The first red line/resistance level was hit (swing high’s 25%) at 1.0941.
My main problem is that the high does not seem to be finished.
On the bottom, you had a Gray divergence.
Now, you have a fan, but the last one is Yellow, and I find a problem. You must go long when a yellow divergence like this gets taken out.
My most interesting picture is coming up next.
The 200-sample weekly volatility.
Can you see how the high voltage wires have almost touched? By the way, the last time they kissed was that black doji we had just pierced into the body of.
The V bottom made a support level (bottom of the yellow V), which was pushed lower by today’s turn around low, and then re-approached, but the damage is questionable. We have not been able to get inside that major long cover wick circled, despite of going outside the BB and thus making an S2.
A pro volume daily candle, but the Money flow becomes too oversold on a short term basis.
We are in the echo move, but it does not have to finish this week, and could certainly get closer to 1.10.
There are V bottoms printing at or before the 8 EMO. In the two ovals, the down leg (3 or 2 black candles) gets exceeded on a closing basis by the up leg (3 or 2 white candles) preceding an explosive move up. This kind of a burst talks about a Wave 3.
A Wave 5 can muster the V bottom as well, but the follow up would not be quite as enthusiastic.
With that said, I am looking for a 3rd and final pullback to the end of trend, a catastrophic exit with no stochastic bar associated. That eggyolk.
So, as projected, a new S1 was made by the lower BB, but no close below since.
The arrow shows where they broke the Rat Poison pattern back up.
The big question is what are the pros doing currently. I do not think that they are selling.
Based on squaring wicks, the market maker first covered their longs, then their shorts twice. They must be neutral to net long.
There are those two red volume blocks above that were left at the end of abruptly terminated high volume churns (green volume bars) to the upside (more orders to be had).
All in all, it looks to be a distribution, but since they don’t seem to care for making an S2, I would think that they want to lift price out of this range on the upside first.
Having printed a catastrophic exit, the market is currently on the quest for making a new S1 level.
You would end up with another purple line, somewhere nearby the 30 sample BB, still on the inside, but within 10 pips of it.
The purple line normally would be placed on the body of the candle, the above picture got adjusted because of the Weak Cat Exit (did not poke above the BB on the first divergence), the body of that white is a bit bogus because of the credit spread expansion, so I went with a line that connects all 3 fractal prints.
What happens after the new S1 prints? If the price manages to close beyond the body, the pullback into the range would be a recoil for a future shot fired.
On the image above you can see that the R1 gets closed above, and then there is a pullback before the bigger run. As soon as R1 gets exceeded again, you see an acceleration to the other BB.
An R2 in red color gets printed with a candle achieving 10 pips+ outside the BB. In this case it pretty much coincided with an earlier R1 print. The rat poison was taken, and all resistances got dealt with for good.
Now let’s see an example of coming back down. This failure on the upside was about a 3x test of a level at 1.0522, and so the price is going back into a prior range.
The price made an S1 in the second hour, it broke it, it never made a new S2 (did not pull away from the BB by 10 pips), made two backtests of the S1 and then broke back inside the prior range targeting the other end of it (cat exit).
Now, let’s look at another one that may be closer to what is about to happen here.
A print & break of S1 followed by an S2 stall out. A reach back for liquidity: can you spot it just above the first fractal up on the way down?
Also, after the 3rd hourly fractal print on the downside you had to go long.
You see, these 3 moving averages are more of question marks.
A sustainable new directional move is decided in the thick of things. If they don’t get approval up front, the loose move will reverse itself from the neighborhood of the 30BB.
A move never starts away from the E-16. A stochastic bar miss is a neutralizer, a call for repeating question 1.
I must say it was very beneficial having to think about the filters.
With the Catastrophic Exits (stochastic bars) I had to allow for an extra bar displacement from the fractal.
if (High[i]>=iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,20,i)) &&
i>0 && iFractals(symbol,0,MODE_UPPER,i) && ExtMapBuffer3[i]==EMPTY_VALUE && ExtMapBuffer3[i-1]==EMPTY_VALUE){
j=i+2;
while (j<i+30){
if (iFractals(symbol,0,MODE_UPPER,j) && (ExtMapBuffer3[j]!=EMPTY_VALUE || ExtMapBuffer3[j-1]!=EMPTY_VALUE)) break;
j++;
}
With the Rat Poison buys, I had to become conscious about the Tres Insoldati Spaciren pattern, the need for the low to be sticking out, the higher lows et cetera.
This is no longer a subjective feel. I had to weed out sudden range expansions and have a minimum size set for the starting lower wick.
If you can tell me why was the last hourly candle was a sell signal, we could start a conversation about a joint signal providing service as long as you are Ok with Macdulio’s Rat Poison Trading for a company name. What just happened here?
Cyans are professional volume. Yellows are amateurs.
The BB is in a squeeze. You may be looking at the short leg up.
The Cyan in the dense yellow block was probably a close of shorts.
The amateurs were going short right above support – wrong footed.
The next cyan was clearly a buy, as price has been rallying since.
The last cyan I would think was a long cover. As you could see on the downside, this may not be the mark of the high, the amateurs can push this higher until they run out of money.
There is such thing as aiding the break out, but this is not that close to thr high and it was a single print.
credits to Barry Taylor for the Better Volume indicator.
Looking at the cyan, professional-size volume block trades, this looks like a distribution.
The stochastic bars hybrid calls the last high bogus.
The two interrupted lines are the fair price of the euro based on the last 3 years. This was reverting to the average.
Normally a high volume churn print is followed by 2 more weeks in the same direction, but given the size of this week’s print this looks like 3 weeks in one.
There is a 7.6x->7.55x slight stretch divergence between the two peak fractals.
I don’t think anyone else is looking at this move up as a C wave.
Trade setups
E-8 is the market going parabolic? Spike back, 3 imcremental candles of a color, go long after the 3rd hour’s close Stop below candle 3’s body
If not, it’s a fade from beyond the 2nd flipback candle’s wick to the next question, stop 10 pips out
E-16 is the market taking the rat poison? 8 hours above / below, Spike back, 3 imcremental candles of a color, go long after the 3rd hour’s close Stop below candle 3’s body Scale out at FFF+ Close on a reverse (E-8) setup
E-4 catastrophic trade 8 hours above / below, Spike back, 2 imcremental candles of a color, go long after the 3rd hour’s close Stop below candle 2’s body Target outside the 240 BB
A U-turn down is bearish. A high volume churn down makes its own resistance, in combination with the terminal distance, this is an end of wave/wave structure.
The 5 waves down were a Thrust, a W3C (rounded up to a W3F with the LL), and another Thrust.
It was 4 pips shy of the T level, but you must work with a little slippage. There is a trip high at 1.0419, good for a quick 16-pip trade as is.
The 14th hour was the reversal from the momentum low, and the volatility increase resulted in a V shape bottom.
If you still don’t believe in driven thrusts, you just saw two of them back to back, with the knowledge that the pullback from the HH/LL is a continuation trade targeting the cover line.
As a reminder, this happened on the upside.
I don’t just blog, I also trade.
I should align my thinking though to start using real size for sure bets.
Professional volume came in a the recent, lower high. I commented the following: if that high gets challenged, they are gonna step up within an extra 15 pips, but I do not expect a challenge within 5 days.
If I had to imagine a “death of money flow” image, it would look like the yellow box. I don’t think this intensity can be kept up for long.
A speculative drawing of an ABC correction with an A leg being a 5-wave structure, a B leg a 3, a C leg another 5 waves. Not sure why, but the idea of a contracting flat correction does not feel satisfying. It feels like another higher high is still in the cards.
I have figured out the filter to distinguish a liquidity break from a stong rally. 130+ pips that is within 2 days.
The BB width just made a new low.
3x BB out #1. We may get 2 more, but the 30BB has to start coming back in radically. The bow back did not make it to the lifeline (8 EMO). Again, this kind of aggression is not sustainable.
The writing was on the wall with that Xtra Heavy MM long cover at the high. The W3C distance got rounded up to a W3F (far end of the orange projection box). We are in a buy box now, so consolidation is more than necessary.
After a W3-something print, the next leg should be a Support or a Thrust print – that would mean a 36-46 pip leg down from the new consolidation mean.
You can see how the Stochastic Bars Hybrid can call attention to a higher high with a missing momentum print.
The up move should cap out at the SOB.
The thrust could get to 1.0365 or so. Scale in to a short between 1.0410 and 1.0427 knowing that a lower low needs to be made for a 3-point turn.
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