EURUSD: DAILY CHART 10/11/2015

11. Okt. 2015

Lots going on here so pay attention!

I am showing a POTENTIAL Bearish bat that I first posted about 2 months ago (purple) that might mark the end of the wave 4 retracement. This bat completes within the MAJOR SR Structure Zones. This area shold have a high probablity of reversal.

But focus in on the current price actions and you will see 2 POTENTIAL patterns that I have drawn in that may be possible targets for the wave (B) completion I am expecting to happen. One is a Gartley (more on that later) and the other is a butterfly. What you will notice is that both wold complete BELOW the lower TL of that large flag pattern. If proces break below the flag's lower TL and fill one or both of these patterns, it DOES NOT invalidate the flag pattern as it would take a new down trend from there to break the flag. For example, if prices broke the lwer TL of the flag, teh nretraced back up to retest that TL and then drop from there, then that cold possibly signal a new downtrend and the end of the flag pattern. It's a possibility that can't be just dismissed as remember, this is a BEARISH flag. However, my OVERALL bias remains BULLISH.

WOLFE WAVE
The Wolfe Wave I have drawn in here is ONLY a POSSIBLE Wolfe Wave and by no means am I saying it will happen. But I can't ignore that it's possible either. If prices do complete this Wolfe Wave, then look for an upswing to follow.

PATTERNS
The way I use patterns is probably not the way most harmonic traders use patterns. I've said many times that I do not consider myself a "pure" harmonics trader. Yes, I try to adhere strcitly to the rules and ratios of harmonic patterns as they are highly specific when it comes to the numbers that must be used in order to achieve the accuracy they get. But for me, patterns like wave counts must "make sense" where you place them. If they do'nt make sense where you draw them, then the lilklihood that they will work is decreased. You must keep in mind that patterns drawn on the chart mean nothing to the market. We use them ONLY to be able to put some kind of easily recognizable geoetric pattern on the underlying numbers which aren't so readily apparent. Patterns in itself do not direct the market what to do. Many timess, although it "appears" that the pattern worked, what is REALLY HAPPENING is that the TRUE reason why the market may have reacted according to the pattern could be some other cause and not the pattern. But the pattern was able to "REVEAL" the underlying cause that is otherweise "invisible" to the naked eye and not entirley obvious. So then it appears for all intents and purposes that he pattern somehow magically "worked". All well and good.

Now the reason for my little dissertaion on patterns here is that I am referring to the Gartley as being "valid" and will watch the PA for reaction if/when it gets filled is because it would complete right near to the lower TL of the flag pattern. Which of course, "makes sense". If it reverses from there, is it because of the Gartley that it reverses? Or is it the TL? Wave count? RSI? Divergence? Who knows? And as long as I make pips off of it, I don't care what is the true reason!

CONTINUED IN COMMENT SECTION BELOW.....