Here is an interesting challenge presenting from recent price action in $USDJPY , where price appears "to have been going nowhere". However, a methodical approach through counts might simplify the field in terms of geometric options and probable direction.
DECIPHERING THE WAVES:
The recent price action in $USDJPY may have left some traders wondering what direction might the market take especially as we face the following blank price field and contemplate recent price gyrations:
First, let's untangle the recent price action by simply recognizing simple a-b-c features of zig-zags with 5-3-5 internal wave construction:
Next, let's acknowledge that the recent swift down move has all of the respectful characteristics of a motive wave, defined by intermediate waves (1), (2), (3), (4) and(5).
Let's also situate ourselves in relation to the current price action and wave count, by assuming that Intermediate wave-(4) has completed with 5-3-5 internals of a , and that we are currently in the development of an Intermediate wave-(5):
It is also well worth noting that Wave's Rule of Alternation appears to apply here, as this Intermediate wave-(4) took on a simpler a-b-c internal structure of minute degree expressed across a larger amplitude compared to Intermediate wave-(2), which displays a more complex internal structure across a much flatter amplitude.
Now, turning to Intermediate Wave-(5), perhaps it has become apparent that the dominant geometry expressed by points 1-2-3-4-5 in the field appears as an , which characteristically appears in 5th wave of impulses (as well as wave-c of flats and corrections), thus ending the entire impulse at minor degree wave-5.
As an aside, please also note that the recent upswing in price may have been caused by this internal Contracting Triangle ("CT"), expressed in blue capital letters A-B-C-D-E , whereby price rallied following this geometry's signature "under-throw":
Price is expected to rally and validate the 2-4 Line of the dominant , assuming that this is the most probable developing geometry that would offer the mechanism of next price action .
However, the interim move will require some patience, as I would expect points 3 and 4 of said geometry to develop in a pattern, validating internal geometric lines as shown in following chart - Note how a 0.618 level aligns with the internal CT's lower border projection and highlighted R/S level (large arrows across band):
Ultimately, I would expect the entire Intermediate impulse to end in a truncation, as shown below:
Above program would become invalidated if price where to rally in the following fashion. For this contrarian inquiry, I have forced the Predictive/Forecasting Model to define a probable target, as shown in the chart, and added a possible to support this alternate plan:
Predictive Analysis & Forecasting
Durango, Colorado - USA
LinkedIn: David Alcindor
Expecting price to meet resistance at defined 120.069 level - RSI's correlating pattern with price is worth heeding, as well:
Price ignored the speculative zig-zag I had anticipated prior to validating the upper border of the channel, and instead went right for it:
In Fibonacci terms, taking point measurements from Intermediate (4) to Minor-4, this retracement is currently resting at 0.750 (a great preparatory signal level), and is expected to remains subdued to the 0.786 handle.
Worth keeping under close watch - I decided to get out of my position from Minor wave-3, expecting a near-completion of current Minor wave-4, and thus a probable decent to 116.707, which is likely to act as a temporizing R/S level (i.e.: expect a reaction to be capped by the under-belly of the 1-3 Line (BLACK) equivalent to an aggressive counter-trend of 0.214-FIB (AFT Method), although if this level of resistance failed, then the A-C Line (BLUE) would present as a next-probable contender, in which case, a significant 0.385-FIB would occur.)
This is all speculative, but a game plan based on objective data (Fibonacci levels, structural levels and R/S lines) can offer a probable plan of anticipation, sort of a structural game theory.
BOJ decision remains pending - Price continues to move as forecast:
TG-1 = 121.645 remains a "make-or-break" level, likely to INVALIDATE the bearish target defined in the original analysis.
Price mulls higher-highs:
Price continues to rally. TG-1 remains in sight. As you may recall, TG-1 is a quantitative target ("Quant-Target"), which tend to define future R/S level if entering into new territories, or confirm prior R/S levels when moving into prior levels.
Quant-targets will also react in a limited fashion, retracing in the Fibonacci order of 0.386 to 0.618, in contrast to Qual-Targets, which tend to define reversals.
Thus, expect a limited retracement upon validation of TG-1.
Price continues to strictly adhere to the bullish forecast, with TG-1 = 121.645 - 20 OCT 2015 knocked out of the way without any interim due retracement (as the nature of these Quant-Target typically call for).
Instead, price continues to rise to the Qual-Target: TG-Hi = 125.225 - 23 OCT 2015. As mentioned in analyses done in minor and mojor $USD crosses, as well as #gold and #euro, there is a unanimous voice calling for a significant decline in the $USD.
Let's keep this Qual-Target in mind:
Watch for this potential retracement risk ... Geo's Off-Set Rule #2 would offer support as shown:
Adding a SL against the proposed retracement. Issue here is potential geometry pointing down for retracement (not reversal) versus Predictive/Forecasting Model dangling unanswered target above.
As mentioned before, Geo is best to define a probable trajectory, whereas Model is best to define end-point.
Price continues to carve lower-lows and lower-highs. A mechanism of ascent back to TG-Hi = 125.225 remains the object of this smaller timeframe analysis. Geo's Off-Set Rule #2 remains the highest probable mechanism to do so.
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)
Signal Service or Private Course - Contact: MarketPredictiveAnalysis@gmail.com
All updates on https://twitter.com/4xForecaster
I mention these simply because quantitative targets (TG-1, TG-2, ... etc) will often revisit the level of the target that was hit - In this case, the TG-1 stands a good chance for this to occur, although this is by no means a consistent feature of these Quant-Targets.
There are several "Chatrooms" in which I do most of the "brain chatter" with myself. These rooms are more like back-stage "ateliers" where I prepare trades in advance. You are welcome to wipe the dust off of the windows and peek in. The glass is rather thick, so I rarely reply to taps on the glass or even shouts from the door. I work very late hours in the ER and I use these moments to collect thoughts, ideas, concepts, and lay it out there in the open.
Following are a few of the rooms where I prepare trading ideas before they become shared on Twitter, Linked-In, Google, Facebook, StockTwits and TradingView communities - So, if you want to have first peek, feel free to stop on by. If I don't reply and it smells like coffee, it's because I might be in the basement, hammering other charts in another "brain chatter" room:
$BTC | Predictive Analysis & Forecasting | 4xForecaster:
$GBP | Predictive Analysis & Forecasting | 4xForecaster:
$CAD | Predictive Analysis & Forecasting | 4xForecaster:
$EUR | Predictive Analysis & Forecasting | 4xForecaster:
$NZD | Predictive Analysis & Forecasting | 4xForecaster:
Metals | Predictive Analysis & Forecasting | 4xForecaster:
Stocks | Predictive Analysis & Forecasting | 4xForecaster:
Indices | Predictive Analysis & Forecasting | 4xForecaster:
* * * Archives of Hit Targets * * *
* * * NEW PATTERN METHODOLOGY * * *
ATHENA - Geometric Methodology Of An Elliott Wave Pattern:
... Letting the reciprocal lines tell you where to hold, stop and go
Here is the latest room I opened - Here too, not much peer to peer chatter. Just free-sharing a new pattern methodology. If you liked the "Geo", then have fun with this one:
ATHENA | Predictive Analysis & Forecasting | 4xForecaster:
Feel free to capture and share links - I do apologize ahead for not immediately or rather rarely replying to inquiries within these chatroom - Best is to contact me through the threads, such as this one, where the discussion can reach a far greater number of traders and benefit not just the chatroom participants, but the larger community of traders here on TradingView and outside.
Also, these chatrooms are not spaces where I would engage traders into circular arguments, as I really have no opinion of the underlying market for which the analyses are provided. This is all educational, and if you need real trading advice, seek that of a certified professional - I am a non-certified life-time student of the market. I am the author of several proprietary (i.e.: not for sharing) patterns (Great White, Janus, Euclid) and lesson-based shared methods (EAGLE, AFT), but I do spend most of my time double tasking between broken people and breaking markets.
PS: If you like certain charts, ideas, concepts, then given it a thumbs-up so I know which one to delve into and which one to lay off of. And, if you think these are ideas that can advance the edification of a peer, then I thank you ahead for sharing - I don't make money via memberships. Just trading my own ideas and free-sharing ... Just a better credential, if I may say so.
Cheers to your profitable trades,