A-B-C-D Trade - page 205
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AS the U.S. session is in their virtual lunch period, here is the continuance of the same split-screen charts.
Left chart 15-min with session colors shows triple touch at bottom and bounce up off that 161.8. The retrace up went to the blue 38.2, which is also the 61.8 retrace from the Asian High.
A whip saw occurred due to negative U.S. Jobless Claims at 12:30. Price hit bottom and shor back up to the European High. This is a good example of why traders like to stay out on impact-data, unless they specialize in "trading the news".
On the right, we see the GannBoxx_144 continue to provide S&R. This chart also employs the RSI divergence indicator. We had a signal on previous pullback at initial hit to the 161.8 during 09:00 hour.
The latest signal is a reverse (or hidden) divergence. If we look at the left chart, we can see that 2nd peak at the blue 23.6 fib price of 1733, and time of U.S. data.
The diagonal Gann line 1/2angle4 provided nice support at bottom.
Mr. Blanchflower reminds us that Friday's speech by FED chief Bernanke is not necessarily connected to a formal FED meeting. This event is a scheduled summit. However, he may make hints at possible easing or otherwise.
The attached is EUR/USD 1-hour with session colors.
Wide fib plot (black):
Low = Aug 19th 07:00 1.42578 High = Aug 19th 13:00 1.43928 (European High/Low)
After a 50% pullback to 1.43551 level on Aug 22nd, and subsequent revisit same day, pair made a 127.2 extension to the upside on the 23rd.
We plot a trend line (TL) using that top of 1.44989 and Aug 24th 14:00 high of 1.44803.
Today's European session had a spike down described by some as a "Flash Crash" in the stock market. We'll expand on that later.Meanwhile, the intra-day plot (blue):
High = Aug 24th 14:00 of 1.44803 Low = Aug 24th 15:00 1.43879
Retest of low thwarted during early Asian. Reversal up met TL early European, where 88.6 blue retrace fib resides.
Whipsaw at 13:00 period while U.S. data released. The 161.8 extension hit during 14:00, with nice bounce up of 55 pips thus far. This level is also black 38.2% fib.
This is continuance of the 30-min EUR/USD chart with PSQ9 and lime green Sunday range. It utilizes a more recent wide fib plot (yellow) based on the high/low of Aug 23rd.
The blue 50% fib has been good support all week, just above the Sunday High. Fibo fan's 88.6 ray caught 08:00 high, just below the Moon 90-degree. An arrow points to the 12:30 U.S. data release.
The next candle (13:00) whipsawed and established the 2nd peak of BAJA bearish divergence. The RSI divergence indicator DPTRSI caught it properly.
Price plunged through Sunday range and hit the wide plot's 127.2 extension to the downside. Fibo fan's 50% ray right there.
Here is the CFD that tends to mimic the German DAX Futures, 30-min time-frame. We marked the High = Aug 17th 6015 and Low = Aug 19th 5341.
Pullback to upside was choppy but methodical, landing at the 61.8 area of 5758 on Aug 25th 07:00.
Price took a dive at the 13:30 candle period, with the 14:00 being a whipsaw, long-legged doji.
Rumors of Germany enforcing a short-selling ban may have spooked traders. France and other European countries have implemented or extended this type of ban. The German authorities have since denied any action to this effect. Another rumor was a possible credit downgrade, which has been denied by Moody's, S&P, and Fitch.
The spike down coincided with EUR/USD price action, although price recovery on that pair was not as immediate.
Some of the jitters may also be attributed to the upcoming Bernanke speech. More and more opinions lean toward the FED not taking immediate easing.
FED verbiage/action effects the Euro Zone due to its financial crisis with peripheral members.
Attached is CFD SPX500, which tends to mimic the S&P 500 Futures. Applying the GannBox_144 indicator, we use the May 2nd high price of 1375.90 as start point, dragging arrow there.
Prices (height) = 3600
Times (width) = 360
Red 1/1angle0 line separates up and down trend. Fib plot (not shown):
High = Aug 17th 1208.10 Low = Aug 21st 1114.00
Price retraced to the 78.6 fib of 1188, hitting the blue 72 horizontal line of the GannBox which denotes 50% level.
This was a set-up for a short, and price has since declined to 1155, representing about +35.00 gross gain.
Basis entry SELL filling at 1184 (fast market) and S/L 1192, Risk = 8.00
Trading down to the 38.2 retrace fib (Plot's Low = 1114.00) of 1161 + spread & cushion = 1163,
made this Reward = 23.00
R/R Ratio = 2.9:1
***
QTA indicator at bottom is custom version of standard found on MT4 called the fib time zones tool. Some instructions can be found in the Gann is the Mann thread.
To invoke some thought, try repositioning the 2 plots to:
Low-Low = Mar 16th - June 16th
High-High = May 2nd - July 8th
Those are the most recent set of peaks and dips.
Continuance of 1-hour XAU_USD GannBox_144.
Labels identify ABC swings with Point A at Aug 22nd high 1912.32 start of GannBox, and Point B near horizontal blue 36 that represents 1/4th level. Swing C at Aug 24th 02:00 high 1854.30.
Hourly candles at bottom closed at the FE 161.8 and diagonal blue 1/2angle4.
As traders hedge and brace for the Bernanke speech later today, gold has risen back up to the yellow 1/3rd level of $1792.
To get more horizontal S&R, plot fibs:
From top to bottom, from Swing C to bottom, or top to Aug 24th 18:00 pivot low of 1748.78. The last option will have its 127.2 as bottom.
Mouse over GannBox lines to see names of each line. We have found that height (and width) settings for box should be multiples of 360, for better results. This plot utilizes 36000 for height.
We almost always leave width at 360. Height needs to be adjusted until discernible compliance with S&R is realized. Start price needs to be a significant high or low.
No hints of forthcoming easing by FED Chief Mr. Bernanke, at 14:00 GMT. He made a cluster of assessments that we agree with. Excerpts via bloomberg:
"Repeated his call for Congress to adopt a “credible plan for reducing future deficits over the longer term” without harming U.S. growth in the near term. The FED can not do it alone."
"He also said that the “extraordinarily high level of long- term unemployment” adds urgency to the need to boost job growth. At the same time, the Fed can’t do it alone..."
Mr. Bernanke seemed to realize the potential to set-up a jump in inflation in the long-term horizon, with too much aggression with bond buying programs.
That said, opinions are that one of the remaining options left in the FED's tool kit is to drive down long-term bond rates and increasing short-term rates.
This reduces the yield curve, and is dubbed "Operation Twist" for the popular dance of the 1960's, which was the last time the U.S. used this strategy.
Strategists are stating that it was effective back then and will not be this time if invoked. The sultry Maryam Nemazee (talent not analyst) also described QE2 as impotent based on results.
Tomorrow, ECB Charmian Mr. Trichet speaks, and many think he may hint to lowering its interest rate at next interval. This seems to be an admission that their rate hikes were mistakes (killing PIIGS even more).
***
12:30 = U.S. GDP 2nd Quarter Price Index annualized rate increasing a tick to 2.3%.
12:30 = U.S. GDP 2nd Quarter annualized rate 1%, below projection.
12:30 = U.S. Personal consumption also up.
13:55 = University of Michigan Confidence down a tick, below projections.
***
EUR/USD had 100-pip+ whipsaw 14:00 and 15:00 candles. Forex traders are used to this, while it kind of freaks out the stock guys, as witnessed by the gasps pointing to the DAX yesterday.
Looking at the attached continuance of the 1-hour chart with PSQ9 and Sunday Range, we saw:
14:00 spike down revisit the yellow 127.2 support and
15:00 candle bounced back up to the top occupied by the 88.6 fibo fan ray, Mars and Moon 90-degree, yellow 23.6 fib, blue 78.6 fib.
Correction:
"Strategists are stating that it was effective back then and will not be this time if invoked."
Should read:
"Strategists are stating that it was NOT effective back then..."
Attached is 30-min XAU_USD with session colors. Fib plot used Aug 25th high/low.
The labels point to spike candles due to U.S. data and Bernanke speech.
Price creeping back up likely due to not only buyers on dips (bulls), but impending Hurricane Irene, which is scheduled to hit New York.
So far, the plot's 138.2 has held as resistance since early European.
The possibility of ECB Chairman Trichet dropping a major hint at easing (tomorrow) might be a major reason for gold levels being capped today.
A reduction in their interest rate would bring EUR/USD down. At least for the short term reaction, XAU_USD would follow.
If the hint materializes, there should be a gap at Sunday's open across many instruments.
As weekend approaches, EUR/USD broke resistance and hit round number 1.4500. Lurking bounce traders saw bounce of 30 gross pips.
That top also was location of yellow 0% fib, blue 78.6% fib, Moon 90-degree. Using today's European high/low (last significant swing) as plot, the top was also the 138.2 extension fib of 1.44985.
Split screen has left chart as a 15-min, where we can see a doji candle at the 16:30 period, that was the hit to 1.4500.
Some bounce traders risk 10-15 pips on these set-ups. Therefore, the Reward/Risk ratios are usually good.
The chart on the left has all of the other resistance levels. The reason the bounce concluded at the spot it did was the yellow 23.6% fib acted as support.
The move up to the top was strong and a pivot can only be seen on the 5-min chart, at 15:25. Plotting retracement using that as the Low resulted in the 38.2 = 1.44667, just about where bounce halted.