a LOT of ratio’s coming together …
here is the EUR vs USD. note, a pretty wide band of target zones and when working w/ FX that’s just too much risk …
so, a majority of the USD Index is made of Euro so what is the USD doing and we can use that as a mirror image …man, what a target zone on the USD!
last post on US Dollar Index: https://bartscharts.com/2021/02/22/usd-index-close-to-a-big-move-up/
well, it’s certainly getting interesting.
watch the levels shown on the GBP and the EURO and USD Index to get a feel for what might be coming this week.
IF we hold these levels then expect dollar strength .. EURO and POUND weak.
IF we FAIL on these sell patterns for the EURO and the POUND then the dollar will take a pounding and go right into the level we have been waiting for what seems like a LONG LONG time … stay tuned tonight.
personally, WAITING and have a “hunch” that the levels will fail (USD weakness) and go forth and attack the lower level shown on the USD Index which is the SAME level equal to EVERY move lower in the USD in the past 30+ years. worth waiting for … don’t you think?
last EURGBP post: https://bartscharts.com/2021/04/01/eurgbp-2/
at this point, to protect a position, if you have one open, move stop to entry level at .8475.
you can see the “polarity” principle in play where the support in the spring of last year is now acting as resistance in the spring of this year …. hmmmm.
anyhoo … I’m looking for an initial target to take some off in/around 8850.
note the 38.2 and 50% retracements, largest measured move correction (dashed red line) and he polarity principle again but this time highlighted by a darker/bolder red. why? this level held as support for MONTHS and when it finally gave away, it gave away big …
note, depending on the form of the correction (if it even stops here) I might be looking to add on a pullback into the 8550-8600 area.
if you have been following my blog, you’ll remember the big measured moves that were around when the dollar was carving out THE low. they have appeared/are appearing again. w/ a wrinkle … using “basic” monthly cycle tools you can see that we have a BIG cycle coming in this month which lines up w/ the measured move target zone a little lower in the index. this could be a BIG DOLLAR MOVE higher ….
below you’ll find the chart that started the dollar bears growling and stopped the dollar bull in it’s track. the form, proportion and balance are amazing and exact. take time to study this chart
since then, the USD Index has basically been carving out what looks like a flat correction and then higher … you can read prior posts to see if this was an A-B-C correction or 1,2,3,4 (in work/finishing) and then higher in a big 5th wave. we are getting a little below the end of wave 1 which breaks a rule if your a purist but it sure looks like we are bottoming. then, the last chart is an intraday chart showing a possible mathematical derivation of wave length based on fibo relationships that could get us into the target zone … so, stand by, as this is a BIG level coming up on the USD.
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 🙂 not sure I do or I don’t to be honest 🙂 ) 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
I’ve been following STOXX for a friend overseas and I truly hope that he and his family and friends are OK w/ all this craziness going on …hat tip, friend.
here’s the link to the STOXX posts on my site: https://bartscharts.com/?s=stoxx
net-net, my friend contacted me a couple years ago and asked about European Banks and, in particular, the STOXX. it was hard to email him back because what I saw – which unfortunately was proven to be correct was a multi-year triangle that had been forming since 2009. it’s ramifications? well, the STOXX WOULD go to new lows and, more than likely, ACCELERATE the move lower because … that’s the nature of moves out of triangle. in my world of using crayons, I have no idea, nor do I care ‘what’ caused the market move one way or the other. there are ALWAYS a thousand reasons. for me, it’s a pattern that helps one manage risk and help one determine how much $$$ to risk and then pull the trigger.
Here’s the updated STOXX chart:
I went back and captured the daily chart showing the target zone … two years ago, chart below:
Note, Darth Vader and the Dark Side connotation with the mouse image below ….
My biggest LOSSES were back in the day trying to trade the FED Decision in the spot currency markets. There I said it.
What I came to realize, for me – maybe not for you – is its addicting, adrenaline filled adult version of Cowboys an Indians. I can’t even begin to estimate the number of people frantically clicking their mouses for BIDS and ASKS and seeing the easy money then evaporate into the losses but then turn into winnesr and then losers and then, ultimately, closing the position at the market and saying – “great I made money” or “I am so thankful I am out of the market.” Come on, admit it, if your a trader you’ve more than likely jumped into the cage with the gorilla’s juggling dynamite. (OBTW, the dynamite is lit – which means, it will BLOW UP)
Go ahead, click that mouse at 2 EST and you might as well be throwing money up into the center of a tornado with an insane idea that you know where the money will land. (hint: you don’t)
How big is the Spot FX currency market?
(note, at any given time the “retail” market is able to trade roughly 1.5-1.8 trillion)
so, what do you do? well you plan … you play “if-then” and look to enter the market long after the chaotic swings. Trust me, this takes discipline, letting 200+ pips move go in whatever way they are going to go and – sit on your hands.
#3 – as a discretionary trader and somewhat impulsive personality – I have a rule of life: DO NOT TRADE W/IN ONE HOUR of any major fundamental news announcement. NO MATTER HOW BIG THE MOVE.
I’m not trying to preach here – I’m reiterating my gameplan for today at/around 2 EST. Bottom line is there is no gameplan – I’m NOT going to trade a FED RATE announcement. I will watch the chaos like a sniper and prepare my next move … why?
Well, as you can see over the past couple posts the USD is at/approaching a crucial juncture. I honestly don’t know which way it will go but we have MAJOR patterns on the EURO, POUND, YEN, AUSSIE, KIWI that need to work themselves out. The EURO has been in a trading range for a YEAR. It’s also showing some similarities to the bottom that was formed in November 2000.
So, the charts below are going to be my gameplan for post-FOMC tonight around the Asian open.
CHEERS – Bart
- deeply oversold – the most ever since 2000
- consolidation occurring like 2000. should resolve soon
- RSI butting up against resistance (polarity)
- note the RSI has “recovered” but isn’t in the oversold region of the past rallies – it has “recovered” with no real move UP – it’s consolidating.
- note the contracting triangle
EURO DAILY: here’s my gameplan for the EURO in a nutshell
- the PATTERN shows a consolidating triangle. they occur in 5 waves a-b-c-d-e and the “wave” relationship should be .618 of the preceding wave. the “bc” wave has done that and we have a very nice pattern for “cd” in/around 1.0644-1.0720.
- would like to see that hold w/ a move up into “e” to complete the sequence.
- IF we break hard to the downside and the pattern is broken then “assume” that “e?” was the end of the consolidation and get short looking for a daily close below lower trend line as confirmation.
- IF we break strong to the upside then look for “breakout targets” and watch price action in/around these areas. If continually strong and a DAILY close ABOVE 1.171 then TRIANGLE THESIS IS WRONG. Adjust
I like ratio analysis .. it shows rotation, strength vs weakness and a bunch of stuff.
Greece and Eurozone have been all the rage and, well, rightly so – I guess.
But I’m trying to tune all that out and just draw some pictures.
Here’s the deal .. when the DAX underperforms the NYA (the candles go down) then the EURO bottoms and goes UP against the dollar (red line)
So, we just finished a SELL PATTERN of RELATIVE STRENGTH of the DAX vs NYA. So, the DAX should underperform and, if 2015 is any guide, then the EURO should bottom and start up for a tradeable long.
If you read this blog you know that we’ve been a dollar bull, for a while. Great … how do you make money from that? Do you simply step into the fray and short the EURO right here right now OR do your rules require you to wait for a PATTERN to appear … my rules are the latter.
so, you’ve seen some “support” areas ID and, while they worked for a bit, they were all taken out, eventually. SO I WAIT …
this AM, some craziness about ECB, rates cut, QE ( I like QEE – quantitative easing European), deflation and blah blah blah. who cares ….
let’s find a pattern for support and MAYBE BUY this puppy up into the 1.32-3400 handle. Or, just wait for the bounce and sell pattern to appear.
either way, here’s my latest attempt.
I’m pulling out fundamental frequencies and arcs/waves/music … the Voo Doo is in full grunt (reference flying fighters – full afterburner = full grunt) and am now looking for the 1.3000 handle to offer support. We’ll see …don’t read too much into the charts. Just think of a ROCK hitting the WATER and depending on the velocity and weight of the rock hitting the water WAVES will appear and those waves are mathematically defined by their periodicity, frequency and period. Folks, same goes for the market …
Believe it or not …
if you don’t believe this lie is true, ask the blind man as he saw it too! http://strobowave.com/index_7.htm
note in the chart below, we define the rock hitting the water as the initial impulse move down. from there we can calculate the fundamental frequency and come up w/ a target. that is the horizontal blue line ….
since WAVES are being produced we can now project those waves for price and time targets. how do we do that … we use the POLARITY PRINCIPLE. expand the initital impulse arc by fibonacci (music), sacred geometry (1-5, square roots, inverse of those square roots) and the equal octave scale of music. the KEY is to use past ARC resistance and support and look for the future areas transposed on the arcs as you project them. as technicians we “usually” use horizontal support and resistance. we are basically doing the same thing but w/ a twist … we are using the natural plane of the markets movement (X,Y,Z) to see the waves and therefore musical polarity.
rock on, ok?