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Thursday, August 20, 2009

This Andrews Pitchfork channel is well defined, and a break below 997 will be bearish. But it appears the target price will first be met at 1015. The Kijun-sen is coming up to meet the Tenkan-sen. When they cross it will be a Bearish warning.

It still appears that we are in an Ending Diagonal, and have only wave e or 5 to complete.

Now let's look at the daily chart.

The Kijun-sen is at 972.73 and quickly approaching the Tenkan-sen at 995.83. It appears they will have a bearish cross very soon. Also notice the thin Kumo. If challenged it will offer very little support. Normally the Tenkan-sen/Kijun-sen relation to the price would be Bullish, but I'm continuing to rely on other indicators, and the EW. Keeping these parameters in mind it appears that the Ichimoku Kinko Hyo charts could easily issue a bearish signal within days as it would take very little to get a Tenan-sen/Kijun-sen cross.

Of all the mechanical indicators I use, the Andrews Pitchfork is the most reliable. My good friend Dennis always says "follow the trend". Breaking trend lines almost always gives the correct signal. The Tenkan-sen/Kijun-sen cross is also very reliable. The charts above show that to be true. These are the key signals I will be watching.

The way you handle your profit strategy depends on which of the larger counts you subscribe to. After looking around at other Blogs, I find it interesting that many see similar targets while counting the waves differently. There in lies the problem with EW, but what other system can provide the type of insight that EW provides? Used with other indicators it has performed well in the past, and I'm hoping it will get back in the grove once the bears gain control.

The Elliott Wave Oscillator is once again beginning to show divergence, indicating a weakening market. As the market approaches 1015 the EWO should continue to show divergence in the fifth wave by making a smaller mound.

As key supports are taken out, hopefully we will gain insight from the wave formation about the true count. I personally don't believe this market will rest until we see 1045, but I don't think we are headed directly there.

Analysis presented on this Blog has only informational, and educational purpose, and does not represent a proposal for buying or selling currency contracts.

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