A-B-C-D Trade - page 182
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Continuance of last posted 30-min chart from yesterday. We left off with the pair around the 292-degree level, which is the 161.8 extension level on this chart.
Plot: Low = July 12th 1.38363 High 07:30 = July 12th 18:00 1.40529
The "BB" labels denote Ben Bernanke testimony/verbiage, and thus market reaction accordingly.
The July 13th 161.8% extension was made in reaction to "perceived" comments on QE3 as more possible. The 14:00 candle is the spike.
Pair went on to make the 200% extension of 1.42689 on July 13th 23:00 period. That top registered BAJA bearish divergence. This level is also the 225-degree on the SQ9 and was labeled 5/8th MML.
Understanding the resistance levels per last paragraph allows trader to enter at a better price, without a cross-over trigger. For example, when using the 15-min EFT trigger, entry would have been at open of 00:15 candle period price of 1.42468. That's about a 20-pip difference.
We plotted retracement fibs based on Low = July 13th 19:15 1.41296, which was congestion area.
Here are retracement levels with gross pip profit based on entry at 200% fib (doesn't consider slippage, spread, and cushion.
38.2% = 1.42232 +46 pips
50% = 1.42054 +63 pips
61.8% = 1.41875 +81 pips
Stop-loss can be fixed (such as 10 pips) above 1.42811 high making risk = 23 pips.......or 5 pips above 203-degree price of 1.43055 making risk = 42 pips.
Note: we speak in full pips and round off last digit of 5-digit price.
We did not display the extension fib plot avoiding cluttered view. When you plot it, and switch to the 15-min interval, you can see price at the top 00:00 candle open at the 200% fib. That's a good entry point.
EUR/USD bearish movement after 14:00 is attributed to the market's reassessment of Bernanke statements on QE3, due to Bernanke's testimony today.
Here is a split screen on EUR/USD.
Left is 4-Hour with Gann_SQ9 that had also been labeled with 1/8th MML levels. The July 12t bottom registered a BAJA bullish divergence, 1/16th overshoot below the -2/8th.
The pullback went back up to the 5/8th MML. From low to high, the retrace was 38.2 (yellow fibs).
Right is 30-min with PSQ9 and horizontal fib extensions. We posted the BAJA bearish divergence at the top, and retracement to the Mars 270-degree, which is the 50% based on Low = 1.41300 (July 13th).
Pair subsequently chopped around until the 2nd day of Bernanke, this time testimony in front of the Senate Banking Committee. Mr. Bernanke commented that the FED is not ready to implement QE3 due to current inflation conditions/levels.
This sent things back to risk aversion and US strength. Gold, oil, and U.S. stock markets down down.
Pair made the 100% retrace at 18:30, which was also supported by the Moon 0-degree. This plot is not shown, just use the low = 1.41300.
The yellow fibs, which has the top as its 261.8, caught the dip this morning to the 127.2% at July 15th 06:30. This is the same as the 38.2% retrace level shown on the left hand chart.
****
Ahead is U.S. data: CPI at 12:30 GMT, Industrial Production at 13:15, and the University of Michigan Confidence at 13:55.
Contrary to previous schedule posted, the EU Bank Stress Test is now due out at 16:00. A media outlet has printed a rumor expecting several of the banks to have failed the test. This number has been placed at 10-15 out of 90.
Asian markets mixed, caution on US debt, Banks stress tests
Split screen.
Left is 1-Hour chart with zoom-in on Andrew's Pitchfork and AML interior fibs.
Handle = June 1st high 12597
Upper corner = July 8th high 12773
Lower corner = June 26th 11886
We can see the hit to the Upper_ML1 on July 12th 08:00 candle period. This is the 38.2 retrace fib diagonally, between the upper and lower fork lines. A BAJA bullish divergence registered at that bottom.
The interior fib levels are the same as horizontal fib plots: 23.6, 38.2, 50, 61.8, 78.6.
Right chart uses high/low plot of 12773/12377. The Bumasoft Planetary SQ9 also lend S&R. The High was Non-Farms Payrolls (NFP). We also labeled candles when market reacted to Ben Bernanke (BB).
Fibo fan with same plot had its 78.6% ray catch the peak prior to yesterdays BB testimony. Mars 90-degree also there as resistance,
Trend line plot (pink) = July 1st 1477.99 and July 12th 1540.62
Wide fib plot (blue): High = June 22nd 1557.78 and Low = July 1st 1477.99
138.2 (upside) = 1588.26
Horizontal fibs (yellow):
Low = July 12th 1540.62 and High = July 12th 1573.50.
- We saw a 161.8 extension to 1593.82 on July 14th 09:30.
Vertical line is 16:00 EU Bank Stress Test results.
The last few hours have seen gold and these types of instruments rise ahead of this event. If there is shocking news, as rumored, fear will likely result in wild swings on gold. Coming so close to the end of week also plays a role.
This 30-min chart plot of the Andrew's Pitchfork (APF) is a continuance of chart posted July 8th post #1791. That was at the end of that week, when the U.S. Non-Farm Payrolls came in overwhelmingly below projections.
New horizontal fib plot shown in white.
High = July 11th 00:00 1.42248
Low = July 11th 14:30 1.39853
By early July 12th Asian session, this plot would be most logical as the pullback was the largest.
Price action broke the Low (1.39853) on July 12th 02:00, and hit the 161.8 extension (1.38373) to the downside on July 12th 07:30, probing slightly below the lower fork line. That was one trade, with distance between fibs of 48 gross pips.
The bounce off the 161.8 price of 1.38373 was another trade, using retracement plot to target profit, supplementing this plot. Trading back up to the Low of 1.39853, produced the same 48-pip gross.
Price rose to make a 127.2 extension to the upside on July 13th 23:30. Upper_ML2 and wide fib plot's (yellow) 61.8 also there. The wide plot is upper corner of APF to lower corner.
A BAJA bearish divergence registered at the top, as illustrated in recent posts. The 2nd peak 23:30 candle RSI(4) reading of 83 was lower than the 1st peak 21:30 RSI(4) reading of 94. This, of course, was another trade opportunity.
We see compliance with the S&R, including the Median Line (ML) providing support. The white horizontal fib plot's 50% and the wide plot's 100% (Low) also lent support.
****
A BAJA bullish divergence registered on Friday July 15th 13:30. The rise was attributed to lower than expected UOM data. Together with being so close to end of week, this was a "pass".
The much anticipated EU Bank Stress Test had muted reaction by the market Friday. The number of banks said to have failed the test came in lower than rumored. However 16 additional banks were identified as barely passing.
In many corners, this test is considered very lax, as was an earlier stress test. A former IMF executive had criticized the previous stress test.
Week opened with pressure on Euro to the downside. EUR/CHF and EUR/USD gapped down. EUR/USD testing support of 1.40768.
Here is a zoom-in on the last chart. We have placed yellow numerical numbers at high-impact data release periods.
We also repeat the fib extension levels, in blue. Overlay is the indicator Heiken Ashi MA T3 new_alert (HAMAT3. The histogram version, HAMa Step Histo is positioned on the bottom.
No high-impact data en route down to the 161.8 extension.
After reversal, the pullback off the High of July 12th 18:00 candle was 50%, and showed red on the HAMAT3.
After entry at/near the bottom, the trader's attempt to stay in for a larger profit to the upside faces money management aspects, include trailing the stop-loss.
Trailing S/L can use the pivot lows and fib levels, with the HAMAT3 keeping trader in the trend.
One of the key decisions came just ahead of the 1st Benanke testimony (4). Pair had made the 127.2 extension to 1.41158. If trader willing to risk some profit, S/L can be moved just below that 50% pullback level of 1.39490.
Thereafter, trailing S/L can be place just below pullbacks. The High would be best longer-term exit for an elongated intra-day trade.
Waiting through bounce off High of 1.40529 (see last chart), and retest. This level also supported by Moon 270-degree.
Shorter view has fib plot based on swing: Low = 1.40909 and High =1.41864. The 138.2 extension i 1.48544, and pair testing now.
EUR/CHF, after open's gap down, bounced up to the Moon 0-degree, and closed candles at the 23.6% retrace fib (High = 1.15680). Now testing low of 1.14182.
Attached is AUD/NZD. This short was one of the trades featured on CNBC's Money In Motion last Friday.
22:45 was New Zealand CPI, which was projected to increase. Figures came out higher than expected.
High = 1.30019 Low = 1.26749
138.2 = 1.25500, hit 21:15 just after week's open.
!27.2 is same level as Mars 90-degree and acting as resistance.
161.8 = 1.24728, same as next Mars level down, the Mars 0-degree (0-degree is the same as 360-degree).
We also attach a Daily chart on this pair with APF plot. We can see pair breach Nov 19th low of 1.26971.