence support from most recent swing up. Take a look that trend holds bearish here.
    [​IMG]



    Conclusion:
    Coming week will clarify whether it will be true flag breakout or not. That will define direction in medium-term perspective.
    In short-term we should keep an eye on 1.30 area. Since this is a congestion of significant levels – how market will behave around it and what direction it will choose will be determining moment.

    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 23, October 2012

    Good morning,
    on daily time frame it is difficult to comment something - one thing that might be here is bearish dynamic pressure, since price action now does not quite support bullish trend. But I tell "might" is because too few bars just yet with this pattern - it's not sufficient to say definitely have we pressure or not.

    Still, if you read carefully our weekly analysis - you can note that first part of short-term trading plan is completed. Market has shown bounce as respect of 4-hour K-support and WPP. If you will take a look at hourly chart - you'll see that that was particularly the bounce, but not the starting of upward continuation. Since price action was choppy and sloppy with multiple deep retracement and very unstable. This is not how market reestablishes trends.

    Second great assitance that we have now - 2 side-by-side bearish stop grabbers (in a way how I like it) on 4-hour chart. IT means that market at minimum should retest K-area and reach at minimum 0.618 extension of downward AB-CD pattern. That is our minimum programm for today.
    More extended program - is how market will behave around K-support at second test of it. If it will pass further - then next target is Agreement at 1.2950 area. But that will also mean that upward break on weekly chart - was a bullish trap. And that will significantly shift probability in downward continuation. So keep your eyes open...
     

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    #2 Sive Morten, Oct 20, 2012
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 24, October 2012

    Good morning,
    first - couple comments for daily time frame. Trend has turned bearish again. First issue to discuss is possible dynamic pressure. Although we have few bars to assess it, but price action develops as with real dynamic pressure. Still it could be by some other reason.
    So, the idea is - if this is still dynamic pressure, its very often leads market to previous extreme, almost as stop grabber, with acceleration in direction of the pressure (i.e. down). It is not always happens, by rather often. In this case one of the two lows - either 1.2890 or 1.2825 will be the target. I think that's better be focused on former and here is why.

    Now we have "222" Sell in progress. Its 100% target stands beyond daily oversold and MPP - so its hardly that market will reach it within current week. Hence, our major and real target for current week is 0.618 extension - that stands precisely right at this 1.2890 low and at WPS1.

    But here is another reason. Let's turn to 4-hour chart now.
    Trend is bearish, market has completed our AB=CD pattern, but it was rather fast. It tells that market will continue lower - either to 1.27 or to 1.618 extension. 1.618 stands at 1.2880 - do you get my idea? Right - daily 0.618, WPS1 and 4-hour 1.618 target all stand at the same level. And 50 pips lower stands real barrier - daily oversold and MPP.
    I do not know how you will act, but I think that around 1.2880 we have to think about taking chips off the table.

    Currently we have a retracement. I do not know when it will finish, but note, that 4-hour former K-support area has been passed without no respect. Recall that market very often retest solid areas that it has passed with no respect from the other side. So, it might happen that 1.3005-1.3008 will be not bad area to re-establish shorts or scale in the position.

    But follow your own trading plan - I just share with you what I see, and hope that this might be useful for you. Remember - your money is your responsibility. Do not rely on anybody but yourself.
     

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    #3 Sive Morten, Oct 20, 2012
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 25, October 2012

    Good morning,
    today is less moments to comment. On daily chart significant moment is that price has not quite reached 0.618 extension and left it behind. So, reversal in under question, since market very rare lefts targets behind.

    On 4-hour chart we see that market has reached 1.27 level, and turns to pullback. Now, I suppose major level to watch for is 1.3005-1.3020 resistance, that is also previous swing low and WPP.
    If you will take a look at hourly chart - you'll see that this is also an Agreement.
    Overall price action currently doesn't look at thrust and reversal, it mostly has a retracement structure, so chances that price will continue to 1.2880-1.29 are still here.

    But market should not break 1.3020 area to the upside, especially by some explosive move. So, if you will see the signs of it - do not enter short
    Most prefferable scenario for bears - market will coil inside of 1.3005-1.3020 and returned right back below 1.2990 previous swing high by some acceleration move down.
    That will give nice confirmation of possible further downward move.

    So, keep an eye on 1.3020, don't be hasty, wait when price will show itself what market intends to do.
     

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    #4 Sive Morten, Oct 20, 2012
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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 26, October 2012

    Good morning,
    on daily time frame there is nothing to add - nearest resistance is 1.29-1.2911, so as target. May be it will become a not bad idea to think about profit taking there.

    On 4-hour chart we see that market after pullback has returned right back. Here I see two possible scenarios - appearing of Butterfly "Buy" that will complete simultaneously as 1.27 own target as daily 0.618 and probably 1.618 on 4-hour chart. But this hardly will happen today, since for butterfly too few time left.

    On hourly chart we see two possible developments. Bearish dynamic pressure points on downward acceleration, while potential DRPO "Buy" (that has not been confirmed yet) on potential pullback to 1.2975-1.2980 - that is in a row with Butterfly idea.

    Currenty it's impossible to predict which one will take the lead. Personally I think that there are more chances for downward continuation without butterfly and DRPO, mostly because targets stand just 20 pips lower.

    Anyway you've got what to watch for. If market will form DRPO - and it will not turn to failure - expect move to 1.2975-1.2980 and, hence appearing of Butterfly "buy" on 4 hour chart.

    If market will accelerate right to 1.29-1.2911, short-term targets will be completed and market could turn to some retracement. That will be the level where time will come to think about short-term profit taking.
     

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    #5 Sive Morten, Oct 20, 2012
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  6. Rubin Hood

    Rubin Hood Private

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  7. LeFrog

    LeFrog Private

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    Hi Sive

    Thank you for your analysis and have a great weekend.
     
  8. dave edwards

    dave edwards Private, 1st Class

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    Many thanks again. the training is excellent and I can report that I have consistently had positive returns
    since applying the advice received from yourself. My family appreciate it as well
    MANY THANKS SIVE!
    Dave
     
  9. FreddyFX

    FreddyFX Sergeant

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    THANKS Sive.

    I always prefer the written one above the video, as I can make remarks on it in between your text.
     
  10. Johan Andersson

    Johan Andersson Private

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    Sive, also note that IF price will reach and bounce (create a swing low around the top of the flag it will also
    create a nice hidden divergence on H4, where price have made higher lows while oscillator made lower lows
    (reagarding the swing low 12 oct). This is a continuation signal.
     
    #10 Johan Andersson, Oct 21, 2012
    Last edited: Oct 21, 2012
: sive morten

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