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$USD v. $SEK Lesson #4: Geo Construction & Contingencies #forex

FX:USDSEK   U.S. Dollar/Swedish Krona
Friends,

A with lessons and demonstrations offered over the past 24 hours (See $USDTRY, $NZDJPY, ... etc), here is another pair worth looking into, not so much from the perspective of a pending geometric             completion, but as an example of developing a contingency plan.


snapshot


Here, we are contemplating a short (green scare representing a conservative, prudent entry point, where price BACA < 1-3 Line as its signal) As the Wolfe Wave/Geo would have it, targeting the 1-4 Line comes to sight, and this would be the right thing to consider at this point.

However, there is a slight possibility that Point-5 of the completed geometry might in fact be a dud, and that instead, the higher-high structure that build atop this point may perhaps represent the residence of Point-3, of a larger geometric             system.

As a cautionary measure, I would here recommend the trader to look for added confirmation, such as breaking below prior higher lows (for instance, the one at 8.45, and the one slightly above 8.40), with perhaps partial positioning if that fitted your risk tolerance or strategy style) - See following illustration:


snapshot



Another typical price behavior worth waiting for is the conversion of the 2-4 Line from a support-to-resistance, which means that price would retrace from a decline and hit the underbelly of the formed geometry, offering a validation signal to go short - See suggested dashed pathway in following illustration:


snapshot



OVERALL:

In any case, figuring out reasonable and sound price behavior ahead of the game is likely to remove some of the uncertainties that come with this and any other markets - For instance, there still remains the uncertainty whether this pair will ignore the completed geometry, and instead internalize it into a large system. Yet, for this scenario, there is already a contingency plan awaiting in the background, using the Geo's internal construction rules (see prior lessons).

See you on this or other revealing threads.

Best,


David Alcindor
Predictive Analysis & Forecasting
Durango, Colorado - USA


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Twitter:
@4xForecaster

LinkedIn:
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
26 AUG 2015 - Chart update:

As price is moving on the forecast direction, consider this internal geometry (PINK) imposing its own demand upon most immediate and subsequent price action. The 2-4 Line of the larger geometry (BLUE) remains an important signal, not only as a shorting signal upon BACA, as well as a dynamic R/S level.


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David
+4 Reply
26 AUG 2015 - UPDATE:

From Twitter/LinkedIn:
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$USDSEK just BACA < 2-4 Line; Signals move consistent w/ forecast; Heed internal geometry:

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$USD $SEK #krone #forex
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David Alcindor
+3 Reply
27 AUG 2015 - Chart Update / Tech-Note:

Here is a beautiful example illustrating the concept of dynamic R/S valiadtion, where the 2-4 Line acts as a then-support-and-now-resistance, as price breaks support and recoils to validate the underbelly of the geometry's 2-4 Line.


snapshot



When this happens, the market is calling on your participation. Loudly.


David
+3 Reply
4xForecaster PRO 4xForecaster
a year ago
Here i is with a better encroachment of the 2-4 Line extension:


snapshot



David
+3 Reply
27 AUG 2015 - Tech-Note:

Consider a break of 8.44190 to be an overture to these lower targets ... The intermediate pink line might impose a delaying obstacle, though - See chart:


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David
+3 Reply
28 AUG 2015 - Chart Update:

Price commits < 8.44190:


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David
+3 Reply
07 SEP 2015 - Chart Update:

This chart is WAY overdue for an update.

At the risk of being too myopic, I decided to take a few steps back from the M15 chart, and see why it is taking so much time for this pair to commit to the DOWN-side at such a slow, time-consumptive pace.

First, let's look at chaos at the H1 level, then let's take it apart:


snapshot



1 - First, let's simply acknowledge that this pair is HIGHLY responsive to Wolfe Wave and Geo cycle completions. I have left one GREY to the left of the field, and one that is completing at this instance. However, there is also a Geo that completed to the left, with a 5-prime excursion that justified the LIMITED decline to the "squared-in 4" on the left of the chart. If you can see what I am talking about, great. If not and you have an urge to find out, please do let me know, as this also represents a great application of the Geo's Off-Set Rule.

Now that we have our eyes set on the new, nascent Wolfe Wave/Geo, let's remember that the Predictive/Forecasting Model remains BEARISH, and that it has cast its mind to LOWER levels. So, what we are attemting to do is to "reverse engineer" a mechanism by which, based on reliable and predictable geometries, price can descend to the "Model"'s forecast level.

2 - A large A-B-C with internal a-b-c waves is showing that this is the simplest mechanism by which price may descend to the Model's forecast level. If fact, the above WW/Geo would lend itself to that intermediate rally, completing an internal a-b-c leg of the larger reciprocal A-B-C symmetry.

3 - This entire frame is part of a much larger Elliott Wave "zig-zag", or simply "ZZ". The nature of a simple ZZ is that this is the ONLY geometry of Elliott Wave which will initiate its move with an impulse ("IMP") - Every other corrective (COR) moves, besides the ZZ will start with a simple zig-zag, but NEVER with an IMP. Hence, the GREEN-PINK-GREEN frames are simply speculating that while the first bearish impulse is an EW IMP, and that it is followed by a COR, then I am assuming (just assuming for now) that the entire move will be expressed as a IMP-COR-IMP pattern, or a larger 3-wave corrective swing.

One could look at the much larger picture, from which this large correction emanate, and perhaps appreciate that we are in a prolonged, time-consumptive correction period, hence the inherent delaying of the frames at the M15 and H1 levels - Follwoing is the H4 level chart, encompassing the H1 chart above (between the PINK dashed arrows).


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As indicated before, the intent here is to see by which mechanism would the Predictive/Forecasting Model would be able to be satisfied, knowing objective, universal rules of the technical games, wherein Elliott Wave, Wolfe Waves, Geo, and simple reciprocal ab=cd and simplest a-b-c patterns are applied.

In effect, we went through a "reverse engineering" of the pair, remaining as cognizant and respectful of higher-probability geometries.

The point here is NOT to magically second-guess the market, but to maintain a fully developed situational awareness of all that is likely to affect price in its most probable form or function.

Best,


David Alcindor
+2 Reply
08 SEP 2015 - Chart Update / Tech-Note:

... So, taking it all together, now let's go into this in a step-by-step fashion, starting with the completion of this Geo ... Expect an ectopic Point-5 as a Point-5 excursion ... This means that the HIGHEST probability of attainment as a reaction to this down-ward adverse excursion would be the price level corresponding to Point-4:


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Note that I have adjusted the Predictive/Forecasting Model's target (which are still VERY much valid) so that I may define highest-probability targets at the lower timeframes - So, for the time being, let's pay attention to this finer granular level


David
+2 Reply
08 SEP 2015 - Chart Update / QUIZ:

So, as expected and forecast, price is rising from the forecast level (purple arrow).

Now, quick question:

WHAT CAN YOU USE FROM THE HISTORY OF THE CHART TO PREDICT THE HIGHEST PROBABILITY LEVEL FROM WHICH PRICE WOULD DECLINE, AS IT IS STILL ASCENDING?


... Huh?


David
+2 Reply
4xForecaster PRO 4xForecaster
a year ago
(I left a visual HINT in the chart ... The dashed arrow)

David
+2 Reply
4xForecaster PRO 4xForecaster
a year ago
snapshot
+2 Reply
08 SEP 2015 - Chart Update / TARGET Hit:


As expected from a Qual-Target (TG-Hi/Lo and TG-Hix/Lox), price gets repulsed quite briskly.

Keep in mind that Point-3 may still be residing lower than expected. In this case, Point-5 could still be disguised at Point-3 - Best is to look for protracted symmetries along the 2-3 Leg, which by definition of the Geo internal construction, should be the more complex of all internal legs:


snapshot



David Alcindor
+2 Reply
08 SEP 2015 - Chart Update:


Price is:

1 - Either breaching the 2-4 Line to attain the 1-4 Line (Wolfe Wave rule)

OR

2 - Falling from the 2-4 Line, therefore confirming that Point-5 is in fact Point-3, and that the 2-3 Leg is much more complex.

At least, this system gives the trader a physical barrier from which to expect or better define a SL.


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David Alcindor
+2 Reply
10 SEP 2015 - Twitter/LinkedIn Update:


$USDSEK nears reciprocal AB = CD symmetry completion; Predictive Model targets loom at 8.30 and 8.27:

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$SEK #krona


David Alcindor
+1 Reply
11 SEP 2015 - Twitter/LinkedIn Update: TARGET HIT


$USDSEK hit 1st bearish target at 8.301; Lower target probable; Nascent Geo likely to carry price to Point-5:

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$SEK


David Alcindor
+1 Reply
11 SEP 2015 - Twitter/LinkedIn Update:


$USDSEK hit all bearish targets; Nearing critical Watch Line at 8.273:

snapshot


$USD $SEK #krona #forex


David Alcindor
+1 Reply
4xForecaster PRO 4xForecaster
a year ago
TYPO - Watch Line should read a value of 8.27356


snapshot



David
+1 Reply
11 SEP 2015 - Chart Update / Tech-Note:

As all the bearish targets got hit, price continued to roll down to the Watch Line ("WL") level, at which precise point, the bar closed and a new one opened - This attests to the relevance and precision of the WL level, since this is the level that would required the trader to move on up to four times the current timeframe and consider a new analysis at that upped level = This would have meant looking at a new analysis from the M60 x 4 = H4 level.


However, what occurred with as much relevance as all targets getting hit and the WL validating a significant potential bottom-tip reversal level, is that price is now standing at such a taut position to the downside, that a reactive rally is very probable. Ideally, the next bars will fashion a truncation of the next Elliott Wave, that is the 5th wave, and that the Predictive/Forecasting Model will be able to confirm a new bullish target, at the opposite from the current nadir.


First, let's consider the background geometry which has come into shape, as price settled to its lows. Essentially, we are looking at a 5-point plot, calling into sight a potential Wolfe Wave or Geo. This means that the current level of attainment would have defined the vicinity (yes, just the vicinity, as we are still awaiting confirmation of the final nadir level based on the expectation of an Elliott Wave correction and conclusion into either a lower-low or a truncation, as just mentioned) of Point-4. Once this level is define, then look for an upward impulse (not one that may occur right away, since an impulse to the UP-side at this point would be absolutely NOT a reversal readying to shoot up, but simply a simple zig-zag, in Eliott Wave terminology, understanding that (and remember this important point) a correction that starts with an impulse can only be one and only one corrective wave - Namely: The simple zig-zag, or "ZZ". If you have to remember one thing about corrective wave forms, remember this one important point, as it will safe you a lot of premature and painful entries.


snapshot



Now, as a matter of clarification, I have done two recent alterations to the chart:

1 - First, I have corrected the WL value, not as a level, since this did NOT change, but as a typo - See recent comment and chart, which reflects this correction. This target is not one I like to trade, or even refer to as target, since I only use that as a level from which to expect a probable reversal, either as a bottom-tip or tip-top level. In this case, the Predictive/Forecasting Model defined this level as a bottom-tip reversal, and that is exactly where the last impulsive bar closed and opened another one. This is an important event, and not one I would attribute to randomness or chance. This is simply what the Predictive/Forecasting Model does.

2 - I have expanded the RED correction frame defined as "COR" so that the recent candle marks the separation between the entire COR event, which we have been following from the forecast all the way to the hit targets. This is simply a visual reminder for me to remember that at this point, I am expecting the formation of an impulsive wave, hence the "IMP" in GREEN. Whether is occurs at this specific new candle or not is really not what matters. It only matter that I keep this expectation going, since this is not a matter of opinion, but a matter of objective data, defined by a Predictive/Forecasting Model that runs all on its own. This is one of the main feature about this, which is that I do not have to form or emit and share an opinion with the public. Instead, I take what it tells me as Quant-Targets, Qual-Targets and Watch Line, and I simply trade the damn thing. If someone questions me, they are really not addressing the right person, or in this matter, the right thing. And a thing this only is: It points. I shoot.



HOW THE ANALYSIS ARE ORGANIZED:


"MODEL" AT THE FOREGROUND:

I hope that this trade has been educational to you, and that you are starting to see, perhaps learn, and hopefully assimilate the discreet messages I am passing along. As I do not intend to share what the Predictive/Forecasting Model, you should realize by now that the "Model" is NOT capable to tell me HOW price will get to its targets, but simply that it WILL go there - So, as a FOREGROUND generator, it offers all the predictive analysis and forecasting data I need as to where and how far.


GEO AND ELLIOTT WAVE AT THE BACKGROUND:


GEO:

In contrast, the BACKGROUND, which I share on a frame by frame with you, my friend, is the geometries and technical analysis that will articulate the interim movements by which price will attain this targets. I do this by a series of simplest to more involved lessons, which I have shared over the months, wherein I develop the idea of a better system, a more reliable and consistent manner in which simply two lines can be used to define a top-limit and a bottom limit through the Geo, and then define how the Geo has rules that are based on adjustment from the distortions that exist in its construction (i.e.: Geo's Off-Set Rule).


ELLIOTT WAVE ANALYSES:

In addition, as I move along into more complex depths of analysis, I am sharing with you very simple wave analysis. While this exercise is admittedly shared by me as a non-expert in Elliott Wave, then I would not go as far as saying that these demonstrations represent the Elliott Wave Principle ("EWP") per se, as taught superbly by the only real experts and instructors at www.ElliottWave.com. Instead, I use the simplest rules and correlate them to what I know is true and reliable, such as the Geo, and use the Geo against what I know is further true and reliable, which is the stand-alone Predictive/Forecasting Model. Hence, in this chain of reference, I try to diminish my subjective influence, starting by a tried and true "Model" for predictions and forecasting, and devise a mechanism by which price will get to these targets via the geometry-based Geo, which is a mere refinement of the Wolfe Wave, using specific and strict internal construction rules. The wave counts is then a simple application of 1 to 5 counts, making sure that all 1, 3 and 5 termination levels are expressed as unequivocal impulses ("IMP") against corrections in 2nd and 4th waves, in addition to anticipating a complexity or simplicity in the 4th wave, relative to the 2nd wave, as one needs to remain cognizant of Elliott Wave's Rule of Alternations.


OVERALL:

I hope this clarifies a few things about my analysis. I can say that the Predictive/Forecasting Model alone would be sufficient to trade all that moves. If you look back in my history, you will see that it pretty much provides a target for any asset, and any expression set of assets (such as pitting an index against a Forex pair, or simply two metals against one another - Anything goes, and the results are consistently as successful). I do all this because I love analyzing the market. I am a ful-time ER doc, and I do this while on shift, off shift, on vacation and wherever I go. I have several accounts, several laptops, several hot spots, and my children are now succumbing to the contagion - at least my 16yo son is. I have been trading since 1997, when I entered medical school, and never developed any other interest. My undergraduate degree was architecture, a time devoted to sacred numbers at they apply to form, function, space and human activities. So, finding out about a whole new world of geometries applied to the financial markets was nothing more than a cranking up of an intellectual addition to numbers, and an obsession to defy what everyone stated as impossible to call tops and bottoms in the market - something I had the change to contradict.

What is important about what you are doing is to realize that it will take the brain, eyes and mind of an illiterate person entering into a new and vast field of knowledge to provide the last missing piece of knowledge. This has been proven over and over in the history of science, most recently by physicist who left the field of particle physics to answer much bigger questions, such as what would explain the force that is left in-between stars, pushing them further and further apart at a point when all astronomy were expecting a contraction of the universe. This physicist was Saul Perlmutter, who entered a brand new field discovered the anti-matter. This might be too big of an extrapolation, but my challenge to you is to delve into this field of technical analysis with all the ignorance, all the questions and all the fear of the unknown as the tools with which to carve. All other tools are already in the hands of biased, blinded technicians - You will find a gem, but it will take a blissful ignorance of the field.

Best,


David Alcindor
Predictive Analysis & Forecasting
Durango, Colorado - USA


-----
Twitter:
@4xForecaster

LinkedIn:
David Alcindor
-----


.
+1 Reply
11 SEP 2015 - Twitter/LinkedIn Update:



$SEK completes a POSITIVE divergence (not "bullish" divergence!); Price rests on significant 1-4 Line:

snapshot


#krona



Tech-Note:

An important take-away in this and ANY other chart carrying this RSI configuration:

1 - Bullish divergences are associated with DOWN-trending markets, representing a pause as price decline, despite it being called "bullish divergence"

2 - Positive divergences are associated with impending rallying in price. Best is to see a narrow divergence, counting 5-8 bars/candles.

This is not MY rule. It's the rule of the RSI: Know what to expect versus what tis intended out of the market. In other words, the former creates a mistaken expectation with much false positive signals, whereas the latter expresses a directional intention.

Regrettably, people continue to post divergences and illustrate them when one finally occurs. Truth is, it takes SEVERAL of the WRONG divergences (i.e.: "bullish" or "bearish") for a price to finally move in the expected direction. In contrast, it typically takes only ONE of the RIGHT divergence for price to move in the intended direction.

There are several sources of information on this subject. Simply Google and compare the two terms to find out more from other sources as well, so you realize how widespread this mistaken has been perpetrated.

Best,


David Alcindor
+1 Reply
4xForecaster PRO 4xForecaster
a year ago
ADDENDUM - Examples of Negative Divergences:

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Basically:

1 - In the case of a Negative Divergence ("ND"), look for RSI rising "atop" price, as if RSI was "hammering" the next lower low spike in price, and driving the nail DOWN.

2 - In the case of a Positive Divergence (PD), lok for RSI "shoveling" price UP by pushing it up from a higher-low to a higher-up level.


The "Hammer" for NDs and "Shovel" for PDs are the analogies I have been teaching - I hope this makes sense after a while. Don't expect it to make sense right away, as you might need some time to "rinse" your brain of learned methods that remain erroneous - not to me, but as was intended by the real application of the RSI and its divergences: Positive/Negative, not so called "bullish" or "bearish". Yeah, I know, I get yelled at by some who love to hold on to institutional teddy bear-like newly minted knowledge, but I am simply passing the knowledge along, not claiming authorship on this and most other things I share.

Interesting reads on this:

John Hayden - Ultimate Guide to RSI

Andrew Cardwell - www.CardwellRSIEdge.com

I have not taken a course from Mr. Cardwell, but I did read John Hayden's book - I once tried to share some new discoveries on RSI, but all I heard back from Mr. Cardwell was that Mr. John Hayden "plagiarized" his course as a student of Cardwell's course. I then tried to contact Mr. Welles Wilder through a society (www.DeltaSociety.com) I had joined by purchading the material (too weird for my geometric mind to grasp), but when I called, I was informed that Mr. Welles Wilder did not wish to be contacted about RSI a-ny-more.

Yes, I was sad.

Best,


David Alcindor


+1 Reply
4xForecaster PRO 4xForecaster
a year ago
Here is a Google search on John Hayden and his RSI writing ... Material may be copyrighted, so act accordingly:

https://www.google.com/search?q=John+Hayden&ie=utf-8&oe=utf-8#q=John+Hayden+RSI


Best,


David Alcindor
+1 Reply
iefan PRO 4xForecaster
a year ago
So many new interesting areas to explore, thank you for opening all these doors David!
+1 Reply
4xForecaster PRO iefan
a year ago
Yes. Every day is a new cycle, so long as you ignore time. Otherwise, it's all a repetition of an old circle.

David
+1 Reply
13 SEP 2015 - Chart Update:


Current price action is a correction, fashioning the end of recent bearish impulse. Look for internal 4th and 5th waves at that level, pushing Point-4 of the geometry to a lower level at a decelerating rate - Point-4 is the important level in the geometry that defines the 1-4 Line, as well as the most common Geo's Off-Set Rule level of attainment. So, there is no need to trade the chart whose Point-4 remains undefined - However, one should pain close attention to internal wave developments, such as the current correction that followed the vertical bearish impulse, as we know that a 4th way of correction, followed by a 5th bearish impulse will signal the approaching end of a larger swing ... Of course, wait for the a-b-c connection where a reversal of trend by the expression of a bullish impulse would likely have to occur with this transitional correction as well:


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David Alcindor
+2 Reply
14 SEP 2015 - Chart Update / Tech-Note:


I have shifted the RED frame to the right, where Point-4 is likely to reside, so as to concentrate visually on the expect IMP move, which appears to be on its way:


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David Alcindor
+3 Reply
16 SEP 2015 - Chart Update/Tech-Note:


This pair has been quite reliable as it hit all Qual-Targets, and remains compliant to the nature of these qualitative targets, which is to define tip-top (TG-Hi and TG-Hix) and bottom-tip (TG-Lo and TG-Lox) reversal levels. As shown in the M60 chart, a reversal has been reach in the vicinity of these Qual-Targets, and we are now turning to a finer grain level - M15 - and see where this may lead us, using a combined application the of Predictive/Forecasting Model (se new target just defined above as TG-1, a Qual-Target, and not a Quant-Target, hence defining a level of retracement, and not reversal, in contrast with the Qual-Target), as well as advance geometry with the Geo, wherever it appears appropriate:


snapshot



A quick note on the EAGLE strategy, which represents an (E)xtremely (AG)gressive (L)evel of (E)ntry - I am using this level to enter a LONG position, and seek exit at the TG-1, defined in the chart - Note that the TG-1 resides in a cluster of targets from a prior analysis, adding reassurance to this personal trade consideration.

This and any other comments are for pure educational purpose and not a trade recommendation - I am not a certified market professional, so turn to your own experience and due diligence before giving up your capital to cunier-than-thou breeds of trader.

Best,


David Alcindor
+1 Reply
16 SEP 2015 - Chart Update:

Watch for possible (less than probable, i.e.: highly speculative, but worth heeding as price continues to mull a rally at this early reversal point in time) overhead resistance and support range as shown:


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David Alcindor
+1 Reply
iefan PRO 4xForecaster
a year ago
Hi David. Thank you for sharing this EAGLE idea. I'm just curious, with the volatility associated with the FOMC decision later tonight, is it not highly likely that any SL placed for this trade is likely to be hit before price commits to either direction?

Kind regards

Iefan
Reply
kmk.msp iefan
a year ago
I was long but exited due to no rate hike speculations and probably dovish tone
+1 Reply
17 SEP 2015 - Chart Update:


Here is one example illustrating what happens when the operator (i.e.: me, in this case) ignores the rules of the Predictive/Forecasting Model ... The price continued downwards. Had I stay in tune with the fact that the WL was breached, I would have gone up from H1 by a factor of four, or H1 x 4 = H4 to realize that there may have been more legs to the downside.

So, turning back to the H4, here is what the Predictive/Forecasting Model defines as the lower targets ... note that we are now closer to the WL Line belonging to H4, and that we are brushing the TG-Lox target as well:


snapshot



David Alcindor
+3 Reply
18 SEP 2015 - Chart Update:


Closed market at Geo's 2-4 Line; Appears to remain in the COR phase, as bearish Predictive/Forecasting Model target remains unanswered:


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David Alcindor
+3 Reply
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