Upon a new month, price rose from that geometric validation, and appears to remains in suspension as of this writing (23 APR 2015).
Just as important, a new geometry has reached completion at its 5th plot, and since then has fallen further, just as to complete its prior geometric sibling, as just described above.
At this point, there are TWO possible options, which have to be reviewed in correlation with this new geometric completion:
1 - Ether price consolidates with a NET move, such that price attains the 1.618-Fibonacci extension as shown in the chart, and in this adverse excursive process would validate an ectopic Point-5 as its 5-prime (5'),
2 - Price rallies from the current level, and based on the "Off-Set Rule" attains a re-balancing of the past years gyration by validating the 1.38865-to-1.39927 range.
As you ma recall, I have released hints of this pattern completion by posting the large geometry as a background to the recent lessons on "Advanced Market Geometries" (see it here: ). Considering the current "Fork in the road" situation, I thought it was worth releasing the chart with the extent of details as shown in the illustration and start a health and edifying discussion on what the direction might be.
As you may already suspect, I will side with the outlook, but an interim decline to complete a 5-prime definition should be entertained at this point - Let's keep this large time-frame under the elbow for now, as we are currently dealing with the recent geometry just reelased (see it here: ).
Predictive Analysis & Forecasting
Denver, Colorado - USA
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)
Signal Service or Private Course - Contact: MarketPredictiveAnalysis@gmail.com
All updates on https://twitter.com/4xForecaster
1 - "Is France Party Pooping On The EZ? | $EUR $USD #ECB #EURO #forex"
2 - " Le Bear Beats Le Boeuf | $EUR $USD #ECB #Fed #forex"
3 - "Bears Bruise-Battled; Onto Bastille Day | $EUR $USD #ECB #forex"
4 - "$EUR - "Wolfe Case" Scenario Sees 1.26696 | #EURO $USD #forex"
5 - "$EUR Hit Target; Wolfe Profit-Line Pending | $USD #Forex"
6 - " $EUR Hit Worst-Case Scenario Target; Expect Recoil | #forex $USD"
7 - ... Finally, in the most recent release of the L/T $EURUSD chart, I placed a "hint" in the background image for the lessons:
This pretty much sum it up.
In the context of the larger geometry, one might consider whether the current price level constitutes a reasonable departure point for a bullish elan.
For instance, one might consider that the Elliott Wave completed its bearish impulse at its 5th wave, which carved a higher low, and by definition, completed truncated its terminal wave, from which a natural retracement should occur, or perhaps a reversal.
Since an Elliott Wave completes its 5 internal legs of an impulse into a time-consumptive consolidation pattern, this becomes the place to consider the possibility of an Ending Diagonal, upon which we can easily apply the geometric rules developed so far (i.e.: rules that I have elaborated and refined from a Wolfe Wave structure), namely:
1 - As a refinement to the original Wolfe Wave, the "Off-Set" Rule, where a reversal of the geometry (assumedly, the Wolfe Wave patter, from its author: Bill Wolfe - www.WolfeWave.com) defines a target depending upon the point of reversal from which a new swing develops. In the case of this chart, we are looking at a 5-second departure point, thus defining Point-3 of the geo as the probable level of attainment - For a trade, this would represent a conservative, safe target ... See the dashed arrows in the chart.
2 - Also as a refinement to the Wolfe Wave, the "Geo Anchor" is allowing the trader/chartists to use the internal development of the geometry to estimate a more-probable slope of the 1-4 Line, and ultimately a more probable, conservative target as price reverses from Point-5 (so long as a 5' or a 5'' have not been attained, as per the "Off-St Rule" above. In the most rudimentary way, the "Geo Anchor" is that inflection point within the 2-3 Leg of the developing geo that is likely to guide the 1-4 Line as a point of reference, or anchor.
3 - Finally, a refinement of the entire pattern relates to the "Tunneling", which presumes that the 1-4 Line will seek a passage of least resistance, one which would appear to the eyes as a "sparing", or skipping of bars/candles, as if to purposefully carving a linear passage.
Combining ALL 3 RULES above will optimize your speculative projection of a probable geometric development.
The geometric pattern only outlines what is happening inside of it. If it has to expand because Point-4 resides a bit higher or further is not as important as what is the inside paths that are drawn by price. This is what I often refer to about pattern trading, which is that the eye gets caught by the outer layer of a tented pattern, and the trader fails to see the inner armature.
The predictability of the geo does not depend on its outer contouring lines, but by its inner defining points, one of which is the Geo Anchor - Let it expand. Its anatomy still won't change.
- Am I binding myself of all the myriads of possibility by posting profit target?
As a matter of mental exercise, I constantly ask of myself how I could lock myself into the wrong room, and not have the means to get out. This is a very easy trap to walk into, such as pattern trading, where the projection of the contours promise a distance that has not yet been spoken by price, but that your perception overlays as its own premise, and promise.
So, the first thing I would do is remove all trading intentions, and simple look at the price movement for a moment.
Now, one of the rule I have developed and tended to depend upon is that which relates to Elliott Wave impulses. I am not sure that the history of price is hiding in the left portion of the price history, but assuming that we are dealing with an Elliott Wave impulse, then your pt-1 would represent EW's 3rd wave termination level, and your pt-2 would be its 4th wave termination level. Thus, this would define your pt-3 as EW's terminal level of its 5th wave - To be certain of this, it would be best to look at whether your 1-2 height projects to the 1.414 Fibonacci extension (in fact, better the 1.414 than the 1.618, since this would demonstrate a more aggressive counter-trend intention.
Here is what you are getting with a 1.414-Fib extension ... A dead-on hit, followed by a reversal. This suggests a probable decline:
While there is absolutely no way for anyone to find out at this point where a point-3 might be, I would simply follow the probability of price carving new highs versus new lows, and based on the completion of the Elliott Wave impulse, I would simply lean towards a reactive decline following the sustained rallying.
The 5 points, enumerated in BLACK are my feeble interpretation of Elliott Wave (my advice is to not learn from anybody but the authority on this pattern, just as I would not drink the well water from the mouth of a guy who went to the well water. Simply go to the well yourself and get it from from the mouth of the spring ... www.elliottwave.com).
So, here are the geos I would prematurely define, keeping the 1-3 Line slopped downward, just as a reminder that price is probably going to carve lower high, as per our Elliott Wave-based deduction, right or wrong ... Here, we are dealing with probability and a choice has to be as objective as it comes.
Remember that here we are speculating a bit TOO early in the geo development. However, since the Elliott Wave appears to have completed, it is reasonable to define a probable direction (down), and using the EW-based rule (which states to avoid to define a geo off of the impulse), here we are defining the geo AFTER the impulse.
If you recall, there is also another rule pertaining to the EW, which simply recommends to use a "Spine", or a projection off of EW's Wave-2 termination, so as to best confirm that we are probably dealing with a zone of CONSOLIDATION, which is the environment where Geos are the most prolific.
So, you would define this as follows:
Hence, all that is occurring to the RIGHT of the "Spine" will likely represent a CONSOLIDATION, which is the milieu in which to start chasing prancing geos.
Is this all coming together? Is this helpful?
Here is a great example of a FAILED anticipation of a Geo. The anticipation was built on the speculated plots of points 1, 2, and 3, while the Geo was expected to occur with its 1-2 Leg using the Elliott Wave's 5th wave. This makes for a great example, because one of the idealized rule demands that completion of the full Elliott Wave impulse ("IMP") occurred before consideration of any Ge0.
Note that this is simply an exercise in testing the simple rules that I have established, and should not be entertained systematically as it might simply sap too much of your time and energy to test out every single potential development. For this reason, developing simple, clear, strict rules, and adhering to them will help you sift through less probable set ups, and entertain rarer, but higher-probability opportunities.
Here, we are now entering a higher probability zone in which we might encounter a Geo, and he outline offers only represent a mental projection of what I would be looking for in terms of geometric contours. However, it is the internal development of the geometry that interests me (contrary to Mr. Bill Wolfe who asserts that Fibonacci, wave counts and indicators are not necessary to screen for optimal set-u - see his introduction to the pattern here: www.WolfeWave.com). In my view, there is a geometric premise that sets up the highest possible probability for a Geo to occur. Therefore, consideration of Elliott Wave Principle, internal wave counts and an indicator (I use RSI-14) are included in the armamentarium before hunting for the Geo.
I found a WW, with clear support and resistances on its targets. Looks like it wants to test or even break out of the downtrend line since 2014. See the chart speaks for itself.
A bit zoomed in for a better view. RSI is showing a potential bullish divergence also.
Fibbonacci levels also match.
Based on the recent price action, the lower Fibonacci extensions which we had defined earlier as possible springboard levels for a yet-to-been attained bullish targets have been ignored - Instead, price rallied, ignoring these Fib-defined levels and moved on every so closely to the Model-defined target last April 29th 2015, namely:
TG-Hi = 1.17801 - 29 APR 2015
At this point, we are left to ponder on the technical mechanism by which price might reach not only that target, but possibly pursue more august levels.
The Model offers the following set of charts:
$EURUSD - H4 Chart:
- In this H4 chart, a smaller Geo illustrates completion of its entire cycle as price found support at that small Geo's Point-4 level, as expected per the Geo's Off-Set Rule. A larger Geo (BLUE) is also shown, having consumed its own 5-point regimen, but now contemplating a 1-4 Line validation, which is the level which the Wolfe Wave aims as its Take-Profit dynamic level. In the mean time, a mid-size Geo (GREY) completed a 5-point regimen as well, at a 5-prime position. Here again, the geometric implication is that of the high-probability reversal towards that Geo (GREY)'s Point-4 level, as per its same compensatory geometric Off-Set Rule - See dashed arrow delineating the probable price pathway with a solid floor defined at that Geo (GREY)'s Point-4 level.
$EURUSD - DAILY Chart:
In this DAILY chart, a most immediate ceiling is speculated at 1.15254, short of the TG-Hi = 1.17801 defined on 29 APR 2015. The colored area (light pink) defines the floor just discussed in H4, as well as the potential interim ceiling as price is likely to negotiate higher notes. In this same DAILY chart, there are TWO new bullish targets, defined as:
1 - TG-Hi = 1.27069 - 22 AUG 2015
2 - TG-Hix = 1.32593 - 22 AUG 2015.
These two optimistic targets have a reason for being, which we might attempt to justify at the WEEKLY and MONTHLY levels, IF and only IF price were to rally above the most proximate 1.17801 target. Note that this 1.17801 target would represent a bracketing of the Fibonacci extensions 1.414 and 1.618, relative to the reactive price action that ensued a multi-year bearish swing.
Question now should be geared towards whether a minimal 0.386 or even an intermediate 0.500 Fibonacci retracement is worth considering as price appears to gain added bullish momentum - This is exactly what we might find in the following WEEKLY and MONTHLY charts, especially as these levels relate to the TG-Hi = 1.27069 - 22 AUG 2015 and TG-Hix = 1.32593 - 22 AUG 2015, just defined today.
$EURUSD - WEEKLY Chart:
This WEEKLY chart is important as it may offer a justification of further rallying. What is illustrated is the completion of a 5-point regiment through the Geo, with an implied expectation of a reactive rally, as should occur at completion of this geometry. The Geo is now complete with its reciprocal ab = cd symmetry in Leg 1-2 (here, symmetry is inverted), a complex Elliott Wave-based TZZ in its Leg 2-3, as well as a simpler Elliott Wave ZZ linking the Leg 3-4 (Point-4 could arguably be at the prior structural high right below 1.5000, but this would have little impact in the projections of the Geo's targets).
$EURUSD - MONTHLY Chart:
As mentioned above, I would attempt to demonstrate a possible technical mechanism by which price might rally to the targets just defined - Here again:
1 - TG-Hi = 1.27069 - 22 AUG 2015
2 - TG-Hix = 1.32593 - 22 AUG 2015
In essence, this MONTHLY chart offers a Fibonacci-based rationale for such possible mechanism of ascent, considering that:
1 - TG-Hi = 1.27069 - 22 AUG 2015 is nearly coming into alignment with 0.386-Fib (for this monthly scale, of course)
2 - TG-Hix = 1.32593 - 22 AUG 2015 is coming in near perfect alignment with 0.500-Fib, valued at 1.32491.
Above bullish scenario would become invalidated if price were to carve out lower-lows. However, for the time being, there is a sense that as the #USDollar continues to weaken, antipodian currencies and commodities are likely to take flight (see recent predictive analysis and forecasts in #USDollar, $GLD, $XPT and $WTI).
At this point, I would simply concentrate on what might occur relative to the most immediate target define back in APRIL 2015, as this level remains a risk for bulls.
Predictive Analysis & Forecasting
Durango, Colorado - USA