Math we like … EUR vs JPY

believe it or not, I learned to trade as a SPOT Fx dude ..no kidding. No stocks, no futures, no ETF’s out of the Navy I jumped right into the INSANE world of SPOT FX …

I still trade the SPOT MARKET … I’ll check out the majors, then the crosses and see what’s the scoop. no kidding, I once heard that ALL the world bonds and commodities and stock markets would have to operate for 90 days non-stop to match the liquidity of ONE DAY on the Currency Market. YEW …

in this case we have a currency pair as the EURO vs the Japanese Yen. chart goes up the Euro is stronger. chart goes down the Yen (versus the Euro) is stronger … it’s as simple as that.

I’m cruising the charts waiting to get locked down in CA and saw a neat chart to my eye. I just started working this chart and …boooooom … we find a level as depicted.

Let’s make this easy, when we have a LOT of math in a really TIGHT area we HAVE to take a swing at the bat … now, that being said, that is some nice thrust from the 121.62 area but I think that last thrust up was the end of a flat correction. so the recent wave down, should (trust my count or not ūüôā not sure I do or I don’t to be honest ūüôā ) go to our targeted BUY ZONE. Say 120.50-121.

let me know if you have any questions on how the levels were derived …

oh, in the spot fx world, w/ SO MUCH math in one area, I usually give myself 30 pips below – max- for my stop out. w/ the liquidity of the FX and the math as shown, go down to a 1 minute chart for the entry .. seeing these levels hit, instantaneously watching the reaction and to think that w/ a home computer and some PATTERN work the entire world STOPPED selling EUR vs JPY and started BUYING EUR vs JPY. still amazes me … I’m always surprised to see this insane way to look at anything rational about the markets work from time to time ….

good weekend to you – Bart

Trade / Investment of the Year?

12/31/2016 – just updating the ‘trade of the year 2016’ from August. I’m updating it because, right now, at the end of 2016 I don’t have a CLEAR CUT pattern. ¬†This triangle worked out grandly … we’ve hit a sentiment extreme in the Gold and EURO pessimism world so probably time to start throttling it back a little. ¬†We’ll see …

if anyone has some trade investment of the year ideas they would like to share – hit me. ¬†again, I’m simply looking for a PATTERN. ¬†the ‘trade of the year’ is a PATTERN not what I ‘believe’ but what I ‘see’ …

put the next 3 charts in context … they are an update to the post from August. ¬†Study the post all the way thru …

as always, rock on, ok?

HAPPY NEW YEAR!

page_16-12-31_14-54-00 page_16-12-31_15-02-31 page_16-12-31_15-04-22

 

 



you wait, patiently, for opportunities to appear which “change the game.”

as many of you have been following me know, the swing patterns that we watch take some time to develop … in this case a thesis is made for the “trade of the year” to be SHORT EURO vs USD.

what do we have working?

here you go …

Page_16-08-17_08-29-17

note, the MATH stopped the decline of the EURO and we are carving out – almost exactly – the same pattern that appeared at the all time low of the EURO after it was introduced. ¬†if you take the time to measure the moves …(I have) you’ll find the swings are almost exact. ¬†the LAST TIME the EURO did this it EXPLODED in a multi-year advance that crushed the dollar. is that going to happen again …?

have no idea … but the “rule” from the great land of the CMT is that the consolidated triangle breaks in the direction of the trend going into it …so, in this case, the EURO “should” breakdown against the USD. As shown from the lows in early 2000 .. it certainly didn’t do that. ¬†but here’s the daily … and remember the triangle has 5 legs labeled a,b,c,d,e ..

Page_16-08-17_21-02-07

here’s the dollar index pattern:

note we have an AB-CD present, a .618/.786 overlap and a 1.612 extension present. ¬†THIS COULD BE THE SUPPORT TO CATAPULT THE DOLLAR HIGHER …just a pattern.

Page_16-08-17_20-55-06

it’s just a pattern but the probability that we are in the final ‘e’ leg of the 1.5+ year consolidation of the EURO is high … this is POTENTIALLY a monster move coming ….

let me know if you have any questions …

B

PS – here’s the geometry of the consolidation .. one line oriented w/ price and time and 90 degree angles created this trend line. ¬†(I am writing this before I draw it – cheers)

Page_16-08-17_21-15-16

IF you take the time to study this – and why not if you subscribe to my blog you’ll find that MOST if not ALL the major pivots occurred around the construction of this simple square.

Here’s a great picture from Mr. Joe Dubs:

VItruvian-Man-Square-Circle-Green

here’s the monthly square:

Page_16-08-17_21-31-54

again, only one line created these trend lines and it was the low to high and then 90 degree angles. folks, take the time, defy human nature and prove it to yourself …look at the geometry present.

the other thing you can do, if you REALLY want to dig deep is to use the box height and widths to create the time cycles present in the EURO or any security. but I’m tired, it’s late …just think A^2+_B^2=C^2. ¬†perhaps there was something to Pythagoras and the Music of The Spheres …or not.

Bart

Trade / Investment of the Year?

you wait, patiently, for opportunities to appear which “change the game.”

as many of you have been following me know, the swing patterns that we watch take some time to develop … in this case a thesis is made for the “trade of the year” to be SHORT EURO vs USD.

what do we have working?

here you go …

Page_16-08-17_08-29-17

note, the MATH stopped the decline of the EURO and we are carving out – almost exactly – the same pattern that appeared at the all time low of the EURO after it was introduced. ¬†if you take the time to measure the moves …(I have) you’ll find the swings are almost exact. ¬†the LAST TIME the EURO did this it EXPLODED in a multi-year advance that crushed the dollar. is that going to happen again …?

have no idea … but the “rule” from the great land of the CMT is that the consolidated triangle breaks in the direction of the trend going into it …so, in this case, the EURO “should” breakdown against the USD. As shown from the lows in early 2000 .. it certainly didn’t do that. ¬†but here’s the daily … and remember the triangle has 5 legs labeled a,b,c,d,e ..

Page_16-08-17_21-02-07

here’s the dollar index pattern:

note we have an AB-CD present, a .618/.786 overlap and a 1.612 extension present. ¬†THIS COULD BE THE SUPPORT TO CATAPULT THE DOLLAR HIGHER …just a pattern.

Page_16-08-17_20-55-06

it’s just a pattern but the probability that we are in the final ‘e’ leg of the 1.5+ year consolidation of the EURO is high … this is POTENTIALLY a monster move coming ….

let me know if you have any questions …

B

PS – here’s the geometry of the consolidation .. one line oriented w/ price and time and 90 degree angles created this trend line. ¬†(I am writing this before I draw it – cheers)

Page_16-08-17_21-15-16

IF you take the time to study this – and why not if you subscribe to my blog you’ll find that MOST if not ALL the major pivots occurred around the construction of this simple square.

Here’s a great picture from Mr. Joe Dubs:

VItruvian-Man-Square-Circle-Green

here’s the monthly square:

Page_16-08-17_21-31-54

again, only one line created these trend lines and it was the low to high and then 90 degree angles. folks, take the time, defy human nature and prove it to yourself …look at the geometry present.

the other thing you can do, if you REALLY want to dig deep is to use the box height and widths to create the time cycles present in the EURO or any security. but I’m tired, it’s late …just think A^2+_B^2=C^2. ¬†perhaps there was something to Pythagoras and the Music of The Spheres …or not.

Bart

EURO gameplan w/ FED meeting on tap

CLIFF NOTES: trust your indicators.

MONTHLY RSI (blow up) – when I use to teach the capstone CMT Level III course RSI portion I used to say “look for the key transition.” The market will tell you when it’s “shifting a grid,” so to speak. ¬†The Monthly RSI is showing us that the BEARISH RESISTANCE zone 55-65 have held every rally attempt…HOWEVER, NOTE THAT THE LOWER END OF THE BEARISH SUPPORT ZONES HAS NEVER BEEN TOUCHED AND WE HAVE HIGHER LOWS. ¬†Talk about a mind screw … the resistance zones are clearly showing a BEAR market while the lower end is almost right in between the lower zone of BULLISH support and BEARISH support¬†ON THE RSI.¬† Folks, that’s a triangle for you. ¬†One of the other things that I used to teach is the vaunted “RSI M” and note at current levels we have an M formed at the end of a 1.5 year leg. ¬†We have to wait for the end of the month to see if it closes below that horizontal blue line, so be patient if you are a longer term swing trader – like me. MONTHLY RSI CONCLUSION: a hint to the downside, but no major grid shift evident (a BEAR or BULL market) evident till we test the RSI support zones.

 

EUR vs USD Monthly RSI study
EUR vs USD Monthly RSI study

Weekly RSI: The bearish RSI resistance zone has worked, like the monthly throughout this long, consolidated 5 years. ¬†As we dove into lows at the 1.2 level notice we even went to bottom of the RSI bearish support range. ¬†BUT THEN A KEY TRANSITION OCCURRED !!! The market came down and bounced off the TOP of the RSI bearish zone (30) and then the next support range bounced right off the lower end (40) of the BULLISH RSI support zone (denoted by the green horizontal line on the RSI) ¬†Folks, this is the “grid shift” we discussed and really throws this into a neither BULL or BEAR state of affairs. ¬†An, notice the “depth” of the RSI correction in comparison to the move in price … RSI dove for the deck, price corrected buy not “that much” and we found support right on the BULLISH RSI SUPPORT zone. ¬†Folks, this is, actually a BULLISH weekly RSI indication. ¬†WEEKLY RSI CONCLUSION: oversold finding support on a BULLISH RSI support zone … a continued bounce up in the foreseeable picture?

WEEKLY RSI Study EUR vs USD
WEEKLY RSI Study EUR vs USD

DAILY RSI: key here is as we were making HIGHER highs from Oct 2013 to present, the RSI was making LOWER LOWS …KEY IS right at the upper end of the bearish RSI zone resistance. ¬†Then, as we dove down from the highs made in May ’14, we found SUPPORT in the BEARISH RSI SUPPORT ZONE. ¬†The Daily chart is telling us we are working into a bearish break.

Given this look at the longer term RSI’s we now can state that since the highs in 09′ the BEARISH RESISTANCE ZONES have held and that has been marked by LOWER HIGHS. ¬†However, the contracting nature of the price action is such that on a Monthly and Weekly basis, the RSI transitioned to finding support in the BULLISH RSI band. ¬†In this type of situation a triangle or contracting type of price action is evident and, most everyone, get’s chopped up like the meat grinder in Pink Floyd’s The Wall.

the triangle meat grinder
the triangle meat grinder

in a triangle, the corresponding waves are supposed to be .618 of each leg the proceeded it … in this case our UP moves are .886 (exactly) and .618 that makes up the “e” leg of this potential scenario. ¬†This is important … please see below:

EURO bearish triangle
EURO bearish triangle

also, note that from the high we traced a 5 wave move down (bold blue lines) that do not break any “counting rules.” ¬†So, the ramification is this is 2nd or perhaps B wave triangle completing and we are starting a 3rd of 5 down or a C wave. ¬†Time will tell …

So what do we do to position?

1. ¬†there is a “minor” pattern completing in/around 1.3620. ¬†I don’t like this because the pattern “isn’t complete” w/ regards to C

2. ¬†we have a flat completing around 1.3680. ¬†that “could do it” but w/ the FED talking a BIG OLE’ BUY program could rip this thing 100-1550 pips easily.

I would expect each of these areas to be resistance zones but …

3. ¬†I really like the 1.3800 area due to a LOT of numbers coming together and the “pattern” completing and making sense.

EURO 4 hour intraday
EURO 4 hour intraday

My “hope” is that we do not break thru the lows but RALLY UP into the targeted short zone….guess only time will tell but here is a pretty well thought out gameplan.

Enjoy the ride …