Jan 10 - GBP NZD Trade Idea

Perhaps many of you don't trade this pair, but I have been keeping my eye on GBP NZD lately since it seems to be nearing a Super Long Term Delta low time zone.

First off, we start with SLTD chart. The chart above is SLTD (MC4) chart with the last 3 full cycles. A full cycle of SLTD is a 4 year cycle in length or 1461 days. It never inverts and it has 8 turning points. Because it never inverts, once we know SLTD 1 is a high, it will always be a high. It's pretty simple.

We could see in the chart that SLTD 8 has always been due around green line. The question is whether SLTD 8 low has been due at 2.13 or not. Regardless whether it's been due or not, we could nonetheless see that we are near the time zone of SLTD 8 low. Bear in mind that SLTD is a very high time frame and therefore could have a big standard deviation, sometimes as long as several months.

Let's move on to second chart.

In the second chart above, I am doing a time count and fibonacci time count for the last three SLTD cycles. We could observe the following from the chart above:

1998 - 2002 Cycle
From SLTD 1 in Sep 25, 1998 to another SLTD 1 in Aug 9, 2002 (this is one full SLTD cycle), the length of time is 201 weeks or 1407 days. Remember as I said above that 1 full SLTD cycle is 4 year in length or 1461 days, so 1407 days is pretty close to the average.

From SLTD 1 in Sep 25, 1998 to SLTD 8 in June 14, 2002, the length of time is 192 weeks or 1344 days.

2002 - 2006 Cycle
From SLTD 1 in Aug 9, 2002 to another SLTD 1 in Aug 4, 2006, the length of time is 208 weeks or 1456 days (this is almost exactly 1461 days average).

From SLTD 1 in Aug 9, 2002 to SLTD 8 in Dec 9, 2005, the length of time is 174 weeks or 1218 days.

We could also see the length of time from SLTD 7 in April 22, 2005 - SLTD 8 in Dec 9, 2005 is 35 weeks and the length of time from SLTD 8 in Dec 9, 2005 - SLTD 1 in Aug 4, 2006 is 34 weeks.

2006 - 2010 Cycle (Current Cycle)
By doing fibonacci time count in Dynamic Trader, I believe I might have found an important time link for the next SLTD 1 high. The length of time from SLTD 1 high in Sep 25, 1998 to SLTD 8 low in Dec 9, 2005 is 377 weeks (377 is a fibonacci number).

This tells us that both of these turning points are perhaps important turning points. Extending the fibonacci time count, 677 weeks from SLTD 1 high in Sep 25, 1998 is June 4, 2010 (677 is also a fibonacci number). If I do a fibonacci time count from SLTD 8 low in Dec 9, 2005, 233 weeks from Dec 9, 2005 is May 28, 2010 (233 is a fibo number). By doing this exercise, we find there's a fibonacci time cluster around end of May / early June.

What's interesting about this May 28, 2010 and June 4, 2010 date is this: If you measure the length of time from SLTD 1 in Aug 4, 2006 to the week of May 28 / June 4, 2010, you will get 199 weeks or 1393 days. This is close enough to the average 1460 days (208 weeks) for a full SLTD cycle. In other words, SLTD 1 high might arrive around end of May / early June, 2010.

If we assume that 2.13 at Oct 9, 2009 is SLTD 8 low, then the length of time from SLTD 1 in Aug 4, 2006 to SLTD 8 low in Oct 9, 2009 is 167 weeks or 1169 days. Also assuming that end of May / early June 2010 is the SLTD 1 high arrival, then we have 20 weeks to go towards SLTD 1 high.

The fibonacci time count in SLTD chart probably still doesn't tell us with high probability that SLTD 8 low has arrived at 2.13. But at least we can see that we are near SLTD 8 low time zone with only 20 weeks left before SLTD 1 high is due.

In the next MTD chart, we could see a compelling reason for bullish case:

If the proposed MTD count is correct, we could see MTD 6 has always been due near yellow line.
MTD 4 (2.13) is maybe an LTD low as well although it's not guaranteed because Delta allows for 4 maximum MTDs in this case since one of the MTD point is an inversion. But if MTD 6 low is above MTD 4, then LTD low is likely IN at 2.13, as well as SLTD 8 low.

I also do a time count between MTD 1 to MTD 6 in all three cycles. The length of time between MTD 1 - MTD 6 in the previous two cycles is 127 and 145 days, and in the current cycle it's 170 days. In other words, the length of time between MTD 1 to MTD 6 in the current cycle is already longer than the previous two cycles, which makes it likely that MTD 6 to be due soon.

Next, we'll use Elliot Wave count to project possible price level reversal.

As you can see above, we have 5 waves up and 3 waves down. Wave C is currently about equal to wave A, and we are nearing the price level reversal zone.