4xForecaster

Potential Reversal At 11224 Per Background WW Geo. | $DAX #forex

FX:GER30   DAX index of German listed shares
1470 41 16
WOLFE WAVE PATTERN:

Potential reversal at 11224 per background Wolfe Wave pattern pending completion at its 5-prime position (i..e: along the 2-4 Line transposed and originating off of Point-3 of the pattern (Blue).


BEARISH OUTLOOK:

Overlay of predictive/forecasting model defines 11224 as a significant reversal potential level. If level holds and sends price back into a declining trend, consider 10593 as a conservative conditional level, whereas 10094 as an opening to the bearish 9745 target.


INVALIDATION OF BEARS:

An Elliott Wave prepares to complete its internal impulse count at both lesser degree (small black font) and higher-degree (large grey font). If and once price completes Point-5 of both impulses, a top-structure would define a level of invalidation if price continued to rally passed it.


OVERALL:

Looking into this coming weak, the predictive/forecasting model calls for a top-reversal at 11224. A decline to the bearish target at 9745 would likely act as a solid floor compared to the two structural levels at 10593 and 10094 - In essence, this week could possible see price tethered between 11224 and 9745 given the structural conditions defined above.

Stay tuned,


David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA


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David Alcindor
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David Alcindor, CMT Affiliate #227974
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)

Signal Service or Private Course - Contact: admin@KADAInstitute.com
All updates on https://twitter.com/4xForecaster
Recluse82
2 years ago
hi david what is your target for long term? with the ecb qe can be seen extreme bullish projection targeting 16-17k
Reply
22 FEB 2015 - Update:

From Twitter/LinkedIn:
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$GER30 - Probable support along WW's 1-3 Line (blue); Target at 11224 remains pending:

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@tradingview $DAX #GER30
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David Alcindor
+2 Reply
24 FEB 2015 - Update:

From Twitter/LinkedIn:
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$DAX hit 11224 target dead-on with new 4-hr bar; Bearish outlook:

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@tradingview $GER30 #euro #franc $EUR #forex
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David Alcindor
+2 Reply
26 FEB 2015 - Update:

From Twitter/LinkedIn:
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$DAX hit 11224 target; Mulls decline around target; Bearish outlook:

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@tradingview $GER30 #dax #forex #euro $EUR
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David Alcindor
+3 Reply
trandom 4xForecaster
2 years ago
thanks David for sharing, keep us updated ;)
Reply
26 FEB 2015 - Update:

From Twitter/LinkedIn:
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$DAX likely reached a terminal point at WW's 5-prime; Bearish outlook prevails still:

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@tradingview $GER30 $EUR
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David Alcindor
+3 Reply
trandom 4xForecaster
2 years ago
David, let me know possible SL for SHORT position
Reply
Recluse82 trandom
2 years ago
this is unstoppable, there is no trendline what could stop dax
+1 Reply
4xForecaster PRO Recluse82
2 years ago
Sure. it's like saying "There is no pawprint that can stop a rabbit running in the snow ... "
+1 Reply
viajero
2 years ago
why do you think it will go down? quantitative easing doesn't even have started yet and german economy seems to being doing quit well atm?!
+1 Reply
Recluse82 viajero
2 years ago
yes, fundamentally no reason to sell dax, small correction can be in the cards, but just because of the overvaliud indicator, unfortunately this is long term buy, ecb qe is not a joke, 60mrd eur/ month, big bubble
+1 Reply
4xForecaster PRO Recluse82
2 years ago
Sure, @lovasz.levente, there is a lot of thing that can be said about the only economy supporting the entire European continent with hopes only. The German economy is in a slump from within and has been in a rut for quite sometime. The QE is completely synthetic, and not reflective of the immediate environment of the Eurozone.

Now, add the Chinese market which is now catching up with the rest of the world in terms of its euphemistic "negative inflation", and you will get the picture that not enough water remains in the pond to lift all these little boats.

In any case, fundamental information which you are referring to is yesterday's news as far as institutional positioning. It is promising, just as the US news kept on redefining its own fundamental tools in order to squeeze the positive out of data that is increasingly uncoupled with reality.

I am not much interested in sharing my opinion about something I do not know much about (fundamental analysis, demographics, central bank statements, ... etc., but there is no recent news that is promising:

- China cuts rate 25 bps after inflation falls to historic lows: Sign of panic or realization that the Europe (#1 customer) is not going the way China needs it to.
- Eurozone faces disintegration as Russia courts Cyprus amid sanctions - Geopolitics are shifting ground amid economic uncertainty
- Europe plans to reduce Russia's influence in European energy markets - Commodity prices will remain low and allow a pivot away from Russian sources
- European banks Will Pay You To Borrow, And Charge You To Save - Cash crunch!
- Greece runs out of funding options despite a 4-month extension reprieve - Greeks got their extension, but not enough money to fill the coffers.
- ECB to look for stimulus alternatives if bonds are in short supply
- Stocks Head For Best Month Since Oct 2011 As US Macro Crashes To 12-Month Lows - The discrepancy continues in full measure
- Russia to draw half its reserve fund to support budget - Feeling the crunch as Eurozone is uncoupling from sanctioned Russian economy
- China's property problems are worse than they seem - China has artificially created a real-estate bubble ... Consequence is on Eurozone.
- The US recovery story is a fraud: SocGen - Euro banks are now revealing what we knew all along, having fed their economies with the same QE Koolaid.
- As IMF Default Looms & Tax Revenues Plunge, Greek Stocks & Bonds Tumble - If Greece trips, Germany gets the pain
- PMI major contraction ... Pending Home Sales Miss For 5th Month In A Row - US economy mirrors that of Europe

... These are only the few fundamental news I was able to find off of Twitter from Newsweek, New York Times, Reuter, Zerohedge, and other market analysts, followed by comments.

Anyway, I don't want to bog this thread down with the slew of fundamental news that has weighed down major markets. Sure, DAX is going up, but taken in its global context, I would guard against using this as a clue of what price might do next - The market could certainly keep going up and up, as it is now well documented that a collaboration of central banks are purchasing US bonds, and the same phenomenon is possible on the German side, since it is the largest Eurozone economy, flanked by France. But it is not a narrative worth putting in context of technical analysis.

When I offered the $USDCHF forecast that it would fall significantly, all was fine and dandy with the $CHF - Fundamentals are yesterday's news. Since then, the markets have adjusted their opinions, but again, the technicals will reflect implied forces, positions, and sentiments that can only be hushed by institutional players, such as central banks, national commercial banks other institutional actors.

For instance, here is what happened 8 months ago, when I forecast a slump in the $USDCHF - Simply click the arrow in the DAILY chart to the left to move price into action ... It hit the bearish target dead-on, and then rallied, as forecast:

Pure Pattern Play Potential | $USD $CHF $EUR #SNB #Forex



Here, most recently, the next THREE $USDCHF chart illustrate the free-fall which the technical analysis had forecast

$USDCHF - Calling a top and pointing to a probable decline after price had hit all bullish targets:
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$USDCHF: Price showed some resiliency, exceeding the top-reversal ... Bears remained very much part of the forecast:
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$USDCHG churns through all bearish targets at once:
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$USDCHF ... And now, here is the chart with animation (click arrow) showing bullish targets are now being hit as price follows a reversal path:
Bulls Are Being #Franc, Pushing Back In Earnest $CHF $USD #forex



The point of these illustration is not to show that I was right in every directional "opinions", since these were not issued from how I felt about the market, or what the recent fundamental data was revealing. It simply followed what the predictive/forecasting model does on its own, regardless of what I just read about $CHF funding or the Franc's uncoupling from the Euro, or how German's economy (a proxy pawn of the $CHF) was faring.

So, please excuse my rather cold-shouldered position to "yes, fundamentally, no reason to ...", because these are just rumors, opinions and do not fit in the model, which I use as the sole source of market filtering. It may not be right in this case, or any other cases, but it has held well for most of them. Also, any indicator shown in the chart is not considered oversold or "over-valued" whenever it reaches a high number - I understand that this is what is being taught, but the qualifiers are simply non-sense and only affirm an opinion-based analysis that should not be expressed in the first place - I can show you how mathematically, a so called oversold or over-valued RSI has nothing to do whether too many people bought the underlying asset. Again, I understand and very much realize this is what has been inculcated to those gulping at the faucet of institutional players that not only teach that way but also lets you open an account that is all-seen to them, but that is how the market works ...

Again, I have asked that a chart be produced, because that is all I can and must look at (I still do not see the wave you are referring to). The chart you have linked does not tell me anything about invalidating the possibility that the current situation is or is not a Truncated 5th wave. Still, whether it is or not remains an independent variable from the model. In other words, the fundamental data cannot be used as the reason for price to reach higher, at least not when technical analysis assumes that the fundamental data of yesterday carves the technical lines of today.

My expectation from the model run at different time scales is that price could certainly go up in a way that is significant to a M5, M15 or H1 scale of interest, but I cannot express an opinion for or against simply based on fundamental. Still, at the scale that I chart, even an escalation to 11400 would simply be a fractional differential considering the abysmal target resting at 9745.

On a pure geometric basis, What I look for is a failure of price relative to the 2-4 Line projection off of Point-3, defining the 5-prime. When banks are getting the go-ahead from their central agents to move in a certain way, it will show just enough information for the model to give me the additional data which even the geometry won't be able to ascertain. Then and only then would I consider a counter-trend position. Until then, the model offers probability data.

Anyway, this is a long winded position, but one where I do my best to explain that my opinion about the market, my feeling about the charts, or my sentimental bias is worthless and has no place in my analysis. Asking me what I think is asking the wrong question. Asking whether the model can be wrong would be a step in the right direction, but the answer would be that the model is always wrong at the outset, until it is proven right, which is why I do NOT trade without defining my Stop-Loss first and foremost (assuming that the model is wrong) and only then defining my take-profit (assuming that it could be right). Once these two points are defined, I place the trade. Never before.

Once the trade is placed, I let the market prove the system right or wrong, but at that point, there is no reason for me to question my position - In fact, I rarely check the trades I placed, except perhaps to add on whenever there is a good technical reason to do so (WW pattern along the way or a positive divergence).

Overall: my opinion does not matter. Only the model speaks and keeps control of the trade.


David
+5 Reply
IvanLabrie TOP 4xForecaster
2 years ago
Pure gold of a comment David!
+2 Reply
4xForecaster PRO 4xForecaster
2 years ago
News:

Well, here are more of that news ... Very à-propos:

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China: Manufacturing Declines For 2nd Straight Month
March 1, 2015 | 17:13 GMT

China's Purchasing Managers' Index, a statistic that looks at activity in factories, registered at 49.9 for February, below the level of 50 that indicates growth, France24 reported March 1. The index came in at 49.8 in January. The announcement came a day after the country's central bank cut its one-year interest rate for deposits by .25 percent to stimulate the economy. In 2014, China's economy grew by 7.4 percent, its lowest rate in 24 years.
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Source: Stratfor - Global Intelligence
https://www.stratfor.com/sample/situation-report/china-manufacturing-declines-2nd-straight-month
+3 Reply
4xForecaster PRO viajero
2 years ago
Hello @viajero - My approach is purely technical. I do produce much "belief" or "feeling' about it, so there is no opinion generated in the analyses. It's the same predictive/forecasting model applied on all other charts - David
+2 Reply
viajero 4xForecaster
2 years ago
so your forecasts and trading is purely based on TA? You don't take fundamentals into consideration since according to your approach they are already reflected in the chart? Am I understanding you correctly?
+1 Reply
4xForecaster PRO viajero
2 years ago
@viajero - Yes, you basically defined the very nature of technical analysis - David
+1 Reply
4xForecaster PRO 4xForecaster
2 years ago
A lot of the fundamental analysis that I take into consideration would typically be from central bank comments. There are also some very good fundamental traders, such as Ashraf Laidi who take a stance based on fundamentals, although he too has recourse to charts and technical analysis, but he is as fundamental as on can get.

The difference with Forex is that there is very little that can be said about an entire country which is not already known or expected, as opposed to a company that builds shows, cars or export cement.

But, regardless of what I feel or opine, with or without fundamental knowledge, the predictive/forecasting model is built to filter its own parameters, defining the direction, strength, retracement as well as tip-top and bottom-tip reversals.

What I add as an overlay is known geometries, as a way to see whether my geometric interpretation can arrive as a coincident forecast to that one which is defined by the model.

By having the model filter and define things for me, I merely come in as a separate entity from what the model would have already predefined. If the model says up, given a strength and a range, and defines a target for retracement (numerical target) or for reversal (nominal target), then I look at the corresponding fundamentals (typically central banks, or price-moving news, such as rate-related economic data), and then turn to the most reliable geometries I have used (typically, Eliott Waves for appreciating the large movements, then Wolfe Waves for internal movements, and some proprietary geometries), and see how the whole system correlates with the model's data.

It would be the same as looking at a Google Map for a direction as a permanent data (the model), but then looking at the weather, the road conditions, the traffic (all being fundamental data), and see whether it can indeed get me there the way it says it should (the trading plan).

Kapish?

David
+3 Reply
viajero 4xForecaster
2 years ago
kapish!

and thanks again for explaining yourself in such a detailed way! much appreciated!
Reply
viajero 4xForecaster
2 years ago
OK. Interesting! I don't know much about trading and TA but what I've read so far always highlights that TA is just one of three approaches (technical, fundamental & sentiment) and one doesn't work without the other two...

but thanks for explaining your approach in some depth! makes sence to me.
+1 Reply
4xForecaster PRO viajero
2 years ago
Yes, @viajero - there are three terms related to trading, as you have named them: Technical, Fundamental and sentimental, ... and quantitative.

I am not sure I would go so far as calling them different approaches. It would be like calling each car parts as a separate, self-sufficient elements of the automobile. In the most simplistic ways, yes, they are separate disciplines, demanding a great deal of in-depth knowledge.

However, I would argue with anyone that I can teach my system to the silliest guy out there, without having to know much about sentimental reading, quantitative analysis or fundamental research, and they would be doing just fine.

In fact, I would argue that the Wolfe Waves pattern alone is all that anyone would need to do quite well in trading, and this is even a smaller element of technical analysis.

Still, taking as a whole, I would say that fundamentals shape the charts, the charts reveal the sentiments, and quantitative analysis filters out probability sequences to optimize a set up ... And that's precisely what the predictive/forecasting model does.

What I do from this quant analysis (which is nothing more, nothing less than a composite view of market data) is to see how "real" it all is relative to the reality of the moment, which is what central banks, commercial players, and institutional actors are doing ... They provide the sentiments shaped in charts, based on fundamental data which they own and act upon before the public can react.

One important aspect about Forex to understand is that there are TWO parallel markets, one for the banks (interbank), and one that is allowed to live with a relative amount of slippage, so as to offer competitive spreads and actionable arbitrage (retail banks).

Unless you trade within an institution (if you do, you would be able to have access to all of the retailer's positional data), then you are probably trading within the retail pool.

There is nothing wrong with that at all, if you are okay with this "central intelligence" advantage banks have over you.

David
+4 Reply
03 MAR 2015 - Update:

From Twitter/LinkedIn:
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$GER30 rolls from TG-Hix at 11472; High-prob. reversal sets in:

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@tradingview $DAX #DAX #GER30 #EURO $EUR #forex
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David Alcindor
+2 Reply
4xForecaster PRO 4xForecaster
2 years ago
NOTE: This extreme target high (usually in purple code in all the chart) was added yesterday, following a discussion in which a request for reversal was made - here are the two charts in the discussion thread (See thread here: https://www.tradingview.com/chat/#5eHLst6YxeVqGlaO )

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David Alcindor
+2 Reply
04 MAR 2015 - Update:

From Twitter/LinkedIn:
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$DAX hit 11472 TG-Hix; Bounced off TG-Hi; Rallying to meet strongest resistance at 11436:

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@tradingview #GER30 #DAX
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David Alcindor
Reply
trandom 4xForecaster
2 years ago
hi David, so DAX should test 11436 and drop again? What is suggested SL for SHORTs positions?
Reply
4xForecaster PRO trandom
2 years ago
Hello @trandom - Around the model's nominal targets (TG-Hi/Lo are in hot red and TG-Hix/Lox are in bruise purple), significant consolidation is expected to occur. This is the level at which an Elliott Wave or Wolfe Wave pattern might emerge with their associated point characteristics.

I am not a license professional, so I won't offer anyone a SL - The color code is all I can ascribe to infer my opinion on trading strategies. I highly recommend traders to answer that question themselves even before defining what the target might be. Never enter into a room fro which you cannot estimate a safe exit in the first place. Same applies to trading.

Some traders use Fibonacci extensions, other won't even use SL. Truth is, not one technician or trader can recommend any SL whatsoever, considering that the account side, the leverage, risk tolerance, exposure and mrgin are too many of the variables that will make my trading differ from another perhaps even safer trader.

My risk varies up to 3% of total account, depending on the underlying asset traded and the convergence of technicals, fundamentals and quant data.

If someone offers you a SL, make sure that the number of pips from your current position to that defined by that other trader (who has hopefully laid out his own parameters based on his/her own personal needs) correspond to a percentage of loss that you are willing to lose.

Personally, I trade not on that one desired target (which is defined by the technical circumstance, and thus stands isolated from my needs), but based on how often I am willing to be wrong 33 times, based on a risk of loss of 3% maximum.


David
+4 Reply
jangseohee
2 years ago
time to put my short order?
snapshot
Reply
jangseohee
2 years ago
apologize for repeatition
this is the complete pic on how i derive at the channel

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+1 Reply
4xForecaster PRO jangseohee
2 years ago
Hello @jangseohee - I have started to offer continuous lessons in market geometries - Please, refer to this link:
Tech-Note: Explaining Aspect Of The Predictive/Forecating Model


Please, only post patterns on the charts that correspond to the underlying Forex pair, index or stock - I will erase the charts, comments or input off of the lessons, as a way to encourage traders to keep their questions associated with the chart and avoid cumbersome threads in the lessons, which I hope to keep as a daily blog/journal.

In the case of this chart, I am not sure what your question is. If it is about triggering a trade, defining a stop-loss or a target, I am not in the position to offer these advices, being a non-licensed trader, and most importantly, not knowing your account side, leverage used, risk tolerance and all the particular aspects of trading what should make all of our trading decisions unique to each trader - If anyone disagrees with this, then I can only say that you are walking hopefully on the same path I used to thread on, and this is time to reconsider how you trade.

My only advice to is trade based the risk profile that is specific to you, based in part on the conditions defined above - One thing I can say is to never ever ever place a trade before defining your stop-loss. I have done this long enough to share this valuable experience, which is the one aspect of trading I have found junior traders to be the most resistant to.

David
+3 Reply
jangseohee 4xForecaster
2 years ago
Thanks David, if you are able to delete my first incomplete post, please go ahead :-)
+1 Reply