Question: So is it here? Is it starting now?
Answer: Maybe. Can't say for sure until there is sold evidence that it has started.
Question: How will I know?
Answer: I will need to see a wave 1 of the wave ( iii ) get established and then a wave 2 of wave ( iii ) AND then prices move back up and past the wave 1 before I can be more sure that the wave ( iii ) has started.
Why did I just say all that? Because although prices have done everything that I predicted it would, the market is still the market and what happens next is not up to me! As a trader, you always must be able to see other possibilities and pathways. And then prepare for it.
Here, I have now added another POTENTIAL pattern (purple) that would complete further down. It has confluence with the .707 retrace of the former up trend. Couple of reasons that I have added this.
1. before reversing, prices have a strong tendency towards retracing previous moves to the "Goldilocks" zone....618 - .886 area. In this case, if prices reverse now, it has not reached there yet.
2. wave 2's have a tendency towards deep retracements of wave 1's; usually more than 50%
3. wave 2's tend to be more complex patterns than a simple .
4. There is another MAJOR SR level below the current one where prices are at now AND it has confluence with the .618 retrace of the previous up trend and is in the "Goldilocks" zone
5. the is not oversold (from 1Hr TF and higher); end of waves are better when it has confluence with oversold/overbought (this is of course, not always the case). Especially with wave 2's because the following wave 3 is a strong impulse wave, an oversold is much more favorable to indicate an upcoming strong movement.
With all the above reasons, although I am expecting some kind of upwards reaction right now, I don't think that it's the start of the wave ( iii ) just yet. Prices may take a bounce here back up to the BAMM Line which would also be the TP1 of both the and the bat. Then it may reverse back down and head towards the "Goldilocks" zone before finally completing the wave 2.
SUMMARY OF MY TRADING PLAN
Because I firmly believe that this pair is now in the wave C up of an pattern and that it is now in it's wave (ii) of the wave C, the next move is the wave ( iii ) up. Which of course, will be the biggest move up of the wave C. Question is when will it begin? In staying with my predictions in the previous posts, there will be some kind of up move reaction right now. However, it more than likely will only be a "bounce" and not a trend reversal. I am taking on more LONG positions here adding to my LONGS from the previous up trend. But I am going to be watching PA very closely as it heads towards the BAMM Line. I may take profits on these new LONG positions and then wait to see what happens from there. If prices do crossover and close past the BAMM Line, then there is higher confidence that prices will continue higher. If it cannot cross the BAMM Line, then we will see more downside as wave (ii) will not be finished.
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Please keep in mind that I am not giving any trading signals here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!
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