TRADING FORK EXTREMES – 3 month Setups.

[Summerset]

Originally Posted by Summerset

Amend to double at 6865. This brings the average to 6814. Keep stops at 6814 + compensation for negative premuims. 1st target 7084, 2nd target 7260.

We will break our double into 2 portions.
Add 1/3 to inital 6763 position at 6910
Add 2/3 at 6877
Place stop at overall entries average.
1st Target 7080, 2nd at 7260

Analysis:-

Since last week the double top neckline on 4hr was broken confirming a Wave 4 on weekly. Remember that we expected a Zigzag W-4 in alternation to the Flat W-2 on weekly. Hence our entry target of 6865.

On the current 4hr chart - shown below- FE100% has been reached. Negative WSI momentum is nuetralizing and could turn positive next week. In anticipation of an end of "C" here, we are incrementally adding a small portion at 6905-10, and in anticipation of "C" continuing to FE161.8%, we will continue to incrementaly add till 6877.

6877 is more favored as a there is a confluence of fibs at this level on both weekly & 4hrs. Our addition at 6905/10 is to enable partial profit taking at 6980, should a 4hr upwards retraction ensue, and the W-4 correction develop a complex sideways form before making 6877.

We need of course to take some partial profits to off set the negative trade premuim.

Profitable Trading

[Summerset]

Originally Posted by Summerset

Limit Buy @ 115.55 for 1.5% exposure. Target 119. Stop 115.05

Order filled with SL currently at Entry.

Analysis:-

On the daily chart, the bear flag shown has reversed into an inverted double top formation = double bottom, whose neckline was decisively broken & closed above last week.

We actually bought the breakout from this neckline guided by a WSI 4hr signal. This signal is trading extensions of the swing 5-->A shown.

As indicated, the 1st target at 61.8% fib Extension is 118.70

The double bottom target concurrs with the 100% Fib Extension at 120.

And should we be riding an extended "C" wave, the 161% Fib extension concurrs with the top of the desending triangle on the monthly chart at 122.50 - (See attached monthly Chart)

Should the WSI on daily signal to confirm the 4hr breakout, this would indicate a prolonged "C" to 122.50

Currently however our target is 118.70. Having also made over 100 points of floating profits, we will attempt to add on position, by buying bounces on the 1hr & 4hr trendlines - raising the overall position averages - and initally aiming for the 118.70 target

Profitable Trading

[Summerset]

Originally Posted by Summerset

We recommend to long 164.75 (bottom of the ascending triangle) at 2.5% exposure. Take 50% profits at 167.8 (300 pts), and remainder at 169 (425 pts). Place stop at 163.6 (-115 pts), below this current month's open at 163.74.

Profitable Trading

164.75 filled.
Move Stops to entry

[Summerset]

Originally Posted by Summerset

We will break our double into 2 portions.
Add 1/3 to inital 6763 position at 6910
Add 2/3 at 6877
Place stop at overall entries average.
1st Target 7080, 2nd at 7260

Profitable Trading

6910 filled raising the overall longs average to 6800.
Place Stops at 6800
Keep 2/3 limit to long 6877
Same targets.

[Summerset]

Originally Posted by Summerset

Buy the Market (4155-60) at 1.5% exposure. Stop at 4110. Limit 4330

Stopped At 4110

[Summerset]

Originally Posted by Summerset

Will atempt to close the hedge by limit order to buy at Entry 1.4152-50.
Keep Stop on Hedge same @ 4190.

Place Stop on original position back at 4110

Short Hedge closed at b/e.
We missed the breakout of the correction.

[Summerset]

Analysis:-


Monthly:- (See Monthly Chart)


The confirmed break above 3650 as indicated by price break > the Gold fork high median, has negated formation of a double top on the monthly.


Long term, there are now only 2 possibilities:-


1- Wave-1 is the 1^st primary bull wave of a Bull market effected by 9/11, and has been dully fully corrected by a zigzag wave-2 to an orthodox 38% of its overall Fib size. The breakout above 1-v indicates that we are now in wave-3 on the monthly, and negates possibility of any complex corrections occurring in wave-2 other than the completed zigzag.

2- If the current undergoing correction falls and closes bellow the Gold fork high median (3720). The analysis in (1) becomes negated, as this would mean that we are still seeing at least an expanded ABC flat in Wave-2, that could still even unfold in a more complex correction.

Primarily, as we take trades only with a momentum proven trend, the Monthly & weekly WSI readings & plots are both showing Eurodollar to have broken out in bullish trend, and therefore we are biased to have broken out in Wave-3 –(possibility-1), and will take long term trading commitments based on this probability.

Projected long term targets for wave -3 calculated from the confirmed Wave-1 Swing are :-

0.618 of wave-1 swing = 1.6770
1.00 of wave-1 swing = 1.8710


Note that as with all wave-1(s), wave-1 on monthly has taken price ideally to a test of the broadening formation, formed on the monthly from Augst 89 à Dec 95.

The current pull back / correction should sustain within the monthly rising wedge, and proceed to break above and support atop levels of the broadening formation > 1.45. Technically, I believe this will proceed as described by virtue of the already broken double top @ 1-v. Having broken the formation, there is no sense in falling back on it except to support on a broken resistance.


We therefore recommend long term to aggressively accumulate 1.3760/1.3720 till 1.3680, for a preliminary advance to 1.46, and further possessing the issue, and holding for mark up until 1.6700.

Keep in mind that as the FED eases on rates, and the ECB raises its anticipated once or twice (25 basis points hikes), interest rate differentials between the Euro & Dollar are bound to reach parity earlier than many speculators anticipate. And the central banks diversifying their reserves in Euros are counting on this premise to dawn on investment & speculative markets and appreciatively mark up their holdings accumulated at 1.32-36 to the dollar.

Its becoming a matter of limited time as the markets begin to discount this as a fact.

Let now evaluate, why the 3760/3720 zones are targeted for accumulation.

Weekly:- (See Weekly Chart)

Wave-1 of anticipated Wave -3 on monthly, breaks up into the confirmed 5 wave counts shown on the weekly. Wave-5 of this wave -1 confirmed on failure at the Elliot channel drawn parallel to the Wave-2 & wave-4 channel line

Typically, we are commencing on a 3 wave correction, pending a 5 wave progression. Because the correction, is going to be as complex as they come. We will not concentrate on the wave form or count, but on its ultimate Fib expansions.

In order to project the ultimate correction's Fibonacci projections, we need to detect & confirm the 1^st complete down leg (Wave-A) of the correction, to throw extensions from. We will therefore move to a smaller time frame to break up the weekly candles

Daily:- (See Daily Chart)

Wave-3 is a confirmed extension (1.618 x wave-1), that should be double retraced. Once by current Wave-4 (down), then a tranculated Wave-5 up. And another ABC correction down (the 2^nd retracement that will make a double ).

Typically too, wave-4 should retract to top of Wave-1. (3720 zone shown).

Note that Wave-2 was a flat. So we expect the start of Wave-4 to be a simple or double Zigzag first.

To project its bottom we need leg "A" of this zigzag to complete. (lower lows on daily must cease to be made) and leg "B" should commence to a Fib retraction of "A".

Currently this is not the case, as a new low of 4015 was made to day.

Once a low for "A" is established, we will take a fib projection of 1.618 from "A" top to its bottom, and therefore forecast "C" (our long entry zone). Currently with respect to the lows recorded, the 1.618 projection of "A" stands ideally at Wave-1 top (3720). This is yet not confirmed however, until "A" ceases to make lows

Once a low is made for "A" too, we will sell 0.618/0.38 of "A" for 3720 "C" projection


We will also sell the close of the day that closes below the low of the high candle that marks "B"'s top


We will add to our sells on a break of the established "A" bottom.

All to target the 1.618 Fib extension of "A" of course

We will be using the WSI to confirm our short entries, and calling the entries in real time on the thread.

We expect to reverse at 3720, provided the daily WSI confirms, or at a max of 3440 (Long term median on the weekly chart) also on a signal confirmation of the WSI too

In the meanwhile, until a low for "A" is confirmed. Intraday traders can sell the down trend line shown on daily

Profitable Trading.

[Summerset]

Originally Posted by Summerset

Limit Buy @ 115.55 for 1.5% exposure. Target 119. Stop 115.05

Close full position at current market values (117.29-33).
There will be a retraction, and we will stand down to reload lower