EURUSD: 9.13PM

I'll be writing the 'Lines in the Sky' report this weekend but given the somewhat solid work done this week by the bullish argument to keep the bears at bay, I have re-worked the grid of the initial drop from 1.6037 in 2008. This will be in the report with more explanation, but I just seemed to be missing a key to the bigger picture this week and this study appears to provide both timing and price guides that fit this correction from the all time high. D6 is not a trendline - it is the half cycle displaced T6. D6's topping zone is on the wane with price action starting to leave that trough behind. The next green grid line is only a few days a way. If the grid line fails to hold price then the 1.3604 Gann line (off 1.6037 at 45 degrees) could be our target. I had been hoping D6 would get another visit before marching on, but maybe the retest will be other side of the grid line. Next week, I will be following the daily My-Wave religiously - big pop coming one way or another me thinks next week. Thought I'd pop this up as it looks blimming interesting to me. Have a great weekend and thank you for dropping in.

EURUSD: 3.45pm

Well, I should have banked the gains; what a pain in the ass. Assume this is an ED of some sort or more. Price above D2 again with softened SMIs on 60min. Will track this for a bit and see if can enter short again higher up. If it drops without me, I am going to swear a lot.

EURUSD: 2.21pm

Price has cracked D1/4 now and held under D2 at the daily pivot. Hardly conclusive unless you have been following the patterns evolving. D1/4 now being backtested into its peak, which represents the strength zone for the EURUSD. If price action can dribble along here allowing the daily My-wave to turn under the pivot, well D1 should be next. I'd still like to see something punchy down to D3 and then back up to D1 but that is probably just asking a bit too much after this turgid week and T4 sat there at 1.2950 too.

Chart error?

Is anyone having trouble opening the chart links in my post? Someone is having a 'google error' come up but I got no issues my end. Do let me know.

EURUSD: 1.10pm

I have moved my stops just above the 1.3015 turn down there and sit here hoping for more downside to get this ball finally rolling. D2 has been cut again here and so far holding out but early days. D1/4 (orange) needs to fail and let price move under the daily pivot and then we should see D1, near S2, pretty smartish. I think D3 is doable today but we gotta get out of this ending diagonal option up top first or any other type of last minute 'shaft my shorts' strategy the market has. In addition the daily My-Wave has got to turn down to confirm everything, so anything quick downhill will undoubtedly get relooked at in due course, which requires sudden profits to be banked. The SMI's have turned down so far, so catch up later at break even or on top of a great week.

Video

Our story in 2 minutes

EURUSD 9.33am

Well, this is looking like 5 waves up again and perhaps the 5th in something! Notwithstanding the wave count, I am still trying to short this 'top' (assumption) and still can not bring myself to go long; well not as long as shorting keeps working for me, which it has all week. I am so bored of telling the same story but the market just can not make a decision so what can I do? To recap, we have come back to a trend line from 2010 in either a Kiss Goodbye or a very bullish cross. The potential for either is visceral and you can feel it is the various counts. Given the state and form of the daily SMI and the prior clear cut 'abc' shape, my favoured count is that this is a 'b' wave following that 'abc' from 1.3171 and we will then see another 'abc' down. There are other counts, the most bullish being consecutive 1-2's and this trendline is the threshold for an explosive 3rd, the power of which would turn over my SMIs, as they only tend to provide spot turns on retracements within trend. Unfortunately, all I can do is wait and try and play my game. We have come back for another touch of the gold grid-line (parallel of the green dashed 85.4% fib fan off 1.2659)which may hold or not of course. But that is 4 touches now, which coincides with the area of that 2010 trendline and the 1.3020 Gann line (off 1.2041). There is the obvious blue grid line below, which is a parallel of the 1.2041 fibfan (85.4%), which might be a useful initial target below to watch out for at 1.2950, where T4 (red thick line will be). Price has still not made it to D5 having cut D4 on the 23rd November. Given the 2010 trendline above, this may be prescient but D2 still remains the gatekeeper as it has all week, with price action laboured all the way up in my opinion. Cut D2 and D3 follows quickly me thinks especially with D4 in a topping zone now and the opportunity to backtest D4& D6 whilst it is at it - the latter was 'cut' in August to the upside and has still not been backtested. In my mind D6 is the real decision point and I would love price to get there and sort this mess out once and for all. We have negative divergence on the 240min chart again and given the SMI's have been working in this move up from 1.2659, I gotta assume they will work here too, especially with that Daily one in the topping position from the first chart today. You can see the support D4 &D6 would provide as a base camp to clear D5 on the right if price could get down there, clearing out the overbought sentiment in the SMI cluster as well. The risk is that they do not hold and something else is up more bearish, but I'll worry about that down in that zone. The 60min SMI cluster is also showing negative divergence and me thinks a move to 1.2878 will set up a bearish price envelope again sitting on T7. We shall see.

EURUSD 7.56pm

I have transposed as much of my working studies on to one chart as I can without really making it messy. Moving to a 30min chart gets D6 on there too which provides me with a bigger overview. That wave action since yesterday 'down then up' defo looks like 'A' down in 5 and then B up in 3 for an expanding flat. We just got 1 down in 'C' tonight. That is my closing thoughts for tonight and I'll be looking to short as close to today's high as I can with stop just above. If it isn't right then I'll lose a few pips but good risk reward me thinks. This fits with my daily SMIs that need steam letting off at the very least! I'll explain matters on this chart in the morning but wave count looks cleaner on this.

EURUSD 7.08pm

Closing out for the night - cancelled all orders and start afresh tomorrow. I still can not get my head around the state of the daily SMIs which are very overbought on my settings if (and a big if, accepted) this move up since 1.2659 is a retracement 'b' wave and not the bullish 1-2, 1-2, 1... If this is the bullish move then the SMI will get rolled over of course but price action is colouring in the dots alright but still for me, in the wrong colours. D4 is bowling out now and that should be creating downside pressure as discussed before. I have the monthly, weekly and daily My-waves all sat up ready to go long but whilst that trendline from 2010 is stuck above, price just does not seem to be able to take advantage. Rather than hope price will go up, I'll just have to keep trading the SMI cycle until something different happens than from what we have seen - if the SMI keeps picking top and bottoms, then I have to assume we are still in a corrective pattern and not an impulsive. If price thrusts up without me or down in fact, then so be it; a clear head in the morning will do me good too. I'll muse on this and post charts again in the morning rather than go over everything again now.

EURUSD : 5.48pm

So, if the top gets taken out, where to next? Here is the grid line study - next line up for the gold parallels of the green dashed 85.4% fibfan off 1.2659, takes us to the Gann line 1.3164, top of the T4 volatility channel and the light blue fibfan parallel of the 'A' wave down from 1.3171. Looks tasty if we get the punch up now!

EURUSD 5.11pm

Shorts banked - price not held by 'D' lines there and will wait and see now. Profitable day and happy with that. Will place a buy order above today's high in case of a spiker and another short entry below that low this evening.

EURUSD 4.52pm

Of course, this could be the 'abc' retrace I have been waiting for all day, but I am short into this with stop now moved to above the 1.2984 turn there. It bounced just above the 1.2938 low from earlier today and My-Wave is still up, so all perfect except I just can not close the shorts and go long - maybe I am weak? Hardly any risk on now but a wasted day if this turns up and takes out the top in the rocketship EW count. If D1 & D2 remain broken to the downside, then D3 is the target and that is the one I have been gunning for. We shall see but somewhat happier than this morning!

EURUSD: 4.06pm

Obviously it was not too much to ask for a fall! That was quick enough for me to consider the sell is on and I have drawn in the 85.4% fib fans. I will sell again on a back test of that line with a stop above the recent high. Busy day!

EURUSD 2.27pm

Price nudged up to that trendline again. I have banked the shorts in profit on the moves down and covered the rest. I still hope for a retrace to load up long but this insipid rolling up hill is right at that line and I do not want to be caught wrong footed. Is a retrace too much to ask with a previous low (e.g 1.2938) as cover? Perhaps. We shall see. Flat for now.

Photograph: View from Joyners Meadow

Sitting up on West Malvern is a small meadow where the views on a clear day are really second to none. This was only taken 2 weeks ago and with snow forecast for the weekend, I thought it might be a good idea to get it posted! Photograph: view from Joyners Meadow

EURUSD 9.25am

Price challenging D1 right now. Still do not like the SMI position on 60min and will wait for that to come back down again to go long. Shorts still on, as tiny and will release when SMI bottoms out if above D1 to reverse long. Games being played me thinks. Refer to daily chart in 6.26am post!

EURUSD 7.09am

So, the game plan for the day then, as covered yesterday, is that if D2 is cut to the downside I'll follow it short to D3 hopefully and if D1 is taken out to the upside, I'll follow it up, at least to D5. I have added an 'a-b' EW count to the move thus far but only short term aid for me and for now I am short with tiddlers expecting D2 to go first and collect the bigger prizes.

EURUSD: 6.26am

The daily chart of the descending regression channel off 1.3171 is still the bearish argument to be dismissed. I had been tracking a 'b' wave up from 1.2659 within a 'B' wave down from 1.3171 possibility, aided by that trend line from 2010 that has been providing a 'Kiss Goodbye' sensibility to the apparent ceiling we have. The trendline T6 and the monthly Donchian channel provided resistance at the same point and D6 provides not only a target since its 'cut' back in August 2011 but also a legitimate gateway to a retest of 1.2041. This is of course just an option, but one that I think the bullish argument is struggling to overcome at present. That daily SMI ate up a lot of ground quite quickly from the 1.2659 low and looks very 'b' like to me. I am quite happy for it not be, but for now, it looks toppy. The grid line study I showed yesterday, highlighted the confluence of support at the Gann line 1.2878 (off 1.2041 low) and T4, being my key trend indicator. We certainly got a reaction there and I was quite happy to switch my shorts for longs for that punch up. That has provided us with the same lines to backtest again and failure to hold may see that decline under 1.2878. This would see price draw under the T4 line and push for the green dashed line, being the 85.4% fibfan that underpins this whole drive up from 1.2659. Break that and well I would go back to the D6 failure scenario above! The monthly and weekly My-Waves survived that first backtest yesterday, but the D4 trough is providing traction as I had hoped it would when I was shorting the top last week. This is being aided by the backtests of D3, D6 & D7, all of which show a neat confluence where the red dotted line is on the first monthly chart there (D3 is on the weekly chart crossing D4). It is the failure for D4 to hold however that needs to be borne in mind, as that will bring on the test of D6 and failure there will put pay to the Bullish argument for now and wash my downhill 'c' of 'B' case right onto shore. If D2 fails, that weekly My-Wave is going to fail and we at least go down for another leg in this retracement of 1.2659. Worth reviewing previous posts about the T6 v T7 debate and for now, T6 is making heavy weather of its chance to support the bulls. It would seem, some tennis is at play here!

EURUSD: 5.55am

My fears were seemingly well founded with little gains after I banked my longs last night. Have shorted a little up here and staggered back down hill. As per yesterday's posts before the passion fell out of shorting, if D2 is taken out, D3 is the target and possibly the backtest of D4. back to bed for a bit!

EURUSD: 10.00pm

I have closed the longs here and banked. I do not like or understand the SMI moves at all. I have attached the 60min cluster here and the 240 min here. These smooth strikes are usually 'b' wave type formations and going in different directions. Now look at the daily - everything is just a bit tense and I'd rather sleep on it. I have however kept my short under 1.2878 if price were to collapse through today's low.

Let me know what you think?

Do let me know if what you are seeing is of any use to you and if there are any ways I can improve matters. Do bear in mind that this is a free resource though, so keep the comments in proportion!! If you'd prefer to send me an email instead of a public comment, no problem - use the link to the right of the page.

EURUSD: 3.52pm

Not too long to wait once it had got down to T4, D2 & that Gann line. Of course, this was the 38% retracement line for the move up from 1.2659, so you could say that is all that was needed for analysis (especially if this was a wave 4 down), but I continue to be impressed with the visual confirmation in time and price of these combined 'T' & 'D' lines. Initial target is D1 and then D5. The speed of this move thus far suggests an impulse wave up, so we can look at the EW counts again if yesterday's high is taken out. I have put a sell order to cover at 1.2878 and will look to top up longs after the daily pivot is cleared, and My-Wave is up, on pull backs.

EURUSD 12.21pm

That last spike down was close enough; shorts dropped. Looks like lots of space overhead in the T4 volatility channel; let's see what the next SMI cycle will do for us. Taking out D1 could be rewarding with the next Gann line up from 1.3020 being 1.3163, although D5 has still not been tagged after the D4 cut last week, so no need to be greedy! Have left in alternative count for now, marking this move down as 'iv' for the bullish count.

EURUSD 11.20am

D2 & T4 Getting close enough to mark that down as another good job done; have banked half shorts and covered the rest for now, so flat. Will release rest of shorts at 1.2878 if get a reversal pattern of some sort to hide a re-entry behind but nothing clever here, given my previous posts. I'd like a ride up the back of D2 up to D1's topping formation to use up the SMI strength in due course to go net short again, but for now, wait and see. If D1 breaks to the upside, then I'll top up longs.

EURUSD: 9.46am

Them 85.4% fib fans! Well, their parallels of the initial 'A' wave or wave 1 to be exact (see Lines in the Sky' report dated 17th November in nav. links for process). I don't call my methodology 'Lines in the Sky' for nothing. The fib fans are only one of the 'lines' of course but this trickle downhill is working its way through a confluence of them right now and in fine detail. Through this mornings low and 1.2878 looks set. But look below 1.2878; bit of a vacuum there to the green dashed line and that is the 85.4% fib fan of the initial move up from 1.2659. That green dashed line is holding up all of this move north so far (albeit with 2 legs already) and is where D3 sits. That is below T4 and T4 is my trend indicator. We shall see.

EURUSD 9.22am

Will this storyboard catch fire? I think D2 and T4 conjunction and that 1.2878 Gann line will be key. Running cover above higher lows now into that zone.

EUEUSD: 6.49am

D2 and T4 confluence remains in my sights at 1.2878 ish - this is also a Gann line calc'd off 1.2041 and holds a number of 85.4% parallel grid lines as support too. Given the previous rise from 1.2659 provides a 38% retracement zone at that area, I will be looking to step aside from shorts, although the daily My-Wave remains down with lower highs and the D1/4 is providing cover at the moment. The 60min SMI cluster is fighting these lows at the moment and could do with a reset to short again. I will not go long until My-Wave is facing up and we have a retrace/SMI cluster to support - honest!

EURUSD 7.15pm

Twitter feed up and running, so do sign up there or via the email if that is easier to keep up-to-date with posts as they occur. Regression channel taking shape and move below D1 is holding below the daily My-Wave with a retracement at present. D1/4 is providing cover without a bottoming zone coming to view until tomorrow morning at the very least (orange line to right of price is straight down)and the current bottoming zone (strength for EURUSD) is just about coming to an end in line with this little retracement, without the D1/4 getting 'cut'. As long as D1/4 holds, looking for next move down as the night moves along.

Testing twitter feed

Test Test

EURUSD: 3.53pm

D1 was taken out and with some decisiveness too. So, unless price action reverses in mid air, we should now make it to D2, which coincides with T4 at the 1.2850/60 area. This is of course also that Gann 1.2878 line area, and where the weekly and monthly My-Waves would be back tested - both of which are facing uphill at the moment. So, we have the daily My-Wave in the chart posted just gone downhill, but the heavy weights only just turned uphill. Back to that T6 vT7 discussion from earlier and the fact that price did not make it to D5 after cutting D4, making D3 a real possibility now, sitting one Gann line lower at 1.2736 - maybe look at the price action last week there! T4 is likely to be the battleground so I'll defer any more on that subject until we get there.

Help requested

I am sure I'll get there but if anyone could help me get there quicker, I would be grateful. I have set up the twitter feed but need to know how to link the posts here in 'blogspot' to automatically feed the twitter page. The email facility is automatic for you readers by putting in your email address but I can't see how I do it from my end to send it to my twitter page. Thank you in advance.

EURUSD: 1.50pm

I like the price action; a bit more cleaner than going up in my very biased opinion. D1 is putting up the first resistance area and looks like a simple 'abc' could have that beat and then on down to D2. The only 'fly' perhaps is if that topping action, the past few days, is an expanded flat and this is the 'c' wave of that. No matter of course if D1 is taken out, because that should provide further measured downside in the interim.

Photograph: Cloud

This really was more impressive in the flesh, so to speak. The weather was awful and there was a slight break in the downpour leaving this hanging out across Great Malvern, viewing from from Sugar Loaf Hill. In 3D, it was quite a sight. Photograph: Cloud

EURUSD: Kiss goodbye?

Update on the chart from the weekend and yesterday. At least the market is responding in the right area; where it goes to is now up to them.

EURUSD 9.57am

The T4 price envelope saw T6 at its upper echelons and yesterday I posted the price envelope for D6, which of course was at the centre of that one. When price was stuck in the '1-2, 1-2' (or was it 'A-B') earlier last week, I suggested that T6 had been left behind by T4, T5 and T7 and that as T7 was still climbing, it was more than likely price would go up to meet T6. The question of course is the same: is it T6 that needs to keep falling, with price rolling back under T4 & T5 bringing new energy to the attempt to turn T7; or is T7 leading and T4 & T5 that need to get above T6 to put everything back in sync? This bigger picture suggests that T7 is still the errant child in class: see how T11 down to T8 are all in order bar T7. Now look again at the first chart and see that if T4, T5 and T6 could get under T7, the obvious ripple has the chance of getting ironed out. As I asked last week, is T7 still leading uphill or is it T6 downhill? I don't think the market necessarily knows the answer but may enjoy attempting to answer that question and that is another reason I think we see another 'abc' in 'c' of 'B' downhill to test the 1.2041 low before going up in 'C' to complete 'E'. We shall see! Just follow the daily My-Wave....

EURUSD 9.24am

Price is resting on D1/4 which has been a very good long indicator this past week, albeit only for small moves generally in this wave up and why I suspect the bullish count - only suspect! Anyhow, a break of D1/4 will also break the trend bottom of that diagonal I drew in (not necessarily a diagonal but drew in perimeters anyway) and also start to tease the daily My-wave downhill, underneath the daily pivot. Initial target should be D1, then if it passes that D2. Given T4 is riding uphill and is my trend indicator at the centre of the price envelope I use, that will be my initial short target, near D2. Price action around T4 should be explanatory in someway and I'll post again when we are there

EURUSD: 6.24am

Not very exciting this is it!? Price would appear to be building a larger ending diagonal, with D5 above at 1.3060 and D3 at 1.2765. These 'D' lines are the next two consecutive numbers from D4 which was our target last week which and was duly 'cut' back on the 23rd. I would expect price to either make it directly for D5 or pull back into D4's trough to test D3 (which is close to the 61.8% retracement of this whole leg up from 1.2659). In light of the placement of the price action and momentum indicators, I still feel a retracement is a must wait to go long again but continue to believe that a larger correction down from 1.3171 may play out. Not a lot to do here but sit this out for me, which is probably why it is grinding higher!

EURUSD 2.26pm

Certainly consolidation going on at the moment and unwinding the 60min SMI but not touching the 4hr cluster as of yet. Whilst the short term story is playing out, I have been building the case for EURUSD sharply down, or at least this storyboard has got to be exorcised from the options list. I think this study does all the talking.... That is the price envelope of D6, being the future price cycle of T6. That trend line is a little more than a monthly cycle, so I have added the monthly Donchian Channel of the high and lows to last night's regression channel from 1.3171 and the interconnected gold trend line from June 2010. As I said over the weekend, we have been up and could continue to go up but hopefully this chart at least suggests that there is more to this story right now than counting numbers in a sequence (EW!). If we are completing a 'b' wave in the 'B' wave down from 1.3171, then cutting D6 again will provide both a price and timing target, which I'll cover in due course. Cutting it of course is another matter. Might want to have a look at T6 and the weekly SMI positioning whilst reading!

EURUSD: food for thought

Food for thought: stripped back and bare! Maybe look at that 240min SMI cluster?

EURUSD Weekend summary

Just to clarify, this is not the 'Lines in the Sky' report which is bi-weekly, but a weekend review of where we got to Friday and what I am looking at going forward. A very brief summary of the 'Lines in the Sky' report from the 17th November would be that I was anticipating the end of either a 4th wave down or 'b' wave from the pivot high of 1.3171 and that we would then be going up in a 5th wave or 'c' wave higher, as part of an 'E' wave in the triangle consolidation that we have been in for years. The alternative count was that the rise from 1.2041 was in fact a 2nd wave retracement and the triangle actually ended in October 2011 at 1.4246. This rise of last week certainly seemed to fit the former explanation as described in detail in my 'LITS' reports, but I am not one for becoming too attached to any explanation and I'd rather wait for a retracement downhill before committing further, and I think this next move down will provide us a lot of much needed clarity. We have reached the top perimeter line of the regression channel down from 1.3171, having cleared D7 with relative ease, but we have that long term Gann line of 1.3027 (calc'd off 1.6037 all time high) directly above, the yearly My-Wave still formed to the downside and the quite obvious pattern recognition of the January to March 2012 move to work through - this latter explanation would be consistent with a return to the perimeter regression channel down to the 1.2041 low, covered in the LITS reports. So to be very clear, I am fully onboard the 'we are going higher' train but would have to put the 'lower first' at top of my next options list, with a possibility the expected retracement just keeps on going. Nothing like being decisive huh! If the blue descending channel perimeter was the target, then this move up from 1.2659 would be a 'b' wave in a larger 'abc' correction from 1.3171. I am also looking at the deep trough being built by D7 (see last chart link) that signifies the topping or testing zone for price action going forward and can see no reason why a retest of the 1.2041 could not be on the cards, creating a double bottom and breakout through D8 in May 2013, perhaps even clipping D11 on the way. This makes sense to me as D11 is the next target line after a break of D10, which we 'cut' decisively in September 2011. This is all big picture stuff of course but the 'euphoria' surrounding the possible 1-2,1-3 now in wave 3 count up (accepting I had been calling for the turn as already covered!)may be premature and I for one like the wretching likely in this being a 'b' wave up here and not the 'turn'. I have included both counts on that last chart and would bring attention to the Gann line above and D5, the latter being the possible target after cutting D4. However, we have moved deep into the time zone of that D3 trough without a reaction and now D4's is coming to view too. You have got to link the charts together in a sort of slideshow approach, but that is a lot of troughs or topping zones lining up down to D7. If all of those 'D' lines fail to provide support, each will provide ongoing acceleration zones until D11 as described above. The monthly My-Wave is still turned down, as was the yearly, but under pressure at present. However, note the SMI cluster on the 4hr chart (last one) - it is simple enough to say that momentum indicators fail when the trend is moving strongly, as they are really most of use to determine ends of retracements within trend, but that is still a big enough timeframe (covers up to 12hrs in my cluster) to suggest a reasonable retracement at least is coming, after which I can re-look at the options. So, price managed to tag T6 and get to the top of the price envelope for T4 on Friday and that is where I topped up my shorts. I only need a small retracement to break even on my shorts and I am mindful of the fact that I am looking for bearish explanations to appease my trading decision, however I can not go long here and will have to wait for the SMI's to bottom out to do so. It is quite clear from the combined daily and weekly My-Waves that there is nothing to suggest anything close to a weakening trend at this stage, but what has been is not quite the same as what will be. For that we will have to wait and see!

EURUSD 8.08pm

Further to my earlier thoughts (2.47pm post) on this being a 'b' wave up in the 'B' wave down, here is a chart to clarify. Key momentum is likely to be driven by the SMI cluster and the confluence of the D4 trough that signifies either the testing area of the 'cut' earlier today or a topping zone above it (see red dotted line to bottom). Given the state of that SMI cluster, I can not assume the latter. Whether a retracement or the 'a' wave of the 'c' wave down in 'B', I am happy to have topped up my shorts at T6 earlier, not quite so happy I already had some from before that extension up. I am quite aware that the existing shorts may be having a 'blinding' affect on me in seeing this as 'b' wave up in 'B' rather than the beginning of the next leg up (which I have been writing about for two months now in 'Lines in the Sky') but for now, I think it unwise to avoid this potential count as it would make for a fabulous move down and then up in 'C'.

EURUSD 6.17pm

Lovely extensions!

EURUSD: 4pm

Price now at exact touch of T6 and near top of my Volatility envelope. Shorts being topped up here. Price has, not so routinely, ignored the topping power of D3 in this push up and now has started approaching the topping zone for D4 too, in addition to the unfinished business with D6. All, in all, fancy a shot down hill will bring me my rewards. I'll post the 'D' line charts over the weekend but wanted to get T6 up here now.

EURUSD 3.05pm

Price has gone through D4 but we are almost at the top of volatility range and near T6, whilst my Monthly My-wave is still turned down. Can it keep going without retracing back to T4 or lower? is it really a 3rd wave up? Watching I am.

EURUSD 2.47pm

Notwithstanding being on the right side of calling this move up in the beginning against all the odds, and ignoring for now the poor shorts I took out trying to be clever on Wednesday, I am still finding it difficult to recognize this formation as a wave 3. This might be my own predisposition for self flagellation but it 'feels' odd to me. Maybe the market is just playing hardball (as ever), but I have this bugging doubt going on and wonder if this whole move up from 1.2659 is a 'b' wave instead. So the 3 waves down from 1.3171 were the 'a' wave and this is the 'b' wave up. Need some proof of course and something to stop me going long on a decent retracement, but if the price action turns whippet fast down hill next week, I am just putting this on the plate.

EURUSD 9.33am

Looks like an ending diagonal pushing into D4. Break of D1/4 and daily pivot should see ED broken but might play about inside the formation for a bit. The volatility envelope is still looking leggy without a retracement to T4, and we have negative divergence, but T6 is so close now.... T6 is the brother of D6 from this morning's chart. T6 is sloping downhill and is closer to the monthly My-Wave in time frame, which is also still turned to the downside, as we saw earlier. Deep retracement is my bet, accepting that I possibly need it psychologically, to justify my shorts from Wednesday!

EURUSD 7.55am

D4 hit and 85.4% fibfan target too. So, does price push on to D5 or retrace first? The SMI cluster suggests the latter, but I thought that on Wednesday! Therefore mixed feelings this morning. I am obviously really pleased with how the 'D' lines have worked and continue to provide entries and target zones. Not quite so enamoured with my trading of them the last two days. Having said that, I still like the concept that rolling down the underside of D4 provides the best outcome right now as the monthly My-wave is still turned to the downside and would normally require a backtest at the very least and D6 is still looking unloved to me. Going long requires SMIs to be oversold, a higher low than 1.2659 bouncing off a lower 'D' line and the weekly My-Wave to stay in tact; D3 is my favourite for now. So far, the market is not playing ball with my wish list but anyone chasing this bus now up hill may get a kicking.

EURUSD: 2.04pm

I have attached a birds eye view of the intermediate 'D' lines. D4 has been our target all week because we 'cut' D3 and if it surpasses D4, then D5. The fact that D6 is way lower is an issue to me, because although D7 failed to put up significant resistance, thus far, D6 has not been returned to since its 'cut' in August 2012. D6 has been providing the 'topping' presence that has been guiding prices since the 1.3171 pivot high, but that channel between D4 & D7, looks like a very neat channel indeed to accomplish the D4 break to the upside and the D6 kiss goodbye (or otherwise of course). Counting this move up from 1.2659 as the wave 1 or 'A' wave would set us up very well for a deep wave 2 or 'B' wave but perhaps price will return on the other side of D4 down to a higher placed D6. What is quite clear however, is how D4 is the gateway to upside acceleration, so no shorting past that line for me. The second chart shows the shorter term 'D' lines and possible targets for my shorts; quite a neat stepping ladder if we go to 'D3'. We shall find out soon enough.

EURUSD 12.37pm

Price has made it to the 85.4% fibfan line, just past the 1.2878 gann line as discussed yesterday. Time and price wise, we are a bit short of D4 here and the 4hr SMI cluster continues to sport an ending pattern, albeit obviously early. It is also worth noting that the monthly My-Wave is still formed to the downside. I could have held on longer with the longs me thinks but the volatility envelope is looking leggey towards T6 without a reasonable pullback. The count of 1-2,1-2, now 1 in 3 is perhaps looking favourite but there are others that still qualify and I have still left the diagonal count (for 'A' or '1')on for now. It is the pull back that will help settle the game plan. Fading this last leg up is making me wince a bit but hopeful that the topping zone of D3 and the EW count inside this leg up from 1.2765, helps me out a bit! Until D4 is 'cut', D3 should provide support at some point and along with T4, is someways down from here. Come on longs, time to bank!

EURUSD 10.41am

On my screen, that last rise was 1 pip higher than last nights. If this is an expanded flat (rather than a small degree 5th up) to keep the series of 1-2's going in the upward direction (rather than the higher degree correction of the proposed diagonal) the daily pivot, D1 & D2, should hold the price action. This is key because if we get an 'abc' oversold SMI on the 60min, then there could be a 3rd of a 3rd coming. All I can do is watch the reaction downhill and see what comes into view. As long as I can off load my shorts at a profit, I am happy and even happier if there is a clean entry to go long again. Catch up later.

EURUSD: 9.50am

If my 'abc' retracement pans out, then the 'D' lines are painting this picture regards timing for me. Whether I am reading them right and whether they are worth reading is another matter, but the journey up worked out pretty good, so lets see if down works as well. Still need to see confirmation below D1/4 mind you!

EURUSD 7.39am

With that pretty 5 waves last night, I have begun to fade this diagonal formation short. Whether it is a leading diagonal or the 4th wave down, I do not know or care that much at this stage. I am more interested in the 'D3' topping formation that is beginning to come into view today (dotted line marks the start area) and the 60min SMI cluster that suggests a retracement is the way to play this for now. This is supported by the 240min SMI cluster that shows the same diagonal formation and is overbought. If we get an 'abc' down, it will come in 3 parts obviously and hopefully look right in comparison to the time it took to complete the diagonal. I have my eye on the D3 bowl, the low of 1.2659 and that D4 to the right for an eventual breakout northbound. If we get a 5th wave down instead, I am hoping it will be pretty obvious. I'll fade any more northbound here short.

EURUSD 11.32pm

Well that looks like 5 waves up to me; not quite 1.2878 or D4 but we have hit the 127% extension of the first move up and down from 1.2659. For now, I have faded this short and expect a steep 'b' wave down at the very least to test 1.2659 the low. Off to bed!

EURUSD 6.33pm

D1/4 is now in its topping zone following the 'cut' at 2pm. Drop out of that regression channel provides a stop loss above and then follow down to 'D' lines sequentially and see how price reacts to them and how the SMI cluster looks at each on the 60min chart

EURUSD 6.05pm

Fading this short from 1.2826: see last post for diagonal possibility. 60min chart and 240min chart showing overbought conditions on this poor momentum run up and we are at that grid wall of mine again and the wrong side. See where this next turn takes us. This whole move up from 1.2659 is starting to increasingly feel corrective, confused perhaps by the US holiday season. Either way, can only play the waves the market gives us and try and call the turns as they happen. Joining up the dots is only the cerebral massage, not the money shot!

EURUSD: 4.24pm

This is painful! In lieu of the SMI going overbought again without a wave 3 launch, I have drawn in the obvious perimeters for the price action thus far. Might get negated quickly or not, but so far, this is all I have in the absence of the rocket. Could be like this all week until we hit T4.

Photographs: Cow

Even the big black cow, munching away on the bracken above North Hill, looks wet. Malvern is very very wet at the moment. I had thought about suggesting my Gracie had grown awful quick (which she has!) but she is a lady and no way to treat one! Anyhow, Cow Part 1 and Cow Part 2. I had to stand real close to get these with my little digie camera!

EURUSD 9.39am

Well this is starting to feel a little more like it huh! Been like trying to house train a boa constrictor this, but hopefully the writhing is over. Have added EW counts into the 60min chart, although still require yesterday's top to be taken out sharpish to move everything along. T4 is clearly pointing uphill now and took both those 1-2's to do it - the flatness of it before on the turn was a subject of previous discussion and T6 now looks about the top of the volatility envelope, so a realistic target. D4 is going to have to be dealt with first though, on the way to D5. Although I would feel better banking at D4 and looking for a roll down the underside, it could quite easily pass straight through in a thrust and then fold back over the right hand side like a feather. This thrust through could be worth 50pips more, so I'll keep the 1.3020 target in mind for now and see how close we get before a pull back - an ending diagonal for wave 3 would help tighten the first exit! Interestingly, the 85.4% fib-fan of the move down from 1.3171, sits at D4, so could be formidable resistance or hot butter through knife; the latter would fit with my prior comments. Above yesterday's high and we should have cracked my blue grid wall, leaving the red grid wall above in its sights. A move to there in wave 3 is going to make that gold dashed line from the weekend report, a realistic target for wave 5 in my mind - will look at calculations nearer the time. In the bigger picture, with D7 beat (if it is so), then the D8/D9 confluence at 61.8% extension of the possible 'A' wave up from 1.2041 to 1.3171, is my next longer term target after the gold dashed line in the prior chart. That is 1.3355. Another move down though would post pone the bullish count until a likely 5th wave is completed or more consolidation of course but I put that low on my options for now.

EURUSD: 6.53am

Another view through the volatility envelope and the 'T' lines. After the initial move off the 1.2659 low, price has checked back to T4 in the first retracement and now has completed T5. If T7 is breached again, I would have to say that sufficient checking back has been done to run off and catch T6. The game of course will then be whether T6 was holding back for good reason or is just the straggler. I'll be happier with those gains banked before worrying too much about that part of the picture!

EURUSD 6.23am

I should have waited for these lows to go long, especially as I covered this first thing yesterday! Price made it down to the 1.2736 Gann line overnight and the hourly SMI is starting to relocate in the right position. The D1 & D2 troughs have provided strong support thus far along with that gann line and interestingly, D3 has not been touched. Again, as on the first retracement that was deep off the 1.2659 low, I was hoping for the move up to get going, before succumbing to the 'topping' zones marked out with the dotted dash lines. However, we do now have that pull back to D7 in what looks like a 1-2,1-2 count if I want to stay bullish. I have to for the moment as D3 was cut to the upside and this should confirm that D4 is the target until D3 is cut back through to the downside. Those are the rules! The weekly My-Wave is still in tact to the upside, so deep 'abc' test is how I am counting this. If this is going to be a wave 3 up, then I anticipate a solid move now to D5 because the 'topping' power of D1,D2 & D3 has all been used so far and all we got was a higher low - so far that is! So, I am gunning for 1.3020 Gann line not the 1.2878, which should prove a temporary ceiling but maybe a place to top up again. Price needs to get back over the daily pivot and D1/4 to get the rolling thesis back on track.

EURUSD 4.27pm

Not a lot changed in my opinion. Higher lows keep getting tested in a diagonal consolidation pattern, edging higher inch by inch. D1/4 continues to hold above the daily pivot.

EURUSD 2.10pm

This is of course completely maddening but other than my overbought hourly SMI cluster, I can not see any reason here to close my longs. Both the daily and weekly My-Waves are turned up and this morning's spike has had its first pop at the monthly My-wave spine. We keep getting higher lows and highs and we are still above the daily pivot. I am definitely up for closing my longs if we get a spike with an accompanying trend line to use, but for now, I am hanging on in there.

EURUSD 12.40pm

As I mentioned earlier this morning, a flat correction across the daily pivot is going to frustrate the bears and the bulls. I see a triangular formation in play here as wave 2 of the move up. T4 joining the party?

Photograph: Is this the top?

Saturday's climb to the Worcestershire Beacon was certainly a misty affair. Not unlike this ride up in the EURUSD; try as you may, the view ahead is just a tad unclear. This was the view my 9 year old son and I received upon reaching the top. If we had not met Dexter along the way, the day would have been not quite so enjoyable! Photograph: Is this the top?. Don't forget, the quick navigation link on the left will take you to my growing collection of Malvern photographs - I think it makes up an interesting slideshow already. What do you think?

EURUSD: 11.04am

Last update for a bit whilst matters sort themselves out. This is the trend line 'T' chart - the 'D' lines in the other charts are the displaced cousins of these 'T' lines. All of the lines are related to each other mathematically, in time and price by means of one ratio and its inversion; 50%. Here we have price messing around with T4, T5 and T7. Someone is missing the party don't you think and look where T6 is; right at that 1.3020 Gann line. So does price keep on hanging around here under/at T7 or go up to at least talk the matter over with T6? Well, price has cleared D7 already, so odds are on the latter, although keeping T4 in toe is proving tiresome indeed.

EURUSD 10.18am

Bustle Bustle - D1/4 almost cracked. All the 'D' lines are above T4 and facing up. Price is above T4 and the daily pivot. D4 is a long ways off for any shorts to keep on hanging in there if D1/4 breaks. D3 trough does not begin an edge until noon'ish on Thursday. Good luck everyone. See you up top somewhere. Wonder how long my nerve will hold today!?

EURUSD: 9.34am

Quick look at the 'Hurst' cycles work that I am doing and matters seem to following a predictable course at present. I have drawn that top perimeter in through the date line using my imagination and the possibility of a big picture 4th wave working its way out rather than the 'c' wave of a 'e' wave in 'B' - see weekend report. I'll have a look at this in the next weekend report in detail. So far, we have two 3 wave legs since that 1.2041 low, so this is worth considering.

EURUSD 9.22am

I have been chipping away adding longs on small moves down. The taking of D7 yesterday and holding of D3, makes D4 the next target, currently at 1.2984. This is very near the next Gann line up after 1.2878 at 1.3020 which is also a powerful Gann line from the 1.6037 all time high. So, to 1.2878, then let us see what happens. D1/4 needs to crack and hold to get even heavier long if get the chance.

EURUSD: 8.28am

D1/4 held so far - lots of energy around here. If the SMI's bottom out with price still around the daily pivot, bears may be stuck with shorts and wannabe bulls will be scrambling too. Small long in place here and wait for D1/4 to pop and new high to take root.

EURUSD: 7.56am

Price still engaging with the grid wall which is at the very least validating my approach to building these. As such, the creation of that gold dashed potential grid line above is still on my mind - see weekend Line in the Sky Report. This is the cleanest chart this morning to look at matters - price seems to be honouring the D1 & D2 troughs which suggest topping zones if price has previously cut them, which it did. D3 is already having an impact, as the blue dotted line comes into view. This is all starting to look like my favoured situation from yesterday, that having cut D7 in the bigger picture, it is going to lay down over the top of it in a bigger corrective phase. This will also be underneath that grid line from the first chart. Just following this morning and keep an eye on those SMIs - I need a retracement either way that sees the hourly cluster overbought or oversold with a higher low or lower high to play off. At the moment, no play but that Gann line at 1.2736 looks a good starting point.

EURUSD 7.37am

Gracie has not been well over night so a bit behind today. Notwithstanding last nights thrust down, this is starting to look like a correction which fits with T4 needing to come up and price to go meet it. SMI's got room to fall still, so waiting for lower. A strong thrust with an ending pattern could be the buy of the week. Got school run to do too, so hope everything waits for me. Charts later.

EURUSD 10.11pm

Just one of those days where everything turns the right way. Banked shorts on that spike down - too hot for me - back tomorrow.

EURUSD 9.27pm

With everything else done tonight, price has moved back up again. Fading in, in small increments, shorts from 1.2813 - SMI's tired and T4 way down and flat still at 1.2680. There is slight upward movement but I am playing for a return of some sort part of the way to bide time.

Photographs: Meet Dexter

A mixed weekend of hill walking, weather wise, but what a treat if you like the animal life! This was my first sighting of a Harlequin Standard Poodle, by the name of Dexter. A real treat for me as our Gracie, the Curly Coated Retriever, is part Poodle, Irish Water Spaniel and Retriever. Having had the IWS, got the CCR, the missing part of the picture was before me. What a beauty. Meet Dexter (2)

Weight Management Diary

The Weight Management Diary has been updated as of 19th November 2012. It has been a difficult month with the back falling apart again, but still managed to move ahead. Just refer to the quick navigation links on the left to catch up on my progress and perhaps more importantly, the very simple way of getting matters under control!

EURUSD 4.20pm

Shorts closed for a few more pips in the bank. That is it for me today. Will have a look at matters first thing in the morning and see what time has done to provide a safer entry either way. This is the crux of the matter and well established in such films as Kung Fu Panda: there is no secret....there is no secret.....there is no secret well apart from the fact that you need to know there is no secret, which is perhaps a secret in itself. So what am I saying? Well, if I think and feel that the market has zoomed away from my comfort zone and I don't know whether to stay in, add, bank, where to move the stop to, etc, well I think that the market doesn't know either. This is where the work of Goodman, Hurst, Fibonacci, Elliott, Donchian, etc, comes in to play; the patterns that play out in the market are a natural human resolution to figuring out where everyone feels comfortable; the equilibrium point. So start listening to yourself and you start hearing something. Lesson over; must learn that for myself!!

EURUSD 3.53pm

Have sold this for a tiddler. T4 still encamped at bottom of chart - more retracements coming me thinks! Will top up if price drops under D1/4 and gives a 'b' wave to short.

EURUSD: 3.33pm

I have closed longs here: the SMI cluster is showing negative divergence and we are back at that grid wall of mine. I think I would like to re-enter long when the SMIs are back at the bottom of the range and bank my well earned monies here for today. In the back of my mind is the US holiday week in play and possibility of a lack of momentum. Perfect for me would be for price to lay back down D7. So out of market for now and hope for a pull back so I can draw a trend line over an 'abc' pattern.

EURUSD Stops

Stop is under the last low there at 1.2749 - counting a 1-2, 1-2 up from 1.2689 on Friday. If it takes my stop, I'll wait until that trendline into a 'D' line pops, but so far just been topping up here with better risk reward - in fact tiny compared to the possible outcome if D7 rejects uphill! T4 really needs to start turning up to get the market rolling and maybe we go down again to tease it up.

EURUSD : Bigger picture

Another chart from the weekend report: searching for a target using the 85.4% fibonacci fan. Details in the report of how to do this and why. Here is the 'Hurst' study I am running regarding timing and looking at the 11th December now as the next top of acceleration point. See how the previous dates lined up exactly.

EURUSD 11.24am

Another tiresome waiting game but no problem if direction is the right way! Note how D1 is now the one providing resistance, not D3 - this is all happening above D7 - keep this in mind!! Break of that trend line will then have to be retested of course, so sleepwalking up here but the regression channels look hot and potent. Lots of stops to be taken out above 1.2801 - maybe 1.2878 is a little low a target for today? umm.

EURUSD 9.56am

Short term picture making my weekend report 'Lines in the Sky' worth referring to - see quick navigation link to left of screen. Here are the short term lines following the script so far. I am looking for that move to D4 now, which is higher than my 1.2878 initial target, but this latter line should provide a consolidation zone first.

EURUSD: 9.46am

D7 took a punch and now being retested - quick reminder of why this is such a key line in the sky. See weekend report for detailed explanation.

EURUSD:8.25am

Target today will be the daily pivot R3 sitting just above the next gann line calc' in the 1.2878 area, assuming D3 holds of course. All I need to do is stay on the right side of D1/4 and the daily pivot!

EURUSD: 7.47am

Feeling a bit 'Monday morning' myself today but a good walk with the Jack Russell should clear out the cobwebs. Amazing what a day off does! Quick chart this morning shows D3 finally breached making D4 the next target if D3 can hold. Price is right on D7 as I write. This is a key moment in my ongoing thesis.

Photograph: Autumn may be here

It really does seem that Winter is trying to get here before Autumn, which is somewhat concerning as winters in Malvern can be somewhat tiresome after the initial enthusiasm for less grass cutting, wanes. I had been on the look out for an Autumnal scene and I think this one cuts the mustard from West Malvern. Photograph: Autumn may be here

Lines in the Sky report posted

The 'Lines in the Sky' report for 17th November 2012 has just been posted in the quick navigation link on the left of the screen. I have changed the format slightly so that earlier versions are available too. I do not know how many is enough but probably a rolling 3 months in due course should suffice. The format is starting to become more stable now, so hopefully I'll add another asset class in due course. I do quite fancy taking on copper!

EURUSD: 9.32pm

Yes it did! T4 was collected safely and D2 held firm (D2 is the next natural target mathematically after D1 failed in a retracement and I do not know which will hold in advance, notwithstanding guesses/counts) and now we are back up to D1, with D3 a little bit closer in time than before. I think Sunday night sees a gap up or thrust up through D3 towards D4, but I'll write everything up over the weekend. Very exciting week for me, watching these 'Lines in the Sky' come together. I am absolutely not harnessing all the monetary power they are offering, but I am definitely moving in the right direction, albeit my wind and sail!!

EURUSD: 3.52pm

T4 now collected. D1 did not hold and we got what could still be an extension in Wave 2 down. D2, so far has held. Will it now go up?

EURUSD: big picture

The turning points of my 'Hurst Interpretation' chart have been quite startling to me. I do not bring this out too much, cause it is my own work based on my own cycle calcs/indicators, not using spectral, fourier transform etc. Basically, it is a visual interpretation and subject to all sorts of 'tutting'. However, it seems to be working. Given the next turn date of the 11th December, the two '3 wave legs' since 1.2041 and me thinks it is worth a guess at this formation. We shall see.

EURUSD: 12.47pm

Looks like D1 has held at the Gann line as hoped for. Have drawn in possible course of next wave up, cutting D3, bouncing off the back of D1 again, before moving on up towards D4. SMI seems to be helping us here as these only support directly in retracements.

EURUSD: 9.51am

Okay, last charts for a bit. Reckon there might not be much time to do more if price zooms off to the upside. Recall, if D3 is cleared, D4 becomes the next target. 1.62x the current set up for a wave 1 & 2, puts price right at D4. Looking forward to a great end to the week.

EURUSD: 9.39am

Just a quick look at why D7 is so important - that is, if yesterday's high is cleared. I think the chart says it all. If you want to know more, just ask.

EURUSD: 9.25am

Grid and gann lines working well here in creating target areas. A break of yesterdays high should see price embedded in the next section up with 1.2878 as target line.

EURUSD: 9.21am

Looking for D1 to provide support here - it is also the 127% extension of last nights 'A-B', and the SMI seems to support the move - D3 still the target. Got my eye on that D2 topping zone marked out by the green dotted line. A rise into there would clear D3 and then maybe a deeper pull back to pick up T4 from earlier post. Just musing...market will tell us.

EURUSD: 8.26am

Faded in here - approaching 1.2736 gann line, SMI looking like right area for a retracement and the move to downside thus far, looks 'abc'. Could be more downside but moving in long from here.

EURUSD: 6.53am

Well, I am glad I reversed from longs to shorts last night! I am looking at the charts and I could post ten at least, all with key areas being tested but none broken. It is a Friday and it has been a long week, so I am going to avoid the big summary this morning and save that for the 'Lines in the Sky' report over the weekend. I'll keep it simple: I am now looking to go long, as close to T4 as possible. A new high will take out all the areas I covered in detail yesterday, so perhaps go back to those charts if you'd like to recap. Trading day, here I come!

EURUSD: 8.28pm

Shorts closed again here. Closing down for tonight and reassess with fresh eyes in the morning. Good night all.

EURUSD: 5.09pm

Or is it an expanding wedge? Looks like might work better if it reached the lower perimeter, as wave 4 back here inside the wedge would encroach on wave 1. Getting ready to short gain somewhere in here.

EURUSD: 4.58pm

Shorts closed; if ending diagonal playing out, we got some place higher to short again. Worth the waiting this!

EURUSD: 4.17pm

Ending Diagonal for the A or wave 1?

EURUSD: 3.55pm

Shorting this puppy now; nothing too big, just T4 so far away, can count 5 waves up, there is negative divergence on the SMI bundle, weekly My-Wave is till formed to the downside, top of regression channel, etc. Lets see if can pick up an abc back down again.

EURUSD 3.09pm

Well, that is me out for now. Close enough to D3 for me to count that as another tick in the 'methodology works' box! I am a bit buzzy with adrenalin at the moment so, I'll post this chart to mark the transaction and come back later. D7 has got punctured here - this is a key moment and I want to stand back and watch rather than be befuddled with a trade. Recall T4 is way down at 1.2700 ish, so I would love another chance to buy this lower.

EURUSD 10.13am

T7 & D7 sit in the 1.2780-1.2790 area and that 1.2803 low (being the first drive low off 1.3171)is just above. D3 (our initial target) is higher at 1.2830 with the 2.62x extension of the first drive up from 1.2659, slightly higher at 1.2849. If we get there, the weekly My-wave will have been cleared, albeit retesting is probably on the cards after that. So D3 is the target today and then wait for a recamp and for T4 to join the party. See previous posts to locate the above.

EURUSD 9.46am

Price is moving along. D2 seems to have been tested enough but who really knows? Will be happier when D3 tagged, especially as it provides ongoing credence to my 'Lines in the Sky' methodology. I have drawn in an ongoing regression channel off the low and reckon the path to D4 looks clean - this is the displaced brother of T4 which has been leading the charge and is mathematically tidy in time and price to get back to D4. Recall, D4 & D5 are providing 'bottoming' tension, which has taken over from D6 which looked like it caused the whole correction. Clearing D7 is key. Anyhow, the 'grid' shows another attempt at shifting into the next section above and I have drawn in an inverse head and shoulders to watch out for.

EURUSD:7.18am

A quick review of the various My-Waves to help locate what is going on. No need for commentary here as self explanatory. I generally do not hold with 'the trend is your friend' unless it is; more accurate is 'the trend tells you where the journey has been so far, now it is up to you to decide if it will continue'! Daily My-Wave / Weekly My-Wave / Monthly My-Wave

EURUSD 6.34am

D2 has held overnight with price using that D1 trough as suspected to consolidate its position. Also the 1.2736 Gann line held too. D3 is looking like it may well get pushed for today, but unless price action takes on a more aggressive stance, that might be a place to look for reversals downhill, whether corrective or not. Looks like the market does not trust this move uphill at present and nor do I tell the truth!

EURUSD: 6.23am

Not a lot to add to last night. Price action looks corrective but I am hoping it will turn out to be something a bit more sustainable than it looks. Price is still above the T4 trend line and the Daily My-Wave is turned up - not a shorting exercise by definition for me. Looks like this could turn out to be a 4th wave in the 'C' wave down from 1.3171, but nothing clear. I have drawn in 85.4% fibfans off the first strike up off the low (deleted the standard deviation channels as was doing no good here)and now the last high - just to see if we get some traction somewhere. If this does turn up again, then a break of the brown 'A-B' line might help after the daily pivot touch, and the back of the first 85.4% fibfan (top one) may be the target, eventually. Grasping at straws this morning with this dribble but following the DMW & T4.

EURUSD 10.30pm

Can not ignore those stock market drops! Having said that the EURUSD still seems to be making an upward stab and where it will get to, is my concern, not its correlation with equities. Price action seemed to pop out of a triangle earlier today and fall back in what should be a correction, as that looked like 5 waves up. As such, D2 has still not been cleared convincingly, using the D1 trough already to consolidate, nor the grid perimeters & Gann calc line at 1.2736. Price had approached the 1.2803 low of the first leg down from 1.3171, also T7, and got sold off quite abruptly but thus far without follow through. Key here is the removal of the option of a 5th wave down (if 3 is actually complete) and confirmation that we are going up again. We could of course still get another leg down in the proposed 'C' wave which would need a higher break past 1.2878 to outwit. It is no surprise perhaps that D7 is still in play too and the main plank of my 'another leg up thesis' is the beating of this and a move back to D9. So, in the interim, I am going with the simplest explanation and that is we are waiting for T4 to turn up with price and the daily My-Wave are above T4 and in an upward formation (for now!)

Apologies

I think I might have had the incorrect url address for this weekend's 'Lines in the Sky'. Have just updated it to make it a public access link. Do let me know if you have any problems.

EURUSD: 2.00pm

Price still wrangling with D2 & the Gann line but burning off that overbought SMI cluster in the meantime. Daily My-Wave is still intact to the upside and looking like running triangle being built here or something similar. Would appear price is waiting for T4 to turn up but may need that move to 1.2878 to secure the deal. There is going to be a pull back to T4 at some point higher up, so I'll bank longs up there somewhere near 1.2878 and wait for retrace.

EURUSD: 10.00am

Update of the standard deviation channel I drew off the 85.4% fibfan yesterday (of the initial drive up) - I had to draw in -1 & -2 too with that retracement, which will put the fib fan in the centre now as opposed to the right side/underneath. A push above the centre line and holding it will be interesting to see, I think

EURUSD 9.44am

D2 has now been reached along with that Gann line as discussed yesterday. If D2 is breached, D3 is the target. I have drawn in a potential topping line being created by D1 at the moment but I would wait to see what happens at D3. I see the next Gann line at 1.2878 and if price pushes up through D3, it will use this D1 topping zone to lay gently over the back of D3 before pushing onto D4. A push through D2 will create a future topping zone for that too, so need to keep an eye on this next part of the move. If we get a thrust, it is likely a '3' in the wave so we should be able to count 4 and 5 for wave 1 or A up. Catch up later.

EURUSD 7.00am

T4 has been broken to the upside and the Daily My-wave has turned too. Yet there remains some work to be done here. After that ending diagonal and the time spent driving down into it, one might expect something a tad more convincing and some follow through would be welcome! We are sat underneath the Gann line of 1.2736 and a grid line off the 85.4% fibfan off 1.2041. This area has been tested already a few times on the way down, so a break there should seal the fate. We are however, above and holding D1 so D2 should at least get a touch. That sits at the Gann line, so a break of both should catch a wind to D3 or more. The last chart this morning shows where T5 sits in relation to that 1.2878 gann line - on the way and past the 1.2082 marker which sets out the bottom of the first move down from 1.3171. If this is passed, then the wave 4 down is knocked off the list!

EURUSD: 2.24pm

Well, we certainly got a retracement of that spike up! Whilst the low holds however, I am going to assume the market is trying to scare the longs out of their positions and I am using the 85.4% fibfan line of the 'low to spike high' to create a channel, two deviations deep. The 2.168x extension at 1.2828 for wave 3, looks like a good target to me. We shall see.

EURUSD: 12.07pm

Price has pushed cleanly through the daily My-Wave but first stage is for that My-Wave to turn over; so expect some consolidation at that point, although it could be a flattish wave 2 in this first move up, given the pent up demand in the ending diagonal. In Bayer's 'Egg of Columbus' he describes the ED as both 'tongue' and Hors d'oeuvres, as the beginnings of the new cycle are to be found in the entrails of the old and the market needs to separate out the two before moving along. We are already at D1, but with D2 so close, I am looking for that also to be breached and to hold; this should ensure a move to D3 at the least for the next course. The red dash to the left is that amount of the ED I forgo to be ready for this punch; the other lost asset was of course time which bothers me more! Moving up to the next Gann line at 1.2878 (which is where D3 sits)would not only bring into play T5, but also the possible 'A-B' trend of this C wave, with D5 sitting higher at the A-B line of the whole correction from 1.3171. Let us see what the market makes of it!

EURUSD: 11.43pm

Well, it looks like the waiting is over! For all the readers who are as impatient as I am, it is a tough job this but the belated joy of catching another wave is all we have! Catch up later.

Photograph: Getting along

Jackie, the Jack Russell, is over 10 years old now and taken a little time to warm to Gracie. They are at least sleeping together at night which is keeping the puppy quiet for a bit! Gracie has already doubled in size in 2 weeks and will undoubtedly star in many Malvern wildlife photographs in the years to come, just as our beloved Irish Water Spaniel, Reilly, has done in the past (and will continue to do so for as long as the backlog of photos keeps on providing!). Photograph: Getting along

Photograph: Toadstools

That muddy lane surely delivered at the weekend: a hawk of some description and these toadstools. Accepted, not very exciting compared to the Hawk but next to that muddy lane, a delight, albeit not edible me thinks!

EURUSD: 9.20am

So, I have had to have the patience of a saint I reckon, although watching my new puppy Gracie (curly coated retriever) get bigger by the minute, has kept me sort of sane. To recap, I did not want to get involved in shorting the latter parts of the ending diagonal because my bigger picture analysis is that this is the ending pattern of a C wave in a corrective pattern off 1.3171. As such, the thrust out of this mire should take the breath away in comparison to trying to catch shorts for a profit. So, I wait for that break out. The daily chart attached here shows the green regression channel of this whole move down from 1.3171. I have assumed the 'A-B of C' count and posted the 61.8% to 162% extensions of the A wave. As discussed last week, I think the D8/D9 confluence is a key decision point and hope for a 'A' leg to there to begin with. This coincides with the yearly displaced cycle that I posted in the weekend report.

EURUSD 6.35am

Ending diagonal appears to be complete with 5 waves inside the perimeter walls, having reached the 127% extension of the first wave down from 1.3171. Looking for that punch out now and a quick move to D3 to get the next leg up going. We have had 3 legs down from 1.3171, so for now the wave 4 of A or the B wave of ABC up from 1.2041 are still on, although I tend to the latter. However, if we get a consolidation pattern instead of an impulse that takes out 1.3171, well maybe we have wave 4 down of 5. Best keep the options open until the market knock them off the list - my days of doing that for the market are well and truely over!

EURUSD 5.40pm

Not a lot to add to the weekend report but thought I'd throw in the Gann calcs off 1.2041 (11 degrees). We are obviously fighting the slowing momentum of the downward diagonal with the overhead cover of the Gann line 1.2736 which has so far been defended. However, T4 is looking very tired if the 4hr &16hr MACDs have anything to say and a return to T5 at the next Gann line up at 1.2878 (also near todays' R3) looks on sometime soon. The weekend report explains how both T4 & T5 are in bottoming formations in respect of their displaced cousins, but fighting the topping power of D6 and sliding down the underside of D7(see report) - however, see where its cousin T6 sits in the first chart! Some gap now opened up and some return would be healthy me thinks and T5 is a good start, mathematically. Look also where T7 & D7 would be if T5 got tagged - yep under the price action and just in case anyone forgot, T7 is rising!!! Not concerned at any drop as I am not following it, just the break up when it comes.

Photograph: Hawk

This morning I posted a photograph of the muddy lane I faced taking the dog for a walk and expected nothing more. However, the extent of the fog and mist had a hawk of some sort (Sparrow Hawk?) hunting in the hills around me and perhaps suffering from a lack of sight in the gloom - hence it did not fly off when I tracked it with my rather simple digital camera (click and go!). Anyhow, this is my reward for taking the camera out today. Photograph: Hawk.

EURUSD: Lines in the Sky 10th October 2012

The bi-weekly report 'Lines in the Sky' has just been posted.

Photograph: A little muddy

I was somewhat resigned to the damp conditions today and this trail was a good example of what I was expecting. Photograph: A little muddy. However, there were a couple of opportunities for something worthwhile along the way and I'll post these over the next couple of days.

EURUSD 2.00pm

I feel like I have been charting this diagonal all week but not so, only really since yesterday morning. A poke out of the bottom of lower perimeter can offer great risk/rewards and I am now looking for a strong move up. We have been traversing the 'topping' forecast of D6 since 1.3171 and now we have both D4 & D5 asking for bottoming action. Combined with the ending diagonal, the 'C' count of an 'abc' since 1.3171 and the positive divergence, and I have no reason yet to doubt up is coming. First line in the sand however is T4 and D1/D2. Tired of waiting!

EURUSD: 11.10am

Got to see this move down as another leg in the Ending Diagonal of the C wave down from 1.3171. I have tightened up the perimeters and keep staring at the positive divergences across the charts. T1 has made it above T3 now, notwithstanding the move down in prices, so momentum and trend are changing beneath the sheets. Look out for a stab upwards to D1/D2 and if it makes it across to D3.

EURUSD 8.48am

We have had a move up early this morning into the vicinity of T4 as high as 1.2789. It has so far been rejected, but this arrow like formation looks and feels like a 'b' wave - a faker. If this is a 'b' wave, that would make yesterday's sidewards action a possible 'b' in an 'abc' up for the 'a' wave. It would then follow that we have a 'c' wave to come that should take on a more familiar feel. The depth of this pull back suggests that the ending diagonal structure could be the prime target, so I am still looking for a touch at D1/D2. It is noticeable in the first chart that T2 has now made it above T3 (that is the shorter time frame is above a longer one) but T1 has yet to skip across both. This pull back may be acting as a collection trip before moving back up to T4. On the weekly My-Wave we can see how price launched itself out of the downward channel and is back-testing the perimeter right now. There are a number of options going forward but for now, T4 has got to be surmounted if anything other than more of the ending diagonal is to come. Alternatively, price continues to drive down and provide confirmation of a more bearish structure overall.

EURUSD: 4.50pm

Oh, it has been a slow day. But therein lies some of the answer as I have been working on this being a turning zone and so far it seems to be so. If we zoom out on the My-Wave, there is a clear 5 waves down with that familiar Elliot Wave formation about it. We have also got positive divergences on the MACD which usually accompany 5th waves. Zooming in again, and My-Wave has yet to turn up but is obviously under a lot of pressure here. Part of the push and shove I think was caused by dropping under the 1.2742 level, being the 38.2% retracement of 1.2041 to 1.3171, and bringing the 127% extension at 1.2672 into play - a sort of, shall we or shan't we.... Anyhow, we seem to rolling along the bottom of some formation but may just be a trend line, but could still be a ledge to further downside. I am however, looking at the D1/D2 intersection at 1.2815 ish as the decision point, which is where T4 sits (see the My-Wave charts). A clean slice through here would bring D3 into play which sits at the 85.4% fib fan line of this whole move down (green dashed line) from 1.3138. On this final chart, I have marked up an 'abc' for this whole move from 1.3171. I can not see a clear 'third wave' in there at all, and have to run with this either being a 4th wave in the move up from 1.2041 or a 'B' wave. Some clarity will hopefully come from this next move up, but clearing D7 will have to come first!

EURUSD 10.10am

Price pushed down from D1 - I am looking to add to my longs as I count this as a 5th wave down and a potential expanding diagonal or contracting; a small ending diagonal here would be peachy, especially with T1 still above T2 and positive divergence on the 60min & 240min MACDs. This is the Weekly My-Wave and we are nearing the bottom of the regression channel from the 1.3138 top; a good place to be hunting for longs me thinks. In addition, according to my cycles analysis, we are nearing a potential 40day and 80 day bottom on the 13th November. Nothing is ever guaranteed but probabilities for a reversal are adding up in my eyes.

EURUSD: 7.40am

D1 has continued to hold price action in a consolidation phase. Impulse moves follow consolidation moves, so in simple terms, all we are waiting for is the train to leave the station. The extent of the prior moves and the positive divergence on the MACD's suggest up is next, but it is only a suggestion as the market will go where it wants to and the counts will fall in line. My 'long' tiddler from yesterday is still a tiddler and I wait for a series of higher lows that sticks to get trading. My-Wave is still formed to the downside but with T2 still below T1 (bullish) I still think we might get a stab up. As T4 has been leading this charge down of late, price will need to take out yesterday's high to convince everyone of the bullish case or at least have a go, but for now, the bearish one has stopped at that 38.2% retracement line from the 1.2041 to 1.3171 wave and T7 as covered yesterday, so the market is taking a good hard look here. Whatever the outcome, it is a significant zone for later!

EURUSD 6.11pm

Well, that looks like a consolidation pattern to me and not quite the triangle it started out trying to be. It has yet to divulge its hand but this move is pulling price above D1 from the earlier charts. I am looking to go long here and although I have a tiddler on the hook already, I am looking for a strike for home to appear. Let us see if it comes. Any move lower and I'll assume that is a 5th wave down and I'll be looking for a small ending diagonal to fade.

EURUSD: 2.46pm

Looking like the 'expanding flat 4th wave up then 5th wave down with positive divergence down' from yesterday's posts looks on; we got that divergence at the moment on the 60min and 240min charts. Looking to go long on confirmation above D1. Worth a few pips risk here as reward could be high with a possible 5th wave up. Possible entry on breakout above the short term triangle or on break out of the bottom then reversal pattern. Catch up later.

EURUSD: 12.53pm

Been a good run this for me. These 'lines in the sky' are extraordinary in my opinion but it is only since I stopped trying to be led by the potential Elliot Wave counts that life as a currency trader has got easier somewhat. In simple terms, I am trading the picture as it is being drawn, not trying too hard to figure out what the picture is finally going to be. We hit the 38.2% retracement line of the 1.2041 to 1.3171 as anticipated and in doing so D1 has been penetrated, discussed earlier. there is a lot of room in the MACD's to keep going down and the My-Wave has not even turned down yet. I have closed all trades at this juncture and will wait now to see what happens. The market has to make a decision on what count it wants to go for and I can only follow. Breaching that D1 trough needs clarifying, so I am looking for a consolidation pattern to catch my breath.

EURUSD 11.35am

These are the trend lines driving those 'D' lines in the previous post, up to D7. Given My-Wave has yet to turn over yet to the downside and how much pip mileage has already travelled, I wonder with the current failure of D7, whether T7 (at the 38.2% retracement mark of 1.3171 to 1.2041) is about to cave in. The 4hr & 16hr MACD's are in the right position and see how T4 continues to drive the 'stack' downhill - all is in alignment above - just T7 in the way. Will it hold or not?

EURUSD:11.15am

Well, as suggested, price fell from T4 and has retested that level this morning, on its way to the D1 trough. However, price action is looking a little aggressive at the moment, so I have been looking at the bigger picture for clues as to what might be occurring if that trough does not hold. Here is a chart of higher timescale 'lines in the sky'. Look at how D7 is repelling price action at the moment and where D6 currently sits. Now look at the next timescale up and see where D7 sits in amongst the journey and how it just maybe taking over from D9, which has been a long term partner. Alternatively D7 breaks to the upside and we return to D9. Lots of options huh! All I can do is follow D1 though and see where she takes me.

EURUSD 8.09am

Quick one here with the school run but given everything has gone according to yesterday's write ups, perhaps refer back in the interim: Chart1 Chart2 Chart3 Key now is the move into the purple D1 trough. I reckon we just saw the completion of a 'c' wave in an expanded flat wave 4, but the location going into D1 suggests that we either get a shallow 5th wave for a marginal new low at 1.2742 or a 'b' wave to drag the correction out longer. Wave action is our key.

EURUSD 7.42pm

Well, just like magic, price has made it to the Purple D1 line and is also where the T3 trend line sits. The 60min SMI is oversold at present but no immediate reaction downhill. If price falls away on the underside of the purple D1 without making it across, then I'll start shorting the lower highs when the My-wave turns down again. If price makes it across, then we will still see a retracement downhill in due course, but this is likely to be held in the purple trough and I'll be looking for the My-Wave to hold too and the SMI to bottom out, then looking for higher lows to buy.

EURUSD: 3.45pm

My-Wave has almost turned over to the upside. I have added the trendlines I use (T1-T4, shortest to longest respectively) and as can be seen, this quiet period has not been so quiet under the surface. Still looking for price to make it to Purple D1 to gauge what next. This price action does look corrective or a leading diagonal but either way, we hit the 2month tide zone and now going back to check the weekly commitment to continue further downhill or not. MACD's on the charts look primed to me, but may fall away in a 5th wave down, if that is what is on the cards.

Photograph: Views from British Camp

It is a fact that on sunny/clear days, the views across to Wales from British camp are not as clear as somewhat wetter conditions. I am not a weatherman but there you have it. Here are views across from British Camp on a mediocre day up top and not bad at all.

EURUSD: bigger picture

Here is my daily chart showing all off the median 'tides' over longer time frames. See how the 3m and 6m are following up behind the 2month in a very clean stack, butting up against the yearly tide. A move to the monthly tide again would push price above that yearly tide line! From my bi-weekly summary 'Lines in the Sky', I had been working on that initial move up from 1.2041 being an 'A' wave as being part of an 'ABC' to make up the 'e' leg of the triangle from the 2008 high, to complete 'B'. We would then have a substantial decline down into the parity level with the US$. This 'A' leg either completed at 1.3171 and this is the 'B' leg of that ABC=e wave, or we are completing wave 4 of that A leg and moving into the 5th wave. There are other counts of course, including the '1-2, 1-2' count in the big 'C' leg already, but I have not been comfortable with that for a whole year given the incessant chop chop.

EURUSD 10am

Looking at the 240min chart then, we see price has been held thus far above the 38.2% retracement of the 1.2041 to 1.3171 wave up, sitting on top of the 2month 'tide'. We have however completed a 100% extension of the initial move off 1.3171, so maybe the 'abc' B wave is the formation and is complete. We have certainly got some upward reaction going on right now, as I had been looking for, so we will have to see how matters move along from here. I am looking at the 4hr MACD's interaction with the 16hr and their zero-lines as price moves up here. We are firmly bedded in the bolly bands at present and the weekly 'tide' looks very aggressive. Note however, that the monthly does not. So is the weekly still leading, or is it going to get beaten back at least to the top of the bolly band to pick up the monthly tide? The purple trend line (T) moved sidewards and has acted as support for price action overnight/this morning but that 60min MACD is still in the sell zone without a zero-line check back in the bag. Got to bear that expanded flat maneuver in mind as we go along here. Again, the purple 16 line is the initial target zone as I covered yesterday. How price interacts with this will be key. If price moves through it rather than slide off its underside, then that green 32/blue 64 cluster looks attractive to the right. My-Wave is now under pressure as suggested earlier and now we shall see what the market has up its sleeve.

EURUSD: 9am

Very slow action is usually a sign of either a 4th wave or a B wave in Elliot Wave terminology at some degree of count. Given the move down this morning is also overlapping and stodgy to say the least (out of what I thought was a 4th wave triangle yesterday) it is possible that we are in an expanded flat retracement for the 4th wave where the 'b' leg makes a marginal new low but then pops up with what looks like a trend reversal, only to reverse again down in a 5th. A possible confirmation of this is the MACD on this 60min chart which has yet to reach the zeroline, which is usually where the 4th wave ends, prior to a new price low with positive divergence on the MACD. Alternatively. we are in an expanding diagonal as a 5th wave, which would also see a jump up in due course. So, still looking for a pop up with the purple 16 line in the sky as the target in the 1.2835-45 area, at R1. It is possible that My-Wave will not roll over with this move, but get punctured and stay in tact, leaving potential for a deep retracement at the least. The My-Wave rolling range is very tight now, after this sideways action, so expect something punchy! As always, got to stay focused to the possibilities. Might be a fun day this if price could get above the daily pivot!