imprecise they tend to appear like UFO's, it seems to me.
BUT, if this one develops it would be very harmonic/symmetrical
and include the of areas
So, I'm looking for an aggressive short in the area of the RShoulder.
Or/and an additional unit short on a retest of the neckline should
this develop as the ideal is imagined.
the small test of the neckline break was good for entry
at 1.6840. Wondering now if another test of the neckline
will occur before a move lower. I'm sticking to this year's new
rule and moving stops to break even +3 having reached a point
of +60 pips. It's worked well so far this year. In this case I'll give back
60 pips but not 100.
1) this recent decline is roughly equal in "sloped-size" to those two rallies during the impulse move, i.e., a reaction in response to the prior action (dark green fork);
2) the ongoing sell-off of some 240 pips is also quite as much as this market had made in the rallies before (270 & 230 pips), so I'd expect roughly 250 pips to the down side as well.
There are also other reasons:
3) this market is in an up trend and is approaching an important SMA(60) on a daily time frame,
4) it is starting to sink in the range of a prior bottom formation - a potential demand congestion.
One last Q --- Does the sharp, almost impulsive nature
of this correction when previous corrections have been more
mild and overlapping and these broken trend lines temper
your bullishness ? I guess question is when would you change
to a more bearish stance ?
Thanks for your thoughts !!!
1) I admit this corrective move down is very impulsive in nature, what's worse - it's two-legged! It has broken two of your trend lines. But would you go short with a stop loss below 1.6835? My guess is "no", because that's where the MPL lies. Regardles of the prior sell-off, you'd probably say "Hell, no!". Now, if you can imagine price getting as high as 1.6835, you'd have one third of the entire decline eaten. So, you know, I'm not scared. :) Of course I'm not feeling as bullish as I did in April, but all I have to do now is survive this rally.
2) strong trends don't turn on a dime; remember? even the 1987 NY stock exchange crash was followed by a rally;
3) how about all those guys that want to see 1.7 broken, possibly making a fakeout above 1.7? Big investors salivate at the thought of that! :) They're not going to change their minds so fast...
4) how about interest rates? http://www.fxstreet.com/economic-calendar/world-interest-rates/ BoE said there'd be no hike until Q1 2015. OK., but is there going to be hike by the Fed? I don't think so. So, until then... USD pays smaller interest than GBP, so investers are giong to say: "The heck with the hike, let me get a higher interest!".
That's why I still believe it's just a correction.
When would I change to a bearish stance? Here we're talking about a change from a down trend from an up trend. So that would happen only after some failure, esp.:
1) after a failure of a market trying to make a new swing high,
2) after a much deeper correction that could no longer be called a correction - usually such things happen following a massive, combined central banks' operation, like we saw in the case CHF in August 2011.