A-B-C-D Trade - page 186
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Based on wide plot of High = July 13th 1.42811 and Low = July 18th 1.40246, we can see pair trapped in channel with upper range as the 161.8 and lower as the 138.2.
The chart on the left has PSQ9 plot and the Moon 90-degree is serving as support.
Intra-day aspect saw the 07:00 period test the high (161.8) and bounce down to the 138.2. There is a 70-pip distance between the fibs. Horizontal retrace plot has this support as its 23.6.
XAU_USD spiking up ahead of U.S. open and faces 127.2 and 138.2 levels as resistance.
Here's a 30-min chart on EUR/CHF with multiple fib plots and PSQ9.
1) Covering this week's upswing, we take Low = July 18th 1.14032 and High = July 22nd 1.18910. These are in blue dotted fibs.
2) Extension High = July 20th 22:30 1.17476 and Low = July 21st 09:30 1.16079. We did not show fibs, just labels.
3) Yellow retracement fibs are in direction of up move. Low = July 21st 09:30 1.16079 and High = July 22nd 1.18910.
We can see the 07:30 period establish the high at the 200% extension. Combination of dying euphoria over the Greece deal and profit taking for the week, pair has now retraced to the 61.8 fib (yellow). The Mars 90-degree also there (red).
Handle = Nov 13th,2005
Upper corner = Nov 29th, 2009
Lower corner = June 6th, 2010
Add AML indicator for interior fibs.
Horizontal plot: Low = June 6th, 2010 High = Oct 31, 2010
127.2 = 1.49388 hit May 1st, 2011
Trend line from top.
Plot from 127.2 to most recent = lowest dip is not shown, but price is at the 50% leve now.
Obviously the Euro did not start until 1-1-1999, but this is the de facto feed prices.
Attached is a 30-min chart of AUD/USD with PSQ9 and multiple fib plots.
1) Wide plot (white dotted fibs):
Low = June 27th 1.04172 High = June 30th 1.07402.
2) Most recent significant down swing (blue):
High = July 13th 1.07981 Low = July 18th 1.05994
3) Directional extension plot (yellow):
Low = July 18th 1.05994 High = July 20th 1.07708
***
The July 18th Low had ascending RSI(4) reading, which makes it a BAJA bullish divergence formation.
As price ratcheted up, it met resistance at the Mars 0-degree and Moon 90-degree. The blue 88.6 also there.
Taking the High established there, we can see pair made a 38.2% retrace to 1.06904. We have BAJA bullish divergence at this pivot.
The July 21st 09:00 candle was the 2nd dip and registered 17 on the RSI(4). This was the 1st candle to close below the 03:00 1st dip.
If entering here at the pullback and trader wants a trigger, the 15-min EFT signaled entry at the open of the 10:00 candle period, at price of 1.06992, and safely above pivot low 1.06930. The 38.2 fib (yellow) was 1.06904, and placement of stop-loss should be below this.
Break of High (yellow fib) occurred on July 21st 14:00, and some will enter there (breakout trade).
Pair hit the 138.2 (yellow) extension on July 21st 15:00, and probed to the Mars 90-degree which is also near the blue 127.2. Consolidation thereafter, leading into the weekend.
Just finished watching President Obama's press conference, addressing another impasse with debt ceiling negotiation, after his party submitted their plan.
The opposing party's representative advised him that he will be walking out of the talks.
The markets will all be reactionary come Sun/Mon and we'll see some spikes and whipsaw action.
Meanwhile, everyone anticipates weekend meetings. We'll try to post certain currency pairs with plots for S&R.
Once again, we’re going to feature a currency pair mentioned on Money and Motion, a CNCB production that airs every Friday at 5 p.m. Eastern Time. As with the mainstream, trades highlighted are of the position trade variety.
The AUD/CHF was highlighted for traders that expect either a debt default by the U.S. or a credit downgrade by S&P and/or other rating agencies. Traditional flight to safety is to gold, CHF, JPY, and usually USD.
Here is the link to their web site, which describes the reasoning behind this trade. Bear in mind, fundamentals are used.
News Headlines
We will make our plots, with both a wide view and a zoom-in view.
AUD/CHF with
1) Andrew’s Pitchfork plot on 4-hour:
Handle = July 8th 12:00 high .91698
Upper corner = July 22nd 08:00 high .89373
Lower corner = July 18th 00:00 low .85910
Add AML indicator for interior fibs.
2) Wide horizontal fib plot (yellow): High = Handle and Low = Lower corner.
3) Most recent extension to upside: Low = July 21st .87748 and High = July 21st .88934
The 138.2 was hit on July 22nd 08:00 and became the upper corner for the APF plot.
4) Retrace plot using Low = July 18th 00:00 low .85910 and High July 22nd .89373
5) Trend line as seen on 1-hour interval:: July 18th 01:00 low .85910 and July 21st 09:00 low .87762.
****
The attached 30-min zoom-in chart shows 3 swings with BAJA divergence, marked by yellow arrows. The times of the 2nd dips or peaks were:
The 1st BAJA divergence (bullish) on July 21st 07:30 was the bottom of a 127.2 extension down.
The 2nd BAJA divergence on July 21st 16:30 was bearish and top to a 161.8 extension.
The 3rd BAJA divergence on July 22nd 14:00 was bullish and the bottom of an ABCD FE 200. Trend line also there.
****
Friday, July 22nd saw price extend up to the 138.2 and bounce back down to the 38.2 fib. It closed the week near the 50% wide fib (yellow). The 50% of plot using Low and 138.2 as Low/High also acted as support..
Considering the events with the U.S. debt talks impasse, news which broke after the market closed, it is anticipated that there will be spikes and whipsaw action upon open of the new week and perhaps open of each session on Sunday/Monday.
There probably will be gaps at open of week with most currency pairs, as well as oil and gold. While we don’t expect Armageddon, but there should be good movement. It may come in spurts, or it may be powerful moves. We need to stay on our toes if trading it and keep the money management in tact
Obviously the inexperienced or conservative trader should stay on the sidelines during volatile open. Note that the market officially opens at 19:00 GMT Sunday, but many brokers don’t open their trade platform until a couple of hours later.
We will watch for break of trend line to the downside and plot extension fibs according to swings that develop. The wide fibs would also be respected by the market, as well as the diagonal interior fibs within the APF.
Fibo fan (not shown) from Low = July 18th .85910 and High = July 22nd .89373
This set-up and plots are not in line with Money In Motion position trade. They are awaiting a pullback to the upside before entering a SELL. The 2nd attached chart has the 4-Hour interval and their Entry (white), S/L (red), and Take-Profit (blue) labeled, along with our basic fib plot.
Attached is 4-hour AUD/CHF with the Golden_section_v3.2 indicator. We can see the top on Friday is the 100% horizontal fib. This is also the mid-point of the yellow box.
The center is the location of a pivot on July 6th. We see the spiral make its way outward from there. We have fibo fans on both side from the center.
In the edit function, we altered the default settings as follows:
1) ExtFiboLevel = true (this turns on horizontal fib levels to upside)
Now, turn it back off as we need to look at the next 2 edits with less clutter on the chart.
2) ExtLeftChannel = true
2A) ExtChannelColor = aqua (or your choice)
Fib channels will appear moving diagonally toward the upper right hand part of the chart. At this time, we do not understand how it plots.
The Friday top was a hit on the 200% fib channel. The numbering for each fib channel ratio is upside down.
The adherence to the fib channels en route up was excellent. If we manually plotted horizontal fib extension using the July 19th 08:00 high, the top was the 200% extension.
Now, let's turn that off and move to the next edit.
3) ExtRightChannel = true
This turns on the channels moving diagonally down. We drew a solid yellow line at the zero (0.0) level. This line met Friday's top. The 100% level also met the pivot low on July 17th.
Now, you can turn all 3 back on to true. We do not know when the indicator adjusted to make this plot. We assume it was done upon the Friday top.
In any event, it looks good for S&R going forward. As per our previous post, we still will need to plot horizontal fibs based on the upcoming swings.
The one thing we need to watch out for is another adjustment by the indicator, whereby we lose the current plot. The only suggestion is to manually draw trend lines to copy the channels.
In the edit function, just below the ExtRightChannel, is ExtSave. We have turned it on to see if this will lock in the plot. We'll run a duplicate chart for comparison.
USD/CHF 4-Hour Chart
Andrew's Pitchfork (APF) Plot:
Handle = June 15th high .85502
Upper corner = July 1st .85251
Lower corner = June 28th low .82744
Add AML indicator for interior fibs.
ABC Plot Using Fib Expansion tool:
A = same as Handle
B = same as Lower corner
C = Same as Upper corner
FE 161.8 = .80789 (hit July 13th and at lower fork line)
Double bottom 2nd hit on July 17th. Bounced up to FE 100 on July 19th, which is also area of Point B and APF's Upper_ML2
Thereafter pairs has been trapped between the FE 100 and FE 127.2.
The white dotted fibs are from plot A-B, which is what we refer to as the "regular extension". The fib extension tool is used to make plot.
Drop down to the 1-hour or 30-min interval on the chart, and you'll see more BAJA divergence formations,
Here's a continuance of our last chart on the CFD for gold, XAU_USD. The 30-min chart had MurreyMath1.0 (MML), Fibo fan, wide fib plot, and intra-day fib extension plot.
We left off when the 200% extension (also MML 5/8th) was hit during the 11:00 period on Friday. The High for the extension plot needs to be moved here to the 200%, price of 1597.90, and is labeled H2.The fibs are in red.
A strong thrust up at 12:30 broke the High (H2) and hit the 138.2 extension of 1603.46 in the same candle period. We marked this with the 1st arrow.
A small bounce occurred here which was limited due to strength of up move. Price proceeded to hit the 61.8 Fibo fan ray (1605..07) during the next 13:00 candle period. MML 7/8th also there. Marked by the 2nd arrow.
Since that level is also the High from July 21st (marked by BAJA), a bounce was reasonable to assume, and it did occur, down to 1599.90.
The 161.8 was hit during the 14:00 candle period (3rd arrow). We can also see the declining RSI(4) readings, denoting BAJA divergence. We saw some profit taking, but end-of-week requires caution and quick exit accordingly.
If the 15-min EFT trigger was utilized, entry effected at open of 15:00 period, price of 1605.45. This made the opportunity a 2.00 risk (20 pips).
Trading down to the red 127.2 fib of 1601.86 (conservative) would produce about 3.30 (33 pips) net profit. R/R = 1.65:1.
Retrace plot using pivot from 13:45 low 1599.90 had levels:
61.8 = 1602.65
78.8 = 1601.44
100% = 1599.90
Retracement dropped just about to the H2, which should be the maximum to any thinking due to end-of-week. The 16:00 15-min candle closed near the 100% fib. Take-profit (TP) at the 100% would have produced about 5.00 (50 pips) and R/R of 2.5;1.