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Help Me Establish The GbpUsd After Dinner Club 40 replies

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  • #21,041
  • Mar 12, 2016 11:54pm Mar 12, 2016 11:54pm
Quoting roughtrader
do we have bearish divergence? yes we do! a big move is coming {image}

Once I was a trader who relayed a lot of momentum. But every once in a while I got my fingers burned badly, because divergences can stay in place much longer than any trader can stay solvent. Other times, the divergences simply disappeared while price went ahead.

Oh yes, if you are lucky, you can make a killing on playing a divergence. But one has to admit: one needs a bit of luck.

I would not recommend to take a trade based solely on divergence. All in all your chance to be right is around 50:50, best case case roughly 60:40


JMHO
  • #21,042
  • Mar 13, 2016 12:10am Mar 13, 2016 12:10am
Quoting Dr.Phoenix
{quote} From now on the analysis is invalid. Rethinking... Best D.P. P.S. Need Oil Analysis

Hi Friends,

the big picture for Oil is open to multiple interpretations, as can be seen below.

As you can see. at this point we are not able to judge, where the orange B-wave ends

When the orange B-wave has not yet ended, we are in for a years long wide swinging sideways pattern

Attached Image (click to enlarge)
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Let us look now at the first swing down below the first orange "B?":

this move can be counted as either impulsive or corrective. When counted impulsively, it is 1-2(ABC-flat)-3-4-5


Let us look now at the first swing below the second orange "B?":

this move seems to be clearly impulsive


Note: although the chart is on weekly TF, I do also look at the wave structure on lower TF for confirmation of the view
  • #21,043
  • Mar 13, 2016 1:35am Mar 13, 2016 1:35am
Quoting infinitus
{quote} Hi Friends, the big picture for Oil is open to multiple interpretations, as can be seen below. As you can see. at this point we are not able to judge, where the orange B-wave ends When the orange B-wave has not yet ended, we are in for a years long wide swinging sideways pattern {image} Let us look now at the first swing down below the first orange "B?": this move can be counted as either impulsive or corrective. When counted impulsively, it is 1-2(ABC-flat)-3-4-5 Let us look now at the first swing below the second orange "B?": this move...

so what can we make out of this all?

well, trying to find the most probable scenario:


for me it looks like this at the moment:


first look at the PPO (percentage price oscillator) below the chart. The PPO is the tool of choice, when you have exceptional wide swings, because it uses an algorithm that takes care for exponential movements.

There you can see, that the orange wave A produced more momentum than the following swings down. Therefore I do believe, that one of the more probable outcomes the following count is, where we are in a complex wave orange B. In this orange B we are in the red wave B down.

Maybe, in foreseeable future, we also might be in an orange or red ABCDE triangle, which could last for a decade(s) in case of orange, or years in case of red (with wide swings). But that would be a story for another time.

In my shown scenario, the big question at the moment is, if we had reached the bottom already, or if we have to see one more swing down, before a major move up starts.

More to this topic in my next message.


Here the weekly chart:

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  • #21,044
  • Mar 13, 2016 3:05am Mar 13, 2016 3:05am
Quoting Dr.Phoenix
{quote} AndexQ, there is alternative view on Oil the author says that it is early for us to be bullish yet. He says that 42,23 is the main point and needs breaking through before becoming bullish. Best D.P. Source - https://ru.tradingview.com/chart/CB1...nty-istiny-w1/ {image}
but volume reading doesn't support his view on that chart..

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  • #21,045
  • Mar 13, 2016 3:09am Mar 13, 2016 3:09am
Quoting infinitus
{quote} so what can we make out of this all? well, trying to find the most probable scenario: for me it looks like this at the moment: first look at the PPO (percentage price oscillator) below the chart. The PPO is the tool of choice, when you have exceptional wide swings, because it uses an algorithm that takes care for exponential movements. There you can see, that the orange wave A produced more momentum than the following swings down. Therefore I do believe, that one of the more probable outcomes the following count is, where we are in a complex...

when we look at the swings below the last tomato-red wave 4, we can see, that the proposed green wave 1 is equal green wave 3. Well, we have two options here:

A) green wave 1 and 3 are a wave A and C of a zigzag and may belong to the tomato-red wave 4

B) green wave 1 and 3 may be part of an ending diagonal. The recent wave up is the wave 4 of this ending diagonal. The wave 4 reaches the territory of green 1 already, and is invalidated with movement above the start of green wave 2 at 50.90. If you like to short this wave up, >50.90 should your SL. A target range, which is to determined more precise later, is in the 15-20 area.


well, maybe there is a small chance for an option C)

the green wave 1 may also be counted as 1-2-3

Under this view, the whole movement down may have been terminated already.

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  • #21,046
  • Mar 13, 2016 3:22am Mar 13, 2016 3:22am
EW analysis EU


monthly view - big picture:

the EU has reached the lower bound(s) of the upsloping channel and is consolidating in a clear corrective pattern (at least for me)

Corrective pattern means: we will go down sooner or later

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  • #21,047
  • Mar 13, 2016 3:37am Mar 13, 2016 3:37am
Quoting infinitus
EW analysis EU monthly view - big picture: the EU has reached the lower bound(s) of the upsloping channel and is consolidating in a clear corrective pattern (at least for me) Corrective pattern means: we will go down sooner or later {image}

EU weekly TF

looking at the swing down from the 1.399x top:

as I have laid out here in lengthy postings in the past, I have decided to label the move down as impulse as shown in the chart, where we are now most likely in the wave 5 down.

I have labelled it in this way, because it shows so much stunning fib-interwave-relationships.

I know/have acknowledged, that the wave down can also be counted as already finished. But then we have the problem, that the swings since the very low are corrective in nature. In this case the whole count would get much more bearish, because it would imply, that we are now in an X-wave sideways/upways, with another ABC down to come
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  • #21,048
  • Mar 13, 2016 3:56am Mar 13, 2016 3:56am
regarding Forex and Elliott wave analysis:


keep in mind, that the HFT's have discovered the FOREX-markets as their now main playing ground.

We can already see that by looking at the intraday patterns. Nowadays we see a lot of churning, creeping movements, with a lot of overlapping waves.That is disrupting the whole short term Elliott wave patterns, because one believes that it is a corrective pattern, but in the end belongs to an impulsive movement.

Zerohedge had an article about the HFT's and Forex a few weeks ago, but I am not able to find it anymore.
  • #21,049
  • Mar 13, 2016 4:26am Mar 13, 2016 4:26am
Deutsche Bank: Negative Rates Confirm The Failure Of Globalization
  • #21,050
  • Mar 13, 2016 4:27am Mar 13, 2016 4:27am
only part of the herd.......

Greenspan Explains The Fed's Miserable Track Record: "We Didn't Forecast Better Because We Can't"
  • #21,051
  • Mar 13, 2016 4:29am Mar 13, 2016 4:29am
Quoting Dr.Phoenix
{quote} From now on the analysis is invalid. Rethinking... Best D.P. P.S. Need Oil Analysis

Why Oil Producers Don't Believe The Oil Rally: Credit Suisse Explains
  • #21,052
  • Mar 13, 2016 8:13am Mar 13, 2016 8:13am
The Next Fukushima? Active Fault Line Discovered Directly Below Japanese Nuclear Power Plant
  • #21,053
  • Mar 13, 2016 8:24am Mar 13, 2016 8:24am
Gold

based on COT-Index it may be time to go short again
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  • #21,054
  • Mar 13, 2016 8:29am Mar 13, 2016 8:29am
Crude

based on COT Data there might be a bit of upside left.

Look at the small specs in the COT Index. They are going short. At the same time the COT Index for the Commercials is around 32, we would like to see 0 for a short signal.


Daily sentiment index of the options players is around 70 - that is not bullish enough to deliver a short signal
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  • #21,055
  • Mar 13, 2016 8:44am Mar 13, 2016 8:44am
:-)
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  • #21,056
  • Edited 10:31am Mar 13, 2016 10:18am | Edited 10:31am
Quoting infinitus
{quote} Hi Roughtrader, thanks for your analysis One word to Head and shoulder patterns: once the FED did a lengthy analysis of Head and Shoulder patterns, and the found, that it is not profitable see here: http://www.forexfactory.com/attachme...hmentid=927463
Hi! interesting paper, The FED did this? then ofcourse this is what they want you to believe, they are the entities trading against us,
the FED and their buddy bankers. believe me, it is profitable, lot's of traders is trapped long and when the neckline goes, they panic sell,
the move is usually fast and forceful, the risk to reward is great, there is no reason whatsoever this pattern would not be profitable.
if you only go to target 50% it will still be profitable. on Bulkowski's website, http://thepatternsite.com/hst.html
he ranks head and shoulder as the top performer of all the patterns, he have statistics on bucket loads of trades he did.
target is met 55% he claims, that makes it a profitable pattern as long as your risk to reward is more than 1.5 to 1
I rather believe him than the FED. further claiming there is any type of noise in the market is just redicilous.
Bulls are stupid Animals!especially when Im short!
  • #21,057
  • Mar 13, 2016 11:46am Mar 13, 2016 11:46am
Quoting roughtrader
{quote} Hi! interesting paper, The FED did this? then ofcourse this is what they want you to believe, they are the entities trading against us, the FED and their buddy bankers. believe me, it is profitable, lot's of traders is trapped long and when the neckline goes, they panic sell, the move is usually fast and forceful, the risk to reward is great, there is no reason whatsoever this pattern would not be profitable. if you only go to target 50% it will still be profitable. on Bulkowski's website, http://thepatternsite.com/hst.html...

I can show you many H-S-pattern on any TF which did not resolve. Based on my own trading and visual inspection of 100's of HS-Pattern I tend to side with the FED.

Here is another study from the University of Hamburg, finding the same:

Are Technical Trading Rules Profitable?
Evidence for Head-and-Shoulder Rules
1
by
Bernd Lucke
Universität Hamburg
Institut für Wachstum und Konjunktur
Fachbereich Wirtschaftswissenschaften
Von-Melle-Park 5
D-20146 Hamburg
e-mail: [email protected]
October 2000

Abstract
The profitability of chartist trading rules on foreign exchange markets is still under debate.
Since simple technical trading rules may not adequately capture the complex phenomenon of
chartist trading, this paper focuses on the prominent head-and-shoulder pattern as a
representative trading rule which incorporates various „technical“ ideas such as smoothed
trends, trend reversal, resistance levels, and volatility clustering. For various combinations of
the building blocks of head-and-shoulder definitions the result is generally negative: Returns
to head-and-shoulder trading rules are not significantly positive - and if there is any evidence
for non-zero returns at all, then it is is evidence for negative returns.


Good luck with beating the Statistics
Attached File(s)
File Type: pdf uni Hamburg head and shoulder.pdf   57 KB | 532 downloads
  • #21,058
  • Mar 13, 2016 11:59am Mar 13, 2016 11:59am
Quoting roughtrader
{quote} Hi! interesting paper, The FED did this? then ofcourse this is what they want you to believe, they are the entities trading against us, the FED and their buddy bankers. believe me, it is profitable, lot's of traders is trapped long and when the neckline goes, they panic sell, the move is usually fast and forceful, the risk to reward is great, there is no reason whatsoever this pattern would not be profitable. if you only go to target 50% it will still be profitable. on Bulkowski's website, http://thepatternsite.com/hst.html...

this is another study, which implies, that HS-pattern only seem to work in some pairs and in others not

Attached Image


Attached File(s)
File Type: pdf head and shoulder OsCh95.pdf   3.6 MB | 537 downloads
  • #21,059
  • Mar 13, 2016 12:19pm Mar 13, 2016 12:19pm
Quoting roughtrader
{quote} Hi! interesting paper, The FED did this? then ofcourse this is what they want you to believe, they are the entities trading against us, the FED and their buddy bankers. believe me, it is profitable, lot's of traders is trapped long and when the neckline goes, they panic sell, the move is usually fast and forceful, the risk to reward is great, there is no reason whatsoever this pattern would not be profitable. if you only go to target 50% it will still be profitable. on Bulkowski's website, http://thepatternsite.com/hst.html...

and one more:

...
The above results have shown that a trading strategy based around the head and
shoulders chart pattern does not appear to be profitable. Whilst a small number
of mean buy and sell returns are significant and in the direction predicted by
the pattern, the findings are inconsistent. Such a strategy could therefore not
be profitably employed by traders.



...
However, one important finding
was that buy trades, from head and shoulders bottoms, performed less well. In
fact, negative excess returns were seen from 10-60 days after identification of the
chart pattern.


But read the whole study - it has some interesting conclusions and hidden gems
Attached File(s)
File Type: pdf head and shoulder tdwatson_thesis_final.pdf   3.9 MB | 504 downloads
  • #21,060
  • Mar 13, 2016 12:35pm Mar 13, 2016 12:35pm
Quoting infinitus
Crude based on COT Data there might be a bit of upside left. Look at the small specs in the COT Index. They are going short. At the same time the COT Index for the Commercials is around 32, we would like to see 0 for a short signal. Daily sentiment index of the options players is around 70 - that is not bullish enough to deliver a short signal {image}

A Short History Of (Unsuccessfully) Calling A Bottom In Oil
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