Delta Trading

Feb 19: GBP USD - Travelling to ITD 3 low / MTD 10 low

2010-02-18T21:39:00.000-08:00

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.

Feb 10: GBP USD - Travelling to ITD 2 High

2010-02-09T09:00:00.000-08:00

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.

Feb 6: EUR/USD - Medium Term Low Possibly IN

2010-02-06T09:38:00.000-08:00

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

Feb 5: GBP USD - Nearing ITD 1 low

2010-02-05T03:10:00.000-08:00

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.

Feb 5: USD JPY - ITD 1 Inverts

2010-02-04T09:47:00.000-08:00

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.

Feb 2: GBP USD - Medium Term Trend is likely DOWN

2010-02-01T16:36:00.000-08:00

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.

Jan 30 - Delta Update for GBP/USD and USD/JPY is ready

2010-01-29T21:15:00.000-08:00

I have updated the Delta Position page for GBP/USD and USD/JPY, available at the navigation menu above.

For GBP/USD, we are now in both ITD and LTD Inversion Time Period, that's why price has not been trending well, and it's been contained in a range for a number of months now. However, it looks like we may get some solution about the direction soon, perhaps as soon as next month.

For USD/JPY, I am leaning towards a rally from here. How fast and how strong, or whether I am right or wrong remains to be seen, but I am in the bullish side for the moment.

This year I try to become more of a medium term positional swing trader (holding for weeks/.months) and looking for higher probability and higher reward setup. My focus in the first quarter of 2010 has been GBP/NZD and USD/JPY as I posted in the trade idea. As I am now already in the position for both, I would just monitor it until my time target is near and I may not post too much updates in the blog. GBP/NZD has rallied over 1000 pips since I posted the trade idea last time, and I am still holding it now while moving my stop loss. I have taken position in USD/JPY, and now will just wait and see what the market wants to do.

Jan 29 - No Confirmation of ITD 1 / MTD 8 low arrival yet

2010-01-28T08:26:00.000-08:00

I still can't get today's candle to close above the high of the signal day (90.079). This doesn't mean that ITD 1 / MTD 8 low has not arrived at 89.127. It could have arrived, but there's no confirmation that I am looking for yet.

Since no new low is made today, signal day remains the same at Jan 27.

Tomorrow we will have US Q4 GDP announcement which could potentially be better than forecast, and may support USD JPY. The consensus is for 4.2%, but some major banks have raised their estimates recently. Here are some articles
http://www.calculatedriskblog.com/2010/01/q4-gdp-beware-blip.html
http://www.streetinsider.com/Analyst+Comments/JPMorgan+Raises+Q4+US+GDP+Growth+Forecast+from+4.5%25+to+5.7%25/5251369.html

Keep an eye on the event.

Jan 28 - USD/JPY: ITD 1 low / MTD 8 low maybe IN

2010-01-27T15:46:00.000-08:00

Unless there's a very quick drop again today, from time perspective we are due for a turn already and could not delay too much longer, so there's a possibility that ITD 1 low / MTD 8 low has already arrived at 89.127 yesterday. If so, we could be at the early stage of a strong rally into the 100s which last 1 - 1.5 months if my analysis is correct. A daily candle close above the signal day today would further support the conclusion.

P.S. I may not post Delta chart update in the main page of the blog everytime, but I will attempt to update Delta position for GBP/USD and USD/JPY every Saturday. You could find the charts at Delta Position page from the navigation menu above for the most uptodate position.

Jan 28 - USD/JPY New Signal Day

2010-01-27T08:03:00.000-08:00

Continuing the post from yesterday: It's 12 AM Jan 28 in the morning at where I am. My candle for Jan 27 has just closed a few minutes ago and the Jan 27 candle made a new low today, so it's a new signal day. Below is the updated chart:

The new signal day has a low of 89.217 and a high of 89.714. Assuming if there's no new low made, then a daily candle close above 89.714 in coming days is a signal that ITD 1 / MTD 8 low has arrived.

Jan 27: Preparing for a USD/JPY Turn

2010-01-26T08:33:00.000-08:00

Original trade idea is available at:
http://cmellon-deltatrading.blogspot.com/2010/01/jan-13-usd-jpy-trading-plan.html

Here's one way to tell whether Delta low turning point has arrived or not. The theory is available at Introduction - Trading Delta Point from the navigation menu above.

As we are close to a Delta low turning point, any day that makes a new low becomes a signal day. I use a London broker and my candle has closed for Jan 26, 2010. We are making a new low near Delta turning date, so Jan 26 is the signal day. See chart below

As you can see above, the signal day is Jan 26 with a low of 89.37 and a high of 90.545. The idea is that as long as there's no new low made in coming days, then we can conclude Delta low has arrived when we can have a daily candle close above the high of the signal day (above 90.545) in coming days.

EDIT: As I write this, we have just broken 89.37. Some of you who use U.S. broker is still in Jan 26, but my candle is now already in Jan 27 at 12:30 AM (local time), so Jan 27 will be my new signal day, and I have to wait until Jan 28 12:00 AM to get the high and the low of the new signal day (Jan 27) and use the same idea above.

Jan 26 - USD JPY still in bottoming process

2010-01-25T20:59:00.000-08:00

Original trade idea is available at:
http://cmellon-deltatrading.blogspot.com/2010/01/jan-13-usd-jpy-trading-plan.html

USD JPY is currently still in a range with no confirmation of ITD 1 low / MTD 8 low arrival yet.
Per my calculation, ITD 1 low is due on average this Thursday January 28. This date also happens to be 50% TIME retracement from the low of 85 (Nov 26, 2009) and the high of 93.6 (Jan 7, 2010). Something to watch out for.

Jan 22: USD JPY Situation

2010-01-21T23:55:00.000-08:00

Original trade idea is available at:
http://cmellon-deltatrading.blogspot.com/2010/01/jan-13-usd-jpy-trading-plan.html

The move from MTD 7 (93.7) to the low of 89.78 today is in 15 days. In the last cycle, the MTD 7 to 8 move was also in 15 days. From Delta perspective, turning point can happen at any time now, including today. Although I said that I am targetting between 50 - 61.8 fib as the most likely price reversal point, the target may not be reached and turning point may happen at any time now.

Below is the Ichimoku chart

Chikou span gets a support at the cloud (at 89.78), and it's also the low of the parallel trend line channel. Technically speaking, this could be the point of reversal too, although again not yet confirmed, and Delta still allows for a few more days for MTD 8 low to arrive.

Below is USD JPY Delta MTD chart:

As I said in the beginning of this post, the move from MTD 7 (93.7) to the low 89.78 today is in 15 days. In the last cycle, the move from MTD 7 - MTD 8 was also in 15 days. Again, although there's no confirmation yet for MTD 8 low, it could be IN today from Delta's perspective. If we consider that MC3, MC4, and MC5 are all IN at 85, there's also a good chance MTD 8 low would arrive earlier.

Keep monitoring and be on the lookout for this pair.

Jan 21 - USD JPY Approaching MTD 8 Time Zone

2010-01-21T08:23:00.000-08:00

Original trade idea is available at:
http://cmellon-deltatrading.blogspot.com/2010/01/jan-13-usd-jpy-trading-plan.html

Attached is a mid term update of price action.

The boxed area is probable Jan 25 - Jan 29 ITD 1 / MTD 8 time reversal zone using Delta and probable price reversal zone using Ichimoku & EW. This chart is a combination of Elliot Wave, Ichimoku, and Delta.

Keep your eyes open and be alert.

Jan 21 - GBP USD in Inversion Time Period

2010-01-20T17:21:00.000-08:00

Cable is still in ITP, and the possibility of inversion makes the ITD count subject to change.
Following chart is what I am currently thinking.

There's a possibility that we have reached ITD (11) at 1.6457, and if so we are moving down to ITD 1 low due on average Feb 3. However, ITD 1 may invert as well which means that Feb 3 could be an ITD (1) high instead

Assuming ITD (11) has arrived at 1.6457, it's still not yet clear whether MTD 9 has arrived with it. If MTD 9 high completes below 1.688, then this means that LTD (and most likely SLTD as well) is travelling down and that LTD 18 inverts at 1.688.

New Look and Navigation Menu

2010-01-17T16:47:00.000-08:00

In order to make the most relevant and uptodate information easier to access, I have added a drop down navigation bar at the top of the blog with the following format:

Home - Go back to main page

Intro
What is Delta - A little info about Delta for beginners
Trading Delta - Explaining one strategy to trade near Delta point

Delta Position: Most uptodate Delta Count for USD JPY and GBP USD in multiple time frames
Trade Idea: Trades that I am currently working on

With this new feature, hopefully you can find all that you need easier. Enjoy.

Jan 13 - USD JPY Trade Idea

2010-01-12T21:52:00.001-08:00

Recent update of this trade idea:
1. Jan 21 update: http://cmellon-deltatrading.blogspot.com/2010/01/jan-21-usd-jpy-approaching-mtd-8-time.html
2. Jan 22 update: http://cmellon-deltatrading.blogspot.com/2010/01/jan-22-usd-jpy-situation.html

I am of the opinion that USD JPY is soon going to rally fast and furious (and so do other JPY crosses for that matter). If my analysis is correct, there's an attractive opportunity to go long USD JPY soon for a medium term play (around 1 month holding period). You'll find more and more FX commentators coming up with fundamental reason of why YEN is weakening next month, but as usual, they'll do it after the fact has happened ;-)

We'll start off with the SLTD (MC4) chart below

As you can see above, SLTD 8 (MC4-8) has always been due near green line. There's a good chance that SLTD 8 low has been due at 85. The reason is that if I measure the length of time from SLTD 1 to SLTD 8 in the current cycle, it's already 208 weeks or 1456 days. A full SLTD cycle from SLTD 1 to another SLTD 1 is on average 1461 days. In the current cycle, we have almost reached the average 1461 days even though we are just in SLTD 8, so it's already very late and it's highly likely that SLTD 8 is IN at 85.

In addition, we could see three SLTD in a row (SLTD 4, SLTD 6, and SLTD 8), which tells us that the higher time frame (the MC5 - 19 year metonic cycle) has also been due at 85.

Next we go to the smaller time frame and look at MTD chart.

MTD 7 has always been due near yellow line. I currently put MTD 7 high IN at 93.76. We could see that MTD 7 (93.76) is higher than MTD 5 (92.3) telling us that LTD (MC3 low) was IN at 85.

Looking at previous two cycles, the length of time from MTD 7 to MTD 8 is 22 days and 15 days. We could expect the same approximate length of time in the current cycle too, which means that in the current cycle, MTD 8 low's arrival time zone is around Jan 25 - Jan 29. It could possibly be earlier as many of the higher TF (MC3, MC4, MC5) are all travelling UP.

I am targetting a probable 61.8 fib as MTD 8 low due around Jan 25 - 29, which makes a head and shoulder formation. But there's a possibility for 50 fib support too near the kumo cloud (see ichimoku chart).

From the past two cycles, the length of time from MTD 8 to MTD 9 is 32 days and 43 days (around 1 - 1.5 month). In the current cycle, we may also travel up that long once MTD 8 low is IN. Also notice in the past two cycles how strong the move was from MTD 8 to MTD 9. It looks like EW wave 3 type of move. We could also expect such a strong move too in the current cycle once MTD 8 low is IN. This is supported by the fact that MC3, MC4, and MC5 are all IN. When multiple higher time frame are due at the same time like this, movement tends to be really strong

Next we go down into smaller TF ITD.

As I wrote in my previous post, a break of 91.23 (ITD 11 low) signals that MTD 7 high has arrived at 93.76. We are therefore travelling down to ITD 1 low which has always been due near red line (that's also around end of Jan). This coincides well with the timing for MTD 8 low.

Again I am targetting 61.8 fib for a possible head and shoulder formation, but 50 fib could be a strong support point as well due to the cloud top (see ichimoku chart). Or the market could retest close to 85 to convince and trap the bears as well as testing bulls' resolve and psyche.

Next we'll go to Ichimoku chart

Above is Ichimoku chart that I use to target possible price for MTD 8 low. Delta shows direction and time, but not price. For price target, we could use EW, Ichimoku, trend line or any other thing that you like, but for this time, I decide to use Ichimoku since this is Yen pair and Japanese traders love to trade with Ichimoku. For an example of using Elliot Wave to project price target near Delta turning point, you can look at my GBP NZD analysis.

You could see that Tenkan Sen has crossed above Kijun Sen above kumo cloud, which in Ichimoku world is considered a strong bullish signal. Since Delta says MTD is travelling down to around Jan 25 -29, I circle possible price support near this time period. You could see a kumo cloud top in that period, which also coincides with 50 fib retracement from 85 - 93.76. That's definitely a good level to start buying, and keep adding if it drops more.

So to summarize the plan is to buy at MTD 8 low around Jan 25 -29 (possibly earlier) with probable reversal price zone near kumo cloud (50 fib) or 61.8 fib (H&S). Price should not break lower than 85 since MC3, MC4, and MC5 are all due, so this could be the stop loss. And hold the position until MTD 9 high which is around 1 - 1.5 months. And based on previous two MTD cycles, this MTD 8 to MTD 9 move could be really strong.

Good luck.

Jan 11 - GBP USD Long Term View

2010-01-11T04:28:00.000-08:00

Above chart is GBP USD SLTD chart with the last 3 cycles.
SLTD 4 has always been due near green line. The question is whether in the current cycle, SLTD 4 has been due at the question mark place (1.57 on Oct 13, 2009).

If current cycle repeats the previous two cycles (sometimes it does not), then GBP USD is in a very long UP cycle (until SLTD 7).

The length of time from SLTD 1 in Jan 2002 to SLTD 4 in Feb 2002 is 56 weeks.
The length of time from SLTD 1 in Dec 2004 to SLTD 4 in Dec 2005 is 50 weeks.

In the current cycle, if I assume 1.57 on Oct 13, 2009 is the current cycle's SLTD 4, then the length of time from SLTD 1 in Jul 2008 to SLTD 4 in Oct 2009 is 65 weeks. This is longer than the previous two cycles, and thus there's a chance that SLTD 4 was already IN.

Assuming SLTD 4 is still not IN, the length of time from SLTD 1 in Jul 2008 to the current week is already 78 weeks. If SLTD 4 is still not IN, then this cycle's pattern and structure would likely not repeat the past two cycles and we need to do some other analysis.

Now take a look at the length of time from SLTD 4 to SLTD 5 in the past two cycles. It was 52 weeks and 60 weeks. That's 1 year up cycle. 1 year from SLTD 4 in Oct 2009 is Oct 2010.

Jan 10 - More food for thought on USD JPY

2010-01-10T03:31:00.000-08:00

Above is USD JPY ITD chart. If 93.76 is really the MTD 7 high, then the above chart is my preferred ITD count. However, only a break below ITD 11 (below 91.24) will confirm that MTD 7 high has arrived. Otherwise, technically speaking, we could still head up to ITD 1 due around red line (around end of January). If we keep rallying, then ITD 1 high around end of Jan must be MTD 7 high because Delta's rule has a maximum of 3 ITDs within MTD (or 4 ITDs if one of the ITD is an inversion).

Interestingly though, in my Jan 8 post, I mentioned that MTD 8 low arrival time zone is likely around 15-20 days from MTD 7 high. I also mentioned in the previous post that MTD 8 low's arrival time zone is around Jan 25 - 29, assuming that MTD 7 high is at 93.76. If ITD 11 inverts at 93.76, then this MTD 8's arrival time zone matches well with the ITD 1's arrival time zone.

For bullish scenario until around end of January, I have come up with this EW chart:

If this EW count is right, then we could have one more rally to wave 5. However, the requirement for this EW count to be valid is it doesn't break below 91.24. If it breaks below it, then the Delta's logic says that MTD 7 high arrival is confirmed, and therefore this EW count is likely wrong.

Overall, I am leaning towards ITD (11) inversion instead of rallying to ITD 1 high around end of January. But a break below 91.24 is required to confirm it.

Jan 10 - GBP NZD Trade Idea

2010-01-09T22:11:00.000-08:00

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.

Jan 8 - MTD 7 High Arrived?

2010-01-08T09:53:00.000-08:00

Dollar get sold off across the board as a result of worse than expected NFP, making it likely for the Fed to keep rates at prolonged period.

With 5 waves from 85 visible, bearish divergence between stoch and price, and rejection of SMA 200 days (9350), MTD 7 high just might really arrive this time. IF MTD 7 high really arrives, counting 15-20 calendar days from Jan 8 brings us to the week of Jan 25 - Jan 29 as potentially the time for MTD 8 low.

Jan 7: USD JPY - MTD 7 not yet arrived

2010-01-07T07:52:00.000-08:00

The break above 93.2 nullifies my USD JPY Jan 4 post. My view now is that MTD 7 high comes a bit late. We are testing SMA 200, and we'll see if we could break above it. Elliot Wavers anticipate this last high (MTD 7 high) as wave 5 from the low of 85. So we should be in a three waves down (MTD 8 low) after the 5 waves complete.

I am still looking for a decent drop to MTD 8 low for 15-20 days after MTD 7 high has arrived before the rally to MTD 9 high for 1 - 1.5 months.

GBP NZD - Potential Long Opportunity

2010-01-06T22:04:00.001-08:00

I was looking at GBP NZD and there could be a really good long opportunity for this pair. I have attached two charts: Delta and Elliot Wave.

In the Delta MTD chart, I am not labelling the count, but you can see that medium term Delta point has always been due near the yellow vertical line. We are now just right there at the yellow vertical line, telling us a Medium Term Delta (in the current situation it's Medium Term Delta low) has arrived / is going to arrive very soon.

In the EW chart, we can see a five waves up, and three waves down. It's yet to be seen whether wave C has completed, but combining this with Delta tells us wave C should soon / already complete.

Jan 4: USD JPY - MTD 7 may have arrived @93.2

2010-01-04T08:03:00.001-08:00

Happy New Year everyone,

Wishing you all another good and profitable year in trading. Now back to Delta stuff =)

Referring to my Dec 31 USD JPY Delta post, we have touched the second TL that I indicated as possible resistance at 93.2, and we get a sound rejection.

The signal day (the day that makes a new high near Delta turning point) is today with a low of 92.18 and a high of 93.2. To get better confirmation of MTD 7 arrival, a daily candle close below the low of signal day (below 92.18) in the next few days is safer. However, with the sound rejection today, it's quite probable that MTD 7 high has arrived.

As I indicated in my Dec 28 post, once MTD 7 high arrives, we will be in a medium term downcycle for about 15-22 calendar days, and from that point MTD 8 low will be IN, and we will have a MASSIVE UPMOVE with LITTLE RETRACEMENT to MTD 9 high for about 30-40 calendar days.

GBP USD Delta Position

2010-01-01T00:00:00.001-08:00

Note:
Please ignore the system date of this post since I will update this page regularly
I will attempt to update this page every Saturday
Following charts are updated as of Saturday Feb 6, 2010

OVERVIEW
The break of 1.5894 last week is the first indication that MTD 9 high has arrived at 1.6457. It also indicates that the higher time frame LTD and SLTD are probably both travelling down. Sure enough the subsequent break of 1.57 on Friday confirms that both LTD and SLTD are indeed travelling down.

From the MTD, LTD, and SLTD time frame point of view, the downward price pressure likely has not finished. From ITD time frame point of view, we are due for some relief correction.

ITD (MC1)

ITD 1 low most likely has either been due last Friday or Monday of next week. Once ITD 1 low is IN, we are travelling UP to ITD 2 high due on average Monday Feb 15. There is a possibility of ITD 1 inversion, but I am leaning towards no inversion since ITD 2 is due soon anyway. Looking forward, ITD 3 low is due on average Feb 24 and this is most likely where MTD 10 (and possibly also LTD 1) will also arrive.

MTD (MC2)

MTD 9 high has been confirmed to arrive at 1.6457 when we had a break of 1.5894 last week. We are currently travelling down to MTD 10 low. Looking at the past two MTD cycles, MTD 9 - MTD 10 move was in 34 and 30 calendar days. In the current cycle, the length of time from MTD 9 high (1.6457) to last Friday's low (1.5557) was only 18 calendar days, and therefore it's likely that MTD 10 low is not yet due.
MTD 10 low is probably going to be due together with ITD 3 low on average Feb 24.

LTD (MC3)

The break of 1.5894 last week proves that LTD (18) inversion has arrived at 1.687. We are currently travelling DOWN to LTD 1 low. Delta rule says that if LTD (MC3) inverts, it must double invert as well. To allow for an adequate time for both LTD 1 and LTD (1), it's probable that LTD 1 low will be due quite soon, perhaps together with MTD 10 low.

USD JPY Delta Position

2010-01-01T00:00:00.000-08:00

Note:
Please ignore the system date of this post since I will update this page regularly
I will attempt to update this page every Saturday
Following charts are updated as of Jan 30, 2010

ITD (MC1)

We have likely reached ITD 1 low at 87.125 on Jan 26, and MTD 8 low likely arrived with it as well. We can still have inversion, but I am leaning towards no inversion and a rally from here.

MTD (MC2)

MTD 8 low has likely arrived at 87.125 on Jan 26 together with ITD 1 low. Although Delta rule allows MTD 8 low to be due a lot later, I am putting it here because of several considerations.

1) If I assume 87.125 is MTD 8 low, then the length of time from MTD 7 to MTD 8 in the current cycle is 19 days. In the past two cycles, the length of time from MTD 7 to MTD 8 low is 22 days and 15 days.

2) The EW structure and Ichimoku seems to support the idea of a bounce from around this price zone

3) Daily stochastic is oversold. Monthly stochastic is oversold and trying to correct up. Some bullish divergence in monthly chart is also noted.

If MTD 8 low has really arrived at 87.125, then the past two cycles give approximate guidance on what to expect for MTD 9 high.

1) In the past two cycles, the length of time from MTD 8 - MTD 9 is 32 days and 43 days, respectively. We could expect similar thing in the current cycle.

2) In the past two cycles, MTD 8 to MTD 9 price move is 1.236 and 1.618 x MTD 7 to MTD 8 price move., respectively. If I project the same 1.236 and 1.618 x MTD 7 to MTD 8 price move in the current cycle, then MTD 9 price zone is between 100 and 103. However, I will focus more on time rather than price target. So when we get closer to March (30-40 days move is my time target), then I'll be reassessing this price target again.

Dec 31 - Waiting for MTD 7 high arrival confirmation

2009-12-30T19:37:00.001-08:00

There's no change with USD JPY forecast from my last post. We are near a turnaround period and waiting for confirmation of MTD 7 high arrival. I draw two trend lines as possible resistance. Yesterday we touched the first TL resistance at 92.75. The second TL resistance is at around 93.2 (this is also upper bollinger band) if it rallies more. In any case, turnaround is near and I personally won't try to chase market by going long at this level. Bearish divergence is also noted at 4 hour and daily chart.

In the zoomed chart, I am looking for a confirmation of a daily candle close below the low of the signal day to confirm MTD 7 high arrival. The low of the current signal day is at 91.89. This confirmation signal is my way to identify a Delta point arrival as explained in my blog Delta Trading: May 19 - How to Trade Delta Point

Dec 31: GBP USD - ITD 9 low / MTD 8 low IN @5830

2009-12-30T18:59:00.000-08:00

Quick update with GBP USD from yesterday's post. With bullish engulfing candle yesterday, there's a good possibility that ITD 9 low and MTD 8 low have arrived yesterday at 5830. Buying dips is the preferred strategy from now on.

Dec 30: GBP USD - ITD 9 low and MTD 8 low should be IN soon

2009-12-30T04:17:00.000-08:00

ITD 9 low and MTD 8 low will be both IN very soon. We are in the turnaround time period now. We could be a few days late which is perfectly fine by Delta rule, especially if LTD (18) was due at MTD 7 high. This is currently my preferred and main LTD and SLTD count, which shows that both LTD and SLTD are currently travelling down, and thus ITD and MTD are normal to be late for a few days when the higher time frame is travelling down. My chart shows that ITD 9 low average turnaround date is on Monday Dec 28. ITD normally has +/- 1 to 4 trading days standard deviation.

Once MTD 8 low is IN, a look at the two previous MTD cycles show that MTD 8 - MTD 9 could be as long as 50 calendar days and as short as 17 calendar days.

Dec 28: USD JPY - MTD 7 high would be IN anytime

2009-12-28T03:30:00.000-08:00

Hello traders. Hope everyone has a nice and relaxing break. Our vacation trip has been very enjoyable and I couldn't wait to get into the market again.

The Medium Term (MTD) outlook for USD JPY looks pretty clear to me, and there's a good opportunity to do some medium term trading and get good profit for the next two months.

To follow up from my previous USD JPY Delta forecast, ITD 8 high and MTD 7 high arrival time are very near and they could be due at anytime now. If you have not been long until now, it's not the best time to go long now as the risk reward is not good.

A look at the two previous MTD cycles give us the forecast for the next two months. We will very soon move to MTD 8 low which should be due around 15 - 22 calendar days from MTD 7 high. In other words, USD JPY is going to weaken until around second - third week of January. From that point on, MTD 8 low will be IN, and we will have a MASSIVE UPMOVE to MTD 9 high. Be sure not to miss this MTD 8 - MTD 9 move.

2009-12-18T06:18:00.000-08:00

Hi everyone,

I will be travelling next week, so I won't be able to post new update or respond to questions.
Will be back on the 28th.

Merry Christmas and Happy New Year to you all.

Dec 17: USD JPY - Moving along nicely

2009-12-16T20:58:00.000-08:00

No change in USD JPY projection. Both ITD and MTD are travelling up nicely per my last post until around end of December.

Dec 17: GBP USD - ITD 8 high looks to be IN

2009-12-16T20:33:00.001-08:00

ITD 8 high looks to be IN at 1.641, and we are moving to ITD 9 low (also MTD 8 low) due around end of December.

Dec 10 - GBP USD Delta Update

2009-12-10T02:14:00.000-08:00

I have rearranged the ITD count a little bit, but as I previously said, MTD is travelling down until around end of December.

ITD 7 low was due at 1.616, and we are travelling to ITD 8 high for about 3-5 days from ITD 7 low. Target price is around 1.66 (see channel line), then we'll go down one more leg to ITD 9 low due around end of December where MTD 8 low will be due too. ITD 9 low likely will be at the bottom of channel line too.

Dec 7: USD JPY - ITD 7 low and MTD 6 low IN

2009-12-06T22:44:00.000-08:00

As I have warned repeated times in my Nov 25, Nov 26, Nov 27 post, USD JPY is very near to ITD 7 low and MTD 6 low, and MTD is travelling UP for the most part in December. ITD 7 and MTD 6 low were due at 85.

A closer look at both ITD chart and MTD chart show that the rally still has legs and most importantly TIME to complete. IMO, USD JPY is good to buy on dips for the month of December.

Dec 7: GBP USD - ITD 7 high likely IN

2009-12-06T22:12:00.000-08:00

ITD 7 high was likely IN at 1.672 on Dec 2. As I said in my Nov 28 post "since MTD is travelling down, ITD 7 high will likely arrive earlier. It could be as early as 4 trading days."

ITD 8 low is due on average Dec 21. ONS is expected to report 3rd revision of 3rd Quarter GDP on Dec 22. If they revise up another few percentage, then we may see some rally, good timing for ITD 8 low to be due.

Although ITD position might be slightly unclear, MTD outlook still seems to be the clearest with MTD travelling down until around end of Dec. I still think we could break 1.627 by the end of this month.

2009-12-02T02:43:00.001-08:00

Update on my GBP USD Delta chart.

ITD is travelling up to ITD 7 due on average on Dec 8. It may reach as high as the trend line resistance (1.68) per the ITD chart attached.

As I said before, MTD outlook seems to be the clearest IMO and it's travelling down until around end of December. Since MTD is down, ITD 7 may be due earlier than Dec 8. I will try to short cable with stop loss above MTD 7 high at 1.688.

Once this ITD upmove is completed, we shall go down lower than 1.6270

Weekend Thoughts on USD JPY

2009-11-27T20:00:00.000-08:00

I've kept hearing more and more analysts in CNBC and reading news that JPY will keep on strengthening, and that JPY will be the new favored currency of choice, and so on. My question is what time frame do they have in mind with this target?

Per my USD JPY chart last time, it's true that ITD 7 low is not yet confirmed IN. I usually wait for a daily candle close above the high of the signal day candle (the candle that makes the new low) to confirm that ITD low is IN. In other words, yesterday was the signal day as the daily candle made a new low at 84.8. The high of that signal day candle is at 87, so a daily candle close above 87 in the coming days would confirm ITD 7 low is IN provided that there's no further new low is made. Per my ITD and MTD chart, we are currently close to both ITD low and MTD low.
Traditional analysis like SSI, RSI, Bollinger Band also show that this pair is currently at the extreme end and due for a rebound. We also see a doji candle on Friday, which warns us of a possible change of direction.

I agree that 80 or below is maybe be possible in the long term. But it's not the time to short right now at this price level. Note that once ITD 7 low is IN, MTD 6 low will also be IN together, and Medium Term trend is going to travel UP until the end of December based on my Delta count. The risk reward therefore IMHO favors for a long position, at least in the medium term.

Nov 27 - Weekend update on GBP USD

2009-11-27T19:06:00.001-08:00

Posted is my thoughts on cable in intermediate, medium, and long term.

In the Intermediate Term, ITD timing is recently still pretty stretched out and therefore it's a little difficult to precisely time the Intermediate Term. If my ITD position in my last chart is correct, then ITD 6 low should have been due around Nov 27. Since MTD is pointing down, it's possible for a late coming of ITD 6 low, and thus I expect one more low below 1.646 before ITD 6 low is IN. Again, ITD position is strecthed out and not very clear, therefore confidence is not especially high in the Intermediate Term.

Medium Term outlook is more clear and has higher probability. As can be seen in the MTD chart, the last two MTD cycles show that MTD is travelling down until end of December. Therefore, it's likely that medium term trend is travelling down until the end of December. I expect MTD 8 low to be due around end of December.

Long Term outlook is also not very clear because we are in a possible LTD inversion time zone. If you are someone who are bullish in the long term, then the line in the sand is 1.57 (LTD 18 low) and this means that SLTD 4 low is due there. If this is the scenario, then expect range trading between 1.57 - 1.7 for 2 or more months before 1.7 is broken. If you are someone who are bearish in the long term, then it's possible that LTD (18) is due at MTD 7 high, and that we are travelling down in the long term and ultimately breaks 1.57 without breaking 1.7 high. This will probably correlate to the equity market as well. If you believe that equity has topped out, then you should probably use the LTD (18) at MTD 7 high count, and if you believe that equity will keep rallying for another 10-15%, then you should probably use the SLTD 4 low at LTD 18 low count.

The bottom line is that IMHO the clearest outlook is in medium term, where cable should be in medium term downtrend until end of December.

Nov 26 - USD JPY MTD Chart

2009-11-25T22:37:00.000-08:00

Posted is the current MTD chart that I have. ITD 7 low / MTD 6 low should be in soon, and MTD 7 high should be due around end of December.

SLTD is pointing down as 87 is broken.

Nov 26 - USD JPY

2009-11-25T20:34:00.000-08:00

USD JPY has broken 87, indicating that SLTD is indeed pointing down per my chart yesterday.

Possible support level is at 86.5 and 85.6 as indicated by the trend channel.

Nov 20 - MTD 7 high likely IN

2009-11-20T04:52:00.000-08:00

Based on the latest price action, I place ITD 5 high and MTD 7 high as having arrived, and we could be heading to 1.61 in the medium term.

If the ITD positioning is correct, then ITD 6 low should be due around Nov 27.

Nov 17 - GBP USD Update

2009-11-16T20:04:00.000-08:00

It has been a difficult few weeks for me to do a Delta count on Cable. Sometimes that's how life is, and I try not to force a count which I am not really sure of. The best way for me is to observe the market until I feel that I am in sync with the market again.

I don't really want to chase this risk appetite rally. I have been flat in FX for a while, and yesterday I have just sold another good chunk of my stock that I entered in January of this year. Sure equity and high beta currency could keep rallying from here just like many analysts said, but I'll just stand aside and not participate in it.

With that said, attached is my attempt to do a Delta count for cable. If this count is correct, then I expect sterling to keep grinding higher in the next few weeks up to ITD 6, perhaps not in straight line, but a gradual grind. I would attempt to build some short position around Nov 27

Nov 4 - USD YEN update

2009-11-04T00:34:00.000-08:00

Here's the count for USD YEN that I have.

For cable, I am still waiting for BOE's meeting on Nov 5th. Rather than trying to make up counts that I am not sure, it's better to wait until it becomes clear, which hopefully will be after Nov 5. When in doubt, DON'T TRADE.

Oct 30 - Still no Update on GBP USD

2009-10-30T01:45:00.000-07:00

HI everyone,

I am still having difficulties in coming up with Delta count with a good confidence on the recent cable's move. I will sit aside and let the market plays it out for a couple of weeks. Hopefully it becomes more clear after November 5.

Oct 15: USD JPY - Long Term Bottom likely in

2009-10-15T18:40:00.000-07:00

As a follow up to the Sep 29 chart, with three MTD lows in a row, USD JPY looks to have formed a long term bottom for now with a double bottom at 88.

Oct 14 - ITD 1 low is in

2009-10-13T19:56:00.000-07:00

ITD 1 was likely IN at 1.57. I am still bearish with this pair overall and target 1.535 (50% fib). Per my count, ITD 2 high is due around Oct 19, and ITD 3 low due around Oct 29. MTD is likely still travelling down, so ITD 2 high should be due earlier and ITD 3 due later. Looking for a new low by the end of this month.

Vacation for next 2 weeks

2009-10-02T08:52:00.001-07:00

Hi everyone,

I will have vacation for the next 2 weeks with my family. Will monitor currencies during the trip, but may not post any analysis until I return. Hope to see cable at 1535 when I return on the 14th.

Have a good trading.

Oct 1: GBP USD - Delta Update

2009-10-01T10:01:00.000-07:00

Update on chart. As an alternate, more rally is possible until 1.617 - 1.626. NFP may decide the near term direction for this pair.

Sep 29: USD JPY - Long Term Reversal?

2009-09-29T07:39:00.000-07:00

Calling for a bottom, especially for a long term bottom, for this beast is a risky business.

But looking at the wave structure of the chart from Delta's perspective, it does have the possibility for this. I'll be watching to see if price can break 92.522 in the coming days. If it breaks this level, it signals to me that long term bottom has likely arrived at 89.5. The break of 92.522 means a higher high ITD which signals that MTD low (MTD 9) has arrived at 89.5, and since there has been 3 MTD lows (MTD 5, MTD 7, MTD 9) in a row, it also signals LTD 3 low has arrived per Delta's rule.

Without a break of 92.522, no confirmation of a long term bottom.

Sept 25: GBP USD - Alternate Count

2009-09-25T22:09:00.000-07:00

A fellow trader Mervyn has asked a very good question about my last GBP USD Delta count. He asks what makes me think that ITD 11 has arrived at 1.613. Why couldn't it arrive a little late, and that we are actually moving up to ITD 1 due around Oct 8. I think ITD 11 has arrived at 1.613, but that's just personal preference.

Mervyn is correct and his scenario is absolutely possible though. If we do move up, I expect the move is to test the broken trend line around 1.62. Although the ITD direction has not yet been confirmed, this doesn't change the MTD and LTD count. MTD and LTD are travelling down, regardless whether we are moving up in ITD or not.

My chart shows ITD 11 low on average is due on Sep 22. Usually the standard deviation for ITD is +/- 4 trading days. It's therefore possible that ITD 11 low is due either last Friday or early next week, especially with the rule that if the higher time frame (MTD) is travelling down, then the lower time frame's (ITD) low tends to arrive on time or late.

There are two things that I will pay attention to:

1. If we still make new lows by Oct 1, then that's a little too late for the ITD 11 arrival and chances are ITD 11 position is where I previously posted (at 1.613).

2. If we break lower than 1.58 in the next few days, we could drop really fast and chances are ITD 11 low position is also where I posted at 1.613.

If one of the two above happens next week, IMO ITD is likely travelling down to around Oct 8. Otherwise, the alternate scenario chart could happen.

Lastly, even if ITD 11 arrives late per Mervyn's idea, since we are in inversion time period, it's possible that there's ITD (11) inversion which makes the ITD 1 a low due around Oct 8. So if you decide to go long, do be careful.

Sept 24: GBP USD - LTD 17 has arrived at 1.7

2009-09-24T07:29:00.000-07:00

1.611 is broken. Wedge is also broken convincingly.

We have inversion and ITD 1 becomes a low (previously a high) due around Oct 8. I put LTD 17 high as arrived at 1.7. SLTD 3 high will also arrive here as well if 1.58 is broken.

Sept 23: USD YEN Update

2009-09-24T06:21:00.001-07:00

Inability to continue bullish move and take out 93.3 means that MTD 9 low and LTD 3 low position is not confirmed at 90.1.

Looking at the chart now, there is a good chance that we see one more leg lower before MTD 9 low and LTD 3 low arrived. The due date for this low is on the first - second week of October.

Sep 21: USD JPY - Possible significant bottom at 90.1

2009-09-21T02:42:00.000-07:00

USD JPY could have reached a significant bottom at 90.1, especially if 93.3 is taken out in coming days.

I put ITD 3 high at 93.3, which if broken, signals that MTD 9 low has arrived at 90.1. With already 3 MTD lows in a row (MTD 5 low, MTD 7 low, MTD 9 low), LTD 3 low should have arrived at MTD 9 low as well, making this 90.1 level a pretty significant long term bottom.

Bearish trend line has been broken, Stochastic and MACD all supportive for further upmove.

GBP USD: ITD 11 low should arrive soon

2009-09-17T20:33:00.000-07:00

As price seems to go down towards Tuesday Sept 22, I change my ITD count rotation slightly, but the conclusion stays the same.

Medium Term trend is likely still UP, and major level not to be broken is 1.611. Preferred strategy is to buy dips with stops below 1.611. Alternatively, if 1.611 is broken, then I would conclude that LTD 17 has arrived at 1.7 and ITD 10 at 1.674 is also MTD 5 high.

In my count, ITD 11 low is due on average around Tuesday Sep 22. It could be due earlier (today or Monday) as MTD direction is currently UP. Price currently has bounced from a trend line support, and there's also 61.8% fib support. Further weakness should be supported by SMA 100 days at 1.625

ITD 1 high could be MTD 5 high as well, and it's due around October 8. If there's no inversion, then once ITD 11 low is IN, we should move up towards Oct 8.

GBP USD: Alternate Count

2009-09-04T19:11:00.001-07:00

One more thing before I go.

I favor a bullish count where medium term low is IN at 1.611. However, if cable reverses around Tuesday Sep 8 and take out 1.611, this is the alternate count that I will be considering.

Travelling next week

2009-09-04T09:12:00.000-07:00

I'll be travelling next week and may not have time to update blog.
Dollar Index is on the way to break below the wedge as of this writing, as I favored in my previous post.

If we could close below it firmly, coming to next week, we could expect continued and accelerated selling of USD.

Good luck everyone.

ITD 10 low and MTD 4 low likely IN at 1.6112

2009-09-03T03:39:00.000-07:00

Price has broken 1.638, which I labelled as ITD 9 high. Unless my ITD count position is incorrect, I must make a conclusion that ITD 10 low and MTD 4 low have arrived at 1.6112.

This means that ITD and MTD direction are currently UP. MTD 5 high is due at the latest around third week of October. LTD 17 high position is not yet confirmed at 1.7.

Perhaps gold breaking above the wedge yesterday changed the rule of the game. Near term, we could see pressure on USD., and I favor a break of USD Index to the downside at the moment.

Aug 29: GBP USD - ITD 9 High May Have Arrived at 1.638

2009-08-28T18:44:00.000-07:00

Cable's recovery rally has been rejected by the broken trend line and makes a shooting star in the daily chart.

ITD 9 high may have already arrived last Friday at 1.638. Even though the average arrival of ITD 9 high is on Aug 31, ITD has a standard devation of +/- 3 to 4 trading days. And there's a Delta rule saying that if the higher time frame is travelling down, the lower time frame's low tends to arrive on time or late, and the lower time frame's high tends to arrive early.

Since MTD is currently travelling down, it's quite possible that ITD 9 high has arrived 1 trading days early on Aug 28 last Friday. If this is the case, we are travelling down to ITD 10 low due on average around September 8.

Target price is probably at least SMA 100 days at 1.598. This is a critical price level since 1.598 is also MTD 2 low, which if broken, signals that LTD 17 high has arrived at 1.7.

As an alternate, further rally in the next 1-2 trading days is not completely ruled out. However, in my opinion, rally will be limited as ITD 9 high will soon arrive, if not already arrived last Friday.

Aug 28: GBP JPY - ITD 8 low is likely IN at 151

2009-08-27T19:32:00.000-07:00

ITD 8 low is likely already IN at 151 on Thursday. We could be on the way up to ITD 9 high due around Aug 31.

Projected target price for ITD 9 is probably around 156 (broken trend line).

Aug 27: GBP USD - ITD 8 is likely IN at 1.6159

2009-08-26T18:52:00.000-07:00

Target price level and time in the previous post on Aug 18 have been met.

ITD 8 low is probably already IN at 1.6159 on Wednesday.

ITD 9 high will be due on average around Aug 31. We could be on the way to retest the broken trend line now.

Aug 18: GBP USD - MTD 3 High is IN at 1.704

2009-08-18T08:52:00.000-07:00

ITD 6 low (1.634) has been broken, which means MTD 3 high position has been confirmed at 1.704.

Both Intermediate Term and Medium Term trend are bearish.

Intermediate Term trend is DOWN until around Aug 24, or possibly 1-2 days later than Aug 24. We should take out 1.627 by then.

Aug 13: GBP JPY - Same alternate scenario as Cable

2009-08-12T08:25:00.003-07:00

If today is an ITD turning date, there's also another possible count for Geppy with ITD 1 inversion. It's in similar situation as Cable now.

Aug 13: GBP USD - New scenario

2009-08-12T08:04:00.000-07:00

If we use the cable chart I posted on Aug 10, today can not be considered a major ITD turning point. In the Aug 10 chart, we are travelling to ITD 8 low with average turning date of Aug 24. Today Aug 12 would be too early to be considered as ITD 8 low. If we use this Aug 11 chart, we must conclude that the rally today is just a sucker rally and will be brought down again.

However, there's another possibility that ITD 1 inverts. This scenario fits well with the idea that today is an ITD turning point. In this new chart, today can be considered ITD 7 low. Notice in this new chart the difference in ITD count position. In this scenario, we are travelling to ITD 8 high due around Aug 24.

Aug 11: GBP JPY - Long Term Trend is still UP

2009-08-11T06:50:00.000-07:00

GBP JPY Trend:

1. Intermediate Term Trend: DOWN

163.1 level last Friday is ITD 7 high. We are travelling down to ITD 8 low due around Friday Aug 21.

2. Medium Term Trend: DOWN / UP

There's a probability that ITD 7 high is also MTD 1 high. If MTD is down, then ITD 9 high later will be lower than ITD 7 high and ITD 10 low will be lower than ITD 8 low. ITD 6 low at 153.9 could be broken too if MTD is down.

Alternatively, MTD direction could also be UP. If this is the case, MTD 1 high will be due at ITD 9 high, and ITD 9 high will be above ITD 7 high.

3. Long Term Trend: UP

The break of 162.6 level is significant because this level is both MTD 12 high and LTD 9 high. This confirms that long term direction is UP and that MTD (12) low and LTD 10 low at 146.75 is the long term base. This also means that 163.1 will be broken again sometimes in the future.

Aug 10 - GBP USD: ITD 7 and MTD 3 high likely have arrived

2009-08-10T05:12:00.000-07:00

ITD 7 high has arrived at 1.705. ITD 8 low will be due around Aug 24.

There's also a possibility that MTD 3 high has also arrived at 1.705, but unless there's a break of 1.634, there's no confirmation.

August 5 - GBP JPY: ITD 10 High may have arrived

2009-08-05T08:23:00.000-07:00

We have one doji and one spinning top candles in the last two days. Price has also been rejected by trend lines. Daily stochastic is overbought and about to cross over.

Today is also close to ITD 10 high turn point. We have several fundamental news risk in the next few days: BOE interest rate decision on Thursday and NFP on Friday which I think will be worse than expected because ADP today is worse than expected. The event risk in the next 2 days IMO is likely to be bearish for GBP.

There's a possibility that ITD 10 high has arrived today at 162.5. If Geppy doesn't make a new high again, a daily candle close below 160.4 tomorrow / next few days should increase the probability that ITD 10 high has arrived today at 162.5. If ITD 10 high has really arrived, then intermediate term trend is DOWN until around 3rd week of August.

July 30 - GBP USD: ITD 6 low IN?

2009-07-30T04:37:00.000-07:00

It's a little bit premature to post these charts, but if we can get a daily candle close above 1.647 today, there's a good chance that ITD 6 low has already IN at 1.634 yesterday. Attached is Delta Chart and Elliot Wave chart (credit EW count to Jamie Saettle from DailyFX).

July 29 - USD YEN: Travelling to ITD 1 High due around Aug 6

2009-07-29T09:03:00.000-07:00

This is update to the post at July 23.

Considering the time and current price level, USD YEN most likely has inversion, and ITD 1 high will be due around Aug 6.

July 24 - GBP USD : ITD 5 High is In

2009-07-24T08:05:00.001-07:00

ITD 5 high is likely IN at 1.6585 as today's candle has closed (London closing time) below the low of signal day (below 1.643).

MTD rotation is still unclear since it's still not totally out of inversion time period. ITD rotation slowly gets more clear and out of inversion time period.

Intermediate Term direction is DOWN to ITD 6 low due on average July 30.

July 24 - GBP YEN : Medium Term Direction

2009-07-24T06:49:00.000-07:00

There's a bullish count for GBP YEN which will get more favorable if time continues to pass by and Geppy doesn't start to reverse seriously. If USD YEN bullish count I posted yesterday happens to be the correct one, then GBP YEN bullish count could likely also be happening.

Under this bullish count, MTD 7 low, and most likely also LTD 10 low have been due at 146.75, so medium term direction and long term direction are travelling up.

In ITD time frame, under this scenario, ITD 9 low will end above 146.75.

For the bearish case I posted in July 13 to be happening, Geppy needs to start reversing hard asap.

July 23 - USD YEN Situation

2009-07-23T17:55:00.000-07:00

Previous high 94.8 has been topped out. At this point, there are two possible ways.

Either ITD 11 high is due late and in this case after it's in, we are moving lower to ITD 1 due around Aug 6.

Or ITD 11 could invert in bullish scenario as ITD is currently in inversion time zone, and this will make ITD 1 to be a high instead of a low due around the same time at Aug 6. In this bullish scenario, MTD 7 low is most likely IN at 91.7. Bullish count will be negated if USD YEN drops lower than ITD (11) or 93.08

Posted is chart for the bullish scenario.

July 22 - EUR JPY : ITD 12 / MTD 8 High position

2009-07-22T18:32:00.000-07:00

Looking at the EUR YEN ITD chart, comparison of ITD 12 positions to previous two cycles show that the current cycle's ITD 12 high position could already be IN at 134.75. Confirmation of a daily candle close below 132.74 is required to safely conclude it.

Looking at the EUR YEN MTD chart, comparison of MTD 8 high positions to previous two cycles also show that the current cyce's MTD 8 high position could already be IN at 134.75. The same confirmation of a candle close below 132.74 is required for more safety.

In other words, Intermediate and Medium Term top have either already been IN or very near to arrival.

July 21 - USD JPY : ITD 11 High is In

2009-07-21T08:13:00.000-07:00

This is an update to my previous post in July 8 and July 15.

I am currently putting ITD 11 high as already IN due to the daily close below the low of signal day at 94.12.

Intermediate Term direction is DOWN, Medium Term direction is DOWN. Target is below 91.7, and target time is around August 6.

July 21 - GBP USD : ITD rotation seems to get clear

2009-07-21T04:45:00.000-07:00

ITD rotation seems to be getting clearer now and I am quite comfortable with the ITD rotation per the attached chart. However, ITD 5 high has not been confirmed yet without a daily close below 1.6317, so we may still get rally higher. MTD and LTD rotation are still not clear since MTD is still in inversion time zone.

Regardless of the MTD and LTD rotation, if ITD 5 high is already IN at 1.65556, then Intermedate Term direction is DOWN to ITD 6 low due around July 31. The price level of ITD 6 low (whether above or below 1.5982) around July 31 would later further clarifies the MTD and hopefully LTD rotation.

July 17 - GBP JPY : How to Spot the Arrival of ITD 8 High

2009-07-17T00:35:00.001-07:00

As we are nearing the ITD 8 high time zone reversal (take a look at July 13 post to see why we are nearing ITD 8 high time zone reversal), per the rule I posted on how to trade a Delta point (http://cmellon-deltatrading.blogspot.com/2009/05/how-to-trade-delta-point.html), a daily candle close below the low of the the signal day at 152.375 would increase the probability that ITD 8 high is already IN at 155.16.

July 15 - USD YEN : Travelling UP to ITD 11 High

2009-07-15T10:17:00.001-07:00

This is an update to my USD YEN chart previously posted on July 8.

USD YEN has potential to go up some more for another 100+ pips before reversing.

Once top (ITD 11) is reached, the low of 91.7 should be taken out on the way to ITD 1 low (and also MTD 7 low).

July 13 - GBP JPY : Travelling UP to ITD 8 high

2009-07-13T23:18:00.000-07:00

Comparison of ITD 8 highs to previous cycles indicate that it's due around this vicinity in terms of time. In the meantime, MTD and LTD are still travelling down at least until mid August, and therefore we shall get another low soon once ITD 8 high is IN.

GBP JPY Delta ITD chart shows us that ITD 9 low (and MTD 7 low) should be due on average on the yellow vertical line in the month of August. Target price is probably around 50% fib to 61.8% fib from the low 118 to the high 162.6.

However, looking at bigger picture GBP JPY Delta MTD chart, there's a good possibility that SLTD 4 low (Super Long Term Delta) has already arrived at 118. This bigger picture count is subject to change as I will reassess again next August. If it's as I projected, then SLTD in fact is travelling up and therefore we will not get any price lower than 118. When SLTD is travelling up, we will get a series of higher high and higher low LTD.

With this projection, there's a chance that MTD 7 low in mid August would also be LTD 10 low as I indicated in the MTD chart. If that is so,we will then move higher to LTD 11 (and this would also be SLTD 5 high) due on around November.

July 8 - USD YEN Delta

2009-07-08T09:16:00.001-07:00

Looking at USD YEN ITD chart, in the past two cycles, ITD 11 was due only a couple of trading days after ITD 10, then there's a relatively long trading days from ITD 11 to ITD 1.

This may mean that MTD 7 low will be due at ITD 1 low. And time frame wise, ITD 1 low will be due around end of July. In other words, assuming if the low today (91.8) is ITD 10 low, further slide down below ITD 10 is likely after a quick and short lived 2-3 days rally from ITD 10 low to ITD 11 high.

July 8 - EUR JPY Delta MTD

2009-07-08T06:52:00.000-07:00

MTD 7 low was due around the red vertical line in the past two cycles. We are now in that position now, so I will be looking for medium term bottom soon.

Higher picture, MTD 6 high (139.2) has to be LTD 2 high as well because there has been three series of higher high from the low of 112 to the high of 139.2. Delta only allows a maximum of 3 series of higher high.

This means that LTD is travelling down. So even though MTD 7 low is soon to be due and MTD will then travel up, since LTD is travelling down, we shall see a lower low and a lower high. This means MTD 8 high later will be lower than MTD 6 high (lower than 139.2).

You can see in the past two cycles, MTD 8 high arrival is very short. It's only a couple of trading days from the MTD 7 low.

July 8 - GBP JPY Delta

2009-07-07T20:46:00.000-07:00

We are somewhere near ITD 7 low, probably could be due in the next few days. Notice in the past two cycles ITD 7 low was due slightly after the blue vertical line. Currently we are already 1 trading day after the blue vertical line. I am looking for an intermediate trend up to ITD 8 high to add short. That's probably on the third / fourth week of July. I currently have short at 159.8 and will keep it until mid August, currently with stop loss at 160.27. I will move the Stop Loss to 1 pip above ITD 8 high later after I confirm the position of ITD 8.

July 7 - LTD 15 likely arriving late

2009-07-06T04:55:00.000-07:00

Price action with GBP USD has recently left me scratching my head, especially with the pair currently in inversion time period (ITP) for both ITD and MTD time frame.
But it looks now the situation is becoming a little more clear and here's my latest count that I am using.

In the ITD chart, we see that LTD 15 high arrived late at 1.674.ITD, MTD, and LTD are therefore now all travelling down. ITD 4 low will be due around July 13. A break of MTD 1 at 1.58 is required to confirm the position of LTD 15 high.

Although all time frames are now travelling down, LTD 16 low is going to arrive not too long from now. I circle the LTD 16 low time zone. I think it's likely that the downtrend will last until mid August as per my circle.

Looking at bigger picture LTD chart, once we finish this LTD 16 downmove, we'll rally higher one more time from probably around mid August to November of this year.

June 30 - Further thought on GBP USD

2009-06-30T04:22:00.000-07:00

After some thinking period, I come up with two possible Delta count (one bullish, one bearish) and of the opinion that the bullish one is more likely. I will do more thinking over the weekend and post next Monday to see if there's any other possibility.

For now, here are the two possible counts I am considering.

Bullish count

The problem and challenge in the ITD time frame is how to label ITD within the month of June with the inversion period. In the month of June, GBP USD is in a range bound between 1.58 to 1.66, and just today broke the high. If I were to label ITD within this period as per the first chart attached, inevitably the conclusion I must draw is that MTD is travelling up because we have a series of higher high and higher low in ITD time frame. The other conclusion is that since MTD is travelling up and since it breaks the 1.667 (MTD 1 high), LTD must also be travelling up. In other words, LTD 16 low in this case has arrived early and it arrived at 1.58.

In my previous post today, I mentioned that we are close to a medium term high. The bullish count described here still fits into that projection. We could indeed be nearing a medium term high here (MTD 2), and as we travel down to MTD 3 low, by Delta rule it shall not go lower than 1.58 since in this scenario, LTD 16 has arrived at 1.58.

Bearish count

The bearish count ignores the range bound period in the month of June per the second chart attached. The ITD 2 high we would achieve soon would be MTD 1 high and LTD 15 high.

The problem with this is that the ITD timing is messed up, since ITD 2 high will arrive at ITD 3 time zone in this scenario.

June 30 - GBP USD

2009-06-29T21:45:00.000-07:00

Hi guys,

GBP USD Delta count for ITD time frame continues to be challenging at the moment due to inversion possibilities for both ITD and MTD.

I would instead attempt to look for direction from bigger time frame. Looking at the MTD chart, we could see that in the previous three cycles GBP USD formed a medium term top slightly before the red vertical line (I circle them)

In the current cycle, we are also near the red vertical line, and that red vertical line is on July 7.

So I think that we could see some kind of medium term top happening soon.

June 25 - USD YEN Delta

2009-06-24T19:20:00.001-07:00

Still too many possibilities with GBP USD Delta due to the inversion time period in both ITD and MTD time frame. Inversion could be single and double inversion, and therefore there are quite a number of possibilities, and unless we pass through this period, it's hard for me to be certain of direction. I will leave this pair for a while and look at other pairs which are more clear.

Here I thought I want to post Delta count for USD YEN. It seems like the medium term trend is down but we are in an up cycle in the intermediate term time frame.

Still Waiting for Direction

2009-06-22T09:13:00.000-07:00

GBP USD is still in a range between 1.58 - 1.667. The current inversion time period for ITD and MTD make it hard to project with a high degree of confidence. Will wait for several more days. I am currently still leaning on the bearish ITD 11 inversion. If MTD 1 and LTD 15 have arrived at ITD 11 (1.667), then per Delta rule, it's quite natural to expect ITD 2 low to arrive later than the average turning date since the MTD and LTD are travelling down.

June 17 - GBP JPY Delta

2009-06-17T07:13:00.000-07:00

Hi guys,

I will update GBP USD next around June 22. As it stands right now, the alternate bearish count with ITD 11 inversion seems to be the correct one. A break below 1.58 would confirm the position of LTD 15 at ITD 11 high.

For now, while waiting for next turn in GBP USD, enjoy this GBP JPY Delta chart.

June 12 - Alternate Bearish Count

2009-06-13T02:50:00.000-07:00

Hi everyone,

If there's one thing that I learn from trading FX, it's this: We need to keep an open mind. When I use Delta, I keep looking for an alternate Delta count. Of course the alternate count still has to follow the rules and guidelines of Delta system. Fortunately, compared to other trading system, I think Delta is probably one of the systems that does not offer too many alternate counts. Sometimes in certain cases, there's even no alternative Delta count.

The alternative count is important, especially if we are trading in the Inversion Time Period (ITP). The rather difficult time to trade Delta is during the ITP. Those who follow Delta knows the ITP. Inversion can only happen at either side of ITD 1 / MTD 1/ LTD 1. We are now in that time period for both ITD and MTD. So until the ITP period passes, we still probably can not know for sure whether there's any inversion.

So here, I thought I will post an alternate bearish count. In this count, MTD 1 / LTD 15 has arrived at ITD 11. ITD 11 then inverts at 1.58, and we travelled up to ITD 1 due around June 11. ITD 1 could have arrived on time at 1.662 on June 11. Using this count per the attached chart, we are currently travelling down to ITD 2 due around June 22. This alternate count will be the correct count if ITD (11) at 1.58 is broken in the next several trading days. If ITD (11) is broken, the position of MTD 1 / LTD 15 will then be confirmed at ITD 11, and my primary count I posted at June 10 will not be correct.

However, I am still of the opinion that we will break ITD 11 high, and that we are currently travelling up to ITD 2 due around June 22, with a target price level of 1.68 - 1.7. The primary count is posted in my June 10 post. There's no ITD 11 inversion in this primary count.

June 10 - ITD 1 Probably Has Arrived

2009-06-09T18:58:00.000-07:00

Hi everyone,

I mentioned in my prior post that MTD 1 / LTD 15 position still could not be confirmed 100% because Delta rule still allows it to be due later. It seems that one the alternatives could be happening right now.

Looking at the current daily chart, it's very possible that ITD 1 low has arrived on June 8 at 1.5801.

There are several things which led me to think so:

1. It's within the arrival time zone of ITD 1. I said before ITD 1 low arrival is due on average at June 11. June 8 is 3 trading days earlier, which is fine. Also if you read the Delta rule I posted at my June 4 post, when ITD low is due earlier than the average, it's likely that the higher time frame (MTD and LTD) is pointing up. In other words, MTD 1 / LTD 15 is still pointing up. If MTD 1 / LTD 15 has already arrived at ITD 11, then we typically should expect ITD 1 low to be due slightly later than the average turning date, and not earlier.

2. We see a hammer candlestick on the signal day (June 8), followed by a bullish candle confirmation the next day on June 9. June 9 candlestick also closed above the high of the signal day. This is a possible turn signal according to the rule I posted at my May 19 post.

3. Take a look at today's Delta chart, and see the previous two cycles of ITD 1 (I circle and link them together in the chart). They are all due exactly at the vertical red line. This is eerily precise.

What this means is that if ITD 1 low has indeed arrived on June 8, we are now moving up to ITD 2 due on average around June 22. Since there's plenty of time between now and June 22, my guess is that we could make a new high topping out last ITD 11 and this new high would then be the position of MTD 1 / LTD 15. Also if this is happening, then price target is most likely 1.68 - 1.7.

June 4 - Travelling Down to ITD 1

2009-06-04T20:39:00.000-07:00

Hi everyone,

Attached is the updated Delta chart. Not too much difference with the previous one, but I want to highlight several things on the chart.

We get four confirmations that ITD 11 has arrived:

1. It's within the time zone of ITD 11 arrival.

2. We get a daily candle close below the low of the signal day. This is according to the rule I posted eariler.

3. The signal day also happens to be a bearish engulfing candle, which signals bearish potential.

4. Dollar Index has reached my target of 61.8% fib support as posted yesterday.

The position of MTD 1 and LTD 15 still could not be confirmed 100% because there are still two possible alternatives allowed by Delta:

1. ITD 11 could invert and then move up higher than the previous ITD 11

2. MTD 1 and LTD 15 could be due at ITD 2 instead.

If market wants to do any of the two alternatives above, this means a new high would be made and according to Delta this new high MUST be LTD 15, and there's no more alternatives.

But having said the alternatives, due to Dollar Index already reaching 61.8% fib and bouncing, I am of the opinion that MTD 1 and LTD 15 was already IN together with ITD 11. In other words, my main count considers ITD 11 at 1.667 to be already a long term top, and this should not be broken for a while.

What's next?

Intermediate Term trend is DOWN. We are travelling down to ITD 1 which is on average should be due around June 11. I assume there's no ITD 11 inversion here. If there's an ITD 11 inversion, we will get the alternate scenario above.

The higher time frames (MTD and LTD) are also travelling down because my preferred count considers MTD 1 and LTD 15 as having arrived at ITD 11. Since the higher time frame is travelling down, ITD 1 will probably be due later than June 11, so I am looking for up to June 17 ITD downmove.

--------------------------------------------------------------------------------------------------------------------------------------

Delta Rule:

- If the higher time frame is travelling down, the lower time frame low usually will be due on time or late, and the lower time frame high usually will be due early.

- If the higher time frame is travelling up, the lower time frame low usually will be due early, and the lower time frame high usually will be due on time or late.

June 3 - Dollar Index reaches 61.8% fib support

2009-06-03T06:53:00.000-07:00

Hi guys,

Quick update. I still have the same Delta count as yesterday, but I called the top 1 day too early.

What gives some comfort is that Dollar Index looks like bouncing at 61.8% fib support, so it does look like that this could be a significant top for the time being.

June 2 - ITD 11 / MTD 1 / LTD 15 have arrived

2009-06-02T02:06:00.000-07:00

Hi everyone,

I am currently using this count, assuming that ITD 11 / MTD 1 / LTD 15 has already arrived. This count will be invalid if in the next three days, the top at 1.64991 is broken.

If 1.64991 is broken in the next three days, that would be a little too late for ITD 11 to arrive, and therefore if this happens, I would use the ITD 11 inversion count (look at my prior post for ITD 11 inversion scenario). In the event that ITD 11 inverts, we will have Intermediate Term Up until June 11.

But as of now, attached is the count that I favor. There is no inversion in my favored count, and in our case, Intermediate Term trend is down to ITD 1 due around June 11. Please note from the chart where LTD 16 could arrive. I leave some extra space to the right of the chart so you can see where LTD 16 could arrive. Due to the strong rally and better fundamentals, I won't be surprised if LTD 16 arrives in mid July (although it could arrive up to third week of August).

May 28 - Has ITD 11 arrived?

2009-05-28T22:47:00.000-07:00

Hi everyone,

I still could not confirm the arrival of ITD 11 because there's still no reversal confirmation that I am looking for. I am looking for a daily candle close below the signal day. In our case, the low of signal day now is 1.592, and we still could not get a daily candle close below 1.592.

There are three possibilities at this point:

1. If 1.608 holds, then ITD 11 may have arrived on time at May 27.
2. ITD 11 could arrive late in which case we should see more high in this next couple of days before a more meaningful reversal,
3. ITD 11 has arrived on time at May 27, but then inverted at 1.585, and now going higher to ITD 1 due around June 11. You could see this illustration in my previous post titled 3 possible locations for LTD. The inversion is illustrated at the second chart.

We need several more days to determine which one is more likely.

Delta Introduction

2009-05-26T04:26:00.001-07:00

Delta was founded by Jim Sloman and Welles Wilder. Welles Wilder is also famous for developing technical indicators which are among the most commonly used today such as RSI, SAR, and ATR (Average True Range).

Unlike other trading system, Delta places emphasis on time rather than price. The premise is that TIME is more important than price. Delta believes that every market has a cycle and this cycle is influenced by the way our solar system operates. When Delta projects that it's time for market to turn, then market will turn regardless of price. A Delta trader first and foremost concerns about time, and price level is secondary.

Delta is essentially a swing trading system that focuses on time. The idea of Delta is based on a cycle system, where currency makes highs and lows based on a pre-determined cycle. Delta does not try to forecast price level. To forecast price level, we could combine Delta with other methods, such as Fibonacci, trend line, Elliot Wave or other system.

Delta cycle is divided into different time frames: a 4-month cycle, a 1-year cycle, a 4-year cycle, a 19-year cycle, and others. In my post, I often mention the term ITD (Intermediate Term Delta), MTD (Medium Term Delta), LTD (Long Term Delta), and SLTD (Super Long Term Delta). This corresponds to the different time frames cycle.

If you'd like to know more about this system, below is some information:
The official site for Delta is: http://www.deltasociety.com/index.aspx
The official book for Delta is Delta Phenomenon: http://www.deltasociety.com/deltaphenomenon.aspx
Delta training CD: http://www.deltasociety.com/deltatrainingCD.aspx
Another Delta training CD: http://www.deltasociety.com/marketmatrix.aspx

As you can see from the link, these materials are quite expensive to buy. If you are new to FX trading, you may want to try to learn something else first that doesn't require you to pay. The fact of the matter is there is no single holy grail trading strategy which gives you 100% accuracy in your forecast. Stop Loss therefore is a must and proper use of leverage is required. In the end, money management is what determines our success and failure.

So if you are new to FX trading, before you spend money in buying anything, get as much free education as possible. Basic understandings of candlestick, trend line, Fibonacci, and Elliot Wave would be very helpful. In fact, I think trying to learn Delta without basic technical understanding will be quite a challenge, since it takes some effort and time to truly understand and use this system properly. An example of a good free website to learn all of these and more is: http://www.babypips.com/school/
Do check out, read and re-read the money management section of the free website above.

This system, just like any system, will not suit everyone. Some will like it, some will not. Those who like to trade often (daytrader) may not like this system. Many people also hate and think of this system as a scam. For me personally, this system is a welcome addition to my trading arsenal.

For some people, this system's theory about repeatable market cycle influenced by the heavenly bodies is completely rubbish, so be aware of the contra opinions out there. This system is also considered by many to be overly complicated. To me it's pretty straightforward and natural, but it's a different experience to each person.

I created this blog to function like a trading journal, to record how I understand this system and how I implement it to analyze the forex market. I did not create this blog to declare that this is the best system or that this system has no flaw. I like this system because it suits my personality and trading style. It's by no means a perfect system, there'll definitely be times when the analysis is wrong. Even if the system can't be wrong, I am a human, and I sometimes make mistakes in my interpretation of the system. But for every trade idea I posted, I would provide a logical reasoning from my interpretation of the Delta system, and for every mistake I make, I will provide a reason of why and where I get it wrong. This blog is best used by those who either know and use the system, or by those who already have their own reliable system but want to compare and want to know the timing element.

The last thing I want to say is this: Regardless how good our trading system is, an improper use and a lack of money management still ultimately lead to a disaster. We need to manage our money and risk well since there's no such thing as certainty in FX market.

Happy trading.
Cmellon

May 25 - Three possible locations for LTD 15

2009-05-25T04:06:00.000-07:00

Hello everyone,

GBP has not shown reversal confirmation per the rule I posted two days ago. Without confirmation, this pair could continue going higher.

In the meantime, I identify three possible locations (time wise) for long term top (LTD 15).

1. LTD 15 could be due at ITD 11. If this is the case, then long term top should be due around May 27.

2. LTD 15 could be due at ITD 1. In this case, ITD 11 inverts and long term top should be due around June 11.

3. LTD 15 could be due at ITD 2. If this is the case, long term top should be due around June 22.

There is also another possibility that MTD 12 inverts, and LTD 15 is due at MTD 2, but I consider this one unlikely for now.

May 20 - Real Time Example - Trading Delta Point

2009-05-20T22:50:00.000-07:00

Hi everyone,

Here I am using a real time example on how to trade Delta point. The idea and rule was posted yesterday with title "How to trade Delta point".

Today (Asia time) GBP is making a new high at 1.58184. From my Delta chart, we are already close to ITD 11 high. ITD 11 high could also be MTD 1 high and LTD 15 high, therefore this is a significant long term top. However, if you are familiar with Delta, you would also know that we are in inversion time zone for ITD. What this means is that ITD 11 could invert, and MTD 1 and LTD 15 could be due at ITD 1 high instead. If you are not familiar with Delta, then just ignore what I said here. Basically all I am saying is that we are near a signficant long term top.

As I have said in my previous post, trying to pick an absolute top is a little difficult for two reasons:

1. Delta turning date is approximate and not exact. If we enter short too early, the upward move may not yet finished.

2. It's a little difficult to set up an objective stop loss.

But we do know that we are nearing a Delta turning date. So now I have started to do the exercise posted yesterday. Since today GBP is making a new high, today would be the "signal day" or otherwise also called "current high day". As you can see in my chart, the low of the signal day is at 1.5641. Therefore if in the future we have a daily candle close below 1.5641, that would be the first signal that ITD 11 high probably has already arrived.

If tomorrow GBP is making a new high (let's say 1.59) then tomorrow would be the new signal day. We keep updating the signal day everytime GBP makes a new high, and we measure the low of the signal day, and if in the coming days we get a daily close below this low of the signal day, that would be the first signal to us that ITD 11 may have already arrived.

Hope this real time example makes the rule and idea more clear.

P.S. I am not very sure how many people actually read my blog. If people get some benefit out of this blog, I would be glad to keep writing my thought and chart. Whether you are just a guest or someone who register and follow my blog, please feel free to write comments or anything so that I know that someone actually reads my blog :D

Trading Delta Point

2009-05-19T08:38:00.000-07:00

Delta is helpful in providing a perspective on the overall direction of the market. It also gives us an approximate time zone where we can expect a market turn.

There are several ways to trade Delta turning point. One of the ways is to try to pick absolute top price or absolute bottom price near Delta turning time. However, Delta turning time is not exact on one particular date. Delta gives a probable time zone for reversal, not an exact date. Therefore the danger of trying to pick up a top and bottom price near Delta turning date is that we enter too early and the move has not yet finished. However, sometimes in certain situation, analysis of other system such as Elliot Wave and Ichimoku could yield the same conclusion of imminent turn and this is where it's probably worth it to try to get the best entry price near Delta turning date when everything agrees with each other.

Another safer approach to trade Delta point is to wait for reversal confirmation near Delta turning date before we enter into position. Of course this means that we may have to forgo some pips, but this approach is safer and we could also set up a better and more objective stop loss. The following chart illustrates this approach

For example, let's say we are trying to short and catch a Long Term Top (LTD high) for GBP USD. We could wait for reversal confirmation before we enter into short position. Here's the rule:

Rule: Place a sell (short) at the low of the first day that has a close below the low of the high day.

Rule explanation: When we are nearing Delta turning point, we could start to observe price action. Any day that makes a new high becomes a signal day. We then draw a horizontal line from the low of the signal day several days into the future. We call this the current high day. Let's say the next day market makes a new high again, then this new high becomes the new signal day, and we do the same action above (drawing a horizontal line from the low of the new signal day several days into the future).

We keep doing the above until we have a daily candle close below the low of the signal (high) day. Once we get a daily candle close below the low of the signal day, we place a short (sell) below the low of the day and put stop loss above the signal day.

The above's rule applies for trading a Delta high turning point. For trading Delta low turning point, we just simply reverse the rule

May 19 - On the Way to ITD 11

2009-05-18T19:41:00.000-07:00

Hi everyone,

There's no change from my previous chart. We should be on the way to ITD 11 high which is due around May 27.

A medium term top (MTD 1 high) could be due together with ITD 11 high, and if this is the case, this would also be a Long Term top (LTD 15 high) as well.

However, medium term top (MTD 1 high) and long term top (LTD 15 high) could be due later at ITD 2. If this is the case, it will be due at around June 22. My guess is that MTD 1 high and LTD 15 high will be due here around this time. Price level wise probably around 1.6, but we'll look at it more when time is near. Also keep monitoring Dollar Index chart, as we could do a pretty clear Elliot Wave count on it.

In any case, a long term top will soon be due, giving an excellent opportunity to short for a long term or medium term time frame.

For those interested in super long term time frame, I believe that Super Long Term bottom (SLTD 2 low) was already IN at 1.35. Thus, even if we break down from LTD 15 to LTD 16, it should not break lower than 1.35. But I would not worry too much about this for now as this is a very long time frame. As time goes by, SLTD position will get clearer.

May 12 - Considering this new count

2009-05-12T01:05:00.001-07:00

The short setup in my previous post was not executed. It's getting quite late for ITD 9 if it has not yet arrived, and thus I am a bit uncomfortable. Perhaps it has already arrived and I ignore it!

Upon looking at price action, I am now seriously considering this attached Delta count. If 5260 is broken in the next few days, I will be using the attached Delta chart as my primary count. ITD 11 will be due at the end of May.

May 8 - ITD 9 not In yet

2009-05-09T01:16:00.000-07:00

Apparently ITD 9 is coming late as GBP is still rising up as USD is under pressure across the board. In my past post, I mentioned a possible price level target with the use of the parallel trend line channel. Currently, GBP is close to the top of the trend line channel.

I am looking to short at the top of the trend line channel at 1.537 - 1.538 with a tight Stop Loss at 1.5415. This setup however would only be valid on Monday. If price doesn't reach 1.537 on Monday, I would remove this trade as the trend line channel is sloping upward. If this trade is executed, and if my stop loss is taken out, I would just wait patiently until I see a solid reversal signal.

Looking at Dollar Index chart, as I said in my previous post, we are now moving nicely in wave C targetting 50% fib around 80.5. However, we are currently at 38.2% fib with a trend line support, so there could probably be a temporary rebound of some sort before USD continues to weaken.