1 - TG-Lo = 1.45041 - 21 APR 2015
2 - TG-Lox = 1.44341 - 21 APR 2015
For the record, following is the former target:
From a market geo viewpoint, a nascent geometry is likely to cap the current rally to a level that will probably remained below the recent structural high (YELLOW star).
Note that Point-4 is only speculative at this point (RED star), as price continues to negotiate its way up along a possible "tunneling", through which 1-4 Line would tend to traverse. This tunneling is aided by the internal Geo Anchor" which typically occurs at the inflection along the 2-3 leg.
OVERALL: . Invalidation would occur upon breaching the parallel of the 1-3 Line off of Point-2 (not shown in the chart, but it should remain apparent that this geo demands that 1-3 and 2-4 Lines be ipsi-directional and convergent.
Predictive Analysis & Forecasting
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I believe that what you have is a much better, promising candidate, based in several quality factors:
1 - 1-3 Line is distinc relative to its validation of the 5th point, which almost always comes at a shorter distance relative to Point-3 than Point-3 does relative to Point-1 - This is due to the next quality factor ...
2 - The 2-3 is long. It usually is a lot more insidious, contorted, but I believe that its straight nature may have something to do with price's reaction once Point-5 is validated ... Something I am still collecting and verifying.
3 - The "Tunneling" works great. There are three contenders to define Point-4 as its anchor along the 2-4 Line, and I agree here, that the more internal "Geo Anchor" should be considered if it brings the 1-4 Line to a closer level relative to Point-5 (i.e.: less to travel from Point-5 to the 1-4 Line, to optimize the trade outcome). But, here there is no good internal "Geo Anchor, and therefore, you have chosen to place the 1-4 Line relative to the closest validation point among all three for Point-4, thus affording a closer 1-4 Line relative to Point-5 - That's exactly the rationale I would have applied here, whether this went through your head or not.
As a visual security, I would keep adding a dashed 2-4 Line off of Point-3, as a visual reminder of a potential attainment, if Point-5 was to express itself via an ectopic 5-prime position, but also as a visual reminder of a fair and structure-based Stop-Loss, in which case, the "Off-Set Rule" would apply, generating a target not along the 1-4 Line, but at the price level corresponding to Point-4, as you already know.
Here is my defunct, now invalid chart ... RIP:
Yes, as just posted below (without a chart), I have been following a larger geo on this pair, at the DAILY level. A 4-hour or 8-hour chart will do, but the gist occurs at the daily level ... Posting that chart very soon.
I will build the chart and try to explain its basic construction in a stepwise fashion.
As I was explaining earlier, I thought it worth reconsidering the entire geometry, especially whenever price action far exceeds the scale or range of moves originally considered in the analysis. In other words, if price far exceeds the range considered, then a much larger agent is at work at a larger scale.
First, let's look at the recent bearish impulse, using the Elliott Wave principle. What we are seeing is an internal 5-wave down-swing, with the 5th wave terminating at a standard 1.618-Fibonacci extension, as follows:
As was established before, the Elliott Wave consideration if paramount, since our hunt for the Geo occurs at consolidation levels, and we have established a "Spine Rule', which simply makes use of the often straight nature of the 3rd wave impulse as it originates from the termination level of Elliott Wave's 2nd wave. In the chart, there are two such "Spine", drawn as dark purple dash lines.
You will notice that in most cases, the "Spine" that is most adherent to EW's 3rd wave will help herald the emergence of EW's 4th wave. HOWEVER, in the rule we have established, whereby we seek the highest probability of a Geo development, we are best off letting most of, or the entire, Elliott Wave impulse ("IMP") unfold, since it is at the conclusion of such impulse that consolidation will occur, and a consolidation is the primordial environment in which the Geo will emerge. These consolidation areas are referred to corrections in Elliott Wave parlance ("COR"), and such geometries can also be found in the "COR" segments of EW ... In other words, there are other places to wind Geos, and the "COR" environment do not only occur at the termination of IMPs ... There are other places where they would occur, but it would take too long to explain. Simpy refer to http://www.ElliottWave.com for the only true and most respected authoritative site, where Mr. Robert Prechter and other associates offer free course on the basic development of EWs.
Now, let's return to the Geo ... As indicated above, the Geo will develop in the conclusion of the IMP, and in this case, we can look at a probable candidates among many others, as follows:
As we are facing the choice of three good contenders, I will take this time to reinterate a rule that I shared on another chart this week, which simply refers to the construction of the internal legs, and how they compare. In essence:
1 - The 1-2 Leg will most often be constructed by a SIMPLE symmetrical ab = cd geometry, or a simple "zig-zag" ("ZZ") in EW terms;
2 - The 2-3 Leg will most often be constructed by a COMPLEX ZZ, such as a Double-ZZ or a Triple-ZZ, or a W-X-Y-XX-Z construction - This is the Leg that will also support the "Geo Anchor Rule" and give shape to the "Tunneling" concept.
3 - The 3-4 Leg will most often negate a prior, false or pseudo-Point-4. You will see that in many nascent Geos, in which a Point-4 appears to be confirmed, but a 3-4 Leg will offer a larger, but Simple ZZ, or a simple, symmetrical ab = cd pattern in which point-c of that pattern will define the true Point-4;
4 - The 4-5, the 3-4 or the 1-2 Legs should be used for Fibonacci extension points, from which a Point-5 might occur at the 1.272, 1.414 or 1.618 extensions
Now, looking at the first rule above, here is why I would chose the following 1-2 Leg:
First, I am considering the highlighted area, as shown:
Admittedly, this area consists of a wave-4 to wave-5, so it is looking at the near-completion of the EW, when we just mentioned that it is best to look at opportunities following the completion of the 5th wave. However, comes to compete against this concept is the fact that the "Spine" has transected that area twice, suggesting that this area might be optimal for a nascent Geo.
Next, I will look for the simple symmetrical ab = cd, which is the feature of the fist construction rule, as follows:
In this first step, I know that the ab =cd will terminate at the nadir of the entire EW IMP, so I can "reverse-engineer" by drawing its cd leg, as follows:
Next, i simply cut/past and see where the top-end of that duplicated segment points to, as follows:
At this point, I have a perfect ab = cd representing the 1-2 Leg, and by definition, Point-1 of the nascent Geo is given as follows:
Worth looking for are discreet price action that gives credence to these 1-3 and 2-4 Lines, and te following arrows seem to confirm this, as follows:
Here, the 1-3 Line received a above/under validation:
... while the 2-4 Line receives a double-support validation:
While all this comes as a sophisticated explication of the manner that I approach the process of screening through high-probability set-up, it should not be considered a more valid method than one in which you develop your own consistent method. All that I am showing and sharing here is as objective and attainable a means to look for a geometric approach to trading. Combined with our own indicator - if you have to have one - I hope it will greatly enhance the outcome of your trading performance.
I will continue to add comments to the development of this Geo. If it turns out to be consistent and adherent to the underlying geometric development, great. If not, we would move out.
Predictive Analysis & Forecasting
Durango, Colorado - USA