Thread: Elliott Wave Trading Discussion

Eur/Usd

The Story ,,,,,,,,, The Reasoning ,,,,,,,,

Among the major currencies, EUR/USD has been the hardest hit, having fallen from 1.5142 to 1.3584 in 72 calendar days.

There is however an opportunity to go long early next week based on several observations. I have done a quick Delta MTD count for EUR/USD and it seems that it is quite probable that medium term low has arrived last Friday.

From the chart, we can see that MTD 12 low is due after the yellow line. Furthermore, in the last cycle, the length of time from MTD 9 to MTD 12 is 76 calendar days. In the current cycle, the length of time from MTD 9 high (1.514) to last Friday's low (1.3584) is 72 calendar days. With the weekend, the length of time from MTD 9 high to next Monday is going to be 75 calendar days, which is very similar in time compared to the last cycle.

A couple of things support the idea of a corrective bounce:
1. Stochastic is very oversold and in need of corrective bounce.
2. The distance between MTD 9 to MTD 10 is equal to the distance between MTD 11 to MTD 12 (bearish flag pole is completed).
3. The 1.35 - 1.36 area is the weekly ichimoku cloud support zone.
4. Last Friday we had a hammer candle.
5. USD Index daily chart made a doji candle last Friday.

The trend is down in all the major Currency pairs ......
except for the Usd/Chf pair


There are many traders that say only trade with the trend

Right now , the trend is clearly down in the all the major pairs
-courtesy of the what's been going on in Us Dollar (" aka " Usd/Chf )

and the trend is down on most of the major currency Longer-term charts

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anyone trying to buy into pairs like the Eur/Usd , Usd/Yen , Aud/Usd... etc
right now ---- is not trading with the trend !

anyone trying to buy into the Eur/Usd , Aud /Usd , Gbp/Usd ... etc --- is " bottom picking "
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Were are all the trend traders now ? ............

where are trend traders charts showing us , trade with the trend ?

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Guys,
The last weeks showed a bearish action in this major, but the question: "Has the trend reversed or this is just a correction?" still remains. I post here an hourly and a daily chart to illustrate my point. On the 1 hour chart I have 3 different scenarios - blue, red and green.
The blue scenario is supported by the lengths of wave 2 and 4 as well as the equality between waves 3 and 5. It implies that the move is very near to its end.
The red scenario is supported by the structure of both blue waves 1 and 2 - three and 5waves terminal triangle respectively - that imply they may be parts of the previous upmove. The implication of the red scenario is further down price action as price is now sitting at the 100 fib ext of red wave 1 - not enough for wave 3.
The green scenario is supported mainly by the possibility of an inverted flag seen on the daily chart.

Originally Posted by freelancer

Guys,
The last weeks showed a bearish action in this major, but the question: "Has the trend reversed or this is just a correction?" still remains. I post here an hourly and a daily chart to illustrate my point. On the 1 hour chart I have 3 different scenarios - blue, red and green.
The blue scenario is supported by the lengths of wave 2 and 4 as well as the equality between waves 3 and 5. It implies that the move is very near to its end.
The red scenario is supported by the structure of both blue waves 1 and 2 - three and 5waves terminal triangle respectively - that imply they may be parts of the previous upmove. The implication of the red scenario is further down price action as price is now sitting at the 100 fib ext of red wave 1 - not enough for wave 3.
The green scenario is supported mainly by the possibility of an inverted flag seen on the daily chart.

Hi freelancer

I also have your blue scenario in mind not only for the near equality of wave 2 and 4 but also I find it more than a coincidence that wave 4 has retraced wave 3 by exactly 38%...perfect for a wave 4. They fit with the guideline of alternation as well. So with that in mind and given the wave structure of wave 5 so far, aren't we looking at a extended fifth wave that should take us 600 pips further south to somewhere around the 161.8 fib extension of waves 1 to 3 @ 1.3084 for this scenario? That would also take us to the bottom channel line drawn on your daily chart.

Originally Posted by Gray

Hi freelancer

... for the near equality of wave 2 and 4....wave 4 has retraced wave 3 by exactly 38%...perfect for a wave 4. They fit with the guideline of alternation as well. So with that in mind and given the wave structure of wave 5 so far, aren't we looking at a extended fifth wave that should take us 600 pips further south to somewhere around the 161.8 fib extension of waves 1 to 3 @ 1.3084 for this scenario? That would also take us to the bottom channel line drawn on your daily chart.

Hey Gray
I did not mean equality between waves 2 and 4 - I meant wave 2 retraced almost whole wave 1 /typical wave 2/ and wave 4 retraced 38.6 of wave 3 /typical wave 4/
I agree with you that 1.31 could be seen, but at the moment I am more in favour of a correction to the first downsloping line of my hourly chart - and if taken - to the second one.

After reading the comments from Cmellon, Grey and Freelance I think this is a strong possibility.

Wave 3 was 261.8% of 1-2
Wave 4 was a perfect 38.2% retrace of Wave 3
Wave 5 is extended and (V) of 5 is 61.8% of (I) - (III).

The risk reward sure looks good for 1 micro lot gamble.

I redid the channel lines on this and went from the possible 2 - 4 and look where 5 stop.

This is possible in the daily graphics

4 Hr chart of the Dollar

All time frames showing low to peak low RSI and divergences. Bottom of existing down channels or formation of new (1min) up channel.
On the daily this leg has reached my retrace zone form earlier charts.

I don't expect a trend reversal here, just a choppy upward correction. Time will tell what this turns out to be but for now, a long with stops below the current low is how I'm playing this.

TAfool

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Summary
Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Up
Revision Point: Break above 1260
Potential Medium Term Targets: 680 and lower
Preferred Strategy: Short Term Buy opportunity may be explored at the emergence of a Low risk High Probability buy signal on an intraday chart. However, for a slightly longer term, the pull back should be used as a selling opportunity.

With wave i or a at the December 22, 2009 low (1074.90) and wave ii or b at the January 11, 2010 high (1161.75), we now seem to have formed wave 1 of iii or c down of which the fifth sub-wave seems to be at or near its completion at the February 5, 2010 low (1044.55).

If our understanding of the internal marking of the potential wave 1 of iii or c decline is correct, then we can develop two clear alternatives from this information. As per our preferred (bearish) scenario, according to which, the December 22, ’09 low is wave i and the January 11, ’10 high is wave ii, the January 5, ’10 low is in a position to be sub-wave 1 of wave iii. As a result, as the second image shows, we would expect a corrective pull back in the upcoming days, once the sub-wave 5 of wave 1 of iii is completed. However, as per this scenario, we should get a long and swift move down for wave 3 of iii at the end of that pull back, which may provide a very lucrative shorting opportunity.

As per our alternative (bullish) scenario, the December 22, ’09 low is taken as wave a followed by wave b at the January 11, ’10 high and at the completion of sub-wave 5 of the current downward move will signal the completion of wave c. Subsequently, we should see the resumption of the longer term uptrend, which would most likely take the price to new all time highs.

Originally Posted by EZCashDreams

Hey Crossroads..

I just wanted to jump on the wagon here and also say Thanks for posting your charts. They have helped me when I get lost on the count....and that is very often. So thanks and good work....Keep them coming.

Now just some food for thought on your EURUSD count. I think the count is correct but wanted to add some thoughts.

If you measure your 1 and 2 to find your wave 3 target of 1.618 it comes out at 1.3078. If you now measure the extension for your 1 - 2 the 1.618 measures to 1.2880. That means your smaller degree wave 3 extension is longer then your larger degree wave 3.

If the count is correct then we could have a Wave 3 extension to 2.618 (1.2133) rather then the 1.618 (1.3078)..

Something to watch for.

Great point EZcashdreams. I believe we'll see 1.2133 and below.

Lets give this Dollar count a try.

Wave (5) is still less then Wave (3) and (3) in obviously not the shortest with the wave (1)

The Wave (4) Triangle:

The b wave of the triangle could be a Triangle itself and then 5 down for c. d is just a few ticks above e of b to make this and expanding triangle in wave (4). An then the 5 waves up for (5).

The eurjpy seems bearish from here, maybe we break 2008 lows?

hi guys,

it has been an awfully busy exam week for me, with no time for updates or trading decisions. lets update what has been happening. all trades have been settled, so there are no position boxes in my chart.

Originally Posted by qsx

EDIT - closed it for +1010 pips.

now going LONG EUR/USD from 1,407 with an initial stop at 1,382..

Loss of -250 pips in what seems to be quite a panic this week.
matter of fact my other small monsterleveraged gambling account which i managed to turn from 20 euro into 400 from november blew up this week and got margin called for reminding me how important money management is
i will refund it with some small cash this week and continue to experiment with it..

Originally Posted by qsx

the only thing significant for me today is this channel break in the SP500, which leads me to the following conclusion..

the Sp500 short trade got stopped out for +15 points, before it continued to plunge.


detailed analysis coming shortly..