Higher Lows Lower Highs

[Snow Dog 10]

Narrow ranges yesterday with W pivots and support /resistance areas containing the moves.

 

After the strong move up there was little reaction down so I'm viewing this as pause in move up and retaining bias up to 1.3000 area (W pivot, Feb-Apr lows). There is the potential for sells on good candles should the upper resistance level hold again.

 

The German court case due Wed on the legalities of Euro bail outs obviously has the potential to make the market pause.

[Snow Dog 10]

OK 4hr lh, engulfing close, below 50 level. Against the D pos close but its a solid 4hr signal. We stopped at an obvious S level around the W pivot. The bounce up was what we would describe as weak Mrs V sold the 2b back into London session move down. The pre US session weak pos closes on 1hr avoided.

 

Mrs V 60% exited at RN for +30 ish and target is W S1 1.2900, then went off to watch X Factor on the TV. Will need to break the SR levels at 2990 and then W M2 2956.

[Snow Dog 10]

The W pivots and SR levels showing how important they are yet again. Move up on 22nd contained by W M3. Stall on move down at W pivot. Now again stall at W M2. Heading into London close reversal time that may provide a bounce.

 

Plan for tomorrow will be (pa permitting) a lh sell, partial tp and then again targets at W S1 and perhaps leaving a portion for W M1.

[Snow Dog 10]

Whilst we have support levels and W pivots for eur and gu that we can bounce up from sure looks like downside bias.

 

A bounce solid engulfing close might always give scalp buy, any move up in price between the 1hr ma's that gives a 5 min lh or 15 min engulfing close from a pivot, RN/psych level etc etc should be a sell op.

[Snow Dog 10]

Sold 15 min 2b yesterday (evening star pattern also). Good angle down on 128 lwma so we are happy with 4hr trend down (128lwma 15 min = 32 lwma 1hr = 8 lwma 4hr).

 

Exited 60% at W S1. Balance target W M1 at 1.5928.

 

Definition of 2b trade here http://vantagefx.blogspot.com/2010/05/my-basic-trades-higher-lows-and-lower.html

[Snow Dog 10]

Sold 15 min 2b yesterday (evening star pattern also). Good angle down on 128 lwma so we are happy with 4hr trend down (128lwma 15 min = 32 lwma 1hr = 8 lwma 4hr).

 

Exited 60% at W S1. Balance target W M1 at 1.5928.

 

Definition of 2b trade here Vantage fx: My basic trades, higher lows and lower highs

 

Didn't look like making the target level and with the elections coming up we exited balance.

[Snow Dog 10]

Recap 7 Nov

 

A big push up early morning as news of US election results was coming out. Both currencies paused at resistance levels and stalled for almost 4 hours before falling.

 

In general we view above/below our ma's as short term trend, if we are going against them we want significantly more than 1 candle 1 time frame. Focusing on GU, we had a previously identified resistance level, divergence on 1hr and 15 min, 4 hours of hesitation/upper wicks. All together clearly shows the battle to go up and the sell opportunity.

 

8 Nov

 

EUR - D engulfing neg close below 50 RSI. 4hr lower high lower low flow resumed. Bias down.

 

GU - Couldn't manage an engulfing close and there is support at 1.5950. We are below 50 RSI on all 3 time frames. Bias down but there is possibility of bounce at 1.5950/W S1.

[Snow Dog 10]

Very similar scenario to above post. We are above our ma's so buy bias??? Price moved up to Y's high/5 and 6 Nov lows SR level. Then 4hrs of drift. Obviously a struggle to go higher. Upper wicks on 1hr with sell negative divergence. 15 min chart, divergence, lower high, head and shoulders pattern. Shooting star on the right shoulder, little/no lower wick.

 

Exited 60% at W M1 for approx +40, the balance exited just below the RN at W S2 1.2692 approx +80.

 

The W pivots and SR levels continue to do a great job of containing price.

[Snow Dog 10]

To consider in next weeks trading, we have a major support level from Jan '12 1.2626 area. This level should provide a reaction, I'll be looking at some D charts in Jan to see exactly what it looked like. Comparing what happens now will be interesting.

 

Anyway this is without question a major SR level.

[Snow Dog 10]

These charts again show the importance of W pivots and identified SR levels.

[Snow Dog 10]

Its amazing how many days follow this structure.

 

1.2775 genuine lower high sets up move for the day. Pause at W M1, falls to RN 1.2700. Going into pre/early US we would avoid weak 1hr candle fake out moves up. Resumption of London direction resumes to W S2.

 

This is the chart see above we had our trade on Fri. Sold 1.2770 ish partial exits at the W pivots - W M1 and W S2.

[Snow Dog 10]

At some stage there must be a bounce up for eur, even if only by way of some relief rally of sorts. Any move up until proven otherwise would just be a CT scalp and then chance to sell rally in downtrend.

 

EUR D - on 6 Nov we had a small pos close hammer. Couldn't cause a cross of RSI or a cross of 8 lwma which is a pretty tight ma. So didn't inspire too much confidence. From there D bias was down and still is. There is a major SR turning point going back to Jan at 1.2626, a small reaction up from there would only re-inforce downtrend, the Jan move up lasted for 6 weeks and 800 odd pips. So lets say we hit that level and get a 50 pip bounce, my money will be on 1.2626 failing.

 

4hr - Whilst we are not exactly rocketing down at the moment the lower high lower low flow is on. We remain below the RSI 50 level. The 48lwma clearly shows the D trend down (D 8 lwma). The London Close bounce was not that high and the 8 Nov lows acting as R.

 

Pretty much down bias for EUR.

[Snow Dog 10]

D moves above below RSI 50 can run for 4-6 weeks with small retraces along the way. EUR headed down since 18 Oct so we are getting to that 4 week window. Maybe another good down week, we'll see?

[Snow Dog 10]

We have poss buy/positive 4hr divergence. At the moment whilst we are making new lows I'm happy to follow the moves down. Looking for sell divergence on 1hr and 15 min back into down trend.

[Snow Dog 10]

We have Euro group meetings and holidays in US and Canada so things may be slow today.

 

EUR - 4hr lower high lower low flows in tact. Asian session did not push up much. We are at the lows from 8 Nov and D pivot 1.2729 which may provide resistance. We have support areas also in general area and should we fall a major turn area at 1.2626. Bias down.

 

GU - Charts showing similar picture to EUR. Should we move up counter trend then we have resistance from 8 Nov lows, D pivot and W pivot in and around 1.5940. Bias down.

[Snow Dog 10]

The market was very quiet yesterday with the US and Canada holidays.

 

EUR - 4 hr lower high lower low in tact, bias down. The next key support area is 1.2625.

 

GU - Paused at Y's lows. 4hr lower high lower low flow in tact. Bias down.

[Snow Dog 10]

Using D chart as beginning of analysis. Some basic, very basic techniques that work well.

 

We still use RSI 8 with 50 level.

 

One of the more prolific ea writers around puts in a standard option to filter above/below 50 level D RSI on ea's for lower TF's. I have used above/below 50 level for ages on higher TF's.

 

See the lines on chart attached. D chart analysis, I have simple process of D close pos or neg, have I crossed 8 lwma, RSI crossed its sma, RSI crossed 50 level, D on HL or LH.

 

Could have a negative close in uptrend that cannot cross down on 8 lwma and RSI doesn't cross its ma. Thats a weak candle, gives me doubts as to follow through. see the 2nd half of Aug, several red close days that could not cause RSI cross or 8 lwma cross.

 

When all my boxes ticked then I can be quite happy price will follow through. So when I have a D higher low, positive engulfing close like 16 Aug with price cross of lwma, RSI cross its sma and above 50 level then can really be confident of buys from 17 Aug.

 

On 24 Oct we have all boxes ticked for sells from 25 Oct.

[Snow Dog 10]

EUR - No real progress lower for 2 days now. D closed a doji yesterday, still below 8 lwma and RSI 50 level, indications of potential divergence. Struggling with the June '12 highs support level. 4hr divergence but lower high lower low flow still in tact. 1hr lower high lower low flow broken, move up from Y's lows with divergence. Double top at Y's high at the moment.

 

Short term bias up (4 and 1hr) can also sell solid 1hr set ups from pivots/key levels as return to D trend.

 

GU - Same as EUR no real progress lower but we have no D signal for buys.

 

Short term bias up (4 and 1hr) can also sell solid 1hr set ups from pivots/key levels as return to D trend.

[Snow Dog 10]

Recap 14 Nov

 

Short term bias was up against the D charts which had not yet signaled. Price action very erratic.

 

15 Nov

 

EUR - D RSI crossed above its MA but still below 50 level, did not close above 8 lwma. I am not aware of any fundamental game changing news so viewing this as a pause in downtrend. If this is not the case and the start of move up then can probably expect another few days up and down whilst a D double bottom/higher low forms. 4hr appears to have broken lower high lower low flow. The move above the W pivot was rejected strongly and we have the potential for a head and shoulders pattern, clearly seen on 1hr. Negative (sell) divergence on 4 and 1hr.

 

Short term bias up with potential sell from W pivot.

 

GU - Much clearer charts than EUR. Whilst the daily ranges are shrinking we are still on lower high lower lows. The W pivots and support/resistance levels clear again from yesterdays range.

 

Bias down.

[Snow Dog 10]

Recap 15 Nov

 

EUR - Short term bias was up with potential to sell off from W pivot. Buy trades signaled and followed through higher.

 

GU - Bias lower never followed through.

 

16 Nov

 

EUR - D pos close stopped by the 1.2810 support/resistance level and W pivot. 4hr and 1hr flow on higher high higher low. Strong push US session on news. Bias up but efforts to go lower would be no surprise.

 

GU - D pos close still below 8 lwma. 4hr showing divergence but still on lower highs lower lows. Big push up in US session not following through higher. Bias still down.

[Snow Dog 10]

Recap 15 Nov

 

EUR - Short term bias was up with potential to sell off from W pivot. Buy trades signaled and followed through higher.

 

GU - Bias lower never followed through.

 

16 Nov

 

EUR - D pos close stopped by the 1.2810 support/resistance level and W pivot. 4hr and 1hr flow on higher high higher low. Strong push US session on news. Bias up but efforts to go lower would be no surprise.

 

GU - D pos close still below 8 lwma. 4hr showing divergence but still on lower highs lower lows. Big push up in US session not following through higher. Bias still down.

 

Darn, posted this on blog this am. I was out at a meeting, Mrs V also out and missed. Oh well thank goodness Monday is another day. SR levels (1 Oct low), W pivots, lower high engulfing closes working like a charm again.

[Snow Dog 10]

Relatively narrow ranges this week. Another week, the same story, the W pivots and SR areas prove their worth yet again.

[Snow Dog 10]

Anatomy of a trading day. Posting these from time to time as it never ceases to amaze me how often days play out like this.

 

EUR made a high the previous day and 1hr flow flipped over from higher high higher low to make lower highs.

 

15 min engulfing neg close left arrow down. Avoid the pre/early US counter trend fake out. 2b then lower high back into days trend, arrow down right. We have had relatively narrow range days so 1.2700/W M2 a good target.

[Snow Dog 10]

EUR - D RSI is above its ma but below 50 level. Thurs positive close candle could not follow through. Still within range 1.27-1.28. 4hr and 1hr show strong move up from Fri's London close bounce. D still on lower high lower low flow, 4hr and 1hr running against this. No real bias either way.

 

GU - Very similar picture to EUR D still on lower high lower low but 4hr and 1hr running up. W pivots stacked tightly due to last weeks narrow range. No real bias either way.

[Snow Dog 10]

EUR - D engulfing close, 4hr flow now higher high higher low, 1hr has potential for a triple top at the resistance level/W R1 pivot. Bias up.

 

GU - D pos close, at last weeks high. 1hr flow on higher high higher low. Bias up.

 

Both pairs short term bias up but the ranges are so small anything could happen.