Range Bar Studies
There are two reports this weekend, the first being this, a range bar study. Without time as a variable, the price bars provide a different view of the action for subsequent interpretation. By separating out the two reports, I want to see if there are different conclusions to be made or just different angles on the same storyboard.
This 48 pip range bar study(2 times the next one down) shows the MMA wave under significant pressure. It has not turned down yet, but price has thus far failed to get back into the regression channel from 1.27541 nor make headway against the Valid Trend Line drawn off the last two bullish troughs. This is despite the momentum study having apparently nested at this degree. Price is still under the orange 50 period FLD which is desecending and if price breaks to the downside near here, the pink VTL will be the next resistance line in play, joining two bearish FLD peaks together. The descent from the top took 33 price bars marked out by the first of the gold vertical lines, and we are only a couple of bars away from matching that same quantity when price touches the FLD to the right. However, price did break and hold the Monthly S1 pivot this week, to the upside, and the momentum study has only just hatched from its nest. If this is a correction to the upside, then a 'b' wave down back through the MS1 and the orange FLD would perhaps reset this struggle uphill, providing some renewed energy for a 'C' wave move on the Monthly Pivot higher up the regression channel but still to the underside - see 2nd red arrow to right.
This 24 pip range bar study is half of the range of the above chart and twice the range of the one below. It provides additional insight into the drop from the top but admittedly looks busy, given the weekly and monthly pivots, Fibonacci retracement calcs, etc. Firstly, the MMA Wave at this degree is now turned down and price has spent all week testing it, moving above MS1 & the weekly pivot but apparently capped by the 38.2% retracement from the top and the weekly pivot R1. Price also moved above the FLD having cut the VTL at 'b' on Monday and the next one up at the MS1 line during the week. As I have written all week, at this degree, it has all been bullish action, until the last move which came with negative divergence on the momentum study and MACD. The regression channel from the low is looking bullish too, but I can not help feeling that a test of the bottom of that channel and some of the bullish move made since the low, needs to occur to get any further progress uphill onto a firmer footing. A return to just under 1.3400 would retest last week's weekly Pivot and that VTL again and that momentum study certainly has room to fall. Such a fall would fit with the view point from the first chart and might make up a 'b' wave drop.
The 12 pip range bar study is half of the range of the above chart and 3 times the one below. At this degree, the MMA wave has been bullish all week, pushing into and testing the bearish 24 pip MMA wave and trying to help keep that 48 pip MMA wave bullish. However, price action was all over the daily pivot each day, clipping the prior high day highs but failing to push on. There is a very neat VTL just under the wave, but notice how the FLD dropped under it with that push up in price Friday. One can not help feeling, it has been a fragile move up at best and even that is running out of energy and a momentum nest at this degree would certainly help to clarify intentions. Is this correction still on, or will any drop prove fatal to the larger degree Wave? Negative divergence on the MACD had me moving net short into the weekend, combined with the rest of the storyboard and as can be seen, there are plenty of steps down for the market to get stops behind if they fall, which would feed a return back up in a similar fashion. A quick sharp 'b' wave then or something bigger?
At only 4 pips per bar, the MMA wave at this degree is very responsive but remains clean and tidy without dead zones of time playing havoc with the formation. On Friday, that drop down later on looked very bearish on a 15 second chart - almost 5 waves but copped out with 1 pip to go. There may be a bit more to go on this move up, but I anticipate some softening to the downside early next week and with that underway, we might be able to see if the bears are ready to drive down again, or whether the bulls have another chance of pushing uphill. When this 4 pip range MMA wave up fails, it should gain momentum downhill at the higher degrees quite quickly if I am reading this right, so bulls should be careful of any deterioration Sunday/Monday.
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