Just two 'A' waves since the inception of this pair seem to be providing the continuing journey. See green and blue circles to the left of screen; the grid lines are parallels of the 85.4% Speedline of each 'A' wave, depth determined by the original distance of the 'A' wave itself. The 50 period FLD of the monthly price action is flat which continues to suggest the whole move from the top is corrective. The momentum study is overbought, which tends to prove predictive in corrections, until of course they don't and the correction is over. At this degree, it is clear that price is still above a blue grid line, and the 450 degree pyrapoint line at 1.3910 is getting backtested. The green grid line at 1.4000 area has not been tested at all since the top in 2008, whilst the one below has in fact been tested 3 times and the 360 degree pyrapoint line, 5 times. This 450 degree line has been in action 13 times since the top, inclusive of cuts up and then down. For now, I am working on the basis that until that blue line under the price is cut decisively, that the green line above is the target. But, with that momentum study overbought, a cut through the blue line could be decisive and back down to the 360 degree line we go.
On the weekly chart, the pink line appears to be providing a resistance zone for price action. The fact that the rejection coincided with the gold 50% line of the first 'ABC' off the top, itself a well visited zone, has provided a confluence point that has obviously caused some excitement, fueled by the overbought momentum study that adds to the overbought monthly study above.
However, closer up into that same chart, sees price above it's weekly 50 period FLD, having cut and backtested the 45 degree Gann grid line of that aforementioned 'ABC' (see white circles for origin) along with the 90 degree pyrapoint line of the move up from 1.2041. So basically, notwithstanding the current decline, nothing obvious is broken on a monthly or weekly basis and price had to go through some growing pains to get up there in the first place. With that 1.4000 goal so close, I will continue to view further declines in the near term as temporary, although accepting that there is steam to let off in those momentum studies.
The daily momentum study is now oversold, but it does look like the remaining studies up to a week in duration would like to nest too, suggested by my pink box and the previous boxes in time and distance. Given the group as a whole would make up the single study in the weekly chart above, it is quite possible that there is some more work to do the downside in momentum, if not price. That is to say, that retracements can help burn off the time and reduce the extent of ongoing price decay. Price made it down to the 45 degree line Gann grid line of last year's high and low, immediately under last year's high and sits at the daily 50 period FLD. Price is now under both the 200 day rolling regression median and the median of the regression channel up from 1.2041. The confluence noted in the second chart, happened also to be the 61.8% retracement of the 1.4939 to 1.2041 wave too - no wonder the drop! I am showing an expanding diagonal building here but I am not convinced the 'D' leg is over, if it is the correct count. A slide down that 45 degree line in a contracting diagonal however, might help peg it in due course, maybe down to the topside of that red trend line I have drawn in, around that 'B' leg low.
The 4hr hour chart shows the regression channel up from 1.27541 into the top, anchored at both points. That is, price is not now affecting that channel unless I make it live again. It does look like the momentum study is nesting here at this degree, which corresponds with the daily being oversold in the last chart. However, if the weekly study is going to nest too, then this degree is going to see the nest build out to the right for a bit - see the nest on the left into the 1.27541 low for a good example. For now, price is thrashing around the LTL of the regression channel in what could be a flat correction or triangle if there is some more immediate lows to come, or the beginnings of a deeper correction back into the channel if the current low is in.
Price was not too respectful of the 61.8% retracement of the move up from 1.31037, but so far has bounced off the 50% from1.27541. Given the possibility for further nesting, it is quite probable that the eventual target is 1.31656, being the 61.8% retracement from the 1.27541 low. Price is under the 50 period FLD of the 25 pip range bar study, the MMA is currently bearish and falling and price is jerking downhill. A bit early to be calling turns up perhaps.
But price was acting like it wanted to breach the Valid Trend Line of the same FLD in this slightly different view with the possible target being the top of the price envelope at 1.3600. If this were the case, I'd have to count that as a wave 2 up if it stopped there and reversed or perhaps 'a' of wave 2, given the short period in time elapsed. For sure, getting caught in the wrong direction is going to be painful, so trading with the shorter term waves is the only way to go, me thinks.
As of Friday, this is where I had got to with the near term EW counts. I have a love hate relationship with these blessed things, rolling from being pretty darned good at them to getting punched in the face repeatedly. They do help but not always and I am generally led by the underlying MMA wave pattern for confirmation, liberally revising the count as the MMA unravels. I can not seem to do without either for now. Looking for 'C' leg up here but had to go flat into the weekend, so hope for some early bouncing to release my shorts safely.
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