First, some market psychology.
I had a headline shuffled in saying that EUR/USD pierced resistance at 1.1655 this morning – I did not ask for this opinion.
First and foremost, don’t listen to news. They serve someone’s purpose. The broker wants you to buy when they know that there is no more upside. Being contrarian may serve you at times, but you will ending up negating things you shouldn’t as well.
The idea is the same as cutting the picture of a Coca Cola into the film roll for seconds, so you only perceive it subconsciously. After a while you start handling things as your own facts, no matter who put them in your head.
Now, for the technical part: resistance by what standards?
There is no such thing as objective resistance. The 16-pip wide (1/2 fulctuation-size) salmon box due to an RSI2 reversal divergence starting from a new higher high beating the preceeding 26-sample range
score[i]<1 && score[i+1]>0 && High[i+1]>iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,20,i+6)) && score[iHighest(symbol,0,MODE_HIGH,20,i+6)]>score[i+1]
The yellow box is due to the presence of the End Line (the purple diagonal), which is basically an energy discharge notification (CI-7 crosses below 51). The box itself is displaced by 16 pips (1/2 fulctuation-size) on the closer end and 1.2x fluctuation size at the further end.
High[j]+FSize/2*10*Point, Time[j], High[j]+FSize*1.2*10*Point
The idea behind these yellow and blue boxes is that you should be fading moves arriving here if they are against the right direction (it went too far in the wrong direction).
Now, which is the right direction?
All comes down to the wave count.
If you just saw an ABC correction to the upside, what do you think is coming next?
Wave 1, of course. Wave 1 is expected to fall shy from the landing zone of Wave 3 measured by the 15_MIN_ATR_TARGETS routine. As a body insert (label), the core routine was posted here.
Wave 1 is expected to fail before the closer end of the orange box, usually by 20 pips or somewhat less.
The other method is the mirror effect of the pop of the 3 standard deviaton displacement of the 62-sample Linear Regression line (Effect-Counter Effect) – these have al been posted lessons.
What is the expectation for a Wave 2? Faking out the second Doji by 4-9 pips.
What comes next? Wave 3 to the downside, with the ATR box re-adjusted by consolidation.
Back to Psychology, how many times did you hear Ira Epstein mentioning Fibo Nazis? Zero. His targets are the Bollinger Bands, Window Envelopes and moving averages.
A playlist of David Paul vids, he talks about training CFAs somewhere in these 10-min shorts, and how they are shaking their heads when they hear “Fibonacci”.
I can’t stress enough how important the Wave ID list is that I posted in the Taper Harley entry.
I have a quick tab on my phone to remind me of what I am looking for as an end to the current wave.
Anti Pasta? – Pro Pasta!
Hedging inflation with Crypto is another disaster waiting to happen. A quote from below:
…with all this said, the best formula for calculating S1 is measuring a fluctuation maximum (42 pips) from the last continuation divergence.