Aleš’s Lessons #7 – Outside Day Up

The Warning

Be very careful here, this mean reversion has not been gaining traction, you got an extensive consolidation instead, which may be eyeing a number close to 1.12 or even beyond.At the moment price appears to be in a bear flag just under the 3x stretch marker, purple haze, if the bear flag plays out, price should dip into the green box, and that would mean a valid Wave 1 down crossing over Maroon.
After 4x stretch from the mean there are no Primary Sells any more, hitting the same cyan line would become a Spiral Buy and you would have to buy instead of sell. Only secondary sells exist, so you would need the market to first make a peak, then pull back significantly, then re-visit that peak before re-entering.You would be looking for the beat in general, but in extremes, the retest may fall shy of the absolute peak.

The unfold

Today the price went outside the energy bands and tagged from below a previous support level (orange line)

Why am I not expecting any follow through here?

Because the daily energy is still in dire straits.

The 4-hour energy may have had a full charge, but the burst out could never have amounted to more than a beat.

What is the maximum size of a beat?

64 pips would had meant progress. 42.5 pips would just remain a beat.

The spiral buy was not reached, and the 8 hours of allowed rally time would run out in another 2.

These were – the safety concerns

The safety concern is when the hourly stochastic spends most of its time on one side and suddenly flips.

Hedge level values and held out last qualifying magenta levels for better visuals & info

Near Misses

The spiral buy level was missed by less than a pip

The invocation top was missed by a hair, thus the break out level of 1.1194 did not get re-adjusted

Wave 5, just as Wave 3 prior ended up with a successful break. Going with the example of Wave 3, price should come back down to the latest S3 number.

The 4H got exhausted one more time. The beat came on the “3” as was expected. Nothing to say not to mean revert any more.

Later the beat got extended to 30.2 pips on #3.

EU = Exhaustion up

ED = Exhaustion Down

F = Full charge
The counter goes from the last exhaustion for 12×4 hours = 2 days => the beat should occur within this period, 3 is a likely time for it – see the last one

Never seen a run up like that.