Currency Strength Analysis

This is the spreadsheet I have been working on to provide a summary of the Currency Strengths Analysis. There are two components: the outright score of the strongest to weakest currencies and then the pairs which exhibit the strongest trending price action at the point of calculation. Obviously this is past tense and one then needs to determine whether a retracement is in fact one or a change in trend but this is useful ground work I think. Based on this summary, little point in moving away from the dollar pairs for now, although interesting conundrum on Yen's second highest strength score but the trends being 4 bar against it. Any questions, just ask but hope the Guide underneath helps.

Dow

A 'b' bounce off 14905 (S1) would set up a 100% 'C' leg that would stall just below the high. Will it keep going or not? Decisions, decisions!!

Dow: longer picture

My guess is as good as anyone's but I am drawn to the next green hump over on the right: this is the 25day cycle FLD and is a peak, meaning price will bottom/slow down under it, or drive up to it first. It is also right inside the 50day Peak in red. A big picture 1-2, 1-2 would suit the degree of collapse likely in my opinion and why not spend even longer building to a creshendo. Let's see how she pans out then.

USDCAD & Dow

Banked USDCAD early there for great rewards because Dow doing the KISS goodbye and wanted to short that again. S4 is 14625 today and I'd be happy with that tonight even if it does sound too far fetched.

Dow

I am not mad then! Price has made it back to the median zone of the price channel but that momentum cluster is in the wrong place. Would be banking anything near today's low or lower and waiting for the obligatory retracement before looking at this again.

USDCAD

Very bouncy: going for the next Harmonic Octave up at 1.0625.

USDCAD

Still no go on charts as normal - links will have to do until further notice. Don't forget to toggle /zoom to see charts clearly. On the 54month Cyclic Phasing Chart, we appear to be in the 2nd 80week cycle. We appear to have had a 'A' and 'B' leg since the bottom in July 2011 and we are in 'C' or something else of course. Of note is how the price action since the 'B' bottom, has been skirting the lower channel line of the Pitchfork. The weekly momentum cluster is facing uphill and has been coiling of late. Is this overbought then or not? Are we at the beginning of a wave 3 thrust after a series of 1-2's? The median line sits at 1.600-1.700, which is some target! Well that depends on what happens next. The 80week chart shows price in the 3rd 100day cycle of the 2nd 80 week cycle and with a couple of weeks to go until a 50 day low is due and not until the 25th September is the 100 day low due. So no reason to expect downhill targets. On the working chart, we have had a retracement in the past week and a quick move uphill has all 5 trend bars positive again. Perhaps we have only had 'a' of that retracement and therefore we are only in 'b' uphill for the moment. But betting against that 5bar bull set up is not for me, especially whilst price is above the range channel median and even more so, given the sitting position of the large pitchfork from the first chart. So, I am long and waiting for the break of the small pitchfork on the working chart. If it takes out the 1.0555 top, hang on to your hats!!

USDCAD

Here is the latest chart on USDCAD - I tried to post the trend line chart last night and first thing this morning but chart loading broken here. Anyhow, this link should help for now. Note the bullish stack of trends in the subchart, the position of the momentum cluster after the nesting on the left, the 'abc' formation into the median line of the channel. It has taken a week, but hope the rewards will prove worthy. Toggle the mouse to zoom in if chart is a bit unclear.

Dow

I am going to have to use links to post the charts which is less than satisfactory. Whilst nursing my wounds on the Dow, I have been trying to remove as much noise off the chart but leave all the information, if that makes sense. In this update on the Dow, the sub chart shows the underlying trends based on various time frames as denoted in the legend box. The trend I trade is the 25 day cycle, being just over a month in duration; a realistic temperature check I think. Without worrying about EW counts or longer term cycles, it is immediately clear, that despite this run up, the 25day trend is red for bearish and is rolling under the 50day trend line too - so we have a 25day and 50day bearish stack. As such, until we have more information, this run up has to be counted as a retracement into that stack, given the overlapping nature of the move, although accepted it has been persistent and could have been a leading diagonal or series of 1-2's uphill. The reaction is going to be the only way to confirm and with the 25/50day stack bearish for now, I still assume matters will prove themselves to the downside. If an overbought momentum cluster is held by the underside of the range channel, we have a sell again. Hope this work keeps me out of trouble going forward! PS: You need to zoom in a bit, if the chart is patchy!

Currency Strength Analysis

USD$ strength persists: Scores are USD (23)JPY (12) AUD (10) CAD (10) CHF (9) GBP (8) EUR (8). I still have USDCAD on the verge of a break out but can not post charts for some reason. Hopefully, this gets sorted out or I'll use link next week.

Technical problems with blog

Can not seem to upload a chart without all sorts of issues. Try again tomorrow.

Dow

Pre-UE claims type price action but also 'end of correction' type behaviour too (or part of a correction anyhow). I have been using my time to map out Pitchforks across differing timeframes to provide a joined up storyboard that works with the bollinger bands, momentum clusters and Cyclic Phasing. I have added in diagonals to the parallel 'AB' lines based on 50% & 100% of the A-B formation time to provide grids. Very interesting indeed as on each time frame the grid is rebuilt to the consequential 'A-B' that is relevant, providing an ongoing dialogue with actual price action. I won't add commentary to this chart other than to note the grid square/diamond we are in, whereabouts inside that square price sits and how the momentum cluster and the diagonals might interact to provide an Elliott Wave count going forward.

Currency Strength Analysis 7.00am

US$ (20) JPY (18) AUD (13)GBP (10)CAD (9)CHF (7) EUR (3). Dollar pairs should be where the action is again although JPY strength building up here as well.

Dow

Been a day of staring at my charts and wondering if I have a clue! However, starting with the bigger chart, this definitely looks like a 'b' leg being worked off now, if not finished. You can label it 1-2, 1-2 if you like but I prefer 'abc's. If you look at the momentum cluster in the sub chart, there is definitely no 'c' leg in that formation and 'b' is only just recognizable, suggesting it isn't done yet, or it is not getting much interest.

The second chart shows price up at the 4hr bolly band and not a bad marker for a retrace to end or at least bounce down. As mentioned yesterday, the 60min, 4hr & daily sit lower at the 14600, providing firm support or a ledge to push through. Either way, I'd expect that area to get re-tested, especially as the 100 day trend from the first chart is down and we are already at the 50% retracement zone of this last move down.

The 25 day trend is also clearly down (half trend below full trend line) and this whole move looks corrective however you want to count it, due to the overlapping waves. I can not see this as a leading diagonal given the uneven momentum running up to this last leg and prefer the 'b' looking to end and 'c' coming.

Dow

Well, I make this about it - ending diagonal in 5th inside an expanding diagonal in 5th of contracting diagonal in 'e' of wave 4. Or whatever it wants to be! Can't see how it breaks out from here but never say never. Still holding short.

Dow

Well, not for the first time, I have found myself with hindsight having faded an expanding diagonal in the 5th wave coming out of a diagonal. Well, that is what I think it is. If I am right, then I get let off the hook. If not, well I'll swear a lot.

Dow

Breaking up or breaking down? Still looks like a corrective overlapping structure with an overthrow to me but I am biased because I am holding shorts. Momentum cluster looks ready to support a fall, even if only a 'B' wave to this potential 'A' wave up. Certainly deep, so gotta respect what it has just done to the bear case but time to see what the response will be I feel. My trend band is still bearish, so I'll treat this as a 4th wave correction or part of one and see what the drop looks like.

Currency Strength Analysis 2pm

From Strongest to Weakest from a total count of 80: USD (19) GBP (15) JPY (15) AUD (11) CHF (7) CAD (6) EUR (7). Buying USDCAD, GBPCAD and selling EURUSD, EURGBP at right places still looks on from this morning, although EUR got weaker.

Dow

I have readjusted the potential downside Pitchfork again, with the slight new high. The diagonal does look like a good neat count and pattern but perhaps is a 'ab-abc' for the 'B' leg in a larger sidewards diagonal for a wave 4 being built. That would make sense with the prior larger drop and the positioning of price regarding the larger trend lines, covered this morning. Anything that starts procrastinating prior to the downward median line there may be the 'a' leg down and if it is close, I'll bank and see what the 'b' leg has to over. Otherwise, overall, this would be the 'c' leg down of a diagonal if indeed it is one or the 3rd leg in an ending diagonal, if it is one of them. We shall see.

GBPCAD

Now in the target zone

Dow

So is this the 'e' leg from earlier? If so, permission to drop.

USDCAD

Almost there into the target zone. I have taken a 1/4long allocation here and will add in when reversal pattern sticks.

GBPAUD

I still got a 1/3rd short position on this pair but till now has been grinding it lower. Seems we are at a significant juncture with cyclic phasing analysis still calling for the 100day low to be worked out lower. Price is currently inside the retracement cloud with the trend under pressure, albeit timidly for now.

DOW

Price has moved down overnight and is sitting close to the trigger line off the current retracement's Pitchfork. A push through here should 'trigger' ongoing losses, although quite possibly this is a diagonal and needs an 'e' leg first. Very pleased with the price and timing rejection last night as fits all yesterday's analysis with price holding under the 100dfld (pink in second chart) and the median line of the top to retracement Pitchfork, setting up that further declines if the market so wishes to oblige.

Currency Strength Analysis

From Strongest to Weakest from a total count of 80: USD (19) GBP (17) JPY (13) AUD (11) CHF (8) EUR (7) CAD (5). Stand out pairs are Buy USDCAD & GBPCAD, sell EURUSD & EURGBP. The two CAD based pairs look closer to their target zones than the EUR based pairs but still a bit to go.

Dow

New Pitchfork based on the current retracement. The median line at approx 14580 would be at the confluence of the 60min, 4hr & daily bolly bands (2SD). I'll take that if any trend line breach suggests further pushing into that zone is looking like ending.

Dow: Cyclic Phasing Analysis

I have been back to 1982 and the 54 month cycle (1200 trading days) is relatively uniform in its pattern, although running short or long as it wishes. We appear to be in the 3rd 80 week cycle within that 54months. The last 80 week cycle is running long but only to catch up with the 54month which is still operating within its normal remit. As can be seen on the 80week cycle chart, price is running very long on both the 80week and 100day cycle, leaving very little cyclic structure to hang ones hat on, other than down until the 54 month cycle low comes in. So for now, I am assuming that whilst the 25day trend that I use each day, is downhill, we are moving towards this low over time.

Dow: why a sharp descent?

A question from Anonymous regarding my qualification of a 'sharp' descent. If we look at the 8hr chart, the Pitchfork off the top and its retracement, have price sat underneath the median line and thus far held there through this flat retracement. Note, that price is underneath the pink line - this is the 100 day fld. The fld is the 100 day trend, shunted forward by 50 days. As the 100 day trend is currently turned down (stripey blue wave)(along with the 25 day which is down in the second chart), the fact that price is under its fld makes this a strong contender for a continuation. This being that the current trend is weaker than it was 50 days ago by price being under the fld. In addition, price has tested and bounced back from the 400 day trend line - this is a big trend, although not as big as the 54 month one I use too. Given this is the first attempt at the 400 day trend and given price is underneath that median, I anticipate an ending diagonal into the void to test as much as possible or a double bottom. Visually, this whole move down from the top still has the look of an 'abc' retracement, but would expect the 'c' wave to end with an ED. As such, I think we may be seeing legs i & ii of that ED with iii due next. The second chart shows the lower degree Pitchfork medians and a failure here may see a return top the lower one at 14400. What may in fact happen is that the 400 day trend gets taken out instead of this being an overall retracement and we get a waterfall count instead (1-2s). Of course, I may be wrong too! This looks like an ED to end 'c' of 'ii', so we should see something downhill pretty soon!

Dow

I have not posted the Currency Strength Analysis for this afternoon as I am busy with the Dow. I am counting this move up as 'c' in 'c' of a corrective with price attempting to make it to the 'half trend line' which coincides with the Median Line of the first wave down and retracement 'A-B'. I make the median at 14834 but anywhere short of that will be fine by me. Looking for a very sharp descent.

AUDJPY

Have banked some longs from lower in the diagonal but still await a thrust up.

Dow

Still looks like a flat retracement into the sell zone of bolly band, half trend cycle line and pivot, with momentum cluster looking primed to rip. Faded into this rise and looking for 14400 ish.

Dow

To breakeven with this now - lets see where it takes us.

AUDJPY

As far as I can tell, (and I really am doubting my sanity with this pair!!) the 'b' in 'C' has also taken the form of a diagonal, pushing the 25day regression channel to the right. A break out could really be something as the coiling has been never ending and there must be stops galore to feed it.

DOW

I am going to put the expanding diagonal on my wish list here: can count it anyway I want of course, but into the sell zone in a 3 waver. If the count is right, that should be a lovely 5th down to the bottom.

Dow

Gone short at same place as last night (glad I banked!!). Might be an expanding diagonal or triangle but shorting into 60min bolly band, R1 and Half Trend line with a momentum cluster that suggests that the down trend should persist.

USDCAD

Not far away from buy zone now, if of course it sticks. Shorts are off and looking for long play in due course.

USDCAD

Moved to breakeven with stop now. Targeting lower parallel line or anywhere close. Given this is the number 1 strengths pairing at the moment, I am obviously looking to buy down there somewhere but for now, it has got to get there and create its 50 day low.

Currency Strengths Analysis 7.00am

USD (20) GBP (17) JPY (13) AUD (10) EUR (8) CHF (7) CAD (5). Strongest to weakest pairings are therefore: BUY USDCAD, USDCHF, GBPCHF, GBPCAD. However, most importantly buy at the right place and in my terminolgy that is the confluence of the half trend line, lower 60minute bollinger band, a daily pivot line with momentum cluster nesting and finally in a due cyclic phasing low. For the moment 3 are overbought for my liking but interestingly GBPCHF has come up on a relative strength basis whilst actually being in a sell mode regarding the trend line stack: that is, it is currently in sell mode. But looking at the shorter term charts and it may be picking up that a retracement may be coming to an end. I'll still wait on this but worth keeping an eye on.

USDCAD

Another bite of the cherry on shorting USDCAD's strenth down to the Half Trend Line in 'c' leg.

AUDJPY

Lots of opportunities to bank the spikes but I think we shall see the 'c' in 'C' now, given the lows continue to stay in place, so not too keen on banking this next one up. Whether this turns out to be a wave 4 overall or A up, is another matter for later in the week.

Dow

That will do me for tonight.

Dow

Moved to break even - lets see if she keeps tumbling into the close.

Dow

Not quite back tp the half trend line but daily pivot may provide cover. Having a go short from here.

USDCAD

Lovely. Shorts closed.

GBPJPY

From earlier, the Strengths Analysis had highlighted this pair as one of the top four. It went deeper than the 'half trend line' but still provided an excellent bounce if you had followed it down. The daily pivots and 60min bolly band usually provides keen support or resistance lines back into trend and works well with the trend line band.

USDCAD

Breaching diagonal - stops in at breakeven and looking for price to push on towards the daily pivot.

AUDJPY

Starting to look a bit better this. Longs will be banked at top bolly band perimeter/dashed lines.

USDCAD

Short is looking good here. Will move to breakeven with stop on break of diagonal and target moved to the lower bolly band at the daily pivot.

USDCAD

Sold USDCAD for 1/4 allocation at 1.0543 with rolling half trend line as target