Momentous Entry

Momentum means a million and one things for a million people. For me, it is about daily candles closing up / down 27 pips or not on the Euro.

A new Cover low / high is an indication of loss of previous momentum / possible reversal. Until a Cover high/low is printed the momentum shows up in the counter direction, the momentum is considered intact. A Cover low / high has to be a 4-candle low/ high. Inside candles, mere 2, 3 sample highs / lows don’t count.

First, the sensationalist part. A double top target (upon taking) out the low is 1.10752.

Intermission.

Look at all them Cover signals.

The current candle will receive its C on Sunday, it needs another candle to print first (cycle runs till 1 not 0), but you can already say it is a C because it is a 4-sample high that closed back down by more than 27 pips.

First rule of the cover candles: if the following day continues in the original direction of the momentum making a new higher high / lower low, but it does not close back 27 pips, you are looking at a Capitulation in progress.

Second rule: the displacement numbers in white are carefully chosen, 31 pips on the downside and 39 on the upside. Unless these numbers get violated, the Cap is considered intact.

When a cap is further in than the previous one, suspect some kind of a trendline forming.

Of course, if a new Cap gets printed further out in a sequence, that pushes the Cap moratorium out by the increment.

The gray arrows are independent of the C-s, but they often follow them up on the next candle. These serving signals are a 3-canle sequence with the middle candle sticking out and the 27-pip filter is active again. Plus there’s a pro volume filter to avoid crowding. The arrowed candle also surpasses the mid point of the prior candle and displays the color of the new momentum.

 ///////3-candle serving reversal arrows up
   if (Low[i]>Low[i+1] && Low[i+2]>Low[i+1] && Low[i]<((High[i+1]+Low[i+1])/2)  && Close[i]>Open[i] && Close[i]>iLow(symbol,0,iLowest(symbol,0,MODE_LOW,2,i))+270*Point
         && !gr[i]){
      ObjectCreate("Binga"+IntegerToString(i), OBJ_TEXT, 0, Time[i], Low[i]+20*Point); 
       ObjectSetText("Binga"+IntegerToString(i), CharToStr(241), 26, "Wingdings", DimGray);    
   }
      ///////3-candle serving reversal arrows down
   if (High[i]<High[i+1] && High[i+2]<High[i+1] && High[i]>((High[i+1]+Low[i+1])/2)  && Close[i]<Open[i] && Close[i]<iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,2,i))-270*Point
         && Close[i]-Low[i]<270*Point && !gr[i]
         ){
      ObjectCreate("Binga"+IntegerToString(i), OBJ_TEXT, 0, Time[i], High[i]+230*Point); 
       ObjectSetText("Binga"+IntegerToString(i), CharToStr(242), 26, "Wingdings", DimGray);    
   }

Now, let’s talk possible outcomes following a Cap candle up.

As per the image above there on the upside there are no back to back Cs on the upside, only on the downside prior to a Capitulation. This means, that if you get the the Cap extended come Monday, the odds would increase for a capitulation move being in place. Overall this bears very lowest odds.

Even lower odds still is that the new candle would make a higher high and would not close back by 27 pips by the time of the daily re-balancing confirming a Capitulation in progress.

We could say with high likely-hood that the next candle is going to be a black one. We could say that the low is going to be violated, but it may take more than one day. (In case of the rolling pin on the left, it took 5 days to cover the distance of 150 pips from the close to the low). In our case the close to low distance is 40 pips, this could fill in a sneeze. The recoils were 22, 19 and 19 pips on the previous examples. This would mean a lower high, as the current one is 34+ pips away.

Overall, a Cap on the upside (vs. the downside) is foreshadowing a sinister move on the downside in excess of 100 pips from the C’s close and could only be contained with either a momentum reversal (4-sample lower low closing back up 27 pips) or a serving day (gray arrow, discussed earlier). So watch out for a daily candle spiking back up more than 50% and having a Green color or look for a Cap print below the 1.1263 daily swing low, and in the meantime short the living lights out of this sucker.

In case you are curious about what my Energy Bands are thinking of the moves of late.

& here’s how regaining the momentum would look like:

take out the low and close more than half way back up of the previous candle

The channel. Murena Williams is not conscious of the upside yet, for there has only been 2 closes above God, not 3.
Introducing momentum logic. If tomorrow makes a lower high, it would turn salmon. The Purple bands are a play on VWap. Full candle outside the bands on the left in yellow, then back in the bands, volume spike – followed by a lower close next day.

The structure is called an ‘Expanding” Flat if Wave B retraces between 105% – 138% of wave A, and Wave C ends anywhere beyond the end of wave A. Expanding Flats occur most commonly.

In case you still don’t believe that waves end in dojis, look at where support was found on Friday. At the 2-doji resistance line. Trapped between doji 2 and doji 3, printing a new doji.

I use 8-pips displacement for the 2 dojis, 10 for the 3 dojis and 16 for the 6 dojis.

double kibecup=0;
double kibecdn=1000;

deletetxt1("Kibec");
i=1;
j=0;
while (i<lookback) {
  if (doji[i]!=EMPTY_VALUE){
      j++;
    if (Close[i]+100*Point>kibecup) kibecup=Close[i]+80*Point;
    if (Close[i]-100*Point<kibecdn) kibecdn=Close[i]-80*Point;
  }
  if (j>1) break;
  i++;    
}

ObjectCreate( "Kibeca", OBJ_HLINE, 0, Time[0], kibecup );
ObjectSet("Kibeca", OBJPROP_COLOR, clrDimGray );
ObjectSet("Kibeca", OBJPROP_WIDTH, 1 );
ObjectSet("Kibeca", OBJPROP_STYLE, 4 );

ObjectCreate( "Kibecb", OBJ_HLINE, 0, Time[0], kibecdn );
ObjectSet("Kibecb", OBJPROP_COLOR, clrDimGray );
ObjectSet("Kibecb", OBJPROP_WIDTH, 1 );
ObjectSet("Kibecb", OBJPROP_STYLE, 3 );

ObjectCreate("Kibec8", OBJ_TEXT, 0, Time[0], kibecup+65*Point);  
      ObjectSetText("Kibec8", "                      "+DoubleToStr(NormalizeDouble(kibecup,4),4)+"-2Res.", 11, "Arial Black", Maroon);  
       ObjectCreate("Kibec7", OBJ_TEXT, 0, Time[0], kibecdn-25*Point);  
      ObjectSetText("Kibec7", "                      "+DoubleToStr(NormalizeDouble(kibecdn,4),4)+"-2Sup.", 11, "Arial Black", Teal);