I had the USD/JPY, USD/CHF, EUR/USD and EUR/JPY for some good pips as they all closed their gaps from the Sunday open. But the GBP/JPY has been a stubborn little guy, and made me yell a Homer, "Daow!" this morning as it plunged to the depth of bear land. There looks to be a correction forming for some upside, but how much? 38% fib? 61% fib? Will it close the gap? Anyone else in the same boat?
- #2
- Oct 22, 2007 8:07pm Oct 22, 2007 8:07pm
- | Joined May 2006 | Status: Trade Towards the 5 ema | 2,881 Posts
- #4
- Oct 22, 2007 8:48pm Oct 22, 2007 8:48pm
- | Joined Nov 2006 | Status: Trader | 2,021 Posts
It looks like it made a five wave decline from about 240.66 to last night's low at around 230.28. The 38% fib is at 234.23 so I'm guessing it will find resistance there and form wave A of the correction. Hopefully I'm right so that wave C in the correction will get to 61% fib at 236.64 which is well above the gap. From there, GBP/JPY should fall hard as I see it surpassing last month's low. I took a big risk going against the larger trend to close this gap so it's stressing me out.
I wish I could post a chart, but I'm using GFT and I don't know how to do it.
I hope to see your chart on your EW count. Cause mine is labelled differently and I could be wrong.
Based on my count , we have seen the top of Big Wave B up and sub wave c up @ 240.66 which was the last HIGH. and this move down I am more inclined to believe is the development of the Big wave 3 down.
This issue on whether price will close the GAP or NOT.... is a bit of a wonder for most still.
On my part, if I base it on the EW Count I made and the guideline I use, then I would say that the wave 4 rule or projection states that it will end near the termination point of sub wave 4 of prtevious wave 3 and this is near the 50% retracement of wave 3.
Another corrective wave projection I use is the relationship between wave c and wave a where c is potentially related to wave a by the following %s 61.8 100 and 161.8 where c can be 61.8%, 100% or 161.8% of wave a.
And the maximum of 161.8% is in the vicinity level of the 50% retracement and near the termination point of sub wave 4 of previous wave 3. So 2 points there for validation.
FE 100.0 is a bit far from termination of subwave 4 of previous wave 3 so it is very conservative target. So best to watch the wave 5 impulse development of the wave 5 up to end the wave c of this wave 4.
While the other rule where wave 4 maximum must not overlap with end of wave 1 @ 236.64 is already too high for my last guideline where wave c must not exceed 161.8% of wave a, otherwise the 3 wave movement instead of being an ABC becomes a 123 going for the 45 wave count.
In other words, it will be an impulse wave UP instead of just a corrective wave up and that (impulse) further means that the longer term move is Bullish.
But in this case, if Price does not close the GAP , then we are back to the down trend.
I beieve others have found an occassion when a GAP was not closed. So it is still possible that this may not close.
I have my charts to show this in my thread. Let me know if I need to post it here.
EG
- #5
- Oct 22, 2007 10:01pm Oct 22, 2007 10:01pm
- | Joined May 2006 | Status: Trade Towards the 5 ema | 2,881 Posts
- #8
- Oct 23, 2007 7:03am Oct 23, 2007 7:03am
- | Joined Oct 2007 | Status: Trader | 1,236 Posts
"Timing Is Everything. Really I Swear It Is"
- #10
- Oct 23, 2007 8:30am Oct 23, 2007 8:30am
- | Joined Nov 2006 | Status: Trader | 2,021 Posts
Hey Todd.
I must admit that my view about the GAp not being filled was wrong.
Even my wave counts I had to revise several times.
My apologies to Tiki if my wave views irked him.
This is the reason why I am trying to test and study other systems together with EW so I can better see or anticipate price turns potentials.
EG
I must admit that my view about the GAp not being filled was wrong.
Even my wave counts I had to revise several times.
My apologies to Tiki if my wave views irked him.
This is the reason why I am trying to test and study other systems together with EW so I can better see or anticipate price turns potentials.
EG
- #11
- Oct 23, 2007 9:06am Oct 23, 2007 9:06am
- | Joined Nov 2006 | Status: Trader | 2,021 Posts
El Grande, thank you for your very thorough post. You're much more an advanced and sophisticated analyst than I am so I'm sure your charts are more accurate than mine. I use EW loosely in combination with the MACD, Stoch. Osc. and MAs. GFT's software doesn't allow you to cut and paste a chart. Bummer. I did look at your postings and it looks like you're using much smaller time frames than I was. I know this is tough without a visible chart, but let me try to break down what I see and you can tell me where I'm wrong.
On the 4hr chart:
- 5 wave decline from 240.66 - 230.28
- 1 wave 235.82
- 2 wave 238.81 (exactly at 61.8% fib)
- 3 wave 232.24
- 4 wave 234.50
- 5 wave 230.28
Seeing as that I'm long in trying to fill the gap, I'm looking for an A-B-C correction of the previously mentioned 5 wave at:
- A correction 234.24 at 38% fib.
- C correction 236.70 at 61.8% fib.
Even if the correction from 240.66 to 230.28 only goes to 50% fib (235.48) it will still close the gap.
I also feel that the 5 wave I described above is a trend reversal to the downside, and the further strong decline will continue in the 38% - 61.8% fib. range (234.24 - 236.70). I may have my targets off, but I feel the long term trend is still down now, and I'm playing with fire going against the trend to fill this gap. Hence the reason I'm seeking other opinions on the upside potential to the GBP/JPY filling that gap in the scenario I proposed.
But your wave 5 would now be my wave 3 while the retracement that followed it going up to 235.64 will be my wave 4
Then targetting 226.19 at most for my wave 5 till 224.35.
the first sub wave of big wave C down must over balance the previous sub wave c in the Big wave B.
of course that is assuming that my 4 hour chart labelling is correct with the flat ABC x Triangle sub wave b inside Big wave B up.
EG
- #13
- Oct 24, 2007 1:32am Oct 24, 2007 1:32am
- | Joined Nov 2006 | Status: Trader | 2,021 Posts
Hey EG,
I was actually wondering myself if that correction I claimed was actually a leg four seeing as that it didn't overlap wave 1, even though it was by only 3 measely pips. That might be a just a little too close for comfort, but still a possibility seeing as that they wave 1 and 4 don't overlap.
Now if we do say that 238.80/230.28 is wave 3, and 235.80 is wave 4, we may have a problem if our target is 226.19 because this would mean that wave 5 would be longer than wave 3:
Wave 3 = 238.80 - 230.28 has a length of 852 pips
Wave 5 = 235.80 - 226.19 has a length of 961 pips
So we either need to shorten our target for wave 5, or adjust some of our labels. Let me know if I missed something and what your opinion is if you get a chance.
Side note: the USD/JPY, EUR/JPY, GBP/USD and EUR/USD are all showing similar wave counts and signs of another major decline that I feel will drop below August's lows. I'm short all these pairs now, with stops at recent major highs. As for the GBP/JPY, it should drop well below August's low of 219.29. The Dow and S&P will follow with major declines. Basically, I wouldn't be long anything right now other than the USD/CHF, and even that is suspect. Most of these pairs have overbought stochastics in 4hr and above charts with them starting to cross down, and bearish divergence on the RSI. All signals of a trend reversal. Then when you add Elliot Waves and fibonnacci, you have a strong signal for trend change to down. The medium term trend is down, and it's going to be strong, hard and fast.
Just thought I'd add that.
Regards,
Todd
I do not think there is a problem with wave 5 being longer than Wave 3 for as long as wave 3 is not the shortest between waves 1, 3, and 5.
In this case, wave 1 is the shortest among the 3.
So with wave 5 having the potential to be the longest among the 3, FE 261.8 @ 226.19 is the minimum target followed by FE 300.0 @ 224.350 then even FE 425.0 @ 218.34 is possible.
Now would that not be just fitting in the picture?
I know many have been hollering that this pair is going to FALL really very Low. Now that we have waves 0, 1, 2 and 3 and already a possible 4, I will be conservative in seeing the farthest move down by this pair and that is less than 100 pips lower than previous low of 219.31 at wave Big A end.
I will be posting charts on my thread so as not to clutter yours.
EG