Colors- USD/CHF

Discussion in 'Technical Analysis' started by halcour, Dec 21, 2010.

  1. halcour


    Click on the chart to get the full screen.

    Consider the simple colors of this chart, in a daily downtrend since at least June. Starting 9/13ish, in the downtrend, there's a brief rally with one long spread closing on the high, then the downtrend begins in earnest as yellow completely dominates the white on the chart. Simply compare the spreads, the closes, the trending nature of yellow vs white and it's obvious yellow dominates in every respect.

    Now look at the brief but strong rally 10/15 to 11/01. Note the 3 strong long spreads 10/19, 10/22, 10/26, closing near their highs vs the narrower yellow spreads that fail any kind of significant pullback. Note all the closes.

    Then, at 11/02 the previous resitance at the red line produces the longest downbar closing near the low since the rally. Followed by another wide spread down 2 days later, back near previous support at the blue line.

    The rally starting 11/05 appears to be strong, there is not one yellow down bar for several days, but note the white narrow spreads up; it takes 9 bars up to 11/16 to recover the 3 previous down bars, 11/26 possibly climatic in the trend, resistance at the red line again. An upthrust consisting of mostly narrow spreads of several bars to 12/01, then the rally fails. Note the wide spreads down on the reaction 12/02-12/03 compared to the narrower spreads on the previous rally and consolidation.

    Following a 50% retracement rally 12/08, 12/13 is a relatively wide spread closing on the low, the next day back to support at the blue line. Presently 12/21 a consolidation at support.

    Colors. There will probably be some bounce off this support, but right now yellow, supply, is dominating the chart. Here either a st rally or consolidation is expected, maybe actually taking place, but right now I'm watching for a st break of the blue line soon. Lt, getting near significant support 3/2008.
  2. halcour


    AUD/USD (click to zoom):

    An interesting trend from X to Y. To the left is a classic Wyckoff pattern of selling climax, automatic reaction, secondary test, breakout, initial pullback into the range, then at 8/25 (X) the reaction before the nice uptrend to 10/15 (Y). First, note the mostly shallow reactions at the first five red horz lines and that when there is a significant reaction w/in the trend there is an immediate rally bar. As a channel (dotted lines), drawn from 8/25 (start of this trend) as the demand line and 9/03 as the supply line, note how the closes cling to the upper line throughout most of the trend. 10/05 is the first breach of the lower line, which rallies instantly, but then the closes hover around the middle of the channel while the lows start to ride the lower line, unlike previously. 10/19 is the widest spread by far since 9/1, closing almost at the low, a complete break of the channel and the first significant break since the trend began. This is followed by a new consolidation - buying climax, reaction, ST. The reaction following the ST is to the middle of the range but the current rally is shallow of the ST. Watching this reaction to see if price continues to windup, a possible apex forming? Support or break in that 50% area crucial to see what's going on right now.

    Finally, in keeping with the subject, and simplicity and, er, intuition, note the colors of the X/Y trend. White dominates, the white bars have more real bodies, the yellow have more, narrower dojis.
  3. halcour


    AUD/USD Daily. See previous post/charts for Wyckoff analysis.

    Price is hanging around the upper-part of the BC/AR/ST range since early Dec and, as noted, may be forming an apex. However, currently the spreads and bodies are relatively wide compared to the brief consolidation 2/01-2/09, an upthrusting test of the BC with narrow bodies, as well as a shallow test of the ST.

    Current, important S/R points are the red-dotted 50% line, the BC/ST resistance, and the green apex. Watching the nature of the bodies, closes, and spreads as price interacts with these areas.

    The wkly chart (not posted) also shows some apexishness (apexosity?) with a demand bias w/in the range.
  4. halcour


    Well, I'm late posting to this game, but anyway, taking up where I left off...

    From 2/28 to 3/09 once again there are narrow bodies at the BC/ST resistance as well as at the tightening apex. 3/10, 3/11 relatively wide-spreads that cancel each other out - indecision at the apex - then 3/15, 3/16 wide bodies and spreads that break the apex, the 2/15, 2/22 lows, and the 50% s/r area of the larger range.

    Then 3/18, 3/21 immediately rally to recover most of that previous reaction. From there it's pretty much all white thru the breakout of the range on a sharp rally.

    The nature of this BO - the range duration, the shallow retracement within the range, the climatic nature of the 3/15, 3/16 shakeout with the parabolic rally on positive spreads and closes, the rally duration - suggest it's the real thing. Of course, one always keeps the open mind and watches the chart. This could be an upthrust and it's reasonable to expect for some pullback soon. How deep will it retrace, will it go back into that range, and what are the nature of the spreads and bodies?

    Important support areas are the 4/05 brief reaction low, BC/ST (back into the range), the 2/15 low, and of course, always, the previous significant reaction low, at 3/16.

    Also, on a positive note in the long-term, this range has been riding on top of significant resistance going back to mid-2008.