4xForecaster

Trade Opp Using #elliottwave, Symmetry & Fibonacci | $CAD #forex

FX:USDCAD   U.S. Dollar/Canadian Dollar
1541 49 21
Friends,


PREDICTIVE/FORECASTING MODEL:

A simple trade opportunity came up. Predictive/Forecasting model calls for a reversal at TG-Hi - 1.11972. Taking a step back and considering the entire system from a geometric             stand-point, symmetries come to the mind's eyes here through AB = CD patterns.

While the current AB = CD pattern remains under development, a projection of the first leg comes to near-alignment with the predictive/forecasting model, supporting the model's target at 1.11972.


ELLIOTT WAVES' REGULAR FLAT:

Assuming that this developing symmetrical geometry arrives at a second AB = CD pattern, we would witness the formation of two Zig-Zag occurring at the top of a major trend. This would simply define an Elliott Waves' Regular Flat pattern, whose outer structure is defined by points A-B-C, and internal structure contains sub-wave counts, such that A, B and C would be borne out of 3, 3, and 5 sub-waves, respectively.


DEFINING PRICE BEHAVIOR:

You will notice also that I have made intentional use of Fibonacci values in the larger A-B-C system. These values were chosen out of a back-testing (sample to the left), where two dominant options suggest a consistent price behavior in terms of achievable depth within smaller occurrences of the Flat.

In both option #1 and #2, the values 0.114, 0.214, 1.131 and 1.272 suggest that at times, a Regular Flat (where Point-B retraces without exceeding the origin of Wave-A, and Point-C would fall slightly below Point-A) would contract internally to values as short as 0.214 (the complementary of 0.786-Fib), and as long as 0.114, and that it would also expand to values as short as 1.131 and as long as 1.272 (all these values being derived from the golden ratio, 0.618).

Hence, of the two options, I chose the contracting and expanding values that would best represent the large A-B-C pattern, considering that B is predicted to be at 1.11972. This would place B near 0.114 relative to the origin of Point-A, and thus this would corresponds to a reiteration of the Flat in option #2. For this reason as well, Point-C is defined not by the model, but merely by this anticipated reiteration in price action, defining a target low as TG-Lo = 1.05333.


OVERALL:Simple use of well-established market geometries have allowed the definition of a trading opportunity here, yielding the following targets:

1 - TG-Hi = 1.11972 - 13 SEP 2014 (per Model)

and

2 - TG-Lo = 1.05333 - 13 SEP 2014 (per price behavior evaluation).

The outcome of a Flat is a resumption of the major trend. IF and once this trend comes to validate this predictive analysis/forecasting, we would then look at loftier targets, which the model has pre-defined, pending directional confirmation.

Cheers,


David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA

----------------
Twitter: @4xForecaster
---------------
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
13 SEP 2014 - ADDENDUM:

- HOW TO DEFINE AN ENTRY TO SHORT THIS THING?

Simple, take the time this week-end to review your impulse waves. I recommend that you seek support straight from the source at Elliott Wave International, or simply get an e-book on the matter.

Once you have determined the EWP 5-wave structure in your mind's eyes, look for the following sequence of events:

1 - Look for a downward 5-wave from a new high at a H4 timeframe level;
2 - Wait for a 3-wave to retrace upwards, thus leaving behind it a relative low-point. Give it a numerical name: "1"
3 - Be sure that the 3-wave structure does NOT exceed the origin of the downward 5-wave structure. If it does, wait for next 5-to-3 sequence to occur once again. In a H4 timeframe, that gives you time to do other things.
4 - Once price completes the upward 3-wave climb and reverses downward, place a Limit Order slightly below where Point-1 was defined, and place a Stop-Loss slightly above the level where the 3-wave structure reversed.
5 - Now, go out, take your honey for a 3-day escape in the mountains, trim your toe nails, or learn to make noodles by hands, but do NOT disturb that trade until it falls to the TG-Lo value.

Kapish?

David Alcindor
+3 Reply
FOREXEL
2 years ago
Kapish ) I use the MTPredictor indicator available here (no I am not a salesman just a user) and it helps a lot to find Elliot waves structures as long as one knows the EW rules you describe. Besides that - tnx a lot for sharing your ideas! I have found them to be very useful
+1 Reply
4xForecaster PRO FOREXEL
2 years ago
Hello @RolleV - Do you have an example to illustrate how MTPredictor correlates with a pattern development?
- Thank you: Appreciating the feedback.

David
Reply
FOREXEL 4xForecaster
2 years ago
yes I think I have a few. Here is one which the tool shows the Elliot wave structure as well as the possible levels for an ongoing wave. In this case wave 3 on the monthly chart for USDJPY. MTPredictor allows for experienced EW traders to draw their own major, minor and intermediate Elliot waves as well as helping novice traders like myself by giving trade signals and plotting EW structures such as ABC corrections and more. Hope this answered your question and helps
+1 Reply
FOREXEL FOREXEL
2 years ago
forgot the link, here it comes
USDJPY
+1 Reply
FOREXEL FOREXEL
2 years ago
Here is another example of a C wave trade I took last week, the tool plots the possible C wave in this case and gives you a possible trade set up as well.
USDCAD
+1 Reply
FOREXEL FOREXEL
2 years ago
Correction, it was a wave 5 trade on that time frame. Sorry for spamming
+1 Reply
4xForecaster PRO FOREXEL
2 years ago
Very interesting how it compares to the one I posted earlier, where I have highlighted some of the waves, plus a Wolfe Wave pattern - See below (BTW, please see if you can include the chart in the text by simply pasting the URL of the chart into the tiny wiggly icon at the top left of the writing window - This way, i can read and see the chart at the same time. This is what U use to post the following chart):

snapshot


David
Reply
FOREXEL 4xForecaster
2 years ago
found it...i think )
+1 Reply
thanks david for this post Its very informative
+1 Reply
KevinT
2 years ago
My point of view
snapshot
+1 Reply
KevinT KevinT
2 years ago
Alternative approach. Bullish wolf wave target reached...
snapshot
+1 Reply
KevinT KevinT
2 years ago
see purple and red
Reply
FOREXEL KevinT
2 years ago
one better keep ones options open this week. good stuff - tnx for sharing
Reply
KevinT FOREXEL
2 years ago
Sure. I find this pair especially treacherous. Need op be patient to succeed.
+1 Reply
thank you david
Reply
19 SEP 2014 - Update:

From Twitter:
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$USDCAD - #Loonie reversed at 1.09067 target; Eyes TG-Hi 1.11972 above:

snapshot


via @tradingview | $USD $CAD #Forex
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David Alcindor
+3 Reply
23 SEP 2014 - Note:

Daily notes, technical commentaries, lessons and pearls will be provided in the "Predictive Analysis & Forecasting" chat room. Feel free to follow these added details there (Link: https://www.tradingview.com/chat/#5eHLst6YxeVqGlaO). Only significant technical events will be posted in this present discussion thread, so as to avoid too much unnecessary technical information for the trader and chartist interested only in major technical events.

David Alcindor
Reply
24 SEP 2014 - Update;

From Predictive Analysis & Forecasting Chat Room - Link: https://www.tradingview.com/chat/#5eHLst6YxeVqGlaO
--------------------


snapshot



"Price followed yellow dashed arrow as it reversed at forecast 1.09067 ever more clearly today.

Current price action is likely to belong to a larger zig-zag system, especially as Point-B lurks above.

As you may recall, Point-B belongs to a potential Elliott Wave ("EW" corrective pattern with internal sequence of ZZ-ZZ-IMP reminiscent of a FLAT.

If this was the case, then a short position could be considered at Point-B, using the internal of Wave-C development: Fist look for internal wave-1 of a 1-2-3-4-5 impulse ("IMP", then wait for internal Wave-2 to complete and reverse. As price crosses beyond Point-1, then, consider entry as this may herald the beginning of a internal wave-3.

More on this IF and once we get there. "
--------------------

David Alcindor
+2 Reply
30 SEP 2014 - update:

From Twitter:
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$USDCAD hit 1.11972 target; Large #elliottwave Flat pending? Model sees 1.05333:

snapshot


@tradingview | $USD $CAD #forex
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David Alcindor
Reply
18 OCT 2014 - Update:

From Twitter:
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$USDCAD is prone to decline into #elliottwave Flat completion:

snapshot


via @tradingview | $USD $CAD #forex
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snapshot



David Alcindor
+1 Reply
HamedAghajani PRO 4xForecaster
2 years ago
snapshot
The same idea from another perspective. Thanks, Hamed. https://www.tradingview.com/e/KKKfzOgC/
+1 Reply
28 OCT 2014 - Update:

Large Elliott Wave's Expanded Flat continues to be the expected geometry. Price remains caught in a consolidation pattern ever since reaching presumed Point-B:


snapshot



David Alcindor
+1 Reply
Doctor-Who
2 years ago
David, Hello! What do you think the future movement? We will fall or only growth?
+1 Reply
4xForecaster PRO Doctor-Who
2 years ago
Hello @Doctor-Who - The analysis has not changed. The underlying pattern remains intact - David
Reply
Doctor-Who 4xForecaster
2 years ago
Thank, David.
+1 Reply
4xForecaster PRO Doctor-Who
2 years ago
@Doctor-Who - I am doing a quick write-up on commodity pricing affecting this pair, as well as a shorter timeframe chart to review the interim moves in $USDCAD - Material coming up shortly. Thank you for inquiring - David
Reply
02 NOV 2014 - Update:

From Twitter:
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$USDCAD - Break of 1.11211 support opens floor to bearish targets; Above 1.123842 nullifies all:

snapshot


@tradingview $CAD
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snapshot



TECH-NOTE:

Traders,

As you may already know, this $USDCAD pair is sensitive (i.e.: negatively correlated) to two important commodity pricing.


FUNDAMENTAL DRIVERS:

1 - Price of oil - A rise in oil should be perceived as bearish for the $USD, as it weighs on CPI as well as production cost, considering that the US remains an important importer of oil, and a decline in price may negatively affect the cost of sand oil extraction, which is typically more expensive than other less intensive extraction methods. Sure, the technology has improved, but the US depends on a certain price level to maintain a profitability margin.

Inversely, a same rise in oil will benefit any oil exporting economies, of which Canada belongs. So, any economic indication that the US improves economically will offer a bullish outlook for the $USD, as it promises a rise on the demand side, not just from a consumer camp, but also on the basis of an energy-driven consumption from the production and transport side of things.

and

2 - Price of gold - Canada is a major producer and exporter of gold. The recent bearish pressure on this metal has had a lot to do with the correlated rise in the $USDCAD. At this point, one may presume that Gold is at a stand-still, or perhaps a consolidation segment of its bearish swing, but I am not certain that gold will remain the primary driver of $USDCAD pricing. Instead, I would look at US Central Bank stance relative to interest rates in 10-Year Bonds, as well as price of oil, which are the two likely variables affecting the US economy, by affecting the cost of borrowing and the cost of production and distribution.


TECHNICAL DRIVERS:

In terms of chart action, so far, we have seen a commodity-wide deflationary trend, where the price of both oil (in $UKOil and $USOil) and gold have declined significant - Following are TWO chart reflecting prior analysis and illustrating price subjection to bearish markets:

1 - $USOil & $UKOil:
-
#Oil Sits On Historical Support; Model Sees Lower Levels $USOil


and

2 - $XAUUSD & $DUST chart:
-
Target Hit Dead-On; Bulls Still Aiming higher | $DUST $GOLD

-
$XAU Hit Target @ 1216.67; Limited Rally Into 5-0 Patt. | $Gold



Now, looking at the chart itself, there are several levels I have defined.

First, the trading parameters that should define a potential momentum are:

1 - 1.13842, representing a structural high, whence price rolled, suggesting a significant bearish entrenchment;

and

2 - 1.11211, representing the structural antipod of 1.13842. A break of this level should signify a potential commitment of price to venture towards the bearish targets defined in the chart.


The colored bank (pink) represents an older aggressive entry strategy, defined as E.A.G.L.E. In essence, the values suggest sequential entry opportunities offering the largest risk-reward ratio possible. The range is defined by:

1 - 1.13279

and

2 - 1.13543

While 1.13842 represents a basis from which to assess a risk-management in terms of defining a level for my stop-loss, these E.A.G.L.E values are meant to define partial entries, here in prospective short positions.


PREDICTIVE/FORECASTING ANALYSIS:

Aside from pattern-based analysis, the predictive/forecasting model offers the following TWO targets:

1 - TG-Lo = 1.07959 - 02 NOV 2014

and

2 - TG-x = 1.05328 - 02 NOV 2014

A quick word of caution here - THESE TARGETS REMAIN CONDITIONAL, as they depend on price committed to break-across and close-across ("BACA") 1.11211.


OVERALL:

A BACA < 1.13543 would support a bearish directional bias, using the surrounding values as cautionary parameters in a rather aggressive trade methodology. Remember that the focus here is not this 8-Hour chart, Instead, we remain interested in the original analysis, where the predictive/forecasting model's targets remain intact and in force. However, a break above 1.13842 would put all this analysis into question.

Cheers,


David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA


-------------------
Twitter: @4xForecasting
------------------

.

$USDCAD - 8-Hour Chart:
snapshot



$USDCAD - Daily Chart:
snapshot
+2 Reply
03 NOV 2014 - Update:

CAUTION - BACA > B should annul all bearish intention for the time being.

David
+2 Reply
IvanLabrie 4xForecaster
2 years ago
1.14? I have a long setup forming there...should be an interesting scenario.
snapshot
Reply
HamedAghajani PRO 4xForecaster
2 years ago
Hi David is this still your stand, or you have a directional bias on this pair based on your models. Kind regards, Hamed.
+1 Reply
4xForecaster PRO HamedAghajani
2 years ago
Hello @HamedAghajani - I am remaining in suspension here, so to speak simply because so far, I have rested my eyes on the USDollar. As a synthetic value, the $USDollar gathers a basket of major currencies, against which it is weighed. So, throwing this data in the predictive/forecasting mode, it got PRELIMINARY bearish signs (not signals). As such, the DAILY chart has TWO potential bearish targets, as follows:

1 - TG-1 = 11149 - 16 NOV 2014

and

2 - TG-Lo = 11071 - 16 NOV 2014


$USDollar - Daily Chart:
snapshot



Also, looking at a grand view (WEEKLY), a potential top has been reached, calling for much abysmal values. However, the $USD remains bid at such a strength (see activity of the $USDJPY), that it does not (yet) seem to want to submit to gravity ... It simply won't reverse at the levels that I expected.


$USDollar - Weekly Char:
snapshot

(source:
USDollar Index Scrapes Model
)


Therefore, the only real values that might bring the $USDCAD down might be through the intermediary of ralling commodities, to which the $CAD is positively correlated (here, read $XAU and $UKOil pricings - See charts below), if not through weakness of $USD. Since the $USD has remained quite strong, then I would need to look at $XAU and UKOil strength as potential influence on the $USDCAD weakening, as long aa $CAD is capable to overcome $USD.


$XAUUSD - Weekly:
Forecast Recap | $XAU $USD $Gold $EUR $AUD $CAD #forex

(Source: https://www.tradingview.com/v/bmSQEDux/)

Note that $XAUUSD has been a difficult player to gauge here, as per recent analysis offered in the source's link above. If $XAUUSD rallies along with Crude Oil ($UKOil), it would simply compound the strengthening of $CAD and drive the $USDCAD to the forecast direction at the very least, and perhaps at the forecast targets at best.

So, right now, I am not as much interested in the model's outlook on $USDCAD, as much as the internal drivers of $CAD strength. Fundamentally, Canada has shown improvements in terms of employment numbers, so combined with a strengthening of UKOil (Brent - See chart below, where a reversal at TG-Lo is now expected), a decline in $USDCAD becomes a material possibility:


snapshot

(Source: https://www.tradingview.com/v/Ff9bK6Kz/)

I realize this is a convoluted answer, but this is one instance where the expected decline in the Forex pair is dependent upon the action of other non-Forex agents, here commodities: Oil (Crude Brent) and gold ($XAUUSD)

David Alcindor

+2 Reply
HamedAghajani PRO 4xForecaster
2 years ago
Thanks for your time, and detailed answer. Kind regards, Hamed.
Reply
27 NOV 2014 - Update:

From Twitter:
----------
$USDCAD - Watch for $CAD strengthening in this long-awaited #elliottwave Flat:

snapshot


@tradingview | $USD $CAD #forex
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snapshot



David Alcindor
+1 Reply
27 NOV 2014 - Update:

From Twitter:
----------
$USDCAD chart highlights proximal bearish targets, pending 1.11211 break:

snapshot


via @tradingview | $USD $CAD #BOC #forex
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David Alcindor
+3 Reply
28 NOV 2014 - Update / Tech-Note:

Watch for this potential bearish Kiss of Death:


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David Alcindor
+3 Reply
IvanLabrie 4xForecaster
2 years ago
Nice!
In your experience, how effective would you say this pattern is, David?
+1 Reply
4xForecaster PRO IvanLabrie
2 years ago
As with all patterns, they rarely make the 80% mark.

(highest recorded performance remains the Bat pattern, I believe)

- David
+1 Reply
alex.a 4xForecaster
2 years ago
I would love that kiss by better than expected GDP of Canada?
+1 Reply
kmk.msp 4xForecaster
2 years ago
@David
What is invalidation level for bearish KOD
KMK.MSP
+1 Reply
4xForecaster PRO kmk.msp
2 years ago
I'd seek a triple top, but it all depends on your risk tolerance. Some other traders might seek a 1.414-Fib extension. There is no real answer for these question (which I get a lot), because every trader will have his/her own set of circumstance, and it can only be based on the number of pips one is willing to expose.

The pattern is a triple-base (top or bottom), and risk management should NOT be based on the pattern, but on the personal definition of risk management. Always.

David
Reply
takef
2 years ago
With over 500 pips (by price 1.13842) still applies the pattern kiss of death?
+1 Reply
4xForecaster PRO takef
2 years ago
@takef - KoD is a triple-based (i.e.: triple-bottom or triple-top) pattern. Any excessive adverse excursion from the base should prompt the trader to suspect a pattern failure - David
Reply
03 DEC 2014 - Update:

From Twitter:
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$USDCAD ponders bearish trigger @1.13120 w/ deep tgs vs. bullish @1.14581 w/ limtd upside:

snapshot


@tradingview $CAD #BOC
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David Alcindor
+1 Reply
09 DEC 2014 - Update:

From Twiter:
----------
$USDCAD - Target hit; Predictive model offers limited upside potential; Bearish targets pending:

snapshot


@tradingview $CAD
----------


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David Alcindor
Reply
Sokun 4xForecaster
2 years ago
Will the Cad follow Xau deeper?
Reply
Sokun Sokun
2 years ago
As the Usd looks to invert.
Reply
Sokun Sokun
2 years ago
This phase driven largely by international capital flowing from the periphery (economies) to the core (economy) as economic activity and confidence contract under the weight of debt and economic mismanagement remains largely unrecognized.  This will change, if and when, emphasis on the latter, UDX smashes through cause's upper trading channel. 

Reply
Sokun Sokun
2 years ago
The next layer of resistance is the 90-92 resistance zone.  An upside breakout of this zone will turn bears into bulls and accelerate the trend after some profit-taking.

Reply
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