Who blinked this time?

They both did, but then the bulls blinked again.

What made this 5-wave structure down a primary Wave 2 down?

The fact that it crossed back down through the top of Mr. Maroon.

What is a promotion?

if (Close[i]>iMA(symbol,0,136,0,MODE_EMA, PRICE_LOW,i) && High[i]>iMA(symbol,0,268,0,MODE_EMA, PRICE_LOW,i) && High[i]>E16[i] && E32[i]>E16[i] && RSI2[i]>93  && RSI2[i+1]<93 && Close[i+1]<iMA(NULL,0,32,0,MODE_EMA, PRICE_MEDIAN,i+1)+50*Point){

A promotion is taking place above the E16 and E32 local to 15 minute, above Mr. Maroon, above the E136, has a spiking, peak RSI2 reading, yet it is lower than E32 plus 5 pips. It is a high serve for a slam dunk that would ultimately reverse the price. It shows up as a liquidity break on the 1H.

What provided support for Wave 2 down?

The bye-bye level of the swing up to Mr. Maroon, which is 35% beyond the length of the initial move (Close/Hedge on the screenshot).

Why was not the magenta drawing a channel at all?

A channel requires a trend line which is defined by 3 touches within reasonable time. The Magenta line was never a tend line.

This series is merely a tally for future reference to help figuring wave count, to help identifying what is part of a wave structure and what is not.

The volatility whip that transpired last night is shown by the white lines.

See, when the terminal wave is printed (wave 5 of Wave 5) the market does not immediately start a new wave structure. There is a period that I have called anything from incubation to duking it out to calibration to who blinks first (my kisses to E.W.).

As per the image above, on the 15 min chart the bears blinked. On a 1 hour neither the overbought nor the oversold lines were hit (87,13) , but the 30 minute did get oversold, and can be used in exchange.

One way of playing the volatility whip is once it has the ink dried on it, you put out pending orders 10 pips out from the V and the W terminal points. (In a prior article I used the LOCO mosaic word for LOck out CLose out).

Make note of how subtle wave 1 of Wave 1 up was that started printing around midnight, and it remained entirely inside the Volatility Whip. It started with a reversal RSI2 divergence (yellow line)

What made this wave up a Bona Fide Wave 1 up is the fact that it managed to breach the lower end of Mr. Maroon out of its available 3 pushing attempts (3 waves).

It is probably worth pointing out that the fractal count reached a second #3 (in green) before Wave 1 started.

This current 5-wave structure up (that defined a new channel) just made its second #3, although the other one was buried under the elllipses in matching color.

Oh wait, what is it printing currently if 5 Waves to the upside were made already? Should I start tying the second part already? Actually, not.

This looks like Wave 4 down, for the RSI2 reading has not yet taken out that of Wave 2’s down for a continuation divergence up.

This looks better now:

…

()

Snapshots of the indicator in combination with LEMA 30N2.

Do you want very good signals for 80-120 pip holdings? Look not further.

Bona Fide is effective immediately, so figure your maximum size that you can fit with a 30-pips stop without suffering much pain.

Without it is a scale in / accumulate beyond. The field above was 37 pips wide. Go in 10 pips lower, 20 pips lower, 30 pips lower. Add when price spikes back into the box after leaving.

The field above was 11 pips wide. Go in 10 pips higher. Add when price comes back in the box.

Yours in exchange of a donation to Macdulio@yahoo.com

I used to say that volatility had no predicting power – from one day to another at least. Here’s something to point out that nobody seems to monitor for.

The high tide of the bear seems to be over with in the EUR/USD currency pair.

After the 9.5x stretch away from the mean on the upside and a 9.8x stretch to the downside,

the last maximum stretch did not exceed the 5x mark,

and to achieve that it had to get a new whip from the Market Makers, as Wave 3 fizzled out at the 4x mark.

Since volatility has been coming in, I see the odds favor a similar return for a whip, that should probably materialize at 1.0850 or so, where price would come into both Mr. Maroon and the Lower Guard Rail.

The next 2 levels down are 1.0727 & 1.0644.

…

#property copyright "Copyright © 2020, Macdulio" 
#property link      "https://forexfore.blog" 
#property description "V1.0"
#property description "Stretch Marker"
#property description "The dedgree of Stretch from the MEAN."
#property strict

//--- indicator settings
#property indicator_separate_window
#property indicator_buffers 1
#property indicator_color1  clrGreen
#property indicator_level1 5
#property indicator_level2 9.5
#property indicator_levelcolor clrBlue
#property indicator_levelstyle STYLE_DOT

extern double FSize=32;
double FMax = FSize*6/5;
double iHi4[];
double iLo4[];    

double ExtATRBuffer[];

int init(){
  
   SetIndexBuffer(0,ExtATRBuffer);   
   SetIndexStyle(0,DRAW_HISTOGRAM,STYLE_SOLID,4,clrGreen);
   return(0);
}

//+------------------------------------------------------------------+
//| Average True Range                                               |
//+------------------------------------------------------------------+
int start(){
  
  ArrayResize(ExtATRBuffer, Bars); 
  ArrayInitialize(ExtATRBuffer, EMPTY_VALUE);   
  ArrayResize(iHi4, Bars); 
  ArrayInitialize(iHi4, EMPTY_VALUE);   
  ArrayResize(iLo4, Bars); 
  ArrayInitialize(iLo4, EMPTY_VALUE);   
  
   int i;

  for(i=Bars-100; i>=0; i--){ 
   
     if (Period()==240)   iHi4[i]=iMA(NULL,0,52,0,MODE_EMA, PRICE_HIGH,i);
     else if (Period()==30) iHi4[i]=iMA(NULL,0,414,0,MODE_EMA, PRICE_HIGH,i);
     else if (Period()==60) iHi4[i]=iMA(NULL,0,207,0,MODE_EMA, PRICE_HIGH,i);
     if (Period()==240)  iLo4[i]=iMA(NULL,0,52,0,MODE_EMA, PRICE_LOW,i);
     else if (Period()==30) iLo4[i]=iMA(NULL,0,414,0,MODE_EMA, PRICE_LOW,i);
     else if (Period()==60) iLo4[i]=iMA(NULL,0,207,0,MODE_EMA, PRICE_LOW,i);
}

for(i=1000; i>=0; i--){ 

  if (Close[i]>iHi4[i]) ExtATRBuffer[i]= MathAbs((High[i]-iHi4[i])/FMax*10000);
  else if (Close[i]<iLo4[i]) ExtATRBuffer[i]= MathAbs((iLo4[i]-Low[i])/FMax*10000);
}

  return(0);
}
//+------------------------------------------------------------------+

Stretches from the mean beyond 5 times are the signature of the bear market.

People stopped buying Corona beers, that should explain everything.

Trickonometry.

That’s why they call them experts, not perts.

I think I have a Stochastic Bars Mixed / Hybrid (my rendition of the good old Stochastic Bars) laying around somewhere.

For 15 mins, change the values to 40, 100, 160.

Selling Weakness is a comparison of red print present at the last Swing Low (i.e. Factal).

Sign of weakness circled. From the swing low, go in on 27, 34 & 40 pips pullbacks to build a holding. Do this all the way until your breakeven stops would start taking out your last positions. Oh yes, you want to be on the right side of the Market Makers, so your trading direction would have to be away from Mr. Maroon.

You already know that the Christening ceremony by the Market Makers is over with, and there is no reason to think that this move down would end before hitting the outlier leg. Wave 3 of Wave 3 just commenced.

Now you just need a good auto trail stop system from me plus the info above.

I’m guessing you could fill in the blanks about how buying strength would look like.

…

a drawing from yesterday

…

What do you know, an E-16 pullback for a wave 4 of Wave 3! So early on… A double dodge ball at the Market Maker Arena! Is this a real fight here or the MMs want to hand out more longs before the continuation?

Who knows, all is well as long as you manage to extract moneys without adding to your unhedged, naked directional risk. I for one love markets going nowhere and providing cash every couple of minutes. The math is still 100x$5=$500.

The bias? That has not changed until you see 5 hourly closes printed above Mr. Maroon. A wave 4 has ambitions. Gotta wait it out.

…

A trifecta then, throwing in a back test of the previous channel?

The answer to how high the wave 4 of Wave 3 down could go was in the continuation divergence. As wave 4 would be setting up a continuation divergence of its own, the price had to become more overbought and stay lower than the last reference point.

All of this however calls into question my wave counting. The fact that this move up went back through Mr. Maroon says that this was a Wave 2. Wave 3 down has not started yet, and based on this, it could be a long one down.

Now the channel looks about 45 degrees, the sustainable kind.

…

Close enough

How to interpret the Stochastic Combo and the RSI2 Hedge?

When energy gets exhausted, a sideways to counter direction move is necessary to recharge it.

The upwards purple has no other meaning than showing that price recovered quickly.

Price pulled back to 1/2 way between Mr. Maroon and E32

…

Also, look at the subtle change on the Stochastic Bars pointing out the location of the ultimate head

So, would there be a higher high? Very likely. The question is how much the beat would be. On the downside it was 2 pips.

Bear Market – Defy Reversal – Mr. Maroon – Fractal Switch

Wave 4 Down

Long / Binary Overhedge from Maroon to Target

Long / Binary Overhedge from Wrong About Reversal to far end of Check Point 3

If you want to do this without the right calculations / indicators, be my guest.

They are not for free, for they are my life’s work, but I am willing to give you copies for a reasonable donation.

Macdulio@yahoo.com

Tempering with the 15m time frame, I concluded the following.

During a channeling move, when price crosses over the local E-16 and makes the first two fractal prints, it gives you a hint of the form of the continuation.

You’ll get a flat/shallow pullback that I refer to as a bridge if there is virtually no progress between the 1st and 2nd print.

The following images are with bridges (concentrate on the bottom side):

A bridge can yield you 1-2 pushes up, but only 1 is guaranteed. The entry is virtually at the height of the 2nd fractal or just a tad over.

A deeper pullback / real pullback shows progress being made between the first and the second fractal.

Such pullback may take several layers to get in, and it would always yield 2 pushes (2 x 3 fractal sequences). In this example there was another 20+ pips on the downside from the 3rd fractal, so -26: would had been the perfect entry.

This pullback committing a shot over the bow is the telltale of a divider wave, in this case, a Wave 2, meaning yet again, is that we are still in a Wave 3 to the upside until a Wave 4 pullback appears with its shot over the bow as well.

Much of a market’s story can be read from RSI2 divergences.

I’ve got Mr. Maroon on the screen, my Modified Fractals and the God Awesome V1.71 on the screen.

Vocabulary first.

Reversal Divergence is when the Oscillator shows a higher reading on a lower low or a lower reading on a higher high. (Yellow lines)

Continuation divergence is when the Oscillator shows a more oversold condition at a higher low or a more overbought condition on a lower high. (Red and Brown lines)

Let’s try to read it together!

Pay extra attention to what is happening with the continuation divergences.

After the market reaching a full charge (white stripe at the low), it made a reversal divergence with the back test down (see the two fractals connected at the low with the yellow).

On the way up the market broke the secure high (set by the previous continuation divergence).

Price had a smack down at Mr. Maroon which resulted in a higher, secure low as the continuation divergence underlined it. (Starting point of Wave 1 up).

There was a continuation divergence on the way up that got broken (brown) and eventually a new, secure lower low was printed with the red line down showing up.

Wave 2 down was coming back through Mr. Maroon until a secure, higher low got printed which was accented by a reversal divergence as well.

Another continuation divergence was broken on the upside as well as a reversal divergence.

By all standards this is a Wave 3 up, yet the market is not running yet.

Why? Because there is a lot of head scratching here, at the oversold neckline (20%).

All systems go for a buy, but the belief in further Euro strength is lacking, or we are just waiting on the start pistol. (CP2 starts at 1.0975)

The current market theme has been a strong Wave 1, a lackluster Wave 3 and a rip your face off Wave 5.

We could be facing something similar here.

A mean reversion could take the price back to 1.10.

God Awesome copy can be obtained upon making a donation of your choice to macdulio@yahoo.com

…

As for actualities, I made the following routine for better entries and exits.

2 Fractals is its title, and was made for 15 minutes.

…