Clemmo's Trading Odyssey

Note the paradox that if EU goes up soon it favors the bearish path, and vice versa.

No later than 03.26.

Target achieved. Ahead of schedule, which raises a few questions.

Expecting a pullback from this level short-term, which is to say within 20 days, back to 1391, but whether that happens before or after price reaches 1.1485 I would give even odds.

Gold target - 1339.

Note the homogeneity of angles for price movement. It rises at 50 or 65 degrees and falls at 60 or 18. Of course this will change once the overall trend goes back to bearish and when that will be I'd prefer not to say (guess).

What I love about these bands:

1. They contain 99% + of the price data - meaning there are very few 'overhangs' or 'spikes' pushing through - I believe they enclose at least 3 standard deviations but possibly better.
2. Unparalleled homoskedasticity, which is fancy math talk for avoiding discontinuities (heterogeneous variance) which is fancy talk for 'silky smooth'.
3. The above doesn't come at the expense of (bounded) stationarity.
4. Band to band contact seems to reveal an underlying relationship of angles whose nature (stochastic?) is begging to be explored. However knowing it's one or the other allows for a best-case/worst-case forecasting.
5. They can be extrapolated into the future, much more than the typical half-span of a Millard channel for example.

Euro target achieved and now expecting downward movement to resume, and to take out the previous (Friday) swing at least.

New price and time target for EU.

EU still on target, low expected today or tomorrow.

EU target achieved.

Obviously my gold forecast was off. Accuracy so far 3/4 = 75%.
Luckily I wasn't too committed to my target and I reversed quickly and profited from the big drop. That's probably more valuable than any forecast ever will be - the ability to remain flexible and noncommittal and to react quickly to reality.

The market isn't a natural phenomena - it's self-reflexive and can change its mind. So should you.

We can see that on the D1 timeframe the gold price was already near the top of its range, so this drop wasn't completely out of the ordinary. If price drops to the bottom of the range again it would be around 1170.

However looking at DXY we can see that the pain might be short-lived as the dollar may top out under 98 next week.

Short-term gold may be at a low and will likely retrace back to mid-band...but it will also likely consolidate and take its time doing so.


So, gold is probably not going to be very interesting for the next few days and I'll pick something else to test this forecasting method.

GBPNZD target due before or shortly after close today.

Price is in a holding pattern and the window for this trade is closing so I think I'll be satisfied with 1.94 although it may continue to rise today (or it may not). The market is clearly waiting for some news and is not exactly optimistic about avoiding Brexit altogether.

Expecting a steep decline in GBPNZD if we can trust the PJ methods, and gold is rising faster than expected but it may not last long. Fresh charts coming as soon as I can generate them.

Yeah, too busy to make charts but I suspect gold is near a local high but may not drop much until Thurs/Fri. and pound-kiwi is starting its slide. Although it's going down all month my first target is 1.926 reached within days, <1wk.

Ok here's a gold chart. PJ expects it to range in this 1300-1311 zone for most of the week and start dropping near the end of this week/start of next week. Price target 1280. If it exceeds 1320 that's long-term bullish.

GN is now in its sixth day of a tight range and showing no sign of cracking. This is precisely because I am in the trade. For everyone else trading it with me, I apologize profusely.

The recent historical record for a ranging period is 10 days so we might have at least 4 more days to wait. Of course if you're amenable to making many trades in a day then this kind of market is ideal and probably makes cumulatively more than a single trend trade anyway.

If price never does decline but instead rises above the range this would put some pressure on the theory and be unprecedented in recent history. Of course something like Brexit might do that.

Gold acting as expected and the pound-kiwi remains tenaciously pugnacious, but refuses, so far, to exceed its band, and this gives me a chance to expound on some theory.

Flat ranges are usually considered 'resting' periods where the market accumulates shares or distributes them prior to a selloff. This view hasn't changed at all since Wyckoff and there hasn't been much reason to change it. However I see ranges as areas where the natural cycle of price action has been truncated or 'cut off' by the boundary of the channel in which price naturally travels. For a trend trader these ranges are frustrating or useless but for me they are

1. A good chance to take some frequent trades with little risk of getting caught flat-footed by a resuming trend.
2. A demarcation of where the band edges will occur in the future.

This all gives me some useful information - to wit,

1. The parent band on H1 has been narrowing over recent days
2. The dominant cycle which I had set around 7 days in line with recent cycles is now at least 10 days and it may enlarge further as tension builds up
3. The selloff that I have been anticipating will be larger than expected and occur over a longer period of time (3-4 days instead of 1-2) but the bearishness will also likely confine itself to a narrower band and that band may be rising not falling as I have it now.

Of course it's important to remain flexible and all this will be invalidated if price exceeds the container band edges which I have at a maximum of 1.96 now. This picture also will not be expected to hold past the end of the month when the larger 5.5 week cycle begins to swing upward.

Gold price just bounced back sharply from 1282.5 and that might be it for a while but if you're more patient than I there is surely some more downside. Still, that's close enough to my 1280 target (within 1% of total price and 8% of tradeable range) so I'll count that as a win. 4/5 = 80%.

I'm not sure what to say about my kiwi trade. It's now clearly taking the piss and is just messing with everyone. I don't for a minute believe there are any fundamental reasons to remain optimistic about the pound, and while the RBNZ is softening its stance, the economy of NZ has a brighter future than Britain's, quite simply.

Here's a new chart to try to explain what's happening. If the 13 day cycle failed to assert itself (much) then the way the 7 day cycles hung together in the recent past, I still expect a big downchannel move but it could be delayed for a few more days and it might be preceded by a modest rise back to the peak level of Mar.27.

It's not uncommon for 13 day cycles to have ~4 days of separation between them. The swap on the short side of this pair is not terrible so I'll hold for 4 more days mostly because I'm curious to see just how this plays out. This would be the most enduring horizontal trend in this pair in recent memory. It's too long to be a 'rest/pause' in a longer trend, I'm sure of that.