Tuesday, September 8, 2009
I was expecting some strength at the open, but not like this. I have worked the charts over and over, and the count is not clear to me right now so I have not added any EW notation. I'll be watching the over night action of the Euro and the /ES. The Bears need to break the bottom of this channel as shown in the M30 chart above, and then make their way through this Kumo. I'm guessing that we are still in wave ii and will start down on minute wave iii tomorrow, but that is only because I can't see anything else.
Please notice in the chart above how the way the long flat top of the Kumo turned the price down several times before it broke above the Kumu near the end of the flat top. When it finally broke through it popped up like a cork under water.
The one thing the Bears have going for them is that we are now under the long flat top of the Weekly Kumo (below). This long flat top will provide a strong resistance to the Bulls at 1053.
But they will have to deal with the strong support at 1015 from the M60 Kumo as shown in the chart below.
This is one of the advantages of the Ichimoku Kinko Hyo. It shows at a glance the areas of resistance and support. When the price is inside the Kumo (cloud) there is no particular pull. Changing periods allows for near term or long term interpretation. The Weekly chart below shows that in this time period there is no particular direction.
The Daily chart below shows the price currently above both the Tenkan-sen and the Kijun-sen. This is a bullish sign, but as you can see the price has been oscillating above, and below these lines. A decisive move below the Kijun-sen at 1008.99 would be a light in the tunnel for the bears.
When the price travels away from the Kumo the force attracting it back to the Kumo will grow stronger. In both the M30 and the M60 charts you can see that the price is well above the Kumos which will attract the price down.
But the bottom line is that the bears are at a disadvantage. They will have a lot of resistance to work through in order to take back control. The EW count is getting messy or very bullish. We need to drop below the channel tomorrow.
Well I just checked the mini and it has dipped below the channel. Maybe if we're lucky it will be below the Kumo by morning.
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 18:18