Currently we are travelling to ITD 3 low which is due on average Feb 24. This would likely be MTD 10 low as well.
Thursday, February 18, 2010
Feb 19: GBP USD - Travelling to ITD 3 low / MTD 10 low
We did hit ITD 2 high in 10 trading days as per my last post and then reversed sharply as the Fed increased the discount rate by 25 basis point.
Currently we are travelling to ITD 3 low which is due on average Feb 24. This would likely be MTD 10 low as well.
Currently we are travelling to ITD 3 low which is due on average Feb 24. This would likely be MTD 10 low as well.
Tuesday, February 9, 2010
Feb 10: GBP USD - Travelling to ITD 2 High
Before reading the comments below, take a look at my last weekend's GBP USD Delta update from the navigation menu above in case you have not.
I am still going with the original count that we are currently moving to ITD 2 high. In addition, although I said ITD 2 high on average is due next Monday, there are two instances in the past few cycles where it was due in 10 calendar days, so that brings next Wednesday as a turning point if it were to repeat the same thing. This late ITD 2 high scenario could be possible if MTD low was due at 1.5533.
However, I am still leaning towards early or on time arrival of ITD 2 high, because I think the MTD is still travelling down. The alternate above however is something to keep in mind if we keep making new highs until next Wednesday.
I am still going with the original count that we are currently moving to ITD 2 high. In addition, although I said ITD 2 high on average is due next Monday, there are two instances in the past few cycles where it was due in 10 calendar days, so that brings next Wednesday as a turning point if it were to repeat the same thing. This late ITD 2 high scenario could be possible if MTD low was due at 1.5533.
However, I am still leaning towards early or on time arrival of ITD 2 high, because I think the MTD is still travelling down. The alternate above however is something to keep in mind if we keep making new highs until next Wednesday.
Saturday, February 6, 2010
Feb 6: EUR/USD - Medium Term Low Possibly IN
Among the major currencies, EUR/USD has been the hardest hit, having fallen from 1.5142 to 1.3584 in 72 calendar days.
There is however an opportunity to go long early next week based on several observations. I have done a quick Delta MTD count for EUR/USD and it seems that it is quite probable that medium term low has arrived last Friday.
From the chart, we can see that MTD 12 low is due after the yellow line. Furthermore, in the last cycle, the length of time from MTD 9 to MTD 12 is 76 calendar days. In the current cycle, the length of time from MTD 9 high (1.514) to last Friday's low (1.3584) is 72 calendar days. With the weekend, the length of time from MTD 9 high to next Monday is going to be 75 calendar days, which is very similar in time compared to the last cycle.
A couple of things support the idea of a corrective bounce:
1. Stochastic is very oversold and in need of corrective bounce.
2. The distance between MTD 9 to MTD 10 is equal to the distance between MTD 11 to MTD 12 (bearish flag pole is completed).
3. The 1.35 - 1.36 area is the weekly ichimoku cloud support zone.
4. Last Friday we had a hammer candle.
5. USD Index daily chart made a doji last Friday
There is however an opportunity to go long early next week based on several observations. I have done a quick Delta MTD count for EUR/USD and it seems that it is quite probable that medium term low has arrived last Friday.
From the chart, we can see that MTD 12 low is due after the yellow line. Furthermore, in the last cycle, the length of time from MTD 9 to MTD 12 is 76 calendar days. In the current cycle, the length of time from MTD 9 high (1.514) to last Friday's low (1.3584) is 72 calendar days. With the weekend, the length of time from MTD 9 high to next Monday is going to be 75 calendar days, which is very similar in time compared to the last cycle.
A couple of things support the idea of a corrective bounce:
1. Stochastic is very oversold and in need of corrective bounce.
2. The distance between MTD 9 to MTD 10 is equal to the distance between MTD 11 to MTD 12 (bearish flag pole is completed).
3. The 1.35 - 1.36 area is the weekly ichimoku cloud support zone.
4. Last Friday we had a hammer candle.
5. USD Index daily chart made a doji last Friday
Friday, February 5, 2010
Feb 5: GBP USD - Nearing ITD 1 low
Just to reiterate that we are near ITD 1 low time zone. In the past three ITD cycles (I circle them), ITD 1 was due at 0 days, 3 trading days, and 6 trading days after the red line. In the current cycle, we are currently at 5 trading days after the red line. It will probably be due either today or Monday of next week.
Thursday, February 4, 2010
Feb 5: USD JPY - ITD 1 Inverts
Waves of risk aversion swept the market today. USD and JPY are the biggest beneficiary. I am stopped out of the USD JPY trade at break even.
In last Friday's USD JPY Delta update, I said that there's a possible ITD 1 inversion but I am leaning towards no inversion and a rally from 89.127. That's obviously not the case here. Below is the ITD chart.
Currently there's no indication that ITD 2 low has been due at 88.563 (the low today). With MTD 8 due late compared to previous cycles, there's a possibility that the higher time frame LTD is travelling down, and therefore we may see more Yen strength in coming weeks.
In last Friday's USD JPY Delta update, I said that there's a possible ITD 1 inversion but I am leaning towards no inversion and a rally from 89.127. That's obviously not the case here. Below is the ITD chart.
Currently there's no indication that ITD 2 low has been due at 88.563 (the low today). With MTD 8 due late compared to previous cycles, there's a possibility that the higher time frame LTD is travelling down, and therefore we may see more Yen strength in coming weeks.
Monday, February 1, 2010
Feb 2: GBP USD - Medium Term Trend is likely DOWN
We had a break of 1.5895 yesterday, the key level that I mentioned before. This proves that MTD 9 high has arrived at 1.6457. Looking at the MTD chart, we could see that MTD 9 to MTD 10 move in the past two cycles was 30 - 40 days. In the current cycle, the move from MTD 9 high (1.6457) to yesterday is only 14 days, and therefore it's likely that MTD 10 low won't be due for a while and that medium term trend is still DOWN
In the lower ITD timeframe, we should soon find an intermediate bottom (ITD 1 low due on average Feb 3). From there, we would move up to ITD 2 high due on average Feb 15 if there's no inversion. However, since the higher time frame MTD is still DOWN, we will most likely get one more low at ITD 3 low before MTD 10 low is due.
In the lower ITD timeframe, we should soon find an intermediate bottom (ITD 1 low due on average Feb 3). From there, we would move up to ITD 2 high due on average Feb 15 if there's no inversion. However, since the higher time frame MTD is still DOWN, we will most likely get one more low at ITD 3 low before MTD 10 low is due.
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