I am currently long in a short trade based on an idea by another member but I'm currently also looking to get short for a possible further ride down. I'm basing this on the fact that we had a retracement to the 50% level (almost) of the move down which started on August 25th and ended on September 04th and the fact that we have just witnessed a considerable move down with good downward momentum. RSI is well below 50, sloping down and not overbought yet, MACD is sloping down and it looks like the MACD- and signal line are ready to cross below 0 too. Overbought conditions on stochastics might point to a temporary up retracement but the picture is otherwise quite bearish on this timeframe imo.
In the chart are some patterns which we could see unravelling in the next weeks(?). Please note that this is still very hypothetical since we have only completed XAB and still need CD to complete to actually get to these patterns...! But for me it helps to get an insight on the different possibilities...
I prefer to trade based on the possible completion of one of the bats (and one possible shark), keeping the other shark and crab as alternatives.
I have also included different possibilities of completion of harmonic AB=CD (and alt AB=CD) patterns for the further move down to a posible C leg completion (if it comes...), this to look at possible reversal zones where direction could change from bearish to bullish. The blue arrows give my preferred path and the red arrows some of the alternative paths. The blue zones indicated in the chart are based on the levels defined by the patterns but also on previous structure to the left of this frame. Please note that the first retracement which could start now may also turn out to go all the way up to complete a bat pattern with a high C leg but this is less likely imo.
I included a combined long position for possible completion of a CD leg and a short position to trade off the completion of the bat(s). I am now looking to enter short to complete a possible C leg.
I'M CURRENTLY NOT PLACING ORDERS BASED ON THIS YET, WAITING FOR THE FOMC RATE DECISION ON THURSDAY!! But it's good to have some important levels defined anyway! If I trade based on this I might adjust SL and TP depending on PA at that time!! I will update here if I enter a trade.
GOOD LUCK!!
Comments
KVE
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PA rose as expected but it rose higher than I would have guessed initially. The setup is still good imo since we are now exactly at the 50% retracement level of the move down.
I am currently short from almot the top of today with a tight SL above that top, hoping to ride a wave down to complete a possible C point of one of the patterns. Targets are 1.5365 and 1.5210.
Up after that. If we shoot higher tomorrow I will start over with my analysis. Updated chart:
I am currently short from almot the top of today with a tight SL above that top, hoping to ride a wave down to complete a possible C point of one of the patterns. Targets are 1.5365 and 1.5210.
Up after that. If we shoot higher tomorrow I will start over with my analysis. Updated chart: