TRADING FORK EXTREMES – 3 month Setups.

[zunis-myst]

Hi Summerset,
thank you for your actual update. i have been watching and studying your detailed analyses for more than one year now. And I admit I should have to thank you more earlier. I also followed and still trade your EUR/GBP views. Im am still long (I am not a real long time trader, though in the latter pair, YES).
I use just 4H charts. My take profits executions are between 50-90 pips. Right now I am still long in EUR/USD from 1,4841 in just one trade.
I also use pitchforks, but kind of different ones to yours.
In your weekly charts you have included some Wave counts recently. I copied it but now there has to be changed something here (see chart). It would be nice if you show how you see the wave count today?

Thanks again

Torsten

[Summerset]

Hi Torsten,

Thank you for the compliments, yr always welcome.

The wave wave count, I am currently going by is attached below.

This is based on some wave segregation rules using momentum oscillators (CCi & ADx) in this case. I am actually studying this for some exam on 23rd April.

Some of these wave segregation rules are:-

1- Any wave(1) for any issue in any market & in all time frames, must be precceded by a CCi x Adx Gold cross below the +50 CCi levels. This is because a Wave-1 must mark the termination of a correction wether complex - extended - or simple.

2- Any extended impulse wave, must be sustained constantly above the +100 CCi level. Optimization for issues is possible, in the case of the attached Eurodollar weekly chart its +75

3- For Any extended correction to occur, prices must break the 2A line, and close below it.

The above rules are verified over a large # of issues, markets & time frames.

There are other cyclic rules, and rules cycliclly generated from a Rate of change of CCi & the CCi itself, that are however not verified yet, but sometimes give good entry cross signals.

In our case here (See Chart):-

1- A wave-1, is always generated by a CCi x ADx gold cross (RULE-1).

2- initally, I had anticipated a prolonged extended correction down to 1.40 levels, due to the usual rule of alteration between Waves 2&4 (II&IV, shown in red on the Chart).

This was a mistake, as its not always neccessarily the case. The market proved me wrong by confirming a wave-1 breakout, because of the current valid CCi x Adx Gold cross. (shown on Chart).

3- I therefore expect wave-1 target at ~ 1.53 (=1.618 of last corrective swing). This should be followed by a retraction to 61-78% of Wave-1, marking wave-2. And then an extended wave-3.

4- Fib elipses & spirals can be used to target the end of the wave-2 correction, and wave-3 extenstion. (Use Robert Fischer's book - Fibonnaci strategies for traders - he's German by the way). - I can paste U the url, on where to purchase the book & software if yr interested.

Spirals should be extremely acurate in this case because we have a clear ABC Flat correction to use. They are auto drawn by Fischer's charting software.

5- Note that as long as the CCi remains extended > 100 (75 in our current case), we have a prolonged oscillation in an impulse wave. It has become confirmed prolonged because of the current restart of a Wave-1 marked by any momentum gold cross while price is above its moving average. (i.e- running in trending levels = above 100 or 75 in the CCi).

Trully such an oscillation is becoming extremely over extended, and logically should make a deep correction sometime. But keep in mind that Now, due to outbreak of wave-1. The oscillatory cycle must make 5 impulse advaces, before making any meaningful 3 move correction (-Elliot). The advances may be muted at worst, but never the less will be made.

The current advances are being driven forward whenever speculative selling (because Eurodollar has broken above all time highs), out weights buying. The buying is trully dirven by the higher degree current bull secular TREND, because of Fundamentals.

This means that retractions can no longer be deep (so much as the CCi never closes below 75), & corrections / retractions in wave-2 will make a serries of complex flats or a complex elongated pattern at most. (triangles or their likes).

6-Its most important of course to be disciplined enough, & tightly observe the above 3 segregation & momentum rules during actual comitted entries, but on smaller intraday frames.

All the Very Best

[Summerset]

By running an Andrews Fork on the momentum index of a 5th wave, or the momentum index of any ABC bottoming / topping formation, we can forecast the demise of one higher degree wave, and breakout of the next, upon momentum breakout of the Fork's upper or lower medians.

This relationship is true with any momentum index. Not Just CCi. And is shown, on the current Eurodollar 4hr Chart attached.

Note that the breakout of wave 2 into 3, was precceded by breakout from the upper median of the mommentum fork running on waves 5 --> A/B/C. (all waves of one lesser degree to the current degree).

The same situation is currently materializing with the current impulse wave -3, on 4hrs, which its about to break its lower momentum median & tumble into 4.

Once confirmed over the coming few hrs, the traget is 1.5000

The recommendation is to sell 5440 --> 1.5000. If missed, it possible to sell a break below the 1.618 fib extension shown on the 4hr chart.

Just in case the lower momentum median doesn't break, and price is still doing an extended wave-3 on 4hrs. We will hedge our sell position by buying a stop above the current flat high made at 5520 to target 5770, on the daily.

This is clearly shown on the Daily Chart attached. 5770 is the 2.618 extension of the last corrective swing.

On the daily too, note that we are about to break below the wave-1 momentum fork.

Usually waves 3 show, an extenstion in overbought momentum. While waves-1 & 5s, show only spikes in overbought territory.

Momentum Spikes, and extensions should alternate. Accordingly, with current daily wave-1 we (should) see spike to sell into. But its not confirmed until the momentum fork breaks, and double confirmed with the CCi falling below 100. Because of this possibility of an extension can not be entirely ruled out, and we stand ordered to buy 5520 too with our sell of 5440, or reverse in the 5520/30 vacinity.

After the move is over at 4980/5000, we would buy on signal.

Profitable trading

[Summerset]

As outlined above, Shorts at 5440 should have now engaged, with stops / hedge or reversal to longs at 5520

[rufffen]

hi summerset, how is it going? good to see you posting updates!

Check out this mean USD JPY triangle, it appears it has been brokern to the downside. http://www.moneytec.com/forums/234264-post40.html

Also Im watchin 2.0340-60 area on GBP USD to confirm reversal, meanwhile EUR USD is trading at over 5500 and I can't be certain as to the future direction. USD JPY is pulling towards 95, so that might mean further upside on EUR USD GBP USD, although technicals points that EUR and GBP are nearing reversal point. What do you say?

[zunis-myst]

Yes, it appears - the week hasn't ended yet. We'll know by tomorrow 4.pm CET

[Summerset]

Hi Everyone.

Eurodollar seems to be breaking upwards from an ascending triangle. (Chart-A). If the Acceleration cycle (ADX) truns upwards, the issue willbe embarking on a new upleg in the TREND.

Its time to buy the market for the thrust to 1.6700, and trail the buys by keeping stops below an EMA & BB calculated on the daily lows of 5 or 7 periods. (Both are shown on Chart-A).

For more articulate buying, Chart-B is attached.

Try to buy the triangle's bottom of course at 5750, and double at 5685. A buy stop can be placed at 5999.

I am buying the market on a daily basis, with a stop below the registered low < 5700 at 3.5% Risk exposure. It is possible to be stopped of course, and if so, I will re-load market with stop always below registered low.

The 1st target is 6250 (See chart-B). After an extended 3, expect 5 to equal 1, and 6250 to be easily spiked.

Depending on the pattern that develops at 1.618, progress towards 1.67 at 2.618, will depend on duration of the resistance at 1.618, and wether its a support consolidation or resistance. Either case if the trader stays out of the BB-7 on low close - lower band, its safe to trail to 1.67

Profitable Trading

[zunis-myst]

Thank you Summerset. As always an excellent analysis.
Just one argument about your final target > 1.67. We should consider the European fundamentals and also the global developement, that would weaken more and more. Here I have an illuminating link (from yesterday, April 22,) to what I think what could happen:
http://www.dailyreckoning.com/index.html

And here my pitchfork where the Euro will have a hard time soon to break through.
[ATTACH]28755[/ATTACH