Spi EWT vs Momentum, huge post from ze blog, still ongoing...
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M'kay...
The good ole SPI (or in this case the IGMarkets equivalent) got me started on this whole EWT and Momentum combination, and is currently providing some cool analysis stuff.
I am concentrating purely on the hourly here, though if given time I will try to get in some larger timespan stuff now that I am getting an apparant hang of this way to visualize price movement.
Right, first up the Hourly...
This chart is pretty full but bear with me as I will chop it up into segments ... I am a bit hapmpered by the charting package as on these timespans and lower, I only get a certian amount of historical data...
Anyways.. to the chart! Hurrah!
I'm sorry, the chart is huge n is coverd in mess... Chart was current live prices at 10:00am AEDST.
The main things piquing my attention at the moment are the various wave counts marked first in green, for a larger timespan, and then in Blue for the "current" wave...
Right... from what I have seen here and other instruments... the MACD gives good clues for trend completion.
the best clue on the hrly chart occured back in october 20, marked by the lowest red ellipses on the MACD and by the ellipses on price... mice little trend down marked as wave 2, in green and some nice clean momentum counts...
why was this nice? mkay, strong turn indication on the hourly via the ellipsed MACD divergent lows from price...Bottom of A and Bottom of C in Black...
MACD momentum then gave clues as per previously written "rules" about what waves were what...
Wave 1: Looking at the blue wave now marked wave 1 (which I didn't know was wave 1 at the time... Wave 1 is often the shortest and apparantly weakest wave
Wave 1 gives clues to the length of wave 3 Wave 1 will complete after the MACD moving averages have crossed the zero line.
And at wave 2:
Wave 2 can retrace up to 100% of wave 1, or as little as 23%.. lower timespans give clues to the end of wave 2... The top of wave 2 is a conservative entry to wave 3 or place to add The bottom of wave 2 will show on the MACD moving averages as a higher low.
Which leaves us with stuff to aid a trade... The bottom of wave 2 will show on the MACD moving averages as a higher low. The top of wave 2 is a conservative entry to wave 3 or place to add
Wave 3 cannot be the smallest wave. Wave 3 will go at least as far (pip or point wise) as a 1.618 fibbonacci extension of wave 1 Blue wave 1 confirmed the heck out of itself by porviding a following wave 2, and a strong wave 3 ...
Now... rules for end of wave 3 and start of wave 4...
The end of wave 3 (wave 4 soon) is marked by momentum change when price reaches the wave 1.618 fibbonachi extension of wave 1
Wave 4 GENERALLY retraces between 50% and 61.8% of the complete length from start of wave one to end of wave 3. Lower timespans give clues to the end of wave four.
Wave 4 is a re-test of the region of wave 2.
A tad difficult here as momentum change is not obvious for top of wave three... HOWEVER... at 1.618 Extension of wave 1, Marked by Thick Blue dashed line... Price DID begin to fail... and a legitmate short would have worked well so far.
I reckon we are in a wave four OF ONE OF EITHER the GREEN or BLUE sequnces... danged if I know which :)... but if one looks at the larger sequence in green, that too has hit a 1.618 extension off wave 1 Green....
More to come re targets for wave 4 of each particular flavour... but last chart shows possible...
around time of now in last chart, the blue lines give target areas just looking at the last internal wave up of previous mentioned Wave 3 Blue.
The Red dotted lines give target areas based on the Wave 2 Green or ENTIRE blue sequence.
The Green Dotted lines give targets based on the Entire GREEN sequence.
Oh n by the way I have started looking for longs on EURUSD :)))
(20min delay)