TRADING FORK EXTREMES – 3 month Setups.

[Summerset]

Eurodollar Update & Trade Mgt Pdf attached.

Besides the trade managment outlined in the PDF. Our portfolio will begin to hedge the Eurodollar longs by buying Swissdollar @ 2445-2430, when / if Eurodollar meets 2970-85 again.

Buy in half strenght of the Eurodollar longs.

Clear partial profits of the hedge at 2530. Hold remainder till 2620 & above. If Eurodollar 2780-2860 levels are seen.

Recure the hedge position, using swissdollar, so long as Eurodollar fails to break / close above 2970 on a daily candle.

The hedge in swissdollar, is supposed to cushion the partial loss in Eurodollar longs if prices fall below 2860. (Recall that we are closing 1/2 longs at a loss if 2860 is breached).

[Summerset]

After closing longs averaging 2938, we have stood down Eurodollar the past 2 weekly sessions, for clarity. And in anticipation of 2865 levels to be seen.

Closing out of 2936 was a pre-mature mistake. As it turned out with last week's close @ 3170. The week before that, the last bull candle was not even contested to 61.8% of its fib value.

Furthermore last week's candle has hammered on the 50% AR of the weekly fork. (See attached chart below).

The fork Analogy remains the same. As outlined in the PDF above, and further to it, with last week's close, weekly candles are now rigidly supported on the neckline of the past inverted double top / W-bottom formation frequently spoken of in the PDF. (see chart below).

The weekly fork itself has been confirmed valid, by symmetry in inverted H&S pattern, together with the current inverted double top. Both of which have successively rectified this weekly fork's lower & central medians. (Again see chart bellow for this symmetry).

Consequently the coming target for the broken neckline of the inverted double top (w-bottom) is 3270-80 (See chart below).

Most important, a 3rd test of the "rectified" weekly fork's central median is about to ensue <3440>. This is a basic intermediate trend move on which we must capitalize.

Our bias is that a fall back to To 3000 levels (opportunity to load longs at lower levels), has been ruled out.

Why ?

Because a break of the neckline of the W-bottom, takes price measurement to 3270-80. Last week's close has proven that price is definately and finally done with falling back on & re-testing of the neckline support, (which has been going on for the past 5 weeks). Having bounced out of this modual platform, the next modual is a confluence between the 50% fork AR, together with the broken neckline measured price target. (see Chart below).

Further, our bias is for price to find support on this confluence zone <3240-70>, & re-test the fork ML. <3440>.

As its established that lower levels will no longer be seen. And to quickly capitalize on the coming advance. Recommend to long early next week <3124-43> level. Keeping stops below 3110, as far as 3089. Target 3270 (liquidate 50%), & add 50% longs between <3230-3190>, to continue riding longs to 3430. (liquidate all).

Profitable trading to All.

[Summerset]

Originally Posted by Summerset

As its established that lower levels will no longer be seen. And to quickly capitalize on the coming advance. Recommend to long early next week <3124-43> level. Keeping stops below 3110, as far as 3089. Target 3270 (liquidate 50%), & add 50% longs between <3230-3190>, to continue riding longs to 3430. (liquidate all).

Profitable trading to All.

Lower levels were not seen, despite massive Yen strenght last week which severed the Eurodollar's advance.

Though we would like to artribute this to our technical forecast (posted above). The reality of the situation is that with both Dollar & euro getting battered before the yen. The Euro advanced against its crosses (EurAud, & EuroSterling), where as the dollar failed. (Euro closed above daily intraday breakout ranges aganist both Sterling & Aud- Whereas the dollar didn't)

Our 3143 longs barely engaged -luckily too. The 3270 target was not met.

All CCi readings (Month, Week & Day) are trending long. Negative retractions on the 4hr CCi as long as they run contrary to a daily positive trending CCi graph are to be considered additional price consolidation work - and as such - dip buying opportunities.

We therefore continue to hold our position towards 3270 (1st target) & 3340 (Ammended Final target). Aggressive traders can also add to the position @ 3110/15 (if seen) - keeping SL below 3068.

On the Charts below note that Eurodollar has been moving up in a serries of re-curring inverted head & shoulder formations. This usually throws traders off the main advance- just as its about to breakout.

Down retractions have been in a re-curring serries of double top formations too.

Needless to say, had traders been able to see the patterns earlier. The sighting would have paid off handsomely. Both in breakout returns, and in measuring calculations of retraction ranges to re-load longs from.

Currently, another double top - inverse H&S formation appear to be in the making. (See Charts).

We will therefore aim to capitalize by closing longs @ 3330/40. Short there, and hedge our Eurodollar shorts, buy placing orders for Swissdollar shorts, incase the double top is violated. Else, ride the Eurodollar shorts back to 3090-40, (double top neckline). And Re-long at the double top neckline for an assult / break above the I-H&S neckline (3340).

Swissdollar hedging probability to be also engaged when longing @ 3090-40.

The set up is all best illustrated on the attched charts.

For the coming week the concentration will be on successfully closing @ 3340.

Profitable trading to Everyone.

[Summerset]

Originally Posted by Summerset

Our 3143 longs barely engaged - Aggressive traders can also add to the position @ 3110/15 (if seen) - keeping SL below 3068.

A H&S (-ve consolidation) has confirmed on 4hr- should take price to 3070.

Close longs now- or @ small loss, if SL not left @ b/e.

Re-long again at 3075/85. Remove limit longs from 3110/15 vicinity

[Summerset]

Originally Posted by Summerset

A H&S (-ve consolidation) has confirmed on 4hr- should take price to 3070.
Close longs now- or @ small loss, if SL not left @ b/e.
Re-long again at 3075/85. Remove limit longs from 3110/15 vicinity

Yesterday's H&S played out taking price down to 3070 as expected.
Now a multiple H&S formastion is playing out.
Recommend to close longs at <3150-65> for intraday players, and re-load @ <3087-3105>. Intraday players can trade both sides of the multiple shoulders this way too & Fro for the next 42 hrs.

Longterm, we hold our longs @ 3075, and will only bailout on a pullback to the neckline, after it gets successfully penetrated downward with an outburst of momkentum (Green bars -shown below on chart).

There will be ample time then to close the longs @ b/e on a pullback to the neckline. Else we would miss the chance of riding the longs on a breakout upwards from the multiple right shoulder(s), if they get to act as an inverted double top as happened previously with the left multiple shoulders. (See Chart attached).

[bukumirac]

[quote=Summerset]Yesterday's H&S played out taking price down to 3070 as expected.
Now a multiple H&S formastion is playing out.
Recommend to close longs at <3150-65> for intraday players, and re-load @ <3087-3105>. Intraday players can trade both sides of the multiple shoulders this way too & Fro for the next 42 hrs.


Hi Summerset,

Wery nice analisys, as usual. When right shoulde will form, do You expect big fall or some C corr.wave? about 2820 - 2680?

Thanks,
Bule

[Summerset]

Hello Bule

When the Right shoulder forms, we don't expect a major correction wave to 2820 levels. H&S formations are always related to the time frame sighted on.

A break of this current 4 hr multiple H&S neckline would take price 180 pips below the neckline . (i.e: 3080-180=2900 max).

We don't envision that happening, because of the formed weekly ledge (spoken of in earlier posts above). This ledge gives extremely strong weekly support as of 3040-3000. (possible levels on engineered stop hunting of the 3080 buy levels). But not a reliable forecast to hope for & trade.

Our bias is to continue holding the 3075 longs - right through the H&S movement as outlined below.

Originally Posted by Summerset

Longterm, we hold our longs @ 3075, and will only bailout on a pullback to the neckline, after it gets successfully penetrated downward with an outburst of momkentum (Green bars -shown below on chart).

There will be ample time then to close the longs @ b/e on a pullback to the neckline. Else we would miss the chance of riding the longs on a breakout upwards from the multiple right shoulder(s), if they get to act as an inverted double top as happened previously with the left multiple shoulders. (See Chart attached).

If U have a hedging platform, & wish to play intraday, U could sell the Eurodollar "shoulder head levels" marked out on the chart attached. OR buy Swissdollar- only when Eurdollar reaches such "Shoulder head levels" to sell it when Eurodollar reaches the "necklines" for i-day profits.

We are also more focused on a break upwards from the left shoulder, as it forms. And envision this to occur, on a violation of the inverted H&S formation shown in Gold on the Chart below. Or on a symmetry of the previous inverted double top pattern shown in white.

If the gold neckline gets violated, that would take price to support on top of the green channel shown on the chart below (3240).

I am personally biased, that if we see more consolidation in the "Shoulder heads range" during the next 16 hrs, that a breakout ould ensue upwards above the green channel top. Positive divergence on the 4-hr CCi point to this. (IMHO).

Its better for the trader to conserve his focus & capital, by engaging longs (with the trend). The aggressive trader can therefore engage longs at the lower shoulder heads level <3140-50>, or breakout of the gold neckline @ 3194.

The conservative "normal" trader would naturally buy 3088-->3110, or go look for something more lucrative & less risky. - No need to sweat or take unneccessary risk- In trading there usually never is anything neccessary to chase or run after actually. If in planning a trade, U feel that U are forced in a situation to chase it. Then its best to check yr plan premise, for it could be wrong.

Profitable Trading

[Summerset]

Originally Posted by Summerset

Longterm, we hold our longs @ 3075, and will only bailout on a pullback to the neckline, after it gets successfully penetrated downward with an outburst of momkentum (Green bars -shown below on chart).

There will be ample time then to close the longs @ b/e on a pullback to the neckline. Else we would miss the chance of riding the longs on a breakout upwards from the multiple right shoulder(s), if they get to act as an inverted double top as happened previously with the left multiple shoulders. (See Chart attached).

There will be a variation in trade mgt.

CHART-A:- Expect the 2nd right shoulder to form on 4hr taking price to 3140/50 max - close 3075 longs.

CHART-B:- The H&S on 4hr has formed a cute compact H&S on day, the fall of the right shoulder would take price to a measured target of 2900-2880 on 4hr chart. And to 2980 on daily chart. Recommend to Short 3145/55 to test such levels. SL @ 3195.

CHART-C:- Now comes the tricky part on the weekly. We don't expect the violation of the previous modul support upon which our bull flagmast is based. Instead we anticipate formation of an inverted H&S.

At exactly 3025/14 we recomend to long, with SL @ 2970. We will hold our long provided there is a reversal bar (4hr spike at the intraday breakout level). The longs are confirmed if there is a reversal daily bar.

Else we bailout on a retraction (there is a calculated risk of bailout failure of course) & prepare to re-long @ 2890. To cushion the risk, The Eurodollar longs can be hedged by Swissdollar longs too. - As an insurance policy.

Our longs would target breakout of gold neckline on CHART-C --> towards 3340.

Falling of price to 2890, negates the forecast inverted H&S formation, and turns it into an descending weekly triangle. This would have very bearish implications on Eurodollar.

And in our opinion is not sustained, as Asian central banks have been diversifying through accumilation @ such 2880 levels. Fundamentaly such accumilations would be distributed at 3340 & 3450 levels.

Trade Safe.