Aleš’s Lessons #5 – Pursuit

This is all the current history on the 5 min available.

On the 1st image the Support plots don’t reach as far. What do you see here?

  1. Market is engaged with the upside
  2. Market is in pursuit of a break on the upside (Navy line, later)
  3. Price went parabolic (beyond magenta) – in need of a correction
  4. Correction ends just shy of S2
  5. Market does not engage with the downside
  6. E-135 does not serve as a resistance on the way up

The next leg up.

  1. The Market re-visits the previous parabolic tail and makes a beat over it (less than 10 pips this time)
  2. The Market is still engaged with the upside, but there are caution flags: the second run up should had reached the break out level (in Navy, later)
  3. On the way down S3 gets overshot – it is a beat still, but upside potential is limited
  4. Price finds resistance at E-135 => the Market has turned direction

The market starts stair stepping down until things get over-heated to the downside

  1. The First parabolic move (circle #1) gets a quick reaction – like going into water that is too cold
  2. The Second parabolic move gets a bigger reaction
  3. There is a quick beat of this para move that brings about a relief rally
  4. The Market currently is in engaged with the downside, and it is in a pursuit of a break out
  5. R1 resists on the upside (very limited upside motion / volatility)
  6. The Pursuit of the break out fizzles out without reaching the Green break out level and R1 gets violated on the upside instead
  7. The Market has turned back up
  1. The Market goes ballistic on the upside
  2. The Parabolic tail goes beyond the magenta – in Pursuit of a break out
  3. The gray neckline, where price went parabolic (arrow), does not get violated – this is still the same wave up – likely a Wave 3
  4. The Break out is finally happening – the Navy line
  5. There are 3 attempts, but the break out only registers about 11 pips, so it is unsuccessful (<16 pips) => back to the last continuation level of 1.0938 (CNT on the screen)
  1. Here you see the next parabolic move that is in instant pursuit of ta break out.
  2. 3 Attempts in quick succession, but the break out isn’t happening.
  3. With one more parabolic (echo) wave up the support levels (and the break out level) gets re-adjusted
  4. S3 is the next buy after the capital failure
  5. E-135 on the way up yields to the move
  1. The next leg up starts after a quick spooling around the E-135
  2. It overheats a couple of times, and keels back to the continuation level – just shy of S1 – this is likely still the same wave – most likely a Wave 5
  3. They buy the 3 pullbacks just beyond the E-16 – this is definitely a Wave 5
  4. Price is in Pursuit of a break out

Which brings us to last Friday

  1. The break-out finally happened (>16 pips)
  2. A large correction to S3 is logical & was almost reached
  3. The market engaged with the downside
  4. It is in Pursuit of break on the downside
  5. Price only made it back to the E-135 where it failed (shy of R1)
  6. It is still the same wave down, most likely a Wave 1 which in theory should come in contact with Mr. Maroon before it ends
  7. Mr. Maroon currently is from 1.1056, but it is coming closer of course
  8. A Mean Reversion would take price back to 1.0960

Extension fill – added for a more complete picture

R1 and S1 now held out