Watch for this potential decline as price completes the 5-point regimen of a , naturally seeking full cycle completion at the 1-4 "Take Profit" Line - See M15 chart:
FIBONACCI & STRUCTURAL ANALYSIS:
At first glance, casting a Fibonacci matrix over the structural high-low with 0.386/0.500/0.618/0.786-Fibs as significant anchor levels might grant a few clues as to what depth of retracement (if there were to be one, as per signaled by this ) could be attained.
Yet, combining with the analysis of internal highs and lows that have been inscribed during the recent upswing might reveal a few probabilities.
First, the 0.386-Fib level rests at the first significant resistance to the enduring upswing, as price reached a high of 119.453 (equaled at 119.336 at the 38.6 handle).
This 38.6 handle is significant in its forward projection, as it also lent a R/S level for the ensuing channel/consolidation oscillating about its 119.348/119.453 spine.
Second, there is the 0.618-Fib level, which has served as the lowest tolerance level in that upswing, as price closed only once below it at the first test support on 24 AUG 2015 @ 13:45. After than, it was all whipped cream over custard, as price remained buoyant relative to that Fib handle.
Last is the 0.786 level, which served a similar mechanical function as that of 0.618.
Looking forward, these three levels are to be heeded.
A decline to the 1-4 Line is probable, if one had to rely on the principle. However, there are two prudent measures worth applying here:
1 - Consider a break across with closing across (BACA) below WW's 2-4 Line
2 - Consider a validation of the support-now-and-resistance-then (SNART) event along that same 2-4 Line, as suggest by the dashed arrow.
Predictive Analysis & Forecasting
Durango, Colorado - USA
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)
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"When Do I Enter?"
- Fair question.
Regarding a "Breaking-Across & Closing-Across" ("BACA") event, here is an example where no BACA ever occurred as price tests and climbs along the 2-4 Line of the geometry. The point here is that the market is simply telling the trader that it is not yet interested to commit to that directional side of things.
We discussed two conservative ways to enter before, one being a BACA < 2-4 Line, and a more conservative would let price cross the 2-4 Line and give it time to validate the once-before support-turned-resistance status of the 2-4 Line (in the case of a bearish expectation), and simply enter short at that underbelly validation, if and once it occurs.
Is this making sense at all?
Link to the $EURJPY chart/analysis:
Hi David. Could you please critique my chart.....particularly the larger ab=cd which I have attempted to construct in the developing Geo as you have done in some of your trade ideas. It certainly would bring a nice balance to price geometry if it reached 5' and completed the ab=cd. Look forward to hearing from you, Thanks Iefan
Whereas the USDollar falls under the influence of a basket of currencies against which it is valued, it does not necessarily mean that it would walk in lock-step fashion with each single participants of the basket. If the BOJ intervenes in its own sovereign currency, it is not likely that it will disrupt the total sum of the baskets all on its own.
Hence, I would regard the USDollar chart as a buffering system, wherein, each currency participant can diverge from one another and from the total sum of the basket ... Up to a certain level, of course.
ELLIOTT WAVE ANALYSIS:
At this point, I would pay VERY close attention to the nadir just printed as "squared-in 4", as it appears to be a correction, either as a simple ZZ, in which case, the nadir is at it appears right now in the following chart:
HOWEVER, considering the large vacillations that have occurred of late, I would INSTEAD expect the following possibility, wherein an Expanded Flat could push the nadir of the 4th wave as low as is illustrated in the following chart:
MARKET GEOMETRY - THE GEO/WOLFE WAVE:
Right now, the background geometry we are considering as a mechanism of ascent to the targets defined in the chart is the Geo/Wolfe Wave - We are expecting that the 1-4 Line will be validated (entry point on the Geo/Wolfe Wave is defined by the small GREEN square at the bottom of the BLUE geometry, whereas the exit is defined as ANY point along the 1-4 Line, which the core target defined by the Wolfe Wave, but only one of the 3 high-probability target defined by the Geo, based on its "Off-Set Rule - Here, there is no geometric distortion, hence we are looking at applying the Geo's Off-Set Rule #1.
Once this exit is secured, a reversed entry is eyes based on the Predictive/Forecasting Model upper-most target.
At this point, there is a sequence of events that I am considering, namely the following potential targets, in the order of probability as price cycles through:
1 - TG-Hi = 121.449 - 09 SEP 2015
2 - TG-Hix = 121.813 - 09 SEP 2015
3 - TG-1 = 120.098 - 10 SEP 2015
4 - TG-Lo = 119.215 - 10 SEP 2015
As you may recall, targets are either defined by a number ("Quant-Target", such as TG-1, TG-2, ... TG-n) or a level designation ("Qual-Target", such as a low, very low or a high, very-high by the letters TG-Lo, TG-Lox, and TG-Hi, TG-Hix). While Quant-Target tend to define future picot levels in the cases of new historical highs or lows, they also designate a level from which price is only likely to retrace, but NOT reverse. This is an important distinction, since we are talking about probability of continuation from a Quant-Target ("TG-n") to a Qual-Target ("TG-Hi/Hix or -Lo/Lox"). Hence, the distinction is made on the basis of Fibonacci orders of retracement, which in the case of Quant-Target is expected to occur between 38.6% up to 61.8% (very rarely 78.6%).
In contrast, Qual-Target define probable levels of reversal, and not just retracement, whereby price is expected to retrace past the 0.786-Fib mark, and aim into extension levels such as 1.272, 1.313, 1.414, 1.500 or 1.618-Fib.
Note that given a qualitative designation such as "-Lo" versus "-Lox), where on refers to a low target (typically in RED) whereas the other would be referring to an extremely low target, one has to remember that a TG-Lo has a HIGHER probability of getting hit relelative to a TG-Lox.
Hence, the probability of price reaching a target should be defined by the following ranking:
TG-1 > TG-2 " TG-n > TG-Lo or TG-Hi > TG-Lox or TG-Hix > "WL".
CALIBRATION OF PREDICTIVE ANALYSIS:
The "WL" refers to the "Watch Line" which is typically defined in the price field as a DARK BLUE line. This is a level upon which validation, the trader is called to bring her attention to a higher timeframe, in the order of FOUR times the current frame of consideration. For instance, if an analysis is done at a M15 level and the WL is attained, then the following frame calculation should occur:
M15 x 4 = M60 = H1
If instead, the WL was transgressed at the H1, then we would consider the following frame consideration:
H1 x 4 = H4
One simply has to move on up, NEVER DOWN, such that the next frame becomes H4 x 4 ~ DAILY, and Daily x 4 ~ Weekly, and Weekly x 4 = Monthly. We are only going down in the SAME order of magnification to calibrate a chart from, say a H4 level to a finer H4 divided by a factor of 4 = H1 level of granular definition.
This $USDJPY chart illustrates probability events. They are NOT to be used in any other manner than for learning purposes. Do your own due diligence, and always go out on a trade with familiar acquaintances in terms of indicators and other supports that are familiar to you. I am leaving a lot of more obscure elements out, but what I have posted here is something that is attainable to all, so long as you know the basics of Fibonacci, the Geo, and Elliott Wave rules.
Predictive Analysis & Forecasting
Durango, Colorado - USA
Price continues to follow the interim geometry (PINK) we had drawn on 10 SEP 2015, completing a Elliott Wave's Alternations Rule-based expanded geometry - This is so far verified by the geometric simplicity that links squared-in-1 to squared-in-2, which is balanced by the complexity that links squared-in-3 to squared-in-4.
While the pattern remains in its nascent phase, one has to anticipate at this point the probability of a bullish impulse with its 5-wave internals, to complete the 5th wave at squared-in-5..
The Predictive/Forecasting Model we described in anticipation of this move suggests that loftier targets remain unanswered at this time. Hence, one may reason a mechanism by which this completion is achieved, a 5th and final Elliott Wave elan would represent such mechanism.
Overall, it would be reasonable to remain bullish at this timeframe, at least to the extent defined by the Predictive/Forecasting Model's levels.
All bearish targets have been hit. I had expected an interim rallying into the defined bearish targets, which would have played out as rejection levels from which to add on short positions, but this contingency scenario did not occur.
Instead, price fell to the lowest defined target, and just now came to retrace and carve a higher low. This is the set up which an EAGLE strategy seeks to enter long.
First, let's post the chart as it was drawn before, as a visual follow-through. Then, I will post a new layout, highlighting the EAGLE. This LONG trade consideration would become invalid if the recent structural low is breached.
Here is what I would heed, in terms of upper/lower hurdles, as well as probable support into Point-4 - Just an idea.
Note that I have to re-adjust Point-1 to price's prior structure high. This was done to accommodate the slope of the 1-3 Line, as we continue to seek a reasonable residency level of Point-5 - Current chart is as shown below with all adjustments completed.
Note also that the 1-3 Line has become near-parallel to the 2-4 Line below the geometry. This is now acting as a Tolerance Line as well, so that any break below that price would simply invalidate the entire Wolfe Wave/Geo:
Although rejection just occurred at forecast range, it would be most prudent to witness a reversal confirmation to the upside before considering this as a viable bull ride. A bullish impulse, followed by a correction effecting a higher low, and a break above the high of that bullish impulse might represent the most conservative stance, IMO.
Geo was invalidated by price moving beyond the 2-4 Line - I am now relying on speculative geometry, such as this reciprocal ab = cd symmetry to approximate a level of reversal. Considering that the Geo is not valid, this may also suggest that the reversal that was anticipated will be much lesser, likely in the Fibonacci order of 0.386 to 0.618 - See following chart for these changes and suggested levels:
As price reversed at the bottom target, then reached and also reversed at the top target, we are now left to wonder what should come next.
If we looked at the recent price action, we are witnessing a 5-wave advance, consistent with a bullish impulse. However, this follows at the heels of a sharp decline. Therefore, we have to consider two possibilities:
1 - This current impulse is represents a 5-wave correction - As you may already know, there is ONE and only one Elliott Wave pattern that starts with a 5-wave among all corrective patterns, and this would be a Flat. So, look for a 5-3-5 internal development to confirm that what is starting is indeed a correction. Another clue that this rally might be a correction would be an early departure to the downside and away from the rising channel.
2 - This current impulse is a bullish expression of an impulse, with an interim correction. Here, I would wait for the interim correction to remain above the recent low, and to complete then link into an impulse breaking above the high carved at the 0.386-Fibonacci level.
These criteria will allow to define in general terms the probable direction of price as it continues to evolve at this smaller scale.
1 - Geo points to temporary down
2 - Predictive/Forecasting Model points to ultimately up
The main distinguishing feature, though, is that the Geo is better at offering a probable pathway, whereas the Model is good at pointing to where price wil go eventually while remaining mute about the interim pathway. So, definitely worth heeding.
Here is the trade I took a bit back:
As you are seeing, I am using median and median of median in the channels. These are likely the slopes offered dynamic R/S level as the price moves across the field - This is a very old technique I used to use (see some archives in my older Facebook page) ... Just taking a break from the Geo, so that I do not lose "mental sight" of other intuitive tools I have relied upon in the past:
As you may know, targets that carry "Lo", "Hi", or "Lox", "Hix" are less probable in terms of attainment, but represents levels of reversals if and once attained - Because they do not carry numbers in their designations, but qualitative statements suggesting a bearish-low ("Lo") or extreme-low ("Lox"), as well as a bullish-High ("Hi") or extreme-high ("Hix") qualifier, they are hence called qualitative targets, or simply "Qual-Targets". They are defined by the Predictive/Forecasting Model as levels that, if attained, will most probably be associated with not just retracement (as in 0.386, 0.500, or 0.618-Fib retracement levels), but instead associated with reversal (i.e.: falling at least 0.786 or greater, up to 1.313, 1.272, 1.313, 1.414 or 1.618 reversal orders.
In contrast, those targets that are associated with numbers are those that forecast a retracement in the order defined above (i.e.: 0.386 to 0.618, and rarely up to 0.786), and represent numbers of higher probability of attainment. For this reason, they are defined as quantitative targets, or simply "Quant-Targets".
The TG-Hi I have ascribed to the chart is a Qual-Target, hence represents a lower probability of attainment, but a higher probability of reversal if reached.
However, in these simpler trades, where the timeframe is not optimal to the Predictive/Forecasting Model (which was calibrated for the H4 level, instead), I often turn to structural analysis, looking at past levels of R/S activities, such as in the following chart, where there is also an alignment with a significant 1.618-Fib extension value:
If you look at that structure, combined with this 1.618 value, you might intuitively think that the market would also be barred from rising further than the upper border of the rising channel. Hence, it would be prudent to consider the following path, as we seek the HIGHEST probability set up, and thus forgo the extra height, which may be or may not be occurring in terms of price action ... This is where reason stops and greed grows like willing weed:
OVERALL - Always set your expectation based on the physical attributes of the market. Here, I mean that if you see a R/S level that would reasonable impose a resistance as in this case, then assume that it will, rather than willing it to go higher.
This is particularly true when a combination of technical factors come to a narrow cluster of resistance. In such a case, follow that clue and don't will it to a level that becomes delusionally impossible.
Plus, as this level is likely to offer a slight push-back, then use the medians of the channel to define a reasonable level of re-entry.
Without using my Model, and simply turning to the simplest tools (channel, Fibo and R/S levels), there is a lot any level of proficiency trader can do with simply gazing at the chart. Easy, right?
To some extent I do, but only price-moving news such as central banks - However, I do firmly believe that technical analysis will tend to discount the news.
One source of fundamental news I posted earlier is the dairy auction out of New Zealand: Very little discount appears to be assigned to the price, so it will move quite well in the direction of the auctioned price of dairy.
Here is the source I use for most of my NZD-related charts:
The Predictive/Forecasting Model's target remain bullish as shown. There is a large consolidation with promises to further upside as well on a larger timeframe, which I continue to follow. The original analysis looked at the possibility of 117 vicinity based on possible Fibonacci validation levels, but this is becoming a lesser probability.
Since then, the Model has continued to look up and up:
In any case, at this point, this relative strength chart suggests that we have reached a significant level (a qualitative target at "TG-Lox" according to the Predictive/Forecasting Model, and that further breakdown is favored down to the level illustrated in the chart, whereas a lower probability of reversal exists from current level.
Here, we are looking at a MONTHLY chart, so I would expect time to be a factor in the development of this chart. Still, a narrowing geometry has developed over this consolidation period, and a continuation pattern might reveal itself if and once a 5-point geometry completes.