Thursday, August 27, 2009
The Bulls will find themselves up against a wall of resistance if the don't stay on this trajectory. Heavy resistance from the weekly Kumo should have enough radiant force to push the Bulls back. But if they succeed in getting though the week spot of the Weekly Kumo they will have clear sailing, and a virtual floor beneath them.
But as you can see by my 30 minute chart I don't believe they have the resources to pull it off. Bullish percent is extreme at 83%. During the past decade there have only been two times it has been this high. Those dates are 2004 and 2007, and these were at the peaks of Intermediate waves A and C.
We are currently near the top of Primary 2, and experiencing the same levels of bullishness.
I stand by the count on the charts I posted earlier today. P2 is at hand.
Here is a small lesson from the Kumo charts. Please notice that we traded above the flat top on the M30 Kumo yesterday, but under the flat line of the Kijun-sen (pink). Now take a look at the M15 chart below.
As you can see we had resistance from the M15 Kumo. The resistance coupled with the resistance from the M30 Kijun-sen held the market down. A flat line will always offer more resistance/support whether it's a Kumo or Kijun-sen. It was being squeezed. Now go back to the M30 and notice where it passed through into the M30 Kumo. The falling edge of the Kumo offered less resistance. It's a week spot. This is the concern I have about the Bulls being able to breach this same type of edge on the Weekly Kumo. This big flat Kumo is the line in the sand and will act like a wall of support/resistance.
This is not to say that the slanted edge will always be breached. Certainly not, looking again at the M15 chart you can see that on Tuesday the price followed Kumo's edge quite nicely.
So tomorrow the price will probably drop down along the edge of the M15 Kumo and bounce off the long flat top of the M15 Kumo.
Analysis presented on this Blog has only informational, and educational purpose, and does not represent a proposal for buying or selling currency contracts.
Posted by Robert Campbell at 13:16