Circular Trendlines

As mentioned earlier this morning, the short setups in the range of 3080-3120 are a bit risky trades to take. At the end of today after price has had time to ground itself we can see that it was indeed a bit risky to take short trades.

Because of the number of circles of support and resistance in this area, at times it becomes increasingly difficult to say exactly which circles is price targeting its movement.

Right now the blue circle has been providing support and if situation progresses along the boundaries of the blue circle, we will see the dotted black circle being broken followed by a break of the pink bubble at top.

This will put us back in bullish territory

If the blue circle gets broken, then we will dive to 3000 - 3020 level.

H8

It has been mentioned several times in the past in regards to the black circle and the possibility that the first attempt at penetration through this circle will not be successfull and will be rejected.

The rejection has happened, and due to the bounce from 2974 which was very close to the forecasted region yesterday of 2950:

http://www.forexfactory.com/showthre...18#post5387418

We can conclude that there would not be more lows yet to come.

Instead the bigger picture gives us a projection till 3600/3700 levels.

We have 2 scenarios at the moment:

In the first scenario we will have a pole break of the black circle. This pole break compared to the previous one will travel quite a bit of distance. it will at least travel 1/4 to 1/3 of the vertical diameter of the black circle. This projection will be roughly around 3600/3700 levels, and it depends on how the angle of ascend will look like. Right now if it continues to go up without hesitation it will be around 3680 that we will have a reaction downwards. The green circle will be the resistance zone(s).

In the second scenario, we will be rangebound. That means we shoot up to the pole of the black circle, and then we will be stuck between the black circle and the more solid blue circle. This would create a region of congestions, with a desire to go further up. Its a wipsaw environment where 3300 and 2900 will be visited a number of times, and there would be numerous false breaks at the boundaries fo the 2 circles, but what we will be looking in this case is a desire for motion to hold itself INSIDE the black circle. If this phenomenon happens, then be quite alarmed about the possibility of 3700 be surpassed and we will get close to 3900.

If on the other hand the holding on into the INSIDE perimeter of the black circle is not solid and it keeps slipping all the time, then on one of these slips off the INSIDE of the black circle we will have a severe drop that will clear 2600 and go further down towards 2200.

In both cases we will drop to 2200 in the long run, its a matter of which high will be the one.

If you are long, you should be fine till 3200/3250.

If you are short, then on the possibility of a small reaction at the pole of the black circle you could come at break even. Its a matter of how much stoploss you want to give yourself.

Among the many possibilities that can happen, it is important that one can comfortably switch stances from bearish to bullish on the drop of a hat, and not panic quickly to what could have happened and didnt. To do this one needs to have as much possibilities that are plausible with the long term outcome on each of them.

In the previous post it was mentioned that 2 possibilities could exists, one causing motion to maintain itself inside the black circle and one that will shoot upwards breaking it substantially

Looking at the structure now, be alarmed about a possible expanding environment that can present itself in the weeks to come. The trendlines are shown here, and in the case of a expanding environment, the movement from 2970 upwards will be a 3 Sectional move, which will falsly break 3350/3400 zone, and then drop downwards.

So far we are not even in the making of the first section of this move, but if more time has passed since the last drop from 3300 to 2970 and we are still not at 3400, then chances are that the expanding environment will be the one that will be the eventual outcome.

It all depends on how fast the upper trendline will be reached.

Less time = solid break of 3400 towards 3600

More Time = Expanding Triangle

Here is a update, for whatever purpose that one can use it

Open ended question yet to be answered...

Feb 21 is the new moon

Hello brother
Sorry for late reply forgive me was very busy and as u can see PA mess with traders view not easy
Any way
I agree with u and depends on my time we got 10 trading days to reach the top "end of this month 29 FEB"

my top not agree with urs any how looking forward to see weekly close above 31 that will make me feel safe for my long.

The first attempt at maintaining a bullish scenario is to rise up to the inside of the red circle. if PA can do that, then most probably we have satisfied the requirement of hitting the pole of the black circle on H8 chart:

http://www.forexfactory.com/showthre...28#post5392328

After that to maintain bullishness ,motion will probably either use the inside perimeter of the blue or red circle to go further up. From the looks of this thrust, it seems that 3300 should be reached quite fast. Slight reaction will be observed when motion reaches the red circle, but not now. its going through the blue circle with little hesitation

We are going to have quite a powerfull break to the upside to at least 3280, maybe enve 3320 today. But thats the zone that we are heading towards before any slowdown happens.

As its evident in the diagram, the blue circle is providing quite a powerfull support, and motion is heading towards the center of that circle.

If hesitation is not observed at the center, we will have further movements upwards, but at this point in time lets keep our eyes on the highs of 3200

3160 will be the interim support

Here is a new update, still a buy...

When I look at your charts, I feel like I'm going in circles


I'll be keen on understanding how this works - do you have a link where I could read this?

The only closest thing I have found to this is using fibonacci circles, but I havent seen a book on it, and the material that I have presented is purely based on my own observation since 2009 when I was trying to find areas of support and resistance along straight lines, and when trend was breaking them. I kept thinking that the trend is changing until I found that its not, and its landing on a circle.

I had seen that when a trend changes you usually have a angle shift, if you draw a straight line, but once I connected them with a curve, then it became really interesting.

Here is few observation...

On this chart the upper circle in blue is turning its curvature in such a way where motion seems to have only 1 push upwards toward 3320 and that would turn the blue circle into a "Energy Circle", which at that point it would imply some sort of a reaction downwards.

On the other hand, if price action falls on either of the red bands, it has more chances to be able to go higher than 3320 towards 3400 region.

If the red bands get broken, then its better to stay out for a while and see what is the intention of the movement.

Overall the impression from all time frames is a probable thrust to 3420 region and then a rebound. The upward thrust is taking too much time to begin with and its showing a sense of insecurity to proceed higher up. Here are the details:

H4
The blue circle will encompass much of the action that is going to happen in the next few days, either price action will complete a perimeter to perimeter move, or continue hanging around the center of this blue circle. The more that price action stay around the center, the stronger the center of the circle becomes as a point of resistance. If this happens then we probably will be dipping to 3050 at the bottom of the blue circle (ie a trendline shift) and then move up from there. The momentum generated through this action will be a stronger force to go upwards towards 3600

H1
As long as we hold tight inside the red circle, motion will continue to go upwards and reach 3430 region. This could be by maintaining contact with the inside region of the red circle, or it could be a gradual rise along the straight black trendlines shown. in either case 3200 should not be breached on this time frame. If it is breached then we will dip to the midst of 3000 again.

H1
Although more time has been spent within the 3200-3260 region, but the tendency of this pair to avoid a drop below the red circle is increasing, which means we will either have a strong break above the blue line or use the combination of blue line / inside of the red circle for upward movement

Trend is still bullish, and as the diagram shows, there has been numerous attempts on the pole of the black circle, and I wouldnt be surprised, even if we hit 3207 or a false break that could end up at 3198.

The pole of the black circle is showing strong support, it will probably have another spike towards it, followed by a strong rebound

Here is the view...

Overall the break on the H4 was not very solid, which again introduces the element of doubt to whether there is true intention on price action to go higher towards 3500/3600 level.

Here is the view

Zones for behavioural change are shown ....

I am going to post a technique that I used a long time ago using RSI, that might be helpfull to get good entries on trades, you have to use a image editor to draw the circles, since I havent found a software that can draw circles on the RSI.

Will post the M5 chart soon for lower time frame confirmation

Here is the M5 view...