Potential scenario trade plan for the week ahead. CFTC COT report Euro shorts return to Jan 2016 levels. “EUR 124K short vs 109K short last week. Shorts increased by 15K”

This is an internal structure of price as outlined in my post ‘E/U Past Present Future'(shown in black with an arrow) last week.
1. If Wave C of the larger degree correction on the monthly has printed then price should resume the down trend off the monthly 21 EMA (Yellow).
2. Notice the monthly stoch cycle down and price trying to get below the monthly 5 EMA. We’ll get an update Nov 1st but stoch cycles can last for several candles.
3. The blue box on the Hourly shows price has been falling for the month of Oct. but might be in the position for an a-b-c correction in red a week before the US election.
4. The recent decline is a textbook impulsive wave with a 5 wave count (white) and the 3rd wave having it’s own 5 wave structure (black).
5. Corrections typically follow and impulse wave before the trend continues. Look for wedge, flag, or channel type patterns with overlapping waves on an hourly as an example.
6. If the daily stoch wants to cycle up for a week into a fib zone then set up trade plans to sell high. Try to hold a position into a longer term trade.
7. As long as price stays below the 55 EMA and the 21-55 MACD stays below zero on the daily sellers are in control and price will stay below the monthly 5 EMA.
8. Set up shorting E/U on the hourly & 15 min charts knowing that price may be in a correction or sideways market.
9. Between the 50 & 61.8 fib is a longer term level that was respected several times for over a year so that could be an interesting area if price reaches it (light blue rectangle).
10. Notice how all the moving avg’s are splayed out for the first time in months on the daily & monthly.

Let’s see how it plays but anticipate a possible slower market ahead of the US election and volatility during & after it as well. We saw an example of volatility Friday with the FBI statement about Clinton, the perceived the leader, before that statement as it affected the mindset apparently soon after. Note: FOMC and NFP ahead of election could make for some whipsaw action as well.

Daily (Monthly)

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.