ZB - T-Bonds

further to yesterdays post i am now long and am looking for a medium long term trend up but we have a CL objective ( deep pink) and a previous high at 123'19 to 'take out'. This is a market i have been watching for some time. Two forks initially interested me; drawn from P00 and P0 and neither has had any price activity near their respective centre lines. Of course there is a chance we are still in a range and a further failure (see daily ADX at 23.77) would confirm that we will continue to move sideways however the 'Big W' pattern is still intact and even with another failure i am still optimistic long term for a break out.

T-Bonds & T-Notes (5 yr) + Bernanke press conference

Interest rate Treasury futures look set for a possible sharp rally.The formation i see is a classic 'Big W' or double bottom but we have yet to see confirmation of this by taking out the prior high.

USDJPY

EURUSD

We seem to have reached a important CL( see two small charts) and price action has in my opinion changed/ turned at 1.4700 with the candles/bars telling their own story- although i am getting conflicting signals but have still taken all profit on my long positions and am now flat.
"A bird in the hand is worth two in the bush" situation? I am still looking for the Euro to have a bash at 1.5000 in the coming months but suspect that we may see a RT first.

HG Copper (Comex) ¢/lb

Link. SEE TUESDAYS POST.

Gold...going lower...?

stopped out at b/e so will just watch this one now but still feel pretty bearish and there is another RL above the one i have been 'playing' that has stopped price dead in its tracks.

Short Gold- double tops

This post should be viewed from the bottom chart upwards. There is major resistance ( long term RL seen in lowest/bottom chart in yellow) above the market 1509 to 1511.00
Please note how i mark a upper and lower reaction line (dotted) for every central RL in the chart . You can prove this yourself. First objective is a test of 1500.00 which has just held.
These charts are simplified & stripped of all indicators and studies for greater clarity.
Commentary to follow-----

Euro

5 min euro on RL grid and 150 range bar chart showing the slightly bigger picture. Again the diagonal represents the modified schiff fork see below bottom.( also note the resistance offered by the diagonals on April 12-15 at the 1.45 area.

SPX Daily- Ensign fork tools

Here are some charts of daily S&P. In the second chart i have added/superimposed another second fork (pink) off the labeled pivots P1,P2,P3. Pay attention in particular to the diagonal support resistance.

These charts shows the Ensign Pitchfork tool at work. A great improvement on E-signal as everyone/all sites and forums have all agreed for the last few years. So this fork contains CL + upper and lower MLPs + inner fibs plus reaction lines
(at 50% of A to BC distance as well as the 100% which are shown as a slightly thicker lines). The RL's are extended outside the fork but alas not as far as i need for detailed RL grids/webs. In this chart i have added ' diagonal grid' options. This diagonal grid gives you the diagonal lines which are in effect in the same position as the reaction lines from a Schiff &/or modified Schiff fork (see lower image).
The limitation is that the reaction lines cannot be extended as 'Rays' and stop at about the 3rd WL distance form either MLP. This is regardless of how far you extend the fork forward which you have the manual ability to do. The diagonals are extended as far as both trigger lines which is good.
I have searched for a script/custom indicator to give me the ability to produce a grid with dynamic trend lines (ie warning/reaction/trigger lines) that are fully extended as rays, such as the tool i use in Metatrader MQ4 script custom indicator. I have contacted Ensign (and indeed Esignal) and await both replies as to if this script can be produced along the lines of the MT custom indicator. I guess there maybe a cost but i am sure the rewards will be manyfold and well worth a few hundred bucks for the programming.

HG Copper (Comex) ¢/lb

Now we will see if Copper continues in its horizontal pivot range (caught in the layer of support and resistance offered by the various upper MLP's derived from various Schiff & Mod Schiff forks from the weekly TF) or if price will break lower. The classic AB=CD pattern is visible. We are now spot on a .236 Fib RT form last CD leg 'up' to the recent high 464.95 Remember the two D/S RL's which have carried price lower. They are visible as a red line (from the royal blue fork) and a green line (from the green fork). A test of 400.00 now looks more probable or perhaps price will find support on the thin blue CL from a regular Andrews fork which lies just above 400.00( the mod Schiff incarnation of this fork is the fat blue fork which has the honor of the recent double tops and high pivot at 464.95 which just pierced this UMLP ).



















This post refers in part to the post ' Are all trend lines created equal'? These charts clearly illustrate that the higher the TF the more important the resistance/support offered by any dynamic line such a ML's (CL/UMLP/LMLP) & RL/WL or other unorthodox trend lines.

'Reverse fork on gap' method

Gaps are significant in many ways and are much more valuable than simple pivots and also tell me something about the state of the market which i suppose could be called to be in a heightened state of activity or 'slightly hysterical' ( a good oxymoron?!) and often they indicate a future reversal,but not always by any means. Sadly they occur less frequently in the spot FX market for obvious reasons & the many future markets are a better hunting ground for them. Originally i despised gaps as they messed up my charts and often made it difficult to find the correct frequency of the market. Here is a recent bean chart.
I have used the low of the gap as P0 to draw a reverse fork (reverse P0 or RP0). This i found had very good correlation with past price so then i used the CL of the reverse fork (at any point) for the unfixed p0 of the forward fork and the same two other pivots rp1/rp2. There is however a good pivot very close to the P0 of the fwd blue fork but although this skews the whole fork only a small amount it represents the nearest P0 anchor for a conventional forward fork ...So why draw the fork from the CL of the reverse fork and not from that pivot? It illustrates superbly the relationship between the two forks (reverse and using the reverse CL as a sliding P0) and the value of this gap method which is confirmed by the orthodox pivot and its fork which mirrors the conventional fork off the nearest pivot (often there is no orthodox pivot to use). It could also be argued that the failure of the pivot to touch the CL caused the sharp fall away in price action.

Thought for the day:Are all support/resistance trend lines created equal?

It is often said in books that traders believe all S/R lines are created equal from the point of view of their power to halt the path of price. In my experience this is not true and i have consistently put forward my theory that the higher the time frame the greater the strength of the line. So it follows that a ML or RL has a proportionally greater effect the higher its TF origin.
The angle of lines is particularly interesting and i have been looking at this problem for some years and have noticed the effect of a shallow 45 degree RL/ML is greater than a sharper angle -however the angle of any line changes depending on what time frame it is viewed in.
In Dr Dologa's second book he states that the power of a line is strengthened by sharing:
1.Old Highs/lows ( ie major pivots)
2.All time highs/lows
3. fib levels of.38,.5,.618
4. Round number such as 1.4200 or 1.4000 ( say for the EurUsd) and to a lesser extent .50
5. The ML of a high time frame
6.MPL's
7. Chart patterns.

he states that efficiancy of any line (ML/RL/WL) is increased by at least 50% by any of the above.
Multi pivot lines are i believe nothing more than RL, ML's from higher TFs and i have been able to usually find most of them. The horizontal ones usually emanating from a high TF forks that when viewed in say 60 or 240 min appears horizontal- The copper chart (240min) above is an excellent example of this phenomenon as no one would say the angle of the forks in the daily/ weekly chart is horizontal, would they?

EurUsd + Copper

A superb example of a RL grid in action in EurUsd and HG Copper with a stunning d-sloping fork on what could be a pivot of great importance (and this fork could be suitable for a RL grid if it turns out to be what i call a 'controlling swing'). To see the background on this chart watch this video
Can you see the AB=CD pattern in the daily Copper chart?

Wheat (May11)

EURUSD

Same template/RL grid as last week....clearly shows that price has failed to get up n over the RL ( seen as the lower thick line in the 5min chart) and has retreated but as yet no lower low on each successive cycle. We have however, come a long way in a short time and i am not happy to go long euros and perhaps still favour the short side but like Friday am unwilling to commit to any trade plan until we see where this market is going. The DX is also an enigma to me at the moment and i have no feeling either way but until direction become clearer i am watching some very overbrought markets which i will be posting on this week....Coffee, grains ( especially Corn), beans,Copper just to name a few and YES the video (2) is finished and will be posted within 24 hrs and i have had time to finish some of the resources that have been unfinished and will be also updated/posted soon.

EURUSD...looking a bit toppy at 1.4440?

Have a look at the charts which are the same template but with different time frames. There is a confluence of resistance at the 1.4440 area....No short position yet but watching for the 'turn'. A correction-when it comes should have some 'meat on its bones' and even a 23.6% Fib RT would suffice.
1. look at the B-line indicator in the highest TF...will the short stochs turn under the thick 25-10-1 B-Line?
2. Look also at the RL's and how they have played their role in this trend like a game of snakes and ladders as price ascends through the RL grid matrix.
3. Look at the RL to the RHS of price in the 5 min chart and watch the confluence of the D/S warning line and the D-S RL. We have divergence building in RSI and MaccyD.
4. Remember all these RL/WL's are drawn by auto custom indicator and not manually but the true position of a line is a subject in itself. I believe there are at least 3 locations for every line and can prove it. This in effect means for every line you have three sets of different reactions which create a channel through which price moves with a top line centre line and lower line.