The Geo has completed its geometric cycle at a ectopic Point-5 level which is its most common occurrence, namely at 5-prime (5').

Based on the Geo's Off-Set Rule, price is expected to decline and find its highest probability target at the price level corresponding to Point-4.

A prior analysis based on the Predictive/Forecasting Model had defined two qualitative targets, namely:

1 - TG-Lo = 1.87545 - 21 APR 2015

and

2 - TG-Lox = 1.85918 - 21 APR 2015

OVERALL:

Net bearish outlook based on the Geo's expectation, as well as Predictive/Forecasting Model's unanswered targets.

Best,

David Alcindor

Predictive Analysis & Forecasting

Durango, Colorado - USA

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David Alcindor

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.

As the Geo completed its geometric cycle, price is not heading to its corresponding Rule #2 level:

Best,

David Alcindor

Price finally reached the Geo's level of Point-4, adhering to the Geo's Off-Set Rule #2. In addition, the Predictive/Forecasting Model's 1.87545 target, defined nearly a year ago on April 21st, 2015 was also reached yesterday:

At this point, expect the lower qualitative target to get hit (at a lesser probability), and a reversal to occur at these levels.

Best,

David Alcindor

Price reached the lowest Qual-Target at 1.85918, which was defined last April 21st, 2015:

This lower-probability, higher-reversibility target should prompt trader to look for reversal patterns.

Best,

David Alcindor

Note that price carved even lower-lows, now reaching a prior target defined on February 12th 2015 (over a year ago). While this target represented a lower probability target (as a Qualitative Target, or "Qual-Target"), the nature of these targets are associated with high-probability reversal power:

Considering the recent discussion on imminent reversal in the $GBP vs. $CAD and imminent hit of the $USoil ($WTI) target, one should consider the possibility of a commodity-wide reversal, not only affecting #oil, but #gold as well ($XAU) ... Worth keeping an eye out for these commodities.

Best,

David Alcindor, CMT Affiliate

David Alcindor

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Hi David.

Many congratulations on attaining your CMT credentials!

Looking forward to more of your superb lessons

Kind regards

Iefan

Many congratulations on attaining your CMT credentials!

Looking forward to more of your superb lessons

Kind regards

Iefan

Reply

17 SEP 2015 - Chart Update:

Price is now testing lower structures, with internals suspiciously looking like bearish IMPs:

David Alcindor

Price is now testing lower structures, with internals suspiciously looking like bearish IMPs:

David Alcindor

Reply

1 OCT 2015

GBPAUD

Hi David

Any insight into what price is likely to do when this WW/Geo completes would be greatly appreciated. Kind regards Iefan

GBPAUD

Hi David

Any insight into what price is likely to do when this WW/Geo completes would be greatly appreciated. Kind regards Iefan

Reply

@iefan - Watch for 2.127 and 2.121 range ... Yes, it might pierce through the 1-3 Line first ... Got orders pending in that neighborhood.

David

David

Reply

14 SEP 2015 - Chart Update:

This has been one of the most protracted trade. The 3-5' Line has served as a relatively good gauge to decipher any commitment to the downside - So, no BACA = No commitment from bears.

Based on Geo's Off-Set Rule, all prior target become less probable, compared to the one that remains near and at the level of price of Point-4:

David Alcindor

This has been one of the most protracted trade. The 3-5' Line has served as a relatively good gauge to decipher any commitment to the downside - So, no BACA = No commitment from bears.

Based on Geo's Off-Set Rule, all prior target become less probable, compared to the one that remains near and at the level of price of Point-4:

David Alcindor

Reply

Thank you for the update David, been watching this pair for a long time, since it hit Point 5'. Could I ask, from a technical point of view, had a trader ( me...lol ) entered aggressively at Point 5', where would have been a sensible SL placement. I elected to draw a 1.618 FE off of the 4-5' Leg....could you critique this decision and let me know if there is a more sensible technical SL placement for this trade. Thank you very much. Iefan

Reply

@iefan - There is not one good SL, even in hindsight, when trying to look retrospectively at what-if scenarios - The risk of looking retrospectively is that of confabulation: It becomes too easy to tell oneself how things could have been, so I tend to develop rules and as long as they are consistent across assets and timeframes, I apply them and stick with tradable conditions that fall within the rule. If for instance I had to change my Fib extensions from 1.414 to 1.618, then again to 1.786, then I would be dealing with less relevant Fib levels applying to too rare circumstances.

However, there is always my crutche: The Predictive/Forecasting Model which had not been used to define a tolerable limit to the upswing. Now that I do this in hindsight, I looked backward (upside, in this case) and applied the Predictive Model by projecting a TG-Hix and obtained 2.183 as an extreme high target (see chart below). However, at this point, it would be most prudent to BACA < the 2.13981 level, as this represents the most recent structural low (i.e.: higher-low along the upswing):

David Alcindor

However, there is always my crutche: The Predictive/Forecasting Model which had not been used to define a tolerable limit to the upswing. Now that I do this in hindsight, I looked backward (upside, in this case) and applied the Predictive Model by projecting a TG-Hix and obtained 2.183 as an extreme high target (see chart below). However, at this point, it would be most prudent to BACA < the 2.13981 level, as this represents the most recent structural low (i.e.: higher-low along the upswing):

David Alcindor

Reply

24 Aug 2015

$GBPAUD

Hi David,

Spotted this Geo, quick question....does the new high in price adversely affect the probability of this Geo completing successfully in any way? Thank you . Iefan

$GBPAUD

Hi David,

Spotted this Geo, quick question....does the new high in price adversely affect the probability of this Geo completing successfully in any way? Thank you . Iefan

Reply

Hello @iefan - By applying the Geo's Off-Set Rule, you are keeping the highest probability targets on your side.

Remember to avoid the 2-3 Leg trap, which tends to define too simpler a symmetry at first. Hence, what you have defined as a 5-prime could either be true, or simply Point-3.

Another way to verify this using the same geometric properties of the Geo is to look for any internal Geo. One may consider the existence of a smaller Geo whose Point-1 could originate between points 3 and 4 in your plotting, with Point-3 of the smaller Geo at the second validation of the upper dashed line, Point-4 of the smaller Geo the point of departure of the most recent bullish upswing. I have not looked at it closer, but this could make your 5' an actual 5'', thus limiting the current price decline to the upper red dashed line, as per the Geo's Off-Set Rule.

Worth looking into it as a way to "geometrically control" your risks in the larger Geo.

Overall, the original predictive analysis and forecasting will require a change in target, as we are only interested in the HIGHEST probability outcomes. In this case, there has been enough of change in the geometry that the most probable target, adjusted to the recent adverse excursion in price, will now rest at the level of Point-3.

David

Remember to avoid the 2-3 Leg trap, which tends to define too simpler a symmetry at first. Hence, what you have defined as a 5-prime could either be true, or simply Point-3.

Another way to verify this using the same geometric properties of the Geo is to look for any internal Geo. One may consider the existence of a smaller Geo whose Point-1 could originate between points 3 and 4 in your plotting, with Point-3 of the smaller Geo at the second validation of the upper dashed line, Point-4 of the smaller Geo the point of departure of the most recent bullish upswing. I have not looked at it closer, but this could make your 5' an actual 5'', thus limiting the current price decline to the upper red dashed line, as per the Geo's Off-Set Rule.

Worth looking into it as a way to "geometrically control" your risks in the larger Geo.

Overall, the original predictive analysis and forecasting will require a change in target, as we are only interested in the HIGHEST probability outcomes. In this case, there has been enough of change in the geometry that the most probable target, adjusted to the recent adverse excursion in price, will now rest at the level of Point-3.

David

Reply

As we continue to look at the DAILY chart, the goal here is to find a mechanism by which price would descend down to the level of Point-3 in reference to the large Geo we have been following.

There are some indications within the 4-Hour chart, as well as per the Predictive/Forecasting Model, that price could test 2.25275 as price attempts to complete its Geo cycle (i.e.: First, closing the 5-point geometry, then reaching counter-trend-wise away from the 1-3 Line, just as the Wolfe Wave pattern is know to behave as it seeks validation of its 1-4 Line.

Again, 4-hour chart coming up shortly.

David Alcindor