Predictive Analysis & Forecasting
Denver, Colorado - USA
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Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)
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A quick technical note here, to explain how I use the "Geo Anchor". In the original Wolfe Wave pattern, the 1-4 Line strictly passes through points 1 and 4. However, in the methodology I have developed, I find it much more successful when the 1-4 Line is subjected to more discreet geometric details left by prior price action, especially in the space that defines Points 2 and 3.
As I have demonstrated and explained multiple times before, while the original instructions in the Wolfe Wave pattern call the trader's attention to points 1 and 2, I found t more revealing to look for the inverse plots, namely points 2 and 3, and to look for the existence of an inflection point, or structure within the span of these two points.
This is in addition and in support of a concept I have named "Tunneling", which simply illustrates that more often than not, the 1-4 Line will seemingly pass through a chiasm left by bars or candles, as if on purpose, so that at the early development of the pattern, the trader might possibly see the premature fashioning of a tunnel, through which the 1-4 Line might traverse.
However, to help in defining a reliable target using the 1-4 Line as the end-point, and the reversal off of Point-5, I also found it easier to find a "structural reason" to bring the 1-4 Line (target) to a more proximal level relative to Point-5 (departure point), all the while respecting the "Tunneling" concept, or more precisely, making a purposeful and exacting use of it.
You will see that in this chart, I have modified the large geometry as price declines from the smaller geo's 1-4 Line, and price seeks a level of respite from which Point=4 should be defined.
What I have done is to simply move the 1-4 Line by seeking a "Geo Anchor" illustrated by the GREEN asterix in the chart. Here, not only I maintain the tunneling quality, but I also bring the 1-4 Line to a reasonable level of residence relative to price, which continues to seek support. At this prospective point, we can only expect that this 1-4 Line would define a level of respite for this price searching decline.
Is this making sense? Is the anchor point too obscure? Would you be able to find your way through these geometries? If not, just hang on, read on, and before going to bed tonight, take a piece of paper, draw ONLY a bullish or a bearish geometry focusing principally on the 1-3 Line, and imagine price of any instrument vacillate and complete the geo.
Do this exercise several times before going to sleep over the next 5-7 nights. Then, let go of the pen and paper, and simply draw the pattern with your non-dominant index over and over again ... Yes, weird, esoteric and what not, I have heard it all, but like Nike says: Just do it. It will become second nature, and you will start seeing it before it even knows it wants to be a geo.
So, it remains entirely possible that there is no geometry to be had here. The plots I gave are highly suggestive of a nascent geometry, but only once it is complete that the most prudent trader would consider a position at Point-5.
$EURUSD hit target in smaller geo.; Larger geo lurks; Model eyes loftier targets:
$EUR $USD #ECB #FED #forex #euro
As pointed out earlier today, the original target was abandoned the moment price broke back up into the territory of a smaller geometry. Hindsight revealed that the "Off-Set Rule", which the original targeting had ignored, prevailed - In essence, if Point-5-prime is generated out of the geo., then expect price to reverse not to the 1-4 Line, as it would otherwise do from a reversal off of Point-5, but instead a reversal to the level of Point-4, or as in this case, a reversal from the 5-second (5'') would aim for a reversal to the level of Point-3, which is what occurred in this case - Following is the sequence of charts to support this concept visually:
Here, see you I missed a reversal from 5-second (5''), where price aimed for attainment at the level of Point-3 of the larger geo.:
From the moment this had occurred, price moved on to weave the NEXT geo. I the case of this next geo., here is what ensued:
Price reverses from a 5-prime, thus should aim for the Point-4 level:
... Which it did:
... ... Here too, at this point, price forgets about this completion and moves on to the next geometric weaving ... See III below:
Here, a 5-prime is noted, but was NOT formed, as it did not hit the 2-4 Line off of Point-3 (not shown):
So, here is the result:
Hope this all comes together, as we review the "Off-Set Rule"
There is an interplay of 3 distinct geometries. The largest one is neutral, whereas the smaller two (II and III) are probably about to complete a reversal:
1 - Geo-II is capping advance at its 1-4 Line
2 - Geo-III is likely to see its own Point-5 complete its geometry at that aforementioned capping:
1 - First, let's consider Geo-I: This particular geometry illustrate a perfect example where I have projected the 1-4 Line according to my own "Geo Anchor" rule, and as such, it would have acted as a perfect target/take-profit line, wherein the "Geo Anchor" is represented by the inflection, which typically occurs between Point-2 and Point-3. In contrast, the author of the Wolfe Wave strictly defines the 1-4 Line as passing though these two particular point, without regard of the internal geometric development within the pattern itself - The green star points to that "Geo Anchor":
Next is Geo-II. In that geometry, I had defined the range projecting off of Point-4 based on my own "safety" rule, which I have called the "Off-Set Rule". As you may recall, in most of the cases:
a) If price reverses from Point-5, it will likely attain the 1-4 Line
b) If price reverses from 5-prime (5'), it will likely attain the price level of Point-4
c) If price reverses from 5-second (5''), it will likely attain the level of Point-3.
In this particular case, a significant resistance was impose, implying the force of the "Off-Set Rule" was respected, but a second advance following a slight retracement provided the elan to attain a higher level - That level is expected to be the projection of this Geo-I's own 1-4 Line:
Finally, here is Geo-III: Here, mind you that although I have ascribe a 5', a true 5-prime would require validation of the 2-4 Line off of Point-3, which does not appear to be the case, at least so far. Hence, if a reversal occurs without a true 5', the "Off-Set Rule" will expect price to attain the geo's 1-4 Line.
I hope this clears things up a bit for you.