A-B-C-D Trade - page 99
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Jan 14th Recap
Considering there were 2 major CPI announcements by the EU (10:00) and US (13:30), plus US Univ. of Michigan Confidence (14:55), we had to pick our spots.
AUD/USD, which gets active as the first larger sized country out of the gate for the new day, has been of focus lately in this thread. We plot a trend line underlining the uptrend for day’s set-up. We can see the breakout occurred during the US session prior to Asian open of new day.
We proceed to plot an ABC on the 15-min with swings 17:30/20:30/23:00. Pair bounced off Swing B and almost made it back up to the Swing C price. A fractal indicator would have caught the turn down at price of about .9977 early European with break of Asian Low .9950 at 08:45.
To exit prior to EU CPI, would produce FE 127 .9906 price for about net 40 pips. Trading to FE 100 = about net 20 pips. Extension survived small pop up from EU CPI to eventually hit its FE 200 of .9956 for + 90 pips from Asian Low.
From daily prospective, pair hit fib resistance (38.2) from plot Dec 1st - Dec 31st. The 38.2% fib is .9981 and 50% is .9897 where it looks to close today/week. If we apply the LSMA Channel, we get a mid-line at resistance area an another line supporting the 50% level.
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EUR/USD, the pair in center of most trading, especially with the twin CPI data this day. The attached 15-min chart shows the various swings, resulting from data.
As we wrote earlier at the time, the pair made a FE before descending in reaction to news from China that it is increasing bank reserves. Gold also plummeted.
Another way to find the top was to apply retracement tool from Asian Low to Asian High. This placed the 138.2 = 1.3430 and 161.8 = 1.3449.
Hard resistance of 1.3422/32 from Dec 31st and Jan 4th. This is area of the 138.2. The bounce was small and brief before it bolted to the 161.8. The 5 and 15-min fractal caught the turn, with the 5-min at a better price of course. Note that there was no fractal at the 138.2.
The ABC swings were harder to pinpoint as there was more than one option from Point A. The good plots were (5-min):
07:15/07:45/07:55. This produced FE 100 = 1.3437 and FE 161.8 = 1.3451.
07:35/07:45/07:55 resulted in FE 161.8 = 1.3436 and FE 200 = 1.3448. This was plot we mentioned but ended up posting the wrong FE prices.
Of significance was the 5-min Murrey Math +2/8th level at 1.3458. The 15-min, 30-min, 1-hour, 4-hour, had 8/8th at 1.3428. Gann SQ9 had 1-hour levels at 1.3432/61.
One thing we remember reading from a guru was that the psychology of traders chasing the market beyond oversold/overbought levels are the ones creating the overshoot. Stop-loss orders are triggered, which temporarily exaggerates the situation.
While the news from China received credit for the turn down, we feel that a more natural and larger bounce off the significant 1.3432 level was the norm. EUR/USD has not been above this level since Dec 14th.
We mentioned how to plot the extension down, with the FE 161.8 scheduled for 1.3350, which. was touched just ahead of EU CPI at 10:00. We can see the 09:55 up candle which indicated traders getting out prior to data release. A fibo fan plot from Asian Low to Euro High also had its 78.6 fib in area of this exit level.
The market absorbed the EU CPI but resumed downward, hitting the Asian Low at 12:15 (and 200% regular extension) and bounced.
Things got choppy through US data, but eventually made a regular 138.2 extension back to Asian High. Fibo fan plot from Euro High to Low had its 61.8 and 78.6 catch peaks. A decent day for a day trader continued as once again pair visited the Asian Low at 16:45.
Keeping a fib plot from Asian Low to High throughout the day gave excellent S&R. Note that we have a fractal indicator with alarm (doesn't turn off) that displays less intrusive dots, and have attached for your use. We should have more material for you this weekend. It is also a 3-day weekend in the U.S. so things might be lighter in the markets Monday.
Attached 30-min EUR/USD chart illustrates several trade set-ups and entry opportunities/signals.
We have the fib time zones tool plotted on 2 high of Dec 31st 16:00 and Jan 3rd 16:00.
We marked the following 4 sets of divergence spots with price and the RSI indicator.
1) lows Jan 3rd 1:30 and 07:30
2) highs Jan 3rd 13:00 and 16:00
3) lows Jan 4th 01:00 and 06:30
4) highs Jan 4th 10:00 and 13:00
1) BUY trade off divergence, entry assisted by fractal. Trend line break.. Can trade up to 61.8 or 78.6 retrace fib..
2) SELL trade off divergence and fractals, which was also near Dec 31st high.
3) BUY trade. The .382 and .618 time fibs (vertical) are at or next to Jan 4th lows. Divergence also there, as well as fractal for pivot.
4) The Jan 4th highs assist with trade off of significant high price of Dec 31st 1.3424 (blue horizontal line). Had divergence and fractal. SELL move ended with next fractal, the 1.0 time fib, and low RSI.
Note that each set of RSI divergence had its 1st hump at or very near OB/OS levels of 85/15. Entry can also be effected by shorter interval trigger. We are monitoring another OB/OS oscillator named Back to Future*, which can produce additional divergence signals. There were other divergence spots on the chart, but too numerous to list herein.
The fractal is a 5-candle pattern, with the middle candle the highest or lowest. The fractal can appear before the 5th candle closes. Beware that it might repaint, unless 5th candle closes. I recently attached an alarm version with small dots that are visually less clutter. Unfortunately, no function to turn alarm to OFF.
* not related to program/software with the same or similar name.
Attached is 30-min EUR/USD chart from Dec 15th - 17th.
We have a trend line up from Dec 16th 15:30 to Dec 17th 11:00.
The fib time zones tool (you must apply manually for research) has 2 plots that result in the same entry.
1) 2 highs = Dec 15th 14:30 and Dec 16th 09:30. The 1.272 time fib is Dec 17th 11:30 trend line break candle.
2) 2 lows = Dec 15th 19:30 and Dec 16th 15:30. The 1.0 time fib is the same 11:30 break candle.
We had divergence with the Dec 17th 06:30 and 10:00 candles/RSI.
A fractal at top triggered.entry for open of 11:30 candle (after 5th candle closed).
ABC swings (switch to 15-min) were Dec 17th 11:00/12:15/13:00 which produced FE 161.8 1.3142 , hit nicely at 15:30 and marking bottom level.
If you want to analyze how easy/difficult it was to stay in the trade, suggest you look at Heiken Ashi Smoothed (HAS) on the 15-min. Once past the pivot Swing C, nice and smooth to bottom. The 30-min HAS was red all the way down.
When the tops of the HAS candles are flat with no wick, it denotes a stronger move.
Attached is the 1-Hour GOLD chart which is GMT +2.
We've highlighted the swing points of the zig-zag produced by the indicator ### Gann_SQ9. We set horizontal levels to 90. We understand that Gann philosophy was that 360-degrees is a full cycle, and 1/4th intervals of this is also important.
New week. Our EUR/USD Sunday Reversal Candle body was only 6 pips. Open 1.3383 at 19:00 GMT and closed 23:59 at 1.3377.
Current price now at 01:15 is 1.3335, for + 43 pips.
EUR/USD 15-min plot.
ABC swings: 21:00/22:30/23:45 produced 138.2 price 1.3335. Same as the FE 100.
Attached is 15-min chart. Plot = Low was Friday Jan 14th low 1.3313 to 20:45 1.3378.
Week opened with extension to the 138.2 of 1.3401. Draw a trend line for that upswing.
The bounce broke trend line and went back to the 38.2% fib produced by the low/high plot from Friday (blue X).
After pullback to form Swing C, extended to the 138.2, same as FE 100.
Several entry points, including after fractal locked, at open of 21:45 candle price 1.3384.
***
On longer interval 30-min chart, can see swings with Point C as 61.8% pullback Jan 16th 21:00 1.3401. Point B is 1.3313, and the 138.2 extension is 1.3259.
Note EUR/USD price action also respecting plot from last Friday's Asian low/high, which has 138.2 = 1.3291. Bounced off of that fib. Next is 161.8 = 1.3272 for this plot.
Also draw trend line down.
EUR/USD just touched 30-min Gann_SQ9 90-degree price 1.3285, ahead of 112.5-degree 1.3257, which about same as original 138.2 of 1.3259.
AUD/USD divergence detected, with 2nd low and "hump" 06:30 on 30-min. Triggering entry with Ehler's Fisher, at open 2nd blue bar (thin bar) 07:30 price .9874.
Attached chart also has LSMA Channel and horizontal fibs plotted Jan 14th 07:00 high to Jan 14th 12:30 low.
Note that while the U.S. is on holiday, we have EU Ministers meeting to further fortify rescue plans.
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