Chart is a little crowded but the bottom alternatives are numerous. Perhaps Ammo's "oversold" signal can be matched with one of these areas for a potential bottom. Easiest way to confirm it is when the support area holds and the very next resistance becomes support, nothing of this nature has occurred yet. In fact, the downsloping right shoulder I mentioned last week has been a solid brick wall all along. Another thing to keep in mind is seasonality. Sept-Oct are notorious for oversold conditions, at the same time, most summer rallies are notorious for failing. Will this year be any different due to electoral year? I don't know. What I do know, is that there is an absurdly high probability that the 2011 lows will not be breached in cash in the current year.
My weak link is drawings, no question. And after seeing that chart, I'm going right back to the hospital for another brain scan! LOL! And +1 on the probability of failed Summer rallies. The other thing that has me a little perplexed is the inverted cup and handle attached. With the addition of the next handle to the left, I'm observing a head and shoulders top with fat head. Shoulders being the cup handles, of course. I understand price has trended back upwards leading to the pattern some 53% of the time in the past, BUT that's when the pattern forms near the yearly low. This pattern is at the yearly top... I'd like to see some short covering in the coming days, but as ammo pointed out with the euro snipers, it's a tough road for the bull taking the ball. For now. Ideas? PS: If I'm way off base for any reason, can I use the head injury, just got out of the hospital card? Glad to be home! Gotta say, I do have some very bad short term memory issues which are driving me nuts! I've been writing stuff down like, "get the dog food," etc., Doc said about 3 months back to normal. No biggie!
Speaking of seasonality. End of the month / beginning of the month cycle, statistically beats buy and hold for positive displacement. Just another probability to complicate things even further.
If we break support, very bearish. If it bounces (and I believe this is not expected by TA gurus because of the textbook bear flags all over the indices), it will be a classic compound third wave advance. But you may need to consult Grand Supercycle to get a forecast.
A bear flag is a continuation pattern but here's the thing about patterns and technical analysis. Most of the time, it's got something for everyone, bulls and bears. If you are bearish, you will see a bearish pattern, if you are bullish, you will also see one. Trick is to analyze the charts with no bias and wait until one of the sides patterns begin to work, the other begins to fail, and based on this phenomenon, price will most likely begin to trend, this is one of the few instances where easy money is made; it just so happens to manifest itself in every timeframe. Wear you bear goggles and find the confluence, then take them out, and proceed with the bull goggles and do the same thing. For instance, At the present time there is a bear flag in development, but a bull could also argue that there is an inverse head and shoulder, and so forth, I think you get the idea. the illusions are everywhere, don't let patterns fool you unless one is clearly failing and the opposite clearly confirming, all simultaneously, that way no real prediction is needed, just patience and reaction. If the inverse head and shoulders right shoulder fails, the bear flag will most likely produce its second leg. On the other hand, if the bear flag morphs into a bullish reversal, something that happens all the time, very typical of bear flags, then the inverse head and shoulder will do it's thing. In other words, don't think support is a line, think of support as a bullish pattern, and think of resistance as a bearish pattern, also make sure you know how such patterns fail as this information will help you determine if support or resistance is actually failing, something impossible to do consistently with say, a line. In conclusion, careful when spotting a pattern, make sure you spot them all, then proceed to analyze them all at once to obtain the truth, and when I say all, I mean both sides. Also very careful trusting trendlines, trendlines are meant to fool the masses, most trendlines break even if the trend is still healthy, but that's a whole new topic and it's getting late...
Yeah I really like this area for a weekly reversal. Daily buyers are trying and monthly supports abound in this zone. This coming week looks key and we could whip around here. A spike down to the weekly support of 2325 wouldn't surprise me and then closing higher for the monthly support currently 2450-66. Looks a great week for nimble day trading with the chance of a big swing reversal and a few trend days - a real mixed bag. The daily might kick us off on a buy but you never can tell over the w/e as they love to play the gaps on Monday's EUR. With all the fear factor in the market now, the major supports and the daily buyers I am thinking bullish reversal for the weekly charts. Attached charts are monthly supports left and daily channel right.
Welcome TraderF and thanks for your kind comments. Yeah lack of time and keeping if fairly simple are the real reasons why the thread only rivals the best TA books If I was training someone I'd go into this with a lot more depth than I can here but the bottom line is, TA works.
Comments and accolades were due. In your previous post you posted an Eur US pair monthly chart and marked an area where you would look for a buy signal. This is the area I struggle, where and what exactly would you be looking for ? How late or early do you enter in relation to the area and using what methods? Thanks again for your time.