A-B-C-D Trade - page 129
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Wild ride down on oil and gold. Attached is chart with CFT instruments USOIL and XAU_USD (GOLD).
Upper left chart is 4-hour USOIL with fib plot showing regular 138.2 support at 100.60.
Lower left is XAU_USD 30-min with support at regular 161.8.
Right is USOIL 1-hour with Gann_SQ9 which has support at its 360-degree level.
EUR/USD (not shown) was in consolidation during entire European session. US data 13:30 provided small temporary bump up, but as Euro session end approached, pair returned to lows.
U.S. stocks took a beating today. The CFDs (not for U.S. residents) also offer the SPX500 (follows S&P500). That index is most active during U.S. session of course and we need to adjust our color on the time_modified indicator. Start color for U.S. at 13:30 GMT and end at 20:59.
Plots from few days ago still valid. Low = Mar 3rd 09:00 1.3831High = Mar 4th 14:00 1.4006Fibo FanLow = Mar 2nd 03:00 1.3741High = Mar 7th 1.4013EUR/USD now testing fan's 61.8
Here is that chart with plots. We can see the fan's 88.6 caught the end of European session low, which is just below the FE 100 where we targeted exit.
Here is USOIL Weekly ABCD.
A = Oct 17th, 2010 low 79.85
B = Jan 16th, 2011 high 92.98
C = Feb 13th, 2011 low 83.84
FE 161.8 = 105.08 (closed at that price Feb 27th, 2011 candle)
FE 127 = 100.54 hit this today as support
FE 100 = 96.97 next major support
Here's the SPX500 Daily with fib retracement tool plot:
Low = Aug 31st 1038.4
High = Nov 5th 1227.1
138.2 = 1299.2 (hit Jan 18th)
161.8 = 1343.7 (hit Feb 18th)
There were bounces off both the 138.2 and 161.8 extension levels. Today's current support is there.
These are precise hits at the extensions. If you understand how to plot fibs, it's like taking candy from a baby.
At the very worst, once it hit the 138.2, you would know that confirms and can take advantage of the hit at 161.8, either with the trend or off the bounce, or both.
Now, keep an eye on the diagonal trend line.
Here's the US30 Daily, which mimics the DOW 30 of course.
Low = Sep 1st 10,028
High = Nov 5th 11,468
Pivot = Nov 29th low 10,927 (38.2% retrace)
138.2 = 12,018 (hit Jan 26th)
161.8 = 12,358 (hit Feb 18th)
BAJA bearish divergence Feb 18th candle, catching reversal at top. With 4-hour trigger entry Feb 21st 16:00 price of 12,328, and target short to 138.2 fib of 12,018, profit = +300 pips.
Breaking news: Saudi police fired on rally. This is not good if it deteriorates. Oil and gold has reacted but now waiting.
Here's the same chart for SPX500 Daily (mimics S&P500 index). We added a triangle indicator that also has take-profit levels in both directions. That info is on upper left of chart.
We also respect the 138.2 horizontal fib and round number 1300, which is where market is now.
This is a breakout set-up.
Large earthquake hit Japan about an hour ago, now rated at 8.9, causing Tsunami damage already. Tsunami warnings for several countries.
Edit: They are now announcing estimated arrival times for tsunami in each country. If you live near the coast in affected regions (such as Russia, Taiwan, Guam), please check.
Jup I just watch CNN :S
EUR/USD Review
Here were some of our observations during the week as well as the bigger picture.
Daily Chart
High = Feb 2nd 1.3861
Low = Feb 4th 1.3542
Pullback = 61.8%
138.2 = 1.3421 (hit Feb 14th)
(post #1258)
***
Low = Feb 14th 1.3427
High = Feb 2nd 1.3861
138.2 = 1.4026 (hit Mar 7th)
The top was also location of long-term charts’ trend line.
BAJA bullish divergence caught the major pivot on Feb 14th, with 30-min trigger BUY entry at 1.3458.
***
Low = Feb 14th 1.3427
High = Mar 7th 1.4035
38.2% = 1.3803 (about closing price of Mar 10th candle, with bounce up next candle)
***
4-Hour chart
A = Mar 7th 12:00 high 1.4035
B = Mar 8th 12:00 low 1.3861 (same as Feb 2nd high)
C = Mar 9th 12:00 high 1.3940
FE 100 = 1.3767 (hit Mar 11th 08:00)
BAJA divergence at top, with 30-min trigger = Mar 7th 13:30 entry at 1.4029 (see post #1259).
End of week was 78.6% retracement of C-D.
***
We won’t review trend line from top as that was already covered (post #1253). The trend line from the bottom (on 4-hour chart) was plot using Feb 14th 12:00 low 1.3427 and Mar 2nd 04:00 low 1.3744.
We can see Swing B made a hit at trend line to pivot. When we zoom in, we can see candles and wicks comply with trend line, until confirmation of break occurred on Mar 10th 00:00 candle.
The 2 plot points for the trend line was hardly an automatic choice, but was the top consideration. At worst, once Swing B pivoted, we had confirmation of that plot, and are able to take advantage of the breakout. Horizontal pivot at 1.3854 was last support, if trader chose to respect that.
Post # 1259 also had identified a developing intra-day Head & Shoulders pattern.
***
Intriguing is a plot using the Cycle Lines tool on the daily chart. Plot start at Jan 9th (pivot bottom) and pull to Jan 23rd.
This depicts a 12-day interval, which saw turning points on Feb 6th, Feb 20th, and Mar 6th. These 3 days were all Sundays.
Now, take the Cycle Lines tool and plot backwards with the same starting point date and the same 12-day interval on pull. Each 12-day interval is a Sunday, so we look to see if there were turning points .
We had made mention of our SRC theory (weekly reversals), and this application makes for easier visual in effort to analyze.
Piecing together some recollection of our readings on cycles, we think that the market works on certain cycles more acutely, then decouples.
The 12-day interval is the same as taking a 2-week interval, since Saturdays have no data. Since the beginning of the year, Jan 2nd, if we plot a 6-day interval (weekly), we can see pretty good turning points thus far.