There are very few patterns I consider using in my trades, except some proven ones, such as the Shark, the 5-0 and my own prop patterns (Great White, Janus, Euclid, Deep Shark). However, there is yet another pattern for which I keep an eye out. It is the Elliott Wave's Diagonal Triangle, which most pattern traders would simply define as a wedge pattern.
The particulars of this pattern is its 3-3-3-3-3 wave patterns, numbered 1 through 5, with Wave-5 typically exceeding ("throw over") the pattern before turning precipitously down to lower lows. However, there is yet no such confirmation at this point that the pattern will roll over and carve out new lows, but I thought it worth sharing preemptively, in anticipation that such bearish unfolding is one probable outcome here.
I would recommend the trader to become familiar with the Shark and the 5-0 pattern (consult Scott Carney's "Harmonic Trading" books and website), as well as Robert Prechter, Jr.'s ElliottWave.com site for added instructions on the pattern. Both of these sites continue to teach me lessons on price action, harmonics and market angles.
I wish I could say that my proprietary predictive analysis/forecasting model would be self-sufficient, but I do like to turn to professionals who have a different view of the market, because there simply isn't enough mind and mind's eyes to see and perceive every subtleties when it comes to occult geometries.
In the case of the daily chart, for instance, you will notice that the lines seem to act as channels. However, for these to act as channels, they would have to be defined by lining tops or bottoms and drawing parallels to line up against an opposite price point. In contrast, these lines are what I have defined as momental lines, and they are simply defined by the geometry of a momentum, hence momental lines. What you end up defining is the anticipation of a price projection, not based on its static point (as would occur with horizontal price definitions), but based on the forward projection of a line which is anticipated to act as support/resistance across the entire life of the chart, regardless of its timeframe.
Feel free to Google "momental line + alcindor" or "momental line + 4xforecaster" to pull examples of charts in which I have highlighted these strange discoveries.
In any case, this chart's pattern may or may not roll into a complete EW's diagonal triangle, but the points, lines and geometries are all here, formed in the 4-hour (240-min.) chart, as if at the moment of rolling down ... Worth watching and waiting.
Preliminary targets (i.e.: until model releases signal, hence "Neutral" bias for now) are:
Excellent find. I couldn't agree more that a diagonal triangle is the best pattern to look for in Elliott Wave. They are rare and imply extreme opinion, which makes them even more difficult to trade. I found some lately, with the biggest in Amazon (AMZN) if you see my published charts. Thanks for the heads up on this trade.
4xForecaster
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Thank you @timwest! - I'll look that one up (AMZN) - David
4xForecaster
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06 JUN 2015 - Update:
From Twitter:
"AUDJPY held its ground since forecast; Expecting sheer resistance @ 95.825; Break below median needed: @TradingView"
As of this market's close, one can say that this pair played a good war game, as it held its ground, entrenched above the upper boundaries of that diagonal triangle. In fact, if you took a look at the pattern, it even seem that a smaller triangle was carved out as a an-ultimate tipping pattern. Still, I expect that all this meandering simple represents a form of consolidation as the larger diagonal triangle plays out its destined directional fate ... downward that is - I have defined an additional top-most value for the potential range of price action, and it seems that 95.825 might act as the highest tolerable upper range of this consolidation. Time will tell.
An alternate view of the pair also looks at a series of recalcitrant Kiss-of-Death pattern events, against a potential bullish diagonal, giving an overall impression of a major directional battle being waged until the last hour of the market. So, here too, time tell:
"AUDJPY: KoD to the DOWN-side? Or, broadening triangle to the UP-side? Very near - @TradingView | AUD JPY #Forex"
One fascinating aspect of this chart is its rich technical content. For instance, a "Kiss of Death", or "KoD" pattern has inscribed itself twice (defined as a harbinger of an imminent decline in price where a small parabola is followed by a deep parabola, in a fashion that mirrors the cup-and-handle, which has a deeper parabola first). In contrast, a 1-2-3-4-5 wave pattern has also come to completion, with a signature throw-under at Point-5, similar to the alternate diagonal triangle of Elliott Wave's kind (the alternate feature here has to do with its broadening character).
So, overall, there is a definite conflict, a "Battle of the bulges" so to speak.
Yet, the answer might not necessarily come from the rice field itself ... RSI might hold the directional clue as it wiggles through its own narrowing geometric space.
Cheers,
David Alcindor
4xForecaster
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06 JUN 2013 - Chart Update:
From Twitter:
"AUDJPY: The patterned RSI will have to break consistent to its history for a new high in price - via @TradingView "
As the chart continues to indicate, RSI consistently filters the underlying price action in terms of predictable support and resistance, regardless of price's relative position to its own S/R lines.
However, RSI also indicates that a significant market dynamic support will be required to hoist price above its sustained overhead trendline. In contrast, the underside remains a higher probability as RSI continues to constrained walk down its narrowing wedge.
Cheers,
David Alcindor
4xForecaster
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05 JUN 2014 - update: As Support Turned Resistance, Price Looks Poised To Roll:
As indicated in the chart, price has broken through a temporary trendline, rallied to validate its underside, and is now under the influence of a bearish trendline, looking poised to decline.
Forecast remains intact and in force.
Cheers,
David Alcindor
Sam0101
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i don't think so
4xForecaster
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@GohSam - True: Overhead trendline has been breached, so this is a no-go for sure - David
Sam0101
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yeah somehow i think it will reach 95.8. 95.4 is the middle ground for it to go down or sideway
4xForecaster
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04 JUN 2014 - Update: Wedge Breached To The Downside ... Timber?
Friends,
From 95.931 when I offered this directional opinion, price maintained a sustained downward course, and it has since breach the lower border of the wedge.
This was based on the anticipation of an EW Wave-5 impulse wave completion via a diagonal triangle at Point-5.
Expect price to continue its downward course. The predictive analysis/forecasting remains intact and in force as well.