This Geo has lined up a significant number of condition, both intrinsic to its internal structure and rules (e.g.: reciprocal ab = cd symmetry of its 1-2 Leg, "Tunneling" using "Geo-Anchor"), as well as extrinsic factors, such as the background development of an Elliott Wave bearish impulse, which is in the process of completing its 5th and final wave - At the foreground of all these technical is the Predictive/Forecasting Model, which has developed a bearish bias and defined a significant qualitative target, namely: TG-Lo = 0.96760.
As a disclaimer, I have to site a strong bias towards this analysis, as I have entered a short position today (30 JUN 2015) at 1.13658.
Invalidation of the trade is rather a matter of each trader's risk tolerance as defined by his/her risk management rule. However, for those needing a structural reference, I would consider transgression of 1.16590 an event that should bring the analysis to reconsideration.
Most importantly, I would like to share certain features of Fibonacci which are crucial to defining probable targets.
FIBONACCI & TARGETS:
As illustrated in the chart, there is a close alignment between the aforementioned TG-Lo = 0.96760 (My target of this on-going trade), and the 1.272-Fibonacci extension value, wherein 1.272 is simply the square root of 1.618.
This 1.272 extension level is rather significant in the shallowest, most aggressive counter-trend events, which is what is typically expected in the behavior of the background geometry within the price field, where a quick reversal can be seen in the ectopic locus of Point-5, expressed as Point-5-prime (5').
Another extension that would be typical of a quick turn-around in such a counter-trend measure is 1.414, whereas the standard 1.618 represents a beaten path along which most junior players might pitch their tent and never get hitched.
Along the RSI line, I have added a possible correlation in which only TWO prior events have seen values significantly elevated, followed by a price contraction of 0.786-Fib or extension of 1.272-Fib. It is from this comparative evaluation that I derive whether such excesses in RSI are accompanied by a rigid or elastic price response - In this case, the contraction and shallow extension make this a rather rigid response.
This same response is expected out of a comparable RSI-to-price elastic correlation.
There are other features that we will review as price develops and the geometry unfolds. If it goes our way, all the better, and if not, let us make it a lesson, all the same.
Best,
David Alcindor Predictive Analysis & Forecasting Durango, Colorado - USA
22 OCT 2015 - I will use this space and continue pertinent "Chart Updates" as well as "Tech-Notes" using this "Update Status". so that the analysis remain in easily-retrievable chronoclogy - However, all queries, discussions and other such comments will remain in the "Post Comment" section.
Following is a cut/paste going back to 14 OCT 2015 ===================== 14 OCT 2015 - Chart Update / Tech-Note:
Following a protracted consolidation, price is finally testing new lows, moving in the direction of the bearish targets:
David Alcindor ========================
Kommentar
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15 OCT 2015 - Chart Update / Tech-Note - FORECASTING METHODS USING ELLIOTT WAVE AND FIBONACCI ANALYSES:
Is anyone still following this snail-paced chart?
I thought it would be a good time at this point to develop a bit of the analysis, looking at several technical components in support of the bearish forecast. First, I've come across a few charts that posted contrarian directions, using a mix of patterns or technical tools. I do not feel that I am in a place to correct anyone's analysis once I see something that is wrong, but I can reassert some of my own analysis to see whether I might be looking at it the wrong way.
What follows is a bit of a detailed analysis on this AUDNZD pair, looking specifically at Elliott Wave counts. The degrees used in the analysis are as follows:
1 - Cycle, looking at 1+ years of cycle completion 2 - Primary, looking at months to 1-year cycle completion 3 - Intermediate, looking at weeks to months of cycle completion
A cycle would comprise a 5-wave impulse and a 3-wave correction
DETAILED ANALYSIS:
Now, let's look at the WEEKLY chart:
At first glance, one should agree that the current price action is occurring along a down-slope. Hence, we are dealing with a bearish development. Moreover, the swing low that is developing is paced at an Elliott Wave defining an impulse - I have highlighted the internal motive wave that constitute the 3rd wave of the entire bearish impulse, flanked by a preceding 3-wave correction and followed by another 3-wave correction, each belonging to a separate breed of corrective waves.
These corrective waves do not just a function of delaying the net forward motion of price. They are also important as they help generate a forecast regarding the probability of the ensuing price action.
First, let's note that the preceding correction is a 3-wave with internals defined as 5-3-5. The only possible correction starting with a 5-wave internal is a zig-zag ("ZZ"). Although there are several types of these ZZ, here we are dealing with the simplest of them all (others would be a Double-ZZ and a Triple-ZZ). Note also that in most cases, Wave-2 will develop a simpler correction than Wave-4, as is the case in the current chart:
Second, recall that two rules will tend to affect the predictive potential of price action using these waves (which is why corrective waves are excellent forecasting tools in terms of establishing a probability in the next price development). The first rule is that of equality affecting the development of the motive waves within an impulse. In contrast, alternations affect the development of corrective waves.
... Cont'd ...
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EQUALITY: In general terms, motive wave-1 would almost always equal motive wave-2 if motive wave-3 is extended. Therefore, looking at the entire move and ascribing a wave count, we are looking at the first impulse down, constituting motive wave-1 ("IMP) in green:
If the middle segment of the entire impulse was elongated, then it could be that wave-3, which drives that middle segment, would be extended. In such a case, then the rule of equality would allow us to forecast with a relatively high probability that motive wave-4, which stands at the symmetrical opposite of the elongation, would also be equal to the height (as well as the breath) of the first wave. We would thus be able to forecast the following possible target, terminating at the level of the pink arrow:
Note that the anatomy of the internal motive wave-3 is simply too simple to consider this to be an elongation. Therefore, we can also use the forecasting method of this equality rule and say beforehand that it would probably not apply here.
ALTERNATIONS: First, let's highlight the corrective waves of consideration:
As mentioned before, the corrective wave displays a 5-3-5 internal construction - This is a feature unique to the zig-zag. So, if you know you are establishing a wave count that starts as a 5-wave impulse and moving against the prevailing trend, then you are probably dealing with a ZZ.
The second corrective wave highlighted in the chart has two important features: First, its internal count reveals a 3-3-5 structure - This tells you that you are dealing with a Flat, of which there are 3 forms: Regular, Running and Expanding. Second, looking at the behavior of each internal waves of this Flat, we see that wave-B exceeds the origination level of wave-A, and that wave-C exceed the termination level of wave-A. This makes it an Expanded Flat. In a Regular Flat, wave-B would end where wave-A started, and wave-C would end where wave-A ended, all appearing into a flat top and flat bottom geometry. In contrast, in a Running Flat, the pattern looks like wave-B wants to waste no time moving forward, bringing in the direction of the dominant trend its origin and terminal point skewed above those of wave-A, giving wave-C no chance to level with the end of wave-A.
... Con'td ...
Kommentar
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FIBONACCI PROPORTIONALITY:
Since we are on the topic of proportion, some might find it interesting to note that these corrective waves maintain internal proportions, such that:
1 - Wave-B of the FIRST corrective wave = Wave-C in terms of breadth;
Similarly:
2 - Wave-B of the SECOND corrective wave = Wave-C in terms of breadth
As you might expect, the heights of these wave also maintain internal correspondences, which you can verify on your own. Simply use 1.131, 1.272, 1.313, 1.414, 1.500 and 1.618 to confirm these internal relationship, which are really maintained throughout all and any other Elliott Wave pattern.
OVERALL:
I hope I was able to clarify the expected intent of price action, since what we just covered serves really one main purpose: Deciding what is the most probable price direction. I decided to add this Elliott Wave analysis by stepping away from the geometry exercises I have introduced in this community over the year (Geo), and look into rules and properties that would support continued decline in price.
For those who have followed the analysis from the beginning, here is the Geo as a background geometry, as well as the original target, defined by the Predictive/Forecasting Model in the foreground, as:
- TG-Lo = 0.96760 - 30 JUN 2015
This is a "Qual-Target", which means that a significant push back in the order of a reversal (rather than retracement) is likely to occur.
Best trading!
David Alcindor Predictive Analysis & Forecasting Durango, Colorado - USA
For those familiar with the "House Cleaning" strategy, look for a completion here - Essentially, price is expected to relax to the upside before recommencing its bearish tack:
David Alcindor
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30 OCT 2015 - Chart Update / Target Hit:
Price hit its first and last quantitative target. Per Predictive/Forecasting Model, this should impose a minimal resistance to bears:
Overall directional bias remains bearish - Weekly chart targets remain intact and in force.
David Alcindor
Kommentar
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03 NOV 2015 - Chart Update / Tech-Note:
Price is reacting upward from the quantitative target (TG-1) ... As you may recall, Quant-Target are levels that will define future R/S levels if entering a new territory, or would likely confirm prior R/S levels when traveling back into visited territories.
In terms of amplitude, Quant-Targets will tend to cause a limited reaction (i.e.: retracement rathen than reversal) in price, typically in the 0.386 to 0.618-Fibonaci range.
David Alcindor
Kommentar
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04 NOV 2015 - Chart Update / Tech-Note:
As mentioned before, a probable "House Cleaning" pattern is completing.
Look for 1.09622 level as probable reversal level:
David Alcindor
Kommentar
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07 NOV 2015 - Chart Update / Tech-Note:
Despite a recent consolidation, a reversal off of 1.09622 remains a high-probability event.
David Alcindor
Kommentar
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ANNOUNCEMENT: "Brain Chatter Rooms"
There are several "Chatrooms" in which I do most of the "brain chatter" with myself. These rooms are more like back-stage "ateliers" where I prepare educational trades in advance.
You are welcome to wipe the dust off of the windows and peek in. The glass is rather thick: I rarely reply to taps on the glass or even shouts from the door. I work very late hours in the ER and I use these moments to collect thoughts, ideas, concepts, and lay it out there in the open.
If you think this could be beneficial to friends, peers, family, and perhaps perk up their interest in more advance technical analysis than the over-traded patterns, then feel free to share these links with them.
These are all free analyses, all resulting from years of defining a Predictive/Forecasting Model. I appreciate your intelligent comment, insightful posts and kind referrals.
Best,
David Alcindor Predictive Analysis & Forecasting Durango, Colorado - USA
* * * Archives of Hit Targets * * * tradingview.com/chat/ ===================================
Feel free to capture and share links - I do apologize ahead for not immediately or rather rarely replying to inquiries within these chatroom - Best is to contact me through the threads, such as this one, where the discussion can reach a far greater number of traders and benefit not just the chatroom participants, but the larger community of traders here on TradingView and outside.
Also, these chatrooms are not spaces where I would engage traders into circular arguments, as I really have no opinion of the underlying market for which the analyses are provided. This is all educational, and if you need real trading advice, seek that of a certified professional - I am a non-certified life-time student of the market. I am the author of several proprietary (i.e.: not for sharing) patterns (Great White, Janus, Euclid) and lesson-based shared methods (EAGLE, AFT), but I do spend most of my time double tasking between broken people and breaking markets.
Best,
David Alcindor
PS: If you like certain charts, ideas, concepts, then given it a thumbs-up so I know which one to delve into and which one to lay off of. And, if you think these are ideas that can advance the edification of a peer, then I thank you ahead for sharing - I don't make money via memberships. Just trading my own ideas and free-sharing ... Just a better credential, if I may say so.
Cheers to your profitable trades,
David
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Kommentar
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09 NOV 2015 - Chart Update:
1.09622 remains unanswered and still probable:
David Alcindor
Kommentar
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12 NOV 2015 - Chart Update:
Price leaps to 1.09622 as forecast. Expecting reversal from this level, resumption of bearish targets:
Nascent Geo is occurring within the protracted consolidation zone; Predictive/Forecasting Model's targets remain intact:
4-Hour Chart:
1-Hour Chart:
Note the Geo's internal construction requirements are met, such that:
1 - The 1-2 Leg completes a reciprocal ab = cd pattern
2 - The 2-3 Leg is typically a complex Elliott Wave zig-zag ("ZZ") such as a TZZ, or less commonly a 5-wave impulse ("IMP").
3 - The 3-4 Leg is typically a simple ZZ with its recognizable a-b-c internal construction as drawn in the H1 chart
4 - The 4-5 Leg is typically a simple ZZ, except in this case, where an IMP is expected.
The most proximal target here is the highlighted zone at the geometry's underbelly, corresponding to a significant historical pivot level, as shown in the larger H4 chart.
Best,
David Alcindor
ChimbOt
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Does 5 have to be hit ?
4xForecaster
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Hello @ChimbOt - Yes, a Point-5 is best validated if hit. However, in the case of the Wolfe Wave, I have seen many instances where it is not hit, as price misses by a few pips. The Geo is built to avoid near-misses in all of these points. So, if this does not occur in the Geo, then the expected development will not occur, as in this case, where the Geo turned out to not be one.
Of course, we are looking perhaps too prematurely at the Geo, as I construct speculative 1-3 and 2-4 Lines way early in the price action, but this is merely for the exercise that I share, which is to demonstrate how to train for early Geo and Wolfe Wave detection. I prefer to do it with the Geo, as I have defined very strict internal construction requirements, which if not met, allow me to not waste my time with the development of price.
Hope this makes sense.
David
4xForecaster
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25 OCT 2015 - Tech-Note:
Feel free to follow this frame-by-frame Elliott Wave channel method to define probable proximal targets, as well as points 1, 2, 3, 4 and 5 of an impulse:
(See most recent comments at the bottom of this thread:tradingview.com/chat/ in the "AUD | Predictive Analysis & Forecasting" room)
If this is relevant to your peers, please share this free lesson.
David Alcindor
4xForecaster
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22 OCT 2015 - Chart Update / Tech-Note:
For those familiar with the "House Cleaning" strategy, look for a completion here - Essentially, price is expected to relax to the upside before recommencing its bearish tack:
David Alcindor
Heelfan23
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Good afternoon David!!! I hope all is well. Sorry, I'm not familiar with House Cleaning. When you have some time can you expand on that? I'm trying to absorb as much as possible. Once again you are right on point with your predictions. Absolutely amazing!!!!!
4xForecaster
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30 AUG 2015 - Chart update:
BACA < 1.08940 opens floor to beas:
David
4xForecaster
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30 JUN 2015 - Tech-Note:
* * * Can A Pair Fall Up When Its Component Rise Down? * * *
Simple answer: Yes.
For some traders, there is often a confused glare in their eyes when I discuss foreign exchange and what the pair of currency really means in terms of their intrinsic strength, relative strength and the net movement of that pair - Typically, the discussion becomes coma-inducing when I would mention that a Forex pair could rise even if both individual sides of the pair are in decline, or whenever the contrary occurs, where the pair could fall while both sides of individual currencies are gaining strength.
The concept here should not be lost when you are considering crosses, such as majors in AUDUSD, NZDUSD and the minor AUDNZD. In the case of this AUD vs. NZD analysis, we are suggesting that the dominant geometry would have the pair decline around the level I defined in the analysis. The trader should then assume a number of scenarios that relates to the intrinsic strength of its component, namely what is the strength of AUD and the strength of NZD on their own, distinct from one another?
There are several components worth looking in terms of fundamental, technical and quantitative data that would answer this question. I personally like to look at AUD and NZD as "objects" moved by commodity pricing. For instance, AUD will move in positive correlation with gold, whereas NZD would be most likely influenced by the dairy price, the former representing a large producing and world exporter of precious metals (think gilding India), whereas the latter depends on the immediate Asian theater of dairy and meat consumption (think glutting China).
Still, each of these sovereign currencies would need to be expressed in relative terms to one another through a common intermediary - Think USD. Hence, it would be worth spending some time with the AUDUSD and NZDUSD charts, and all the while keeping an on on central bank decisions (Reserve Bank of Australia, or RBA, and Reserve Bank Of New Zealand, or RBNZ, respectively), as well as keeping a thought on pertinent economic influences already discussed about, such as gold or other influential commodities, whose export have an indirect impact on revenues, consumer price index, and ultimately on central bank decision, once again.
In the case of the AUDUSD, here is what is occurring on a pure technical basis (and by technical, I am invoking the full range of basic technical analytical tools up to advanced market geometries, occult geometries) - Consider the following chart of AUDUSD and NZDUSD:
The AUDUSD chart offers a nascent Wolfe Wave geometry, with its 5-point plot, its 1-4 Line and the plunging 1-3 Line awaiting price validation as a trigger to go long to the upside.
The is also a developing Elliott Wave bearish impulse, whose internal construction depends on certain rules, such as the Rule of Alternations. If you look at Wave-2, its lingering pattern should be contrasted with a sharp, violent, shorter-term development of a Wave-4. Question here is, where is this Wave-4 starting, because once it is done rising, it will nose dive to the termination point of Wave-5, which is the moment I would seek to consider the Wolfe Wave pattern to have reach completion and signaling a long entry at the moment price rises above the 1-3 Line. But perhaps, we are diverging away from the point here, which is to being able to compare the expected probability of a directional move of one pair against that of another, so that the combination of the two, expressed in their own pair, can leak out clues about the composite chart, which is what AUDNZD is in relation to AUDUSD and NZDUSD.
Now comes the question: If the current AUDNZD analysis is expecting this pair to decline, how are we to expect the two individual pairs to rise at the same time? The question perhaps merits to remind oneself that Forex is a MORE THAN charting of relative sthrength. It is the visual expression of the difference between the rate of change of one currency against that of another currency. Thus, it matters not that both could be rising and their product be falling, or that both could be falling and their chart showed a rising trendline. What matters is that the trader understands the intrinsic fundamental, technical and quantitative engines that would move one currency faster or slower one way, and the other other faster or faster the same of opposite way.
After all, the product of AUDNZD is nothing else than the expression of each currencies, with a common intermediary, such that:
AUDUSD compared to NZDUSD
= AUDUSD / NZDUSD
= AUD/USD x USD/NZD
= AUD/NZD
Now, we are left with the conceptual task to answer questions that pertain to the manner that would move the pair. For instance, we already intuitively know that the pair would rise drastically if AUDUSD rallied and NZDUSD declined. But the following set of conditions are true as well:
AUDNZD would rally if both AUDUSD and NZDUSD rallied, but AUDUSD would rally at a faster pace
AUDNZD would rally if AUDUSD, but NZDUSD moved sideways
AUDNZD would rally if both AUDUSD and NZDUSD declined, but NZD would decline at a faster pace
So, can both currencies fall and cause the pair to rise? Yes - A perfect example of this interaction has recently been demonstrated in the UKOIL, USOIL and the relative strength chart that pits UKOIL against USOIL, as shown in the following illustrations:
UKOIL - Monthly chart:
(Source: - See link for multiple target-hits using the Predictive/Forecasting Model)
USOIL - Weekly chart:
(Source: - Here too, check out the performance of the Predictive/Forecasting Model)
In essence, Forex trading requires a more conceptual understanding of rate of change, whereby the differential in rates, and not the directional difference in the currencies, suffice to bring all the fundamental technical and quantitative date into one directional opinion. To be right about the direction of a pair demands to be confident about the direction of each component of the pair as well as understanding the intrinsic forces that influence each currencies.
Finally, the most important task about Forex trading is to understand which set of majors might move opposite against one another, so that the components of each major pair can be dealt with in a third, composite expression of the two. If I knew that RBA considers to cut rate (bearish for AUDUSD), whereas China decides to remove a tariff on all agricultural imports (bullish for NZDUSD), and the Fed has no plan to deliberate on a rate decision until later on in the year (neutral USD), then we have the best combination of two explosive, but opposite forces, wherein the fall in the AUD compounds the falling price action of the AUDNZD when a synchronous news release from China elevates the NZD to loftier valuation.
OVERALL, we are simply talking about trading two organic, living elements, each under the influence of their own fundamental, technical and quantitative data, which prompts the trader to eventually become intuitively apt at choosing the best pair, either as a major, or as a "composite" minor. For this reason, it is very important that the trader becomes well versed in some fundamental concepts, as well as escapes the beaten paths of overused basic technical analysis, and rises to the level of self-sufficient competency. I would recommend that traders read some books on inter-market analysis (just Google the terms, and read Ashraf Laidi's book for instance), and remain flexible with a mind's eye open to "weird" concepts of market geometries (read some of Constance "Connie" Brown books), since all other traditional methods are already discounted or predicted by more astute institutional traders - And perhaps read Twitter feeds from "Foreign Policy", "Strategic Forecast - STRATFOR", and "Foreign Affairs" to get what's coming in terms of geo-political tectonic motions - After all, technical analysis reflects price not so much moved by the retail trader, but by large policy-changing institutional players.
Those who know me have heard the following several times, but in my perception of the chart:
"Price is the carrot that dangles at the end of a stick helf by institutional hands"
If you can "pre-read" the market, you can forecast the market.
-------------------------------------
"The most reliable way to forecast the future is to try to understand the present.'
- John Naisbitt
Best,
David Alcindor
Predictive Analysis & Forecasting
Durango, Colorado - USA
Nascent Geo is occurring within the protracted consolidation zone; Predictive/Forecasting Model's targets remain intact:
4-Hour Chart:
1-Hour Chart:
Note the Geo's internal construction requirements are met, such that:
1 - The 1-2 Leg completes a reciprocal ab = cd pattern
2 - The 2-3 Leg is typically a complex Elliott Wave zig-zag ("ZZ") such as a TZZ, or less commonly a 5-wave impulse ("IMP").
3 - The 3-4 Leg is typically a simple ZZ with its recognizable a-b-c internal construction as drawn in the H1 chart
4 - The 4-5 Leg is typically a simple ZZ, except in this case, where an IMP is expected.
The most proximal target here is the highlighted zone at the geometry's underbelly, corresponding to a significant historical pivot level, as shown in the larger H4 chart.
Best,
David Alcindor