Wednesday, October 31, 2012

THE CONSISTENCY OF WAVE PROJECTIONS ACROSS WAVE DEGREES

In addition to the beauty of the fractal nature of Harmonic Elliott Wave that requires wave targets to be confirmed from multiple wave degrees there is also the consistency of wave projection ratios that exist across all wave degrees and time frames from the 1 minute charts to the monthly charts...

The following video demonstrates these repetitive ratio clusters through the wave degrees and markets.


Don’t rule out another whipping yet…


The Dollar provided some movement yesterday although not without some flicks of the whip within the realms of the recent ranges. While the Europeans saw firm gains against the Dollar we haven’t yet broken any levels that would prevent those whips cracking again. The 1.3022 high EUR and 0.9291 low CHF are the fine lines between extension of Dollar losses and the outstanding risk of a whipsaw to new highs and reversing. Yes, that’s the type of perverted structure that we seem to be to be in. This could even extend to GBPUSD also even though it recovered well yesterday it hasn’t actually escaped the area where these types of move can occur… However, what it has done is break down the potential bearish structure that would have implied a new low.

Thus, barring the potential for black leather to cause a further scarring the general outlook has become more Dollar bearish. We just have to bide our time and continue to exercise patience until the Dollar breaks lower again, albeit within what appears to be a sideways consolidation still, but which would also increase the chance that we’ll soon escape from its boundaries. This even extends to AUDUSD although it appears to be one leg ahead of the Europeans.

USDJPY almost worked perfectly apart from the 10 points above my resistance in a determined attempt to break back higher before the temptress in black leather forced it to retreat with a whimper back to new corrective lows. It now seems to have completed it first corrective structure. I don’t think it’s complete yet. I expect that to occur around the middle of next week. More the problem is the choice it has of three corrective structures it can now develop, two modestly bullish in the near term and the third being further choppy losses. From the look of EURJPY I feel that as long as it doesn’t break above its own fine line it probably has more downside potential. Given I can’t see that developing through EURUSD – well, not all of it – then it does suggest USDJPY may well take option three… However, that’s going to be something we need to observe to confirm the actual outcome.

Thus, today remains with some short-term uncertainty and the potential for a further whipping action so until the key areas that suggest the opposite do take care. Even then, remain aware that the market should remain choppy and prone to some nasty whipsaws.

Good trading
Ian Copsey

Tuesday, October 30, 2012

WEEKLY OUTLOOK FOR THE DOLLAR INDEX

DAILY STRUCTURE


30th October:

I remain bearish and actually feel we are very close to the Wave -a- high that should hold below the 41.4%-50% retracement at 80.37-74 with a focus around 80.47. Once complete we should then see losses in a new Wave -a- that I suspect will approach and perhaps marginally break the prior Wave -iv- low at 78.10. From there a correction in Wave -b- and then a final Wave -c- lower that I'll have to judge as we approach. 

Only a break back above the 81.20 pivot resistance would put the downside under threat and could resurrect the uptrend.


INTRADAY STRUCTURE


30th October:

It appears we had seen an expanded flat in a daily Wave (b) to 78.93 and from there we are towards the final stages of a Wave (c) and actually in the Wave c of Wave v… The 58.6% projection in Wave v is at 80.41 and 66.7% at 80.51. (also note the 85.4% at 80.74) These match the 58.6%-50% retracement in daily Wave -x- and thus we should find a high in this broad area - I suspect the 80.41-50 area - to allow the larger decline to resume.

First drop should be into the span of Wave b of Wave v and second to around the Wave iv - potentially forming the Wave [i] of a new Wave -a- lower.


Good trading
Ian Copsey







Mixed signals


Yesterday was as bad as it can get… well, I hope it can’t get any worse... Having gone through the charts the single biggest impression I drew was confusion. There’s a lot of noise around and it was tough identifying waves with any confidence. If there’s one outlook I can rule out then it’s the recycling I had considered possible in EUR and CHF. That doesn’t imply that the Dollar will not go down. It is one option. However, if it goes down then it’ll break the recycling areas and by some margin.

Noise may well be the clue. All too often noise implies a corrective structure, the sort of development that can break a recent high or low by a few points and then reverse with more venom. This was the second option I had yesterday. I can see arguments for and against this outlook or I could actually even imagine a potential for any consolidation to widen its range and then whip the market out on a sharp reversal. Until we’ve seen more development with more consistent measurable waves the focus must, unfortunately, be directed at short-term trades and controlling risk.

I do have a potential consolidation structure in mind, one I discussed in yesterday’s weekly outlook video. Having seen the drift higher in the Dollar yesterday there is a mild risk of a marginal new high today also although I can’t see massive follow-through. Both EUR and CHF hourly charts are sporting some solid Dollar bearish divergences and only if they break would I begin to consider a stronger extension lower. Until that occurs, it seems to me as if we shall see a reversion back into the centre of the range, and may be a bit more. Even the upside in GBPUSD failed and now has its own ambiguity so take care there also.

USDJPY was also wayward. Overall I remain bearish for now with price having slipped below the 4-hour Price Equilibrium Cloud for the first time in several weeks and right now it’s sitting right above current levels. It’s due a correction lower and it’s more a matter of how the correction develops rather than “if”. This should drag down the cross also although it could prove to be more messy than USDJPY due to the anticipated return into range in EURUSD.

So the message today is… if it doesn’t look right… don’t trade… Look for solid trade set-ups before opening risk.

Good trading
Ian Copsey 

Monday, October 29, 2012

DAILY FORECAST FOR USDCHF


BIAS: We should see losses to 0.9286-91 at least

Resistance: 0.9360 0.9372 0.9386 0.9400
Support: 0.9318 0.9309 0.9286-91 0.9255

MAIN ANALYSIS: Initial trading on Friday was just about perfect with the correction stalling just 4 points above the highlighted 0.9332-38 retracement support from where the rally resumed. However, it wasn't quite in the required structure and the reversal lower from the 0.9386 level was deep enough to suggest that something is wrong. At the very least I expect a recycling back to the 0.9286-91 area. Quite what happens there is critical. It is possible for the uptrend to resume, initially back to Friday's 0.9386 high but probably then to the 0.9430-48 projection area from where we should see a correction.

COUNTER ANALYSIS: However, we should be very cautious as we get to 0.9286-91… any loss of 0.9280 would actually imply follow-through to around the 0.9237 area. I suspect this will hold for a correction higher that will find it hard to get above 0.9290-0.9320. This development would eventually be bearish.

MEDIUM TERM ANALYSIS:
29th October: Friday's developments raises two options: At the very least we should expect a retest of the 0.9286-91 area. While that supports it would retain the potential for a resumption of the rally and probably to the 0.9430-48 area for a correction and then a move through to around 0.9500.

Any loss of 0.9280 would imply extension to around 0.9237 for a correction higher that will find it hard to get above 0.9290-0.9320 and for the larger downtrend to resume.

Good trading
Ian Copsey

A slight detour


Friday wasn’t quite the day I was expecting. The first half went pretty well, the Euro and Swissie reaching their corrective targets for the Dollar to extend gains for what I had anticipated to be a stronger follow-through. That it then failed to progress sufficiently and pulled back to below Friday’s early corrective lows was a clear sign of something going wrong. We probably have two alternative outcomes from this failure – the first is a possible recycling lower but then a resumption of the gains I had expected or; a much larger sideways consolidation pattern. At least, these are the two I shall focus upon and detail the critical break levels in today’s individual analysis.

That we should see the Dollar lose out appears to be universal across the three Europeans. In contrast to the failed expectations in the Euro and Swissie, GBPUSD developed perfectly reaching the top end of the corrective limits I had outlined. Thus, this pair is also due rally again although it is in the final leg of the move higher from the 1.5913 low. Once seen, the risk is for a correction lower. During this process we should discover which of the two options in the Euro and Swissie will develop.

The Aussie, too, appears to be in a similar situation as GBPUSD in terms of seeing the upside resume. Friday’s correction lower was deeper than expected but seems to be one of those abnormally deep corrections for its position. Thus, the basic outline for gains remains.

It seems I was fooled by the depth of the pre-peak correction to 79.95 that looked abnormally deep for that position but the break of both the hourly and 4-hour Price Equilibrium Cloud to form a bearish key day reversal has set up a period of weakness or perhaps a sideways consolidation. Either way the initial leg lower still has a little way to go. The key here is recognising which corrective structure is going to develop but in this initial corrective structure we still have a little more to go.

The impact of a firmer Euro and weaker USDJPY seems very likely to cause some consolidation. Of course we may have each component of the cross move before the other that could complicate matters but overall the cross is navigating what appears to be the same part of a foundation structure, but within the correction there are multiple patterns that have potential to develop. For the moment it seems that we are in a correction and thus take care and take profits early.

Have a profitable week

Friday, October 26, 2012

DAILY FORECAST FOR EURUSD


BIAS: While 1.2950-66 caps we should see losses down to 1.2831-59

Resistance: 1.2950-66 1.2988 1.3004-22 1.3040
Support: 1.2926 1.2888-01 1.2859 1.2831

MAIN ANALYSIS: Yesterday saw the expected correction but was a little deeper than expected, slipping above 1.3016 but then stalling at 1.3022. From there we have seen a dip to 1.2926 that should see Asia generate a correction into the 1.2950-66 area that should cap for follow-through lower below 1.2926 and down to 1.2859 at least and probably 1.2831. This should provoke a further correction higher.

COUNTER ANALYSIS: Only a break back above 1.2980 would call for a retest of 1.3022 and probable follow-through to the 1.3074-82 swing highs… While this may hold for a while it will suggest that we shall see further gains later and back to the 1.3139 and 1.3172 highs.

MEDIUM TERM ANALYSIS:
25th October:   Yesterday's initial move developed as suggested and as long as the 1.2982-1.3016 area caps we should see further losses to 1.2780-1.2831 for a correction and then lower still that I feel will reach a minimum of 1.2704-40.

Only a break back above 1.3020 would bring this back onto a more bullish structure or possibly a sideways consolidation. Watch the 1.3082 corrective high and then 1.3139-72.

Good trading
Ian Copsey

A stretch of the imagination…


Yesterday was strange. Very strange. Very, very strange for a variety of things including people jumping in front of trains at our local station and forcing my wife into a 1 hour detour to make a trip that normally takes 10 minutes…

Well, one thing wasn’t so strange and that was when I got frustrated with the Dollar correcting much deeper than expected against the Euro and Swissie. Now when GBPUSD just sailed off into the blue sky and quite clearly indicating it was ready to resume the underlying uptrend while the Dollar resumed its rally against the Continentals to have the two blocks in apparent negative correlation… that’s strange. Add to that the more direct rally in AUDUSD and which seems to want to push even higher and we have a tug of war in terms of what the Dollar wants to do…

Even USDJPY managed to hit the overdrive and is still pushing higher. It may seem like a minor extension to a deeper projection but we have to understand the longer-term implication. This move is just the foundation stage of a larger wave degree. With this leg being so strong it promises an even stronger leg once the coming correction is complete… I think USDJPY is going to surprise a few people as we move into 2013… This is being seen in EURJPY also, its recovery much deeper than I had bargained for and suggesting a similar overlap higher before a correction.

So the battle over the next few days is going to be between the disparity between EUR & CHF with GBP and AUD apparently looking to go in opposite directions. Beyond that we have another conundrum to resolve in terms of the current move lower in EURUSD that started from below 1.3172 while the rally in USDCHF had its roots in a new low, thus implying the need for a corrective structure rather than a trending structure that we appear to be mapping out in EURUSD. Unless of course, they both give up the Dollar bullishness directly. After all, yesterday was a strange day and today could be as well…

That all adds up to the basic need for awareness today, of what is required to see the Dollar extend gains against the Continentals and what constitutes a break. Be wary today.

Have a great weekend
Ian Copsey