USD/CHF: Possible COUNTER-TREND (!) AB=CD and/or Gartley?
Notice the word 'COUNTER-TREND' in the title!
We made a low (wave (1)?), followed by a lower high (wave (2)?) and today a lower low (wave finished or not?), so the trend is now down!
It's possible that we are now in (close to the end?) a wave 1 of a larger wave 3 down, so keep that in mind!
I didn't get a chance to get short again as per my previous idea, since the down move of this week was so powerful and I didn't have enough time to look at smaller timeframes before this evening (no consolidation after breaking the trendine, but that trendline of course is debatable...)
We've today formed a 7th consecutive bear candle, are now in oversold conditions on the RSI (below 30, close to 25) and we're close to the 1.272 extension of the down move which started in november 2015. This makes me look for long retracement opportunities based on possible finished harmonic patterns.
An exact (100% price movement) harmonic AB=CD finished today at around 1.13 BC so I entered a small long earlier today at 0.9705 based on a 5M candle wedge (we went up 25 pips but didn't get a follow-through so we'll see...). If one believes in a reversal based on this exact AB=CD: it is not too late to enter long at this moment!
On the other hand: if we now continue a little further down a Gartley (orange) would complete right at the 1.27 BC and with the 1.27 extension of AB close by this is probably a relatively higher probability trade than the long I entered today. Another reason to enter at that stage is because it is also at the 0.618 retracement of the large butterfly CD leg which is drawn left in the chart and which I've mentioned in many other idea's on this pair (take final profits on that short trade if you're still in...).
Because of the downward momentum of the past days it's probably best to wait for confirmation in the form of reversal patterns but it's also possible to set orders based on this setup (as depicted on the chart). I will set a small long order in case I won't be able to follow this and might add if we get a good reversal pattern. If the orders don't get filled within the next 3-4 days or if we get a good retracement from the point we are at right now then these orders will be cancelled!
Be aware of the fact that the SL of the depicted setup is quite tight, NOT below X of the Gartley and NOT below the 1.272 'projection' of AB from the AB=CD's C point... (but below the 1.272 'extension' of AB). This is NOT a 'SAFE' SL, which can add to the advise of not setting an order but waiting for confirmation!!
The blue bat is one I've mentioned before several times, I've already set orders for that one.
We made a low (wave (1)?), followed by a lower high (wave (2)?) and today a lower low (wave finished or not?), so the trend is now down!
It's possible that we are now in (close to the end?) a wave 1 of a larger wave 3 down, so keep that in mind!
I didn't get a chance to get short again as per my previous idea, since the down move of this week was so powerful and I didn't have enough time to look at smaller timeframes before this evening (no consolidation after breaking the trendine, but that trendline of course is debatable...)
We've today formed a 7th consecutive bear candle, are now in oversold conditions on the RSI (below 30, close to 25) and we're close to the 1.272 extension of the down move which started in november 2015. This makes me look for long retracement opportunities based on possible finished harmonic patterns.
An exact (100% price movement) harmonic AB=CD finished today at around 1.13 BC so I entered a small long earlier today at 0.9705 based on a 5M candle wedge (we went up 25 pips but didn't get a follow-through so we'll see...). If one believes in a reversal based on this exact AB=CD: it is not too late to enter long at this moment!
On the other hand: if we now continue a little further down a Gartley (orange) would complete right at the 1.27 BC and with the 1.27 extension of AB close by this is probably a relatively higher probability trade than the long I entered today. Another reason to enter at that stage is because it is also at the 0.618 retracement of the large butterfly CD leg which is drawn left in the chart and which I've mentioned in many other idea's on this pair (take final profits on that short trade if you're still in...).
Because of the downward momentum of the past days it's probably best to wait for confirmation in the form of reversal patterns but it's also possible to set orders based on this setup (as depicted on the chart). I will set a small long order in case I won't be able to follow this and might add if we get a good reversal pattern. If the orders don't get filled within the next 3-4 days or if we get a good retracement from the point we are at right now then these orders will be cancelled!
Be aware of the fact that the SL of the depicted setup is quite tight, NOT below X of the Gartley and NOT below the 1.272 'projection' of AB from the AB=CD's C point... (but below the 1.272 'extension' of AB). This is NOT a 'SAFE' SL, which can add to the advise of not setting an order but waiting for confirmation!!
The blue bat is one I've mentioned before several times, I've already set orders for that one.
Comment:
Orders cancelled on the AB=CD, will look for confirmation instead
