April 18, 2009 - PART 1
GBP USD is currently at the crossroad. It has finally broken 1.5, albeit very briefly and swiftly reversed back and closed at 1.478 last Friday.
The natural question after last Friday's close is:
Has ITD 8 high arrived on April 16 at 1.5067?
Delta logic tells us that if ITD 8 has arrived on April 16, that would mean that MTD 11 MUST have arrived as well, because we will already have 3 ITD highs between MTD 10 and MTD 11 (ITD 4, ITD 6, and ITD 8).
The average turn date for ITD 8 should have been April 27, and April 16 seems to be too early. However, it is not totally impossible that ITD 8 has arrived.
For those interested in statistics, here's the statistics of Delta turning point:
- 51% of the time, actual turning point happens within 2 days of average turning point
- 68% of the time, actual turning point happens within 3 days of average turning point
- 81% of the time, actual turning point happens within 4 days of average turning point
In other words, there exists a possibility (around 20%) that actual turning points is more than 4 days of average turning point. Furthermore, since the credit crunch crisis happened in 2008, Delta turning point has been pushed and pulled to the extreme due to extraordinary circumstances, which probably skews the average statistics.
Delta Logic only tells us that since MTD 10 low and LTD 14 low were confirmed IN, MTD 11 must be higher than MTD 9 (must be higher than 4985). Now that GBP has actually broken 4985, there's no Delta logic which gives us 100% confidence to say that GBP MUST continue to go higher than 5067 from this point. And thus, there's a possibility that ITD 8 / MTD 11 COULD INDEED HAVE ARRIVED on April 16.
However, it's also equally possible that the market is trying to shake people's nerve and confidence and in this case ITD 8 / MTD 11 SHOULD STILL BE DUE AROUND the average turn day of April 27 or even later than this. If this is what is happening, I expect GBP to rally next week to higher than 5067. If you are a trader who is bullish in the Intermediate Term, you should attempt to go LONG in this retracement with the line in the sand at ITD 7 low at 4580.
In chart 1 above, I illustrate what GBP should do if this scenario happens.
GBP USD is currently at the crossroad. It has finally broken 1.5, albeit very briefly and swiftly reversed back and closed at 1.478 last Friday.
The natural question after last Friday's close is:
Has ITD 8 high arrived on April 16 at 1.5067?
Delta logic tells us that if ITD 8 has arrived on April 16, that would mean that MTD 11 MUST have arrived as well, because we will already have 3 ITD highs between MTD 10 and MTD 11 (ITD 4, ITD 6, and ITD 8).
The average turn date for ITD 8 should have been April 27, and April 16 seems to be too early. However, it is not totally impossible that ITD 8 has arrived.
For those interested in statistics, here's the statistics of Delta turning point:
- 51% of the time, actual turning point happens within 2 days of average turning point
- 68% of the time, actual turning point happens within 3 days of average turning point
- 81% of the time, actual turning point happens within 4 days of average turning point
In other words, there exists a possibility (around 20%) that actual turning points is more than 4 days of average turning point. Furthermore, since the credit crunch crisis happened in 2008, Delta turning point has been pushed and pulled to the extreme due to extraordinary circumstances, which probably skews the average statistics.
Delta Logic only tells us that since MTD 10 low and LTD 14 low were confirmed IN, MTD 11 must be higher than MTD 9 (must be higher than 4985). Now that GBP has actually broken 4985, there's no Delta logic which gives us 100% confidence to say that GBP MUST continue to go higher than 5067 from this point. And thus, there's a possibility that ITD 8 / MTD 11 COULD INDEED HAVE ARRIVED on April 16.
However, it's also equally possible that the market is trying to shake people's nerve and confidence and in this case ITD 8 / MTD 11 SHOULD STILL BE DUE AROUND the average turn day of April 27 or even later than this. If this is what is happening, I expect GBP to rally next week to higher than 5067. If you are a trader who is bullish in the Intermediate Term, you should attempt to go LONG in this retracement with the line in the sand at ITD 7 low at 4580.
In chart 1 above, I illustrate what GBP should do if this scenario happens.
