A-B-C-D Trade - page 151
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Good time to jump off as data ahead. Fibo fan also has the last mentioned area as its 50% fib, based on using high of 1.43383.
At 09:00 GMT (another 1 hour), economic data due out on European Zone CPI. The fundamental traders might say that this upswing is due to speculation on higher CPI for Year-On-Year figure.
With regards to the fib fan indicator just provided by Kevin, we suggest adding the 50% fib.
Let's zoom in on the turning point at the opening of the week, and subsequent retracement. Take it one step at a time.
We had a "world event" occur over the weekend (Sat.) that was considered to have potential impact on the markets. This was the arrest of IMF chief Dominique Strauss-Kahn, a key person behind the bailouts for troubled EU countries.
The forex market starts off the week at 19:00 Sunday. However, some brokers do not offer trading that early, and thus the calculations on charts are a bit compromised during that time.
The example chart we use starts at 21:15. With the above discrepancy in mind, the BAJA bullish divergence that registered at 23:45 should be scrutinized with caution.
We labeled the swings and important points with lime green numbers.
Let's pick up from May 13th Friday's pivot low at 16:00 GMT. Thereafter, Point 1 to Point 2 was the High/Low plot for our fib extension going downward. The result was a 138.2% extension to 1.40470 May 16th 01:00.
This bottom also conformed to a trend line (pink color) with plot using Lows of May 12th 10:00 1.41223 and May 13th 16:00. BAJA bullish divergence at this bottom.
This bottom also was the 200% extension from horizontal fib plot High = May 13th 07:30 1.43383 and Low = May 13th 04:00 1.41928. Bottom now labeled as Point 1.
The next pivot high is Point 2 price of May 16th 03:00 1.41063. This level is also the horizontal 23.6% retrace from top to bottom. It is also the 161.8 fib from the plot that produced the 200% bottom.
The result of the 1-2 plot from bottom is Point 3, the 161.8% extension. The level was met by the red PSQ9 Mars 270-degree and Moon 90-degree.
Fibo fan plot from High = May 13th 12:30 1.43054 and Low = May 16th 01:00 1.40619. The fan's 61.8 met the Point 3 price.
Point 4 is the 200% extension of Points 1-2. It is also the FE 127, with A-B the same as 1-2. Swing C pullback was May 16th 09:30 low 1.41025.
Fibo fan's 88.6 also met top at Point 4.
And last, using the Andrew's Pitchfork, plot the 3 areas to click:
Handle = May 12th 10:00 low 1.41223
Upper trend line (corner) = May 13th 08:00 high 1.43383
Lower trend line corner = May 16th 01:00 low 1.40470
Result was middle fork/trend line caught the top at May 16th 15:00.
Here's a bonus chart with APF plot and QTA, which is the customized.fib time zone tool.
The QTA had fib cluster right at turning point caught by middle fork (and Point 4 on previous post) at May 16th 15:00.
The 2 plots on the QTA, which of course is automatic, were:
High-High = May 12th 17:00 1.42759 and May 13th 08:00 1.43383
Low-Low = May 13th 01:00 1.41822 and May 16th 01:00 1.40470
1st chart attached is 30-min EUR/USD with recently post fib fan indicator MZZ9. We added the aforementioned Andrew's Pitchfork (white) and QTA.
We added fib channel plot (blue) using the 2 dips of May 13th and 16th as 1st line and Point 3 price 1.41474 (previous post) as 2nd line. This produced a 100% extension at the May 15th top,along with the other confirmation.
The QTA produced 3 vertical fib clusters. We mentioned the top on May 15th 15:00, The others were May 17th 00:00 and May 17th 07:00. These 3 time (vertical) reversals points are marked with white "X" and white arrows on chart.
The 2nd chart plots 2 fibo fans.
Fan pointing down: High = May 13th 12:30 1.43054 Low = May 16th 01:00 1.40470.
Fan pointing up: Low = May 16th 01:00 1.40470 and High = May 16th 15:00 1.42435.
The retrace from the May 15th high came down 61.8% and right where the 2 fibo fans 78.6% crossed May 17th 02:30. This was also a BAJA bullish divergence.
The BUY then proceeded to make a 50% retrace to the upside and near another fan cross. This area also just beneath 1st chart fan indicator's 4-hour fib channel line (red), which acted as resistance.
***
The May 17th 02:30 pivot was caught by the MZZ9 78.6% fib fan line (red), The indicator used this pivot as the 2nd point (dip) in its brown fib channel lower line plot.
Let's look at USD/JPY. We have the 1-hour chart up with PSQ9. We had previously showed you the ABC swings that is still on this chart.
Now, we'll go through the thought process on how to apply the Andrew's Pitchfork again. It is shown in white color.
The high for the "handle point" is without doubt, at Apr 27th 16:00 82.771.
The "low corner" is also pretty clear, at May 5th 11:00 79.556.
The "upper corner" to complete the plot is the one in question. After Swing B, we look at all of the peaks/highs. The one to select must result in a price hit to the middle fork (trend line).
The only peak that met that requirement was May 10th 22:00 high 81.084.
As discussed previously, we proceed to overlay the fib channel tool (blue) right to the middle fork and upper fork. These 2 forks/trend lines should be aligned with the fib channel's 1st and 2nd lines.
Using the fib retracement tool, and plotting from A to B, we arrive at the regular 161.8 extension of 81.790 (hit May 17th 10:00).
This top also was the fib channel's 161.8% extension. The red Mars 180-degree is also right there.
The mini-extension plot (white "X"): Low = May 16th 19:00 80.691 and High = May 17th 02:00 81.221. The same top is the 200% extension from this plot.
If trading this intra-day extension, and S/L is below 38.2% pullback:
Net R/R 2:1: Reward = 50 pips Risk = 25 pips
This post references our reminder to always understand where the market is, in relationship to the fibs, in the larger time-frames. We also allowed the APF to assist us in determining the diagonal fib plot with the fib channel tool. This is a technique we have developed ourselves.
The cluster of fibs picked out the price point and top for exit, but is also a good candidate for a quick bounce trade down.
Market reacting to BOE Minutes, released 08:30, along with negative jobless data.
The attached GBP/CHF has pair testing support at the 61.8% retrace fib, PSQ9 Mar 0-Degree, and 138.2 from wider plot.
Plotting from Top with High = May 11th 14L00 1.45504 and Low = May 14th 07:00 1.43489, the 138.2 extension is the same support. Next support at 161.8 = 1.42117.
Watching CHF pairs, as flight to safety acute when jitters exist with commodities. Gold's peak price occurred on Apr 1st, and oil on May 2nd. USD/CHF pulling back after probe of lows, bouncing off lower fork line of APF..
GBP/USD also testing support. GBP on slide since Apr 28th. BOE voted 6-3 to hold interest rates, per Minutes.
And here is EUR/ISD 1-Hour. Pair was unable to penetrate the 78.5% retrace and formed a BAJA bearish divergence at conclusion of 03:00 candle.
15-min EFT trigger at 04:15 = 1.42720. S/L above high pivot 1.42858 + 6 pips = 1.42908 for risk of 20 pips
It has just bounced off support level with May 16th 15:00 high 1.42435. Targeting exit here = 40 net pips. R/R = 2:1
Correction: Gold's peak was May 1st, not Apr 1st as we mis-spoke.
EUR/SUD hit its 38.2% retrace of 1.4222 at 11:30 and that is also the fibo fan's 61.8.
GBP/CHF did break 138.2 support of 1.42609 and just hit its 161.8 extension of 1.42117. Attached is the 15-min chart.
Trading between these points makes about 40-45 net pips, with tight S/L just above 1.42685, which was 09:45 pivot as well as PSQ9 Mar 0-degree.
Reward/Risk = 40/15 and 2.7:1
While the markets are digesting the just released FOMC Minutes*, we'll post a 1- Hour chart on the USD/CHF. Initial USD strength evident.
We mentioned the lower fork line in another post, here are the 3 points to click on your Andrew's Pitchfork tool found on the MT4 platform:
Handle = May 12th 12:00 high .88885
Lower corner = May 13th low .87963
Upper corner = May 17th 08:00 high .88816
Confirmation occurred when middle fork/trend line hit at May 17th 23:00. This bottom pivot also registered a BAJA bullish divergence. The other low dip was May 15th 15:00. Chart has pink lines denoting this.
Plot for retracement uses high of the same upper corner .88885 and low of the pivot at the middle fork .87834.
The upper fork line provides resistance, and this was hit at 13:00, probing to the 61.8 fib. The 1-Hour candle closed at the 50% fib retracement level of .88319.
S/L = .87784 (5 pips below 23:00 candle)
15-min EFT entry trigger at 00:00 = .87988 + spread = .88018, making S/L risk = 23 pips
Targeting the 38.2% retrace fib of .88201 = 18 net pips R/R .78:1
To 50% of .88319 = 30 net pips R/R 1.3:1
To 61.8% of .88436 = 41 net pips R/R 1.8:1
***
Initial details are that the FED would raise rates sooner rather than later, after conclusion of QE2 in June. No mention of possible QE3.