Islander and Medici trade the European open | Page 87 | Forex Factory

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Islander and Medici trade the European open

  • #1,721
  • Jun 2, 2010 6:29pm Jun 2, 2010 6:29pm
Hi guys! You have some nice stuff here What do you think about this one?
Attached Image (click to enlarge)
Click to Enlarge Name: 6-3-2010 2-22-46 AMpoundyenbearish Gartley.png Size: 44 KB
  • #1,722
  • Jun 2, 2010 11:18pm Jun 2, 2010 11:18pm
GM - I see that I have an interesting post or two to read later.

The daily chart's getting interesting with a doji candle / pin bar yesterday and the high only a dozen pips below the March 1 low......
Attached Image (click to enlarge)
Click to Enlarge Name: jne 3 cable dly.gif Size: 12 KB
Trading Levels with WRBs
  • #1,723
  • Edited Jun 3, 2010 1:25am Jun 2, 2010 11:52pm | Edited Jun 3, 2010 1:25am
Quoting queenfx
Hi guys! You have some nice stuff here What do you think about this one?
Hello queenfx, and welcome to the thread! Nice videos on youtube. Finally I get some use for the Russian I once learnt!

As to your question, I believe the bat patterns that would provide resistance and potentially invalidate the bottom formation happened at an earlier stage, as you can see in the attached pictures.

When failing to hold price down, those levels turned from resistance to support, and the bottom was confirmed.

As Islander just pointed out, this is an interesting area, and things are a bit sluggish at the moment, but no sign of reversal down yet. Which is not to say that there may not be a dip from here, but then there would be bullish harmonic patterns forming, at least in cable with reversal around 1.45, in conjunction with support from the levels mentioned earlier.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: cable bat no2 3 june.gif Size: 28 KB
Click to Enlarge Name: sterling-yen bat 3 june.gif Size: 27 KB
  • #1,724
  • Edited 12:20am Jun 3, 2010 12:08am | Edited 12:20am
As per the pic in the last post, the 61.8% retracement of the post flash crash drop at 1.4740 seems to be what's in focus right now. So far resistance holds.

Interesting to note how attention goes back to the longer term charts once the breakout frenzy is over, and it seems like the 61.8% will hold.
  • #1,725
  • Jun 3, 2010 12:18am Jun 3, 2010 12:18am
Here's the bullish pattern mentioned earlier - in case cable heads down from here.
Attached Image (click to enlarge)
Click to Enlarge Name: cable bullish bat 3 june.gif Size: 30 KB
  • #1,726
  • Jun 3, 2010 2:03am Jun 3, 2010 2:03am
medici
as u said ...in case cable heads down
I have looked at a larger pic ...
not an expert in EW ...
just an other way of showing same waves/swings ...
but ... who knows ..
David

Quoting medici
Here's the bullish pattern mentioned earlier - in case cable heads down from here.
Attached Image (click to enlarge)
Click to Enlarge Name: 3jun ew har.jpg Size: 134 KB
  • #1,727
  • Edited 2:42am Jun 3, 2010 2:22am | Edited 2:42am
Quoting david4u
medici
as u said ...in case cable heads down
I have looked at a larger pic ...
not an expert in EW ...
just an other way of showing same waves/swings ...
but ... who knows ..
David
Hi David,

and thanks for chart. I used to use EW a lot when I traded equities. The book that opened my eyes to EW was Tony Plummer's Forecasting Fianncial Markets, from which I learned a lot about market psychology that I apply to harmonic patterns as well.

I haven't found EW as useful in fx, but your chart certainly fits the psychological criteria, and the breakout the other day had all the signs of a wave 5 exhaustion.

So maybe when the yen selling that hold up the crosses has run its course, there may be a move to the downside. TWT.
  • #1,728
  • Jun 3, 2010 3:37am Jun 3, 2010 3:37am
Hi Medici
I am looking at your GU H4 chart. As far as I read your interpretation , price failled to hold at D so the Harmonic Pattern actually failed .
I don't understand why point D was placed specifically there .
Can't point D be higher ? It looks as there is no name for every different ratio . Have you cancelled any other points higher than D1 (your D) as it exceeds 1.27 of BC ?
I can also see a possible D2 higher , between 1.61-2.61 that fits perfectly with level 1.4781 mentioned before as a key level that can become Support or Ressistence .
(Of course than D2 may not hold as it happened at D1)
Tks again

David
Attached Image (click to enlarge)
Click to Enlarge Name: 3jun h4 gu.png Size: 40 KB
  • #1,729
  • Jun 3, 2010 5:12am Jun 3, 2010 5:12am
IF ....
point C will hold on place ...
we may have a classic Gartley , 150 pips bellow from the current price ...
so long way ahead ...
TWT
Attached Image (click to enlarge)
Click to Enlarge Name: 3june gu h1 gartley cl.png Size: 41 KB
  • #1,730
  • Jun 3, 2010 5:17am Jun 3, 2010 5:17am
Quoting david4u
Hi Medici
I am looking at your GU H4 chart. As far as I read your interpretation , price failled to hold at D so the Harmonic Pattern actually failed .
I don't understand why point D was placed specifically there .
Can't point D be higher ? It looks as there is no name for every different ratio . Have you cancelled any other points higher than D1 (your D) as it exceeds 1.27 of BC ?
I can also see a possible D2 higher , between 1.61-2.61 that fits perfectly with level 1.4781 mentioned before as a key level that can become Support or Ressistence...
Wouldn't say that the harmonic pattern failed at D - it was good for about 175 pips to the downside.

D was placed there because it was the 1.272 extension of AB. Being a level that every body have on their charts, it's a likely level for take-profit orders as well as shorts outright. Thus it's likely that price will reach it and go no further without a dip to the downside.

Once past the D on my chart I wouldn't consider it a harmonic pattern level including XABC, and other Fibonacci ratios and patterns would come into play. The breakout was played on its own terms, and the extension levels to watch were posted earlier. And finally ratios of XA came into play, as the reversal was at 61.8% of XA.

As to other levels, there will of course be other resistance levels above D , and what we a trying to do is pinpoint the main ones using Fibonacci ratios. I don't know where you got 1.4781 from, but anything is possible and there are other 'classic' S/R levels that definitely play a role.


Hope that answers the question.
  • #1,731
  • Jun 3, 2010 5:20am Jun 3, 2010 5:20am
Quoting david4u
IF ....
point C will hold on place ...
we may have a classic Gartley , 150 pips bellow from the current price ...
so long way ahead ...
TWT
Same pattern as I posted earlier, except that I use 1,272 of AB to arrive at 1.4493.
  • #1,732
  • Jun 3, 2010 5:44am Jun 3, 2010 5:44am
Tks medici for your prompt answer , it helps.
1.4781 does not belong to the Harmonic pattern , it was 1st of March Low.
(See Islander's post #1722)
As a day trader , when you see on the H1 GU chart , that we may have a point C on place , would you look for a setup to enter short in the CD swing , wich is a counter trend , or would you wait paintently that price will arrive to point D , and trade with the trend .
Tks again
David
Quoting medici
Hope that answers the question.
  • #1,733
  • Edited 12:03pm Jun 3, 2010 5:58am | Edited 12:03pm
Quoting david4u
Tks medici for your prompt answer , it helps.
1.4781 does not belong to the Harmonic pattern , it was 1st of March Low.
(See Islander's post #1722)
As a day trader , when you see on the H1 GU chart , that we may have a point C on place , would you look for a setup to enter short in the CD swing , wich is a counter trend , or would you wait paintently that price will arrive to point D , and trade with the trend .
Tks again
David
David, you're welcome.

I wouldn't be thinking about possible future lows when doing my day trading. What matters is what levels are in play now and where reversals may happen or intra-day trends start. This morning I went short when 61.8% of XA held and price broke down below the 261.8% level of the breakout range at 1.4722, and I entered on first retracement to 1.4722. Closed at 61.8% but I should perhaps have been more patient...
  • #1,734
  • Jun 3, 2010 6:14am Jun 3, 2010 6:14am
Sorry medici ...
I am not on same page as you ...
What's the chart I am supposed to find those levels ? (61.8% of XA)
H4 , H1 , M5 ?
Would appreciate if u can post a chart or point for me the relevant chart and I will try to follow you from there.
Tks
David

Quoting medici
This morning I went short when 61.8% of XA held and price broke down below the 261.8% level of the breakout range at 1.4722, and I entered on first retracement to 1.4722. Close at 61.8% but I should perhaps have been more patient...
  • #1,735
  • Jun 3, 2010 6:18am Jun 3, 2010 6:18am
Quoting david4u
Sorry medici ...
I am not on same page as you ...
What's the chart I am supposed to find those levels ? (61.8% of XA)
H4 , H1 , M5 ?
Would appreciate if u can post a chart or point for me the relevant chart and I will try to follow you from there.
Tks
David
The relevant charts were posted in posts #1680, #1685 and #1723.
  • #1,736
  • Edited 1:37am Jun 4, 2010 1:00am | Edited 1:37am
I didn't trade these but find them quite instructive.

Parabolic arcs, such as the ones in Euro pairs Tuesday, almost always retrace 61.8% of their range. So if you missed out on the sharp move up, there's the opportunity to enter short on the next lower high.

The second trade is a 161.8% extension of the post-parabolic-arc retracement. Truly a high-probability trade.

Beauties, aren't they?
Attached Image(s) (click to enlarge)
Click to Enlarge Name: euro-yen parabolic arc 5 june.gif Size: 27 KB
Click to Enlarge Name: euro-yen fix extension 5 june.gif Size: 28 KB
  • #1,737
  • Jun 4, 2010 2:13am Jun 4, 2010 2:13am
Cable is keeping up the bullish momentum, with next target the 61.8% level of the push down from 1.5523, as can be seen from the 4 hour chart.

From the daily it is clear that the down-trend has completed its five wave pattern, and a three wave correction could be expected. See chart.

The shape of the three wave sequence up will determine whether the May bottom was a longer-term bottom or price will continue down below it. A harmonic pattern forming would indicate a possible five-wave journey down again.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: cable h4 5 june.jpg Size: 93 KB
Click to Enlarge Name: cable daily 5 june.jpg Size: 101 KB
  • #1,738
  • Jun 4, 2010 2:52am Jun 4, 2010 2:52am
A couple of Fibonacci cluster areas on the way up.
Attached Image (click to enlarge)
Click to Enlarge Name: cable fib clusters 5 june.jpg Size: 116 KB
  • #1,739
  • Edited 5:08am Jun 4, 2010 4:52am | Edited 5:08am
It's darkest just before dawn. I made the attached charts on Monday, indicating a possible reversal around current levels.

For now 138.2% of AB, exactly to the pip, has stopped the downward journey. If it holds a possible target to the upside would be in the 1.3200-1.3250 area.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: euro butterfly 31 may.gif Size: 31 KB
Click to Enlarge Name: euro retracement 31 may.gif Size: 28 KB
  • #1,740
  • Edited Jun 5, 2010 1:41am Jun 4, 2010 7:04am | Edited Jun 5, 2010 1:41am
Quoting medici
It's darkest just before dawn. I made the attached charts on Monday, indicating a possible reversal around current levels.

For now 138.2% of AB, exactly to the pip, has stopped the downward journey. If it holds a possible target to the upside would be in the 1.3200-1.3250 area.
Remember that the Euro downtrend started with a suprisingly strong jobs report in December. And maybe it takes a break with the suprisingly weak jobs report today.

The weakness is, even more than in the headline number, that more than 90% of the jobs created were government jobs. In addition to the obvious conclusion that the US recovery is very weak, it means that the US government is spending a lot more than it should, thereby increasing the debt situation. Which is all very dollar bearish.

So I'd like to be bold and claim that this was the bottom of the first leg of the downtrend and that the Euro is ready for a substantial correction.
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