[fxbaja]

Some of the Asian countries were closed Monday June 6th, but Japan was open.

Let's flash back to our original lesson, the breakout of the Asian high/low. For those of you that have been here since then, one year ago, you probably have a better grasp of how being familiar with support & resistance can assist us.

The attached 30-min EUR/USD uses indicator Time_modified 2. We adjusted the U.S. session start time to 14:00 GMT. This makes the color overlap the blue European session. We also have RSI(4) and EFT.

We want to plot a fib retracement. There are 2 choices for the low. The European low of June 3rd 12:30 1.44498 is too far for our intra-day use.

We have an up arrow pointing to the pivot low on the 14:30 candle of 1.45599. The high = June 5th 23:15, which is just ahead of the de facto Asian open of 00:00.

We see that it is pretty quite and range bound through the Asian session.
Last Friday ended at the 161.8 extension, with Mars 270-degree acting as further resistance. Sunday price action could not beak through to the upside, and bounced down to the 38.2% retrace fib area at 1:30 to establish session low (1.46211).

From the bottom, the pair made a choppy ABCD upward to the FE 100 (candle closed at FE 100). The candle's wick retouched the session high at the end Asian. This is a bounce trade entry for intermediate/advance level traders.

Now let's look at the bounce down off of the Asian high. It dropped slightly below the Asian low to 1.46153. Notice that the candles closed at the actual 38.2% fib. of 1.4619.

Breakout traders unaware of the 38.2% fib would have entered and likely stopped out on the spike back up. That movement up was a 88.6% retrace, which is also an intermediate/advance-level skill entry for a SELL.

The subsequent push down at 09:30 was successful in breaking that support. Switching to the 15-min interval will also show adherance to fibs. How can we tell that this push down was significant?

The 09:30 30-min candle closed at 1.46081, well enough below the Asian low. The 2 peaks prior to that had declining RSI(4). The 08:30 and 09:00 candles closed with a lower RSI than the 1st peak of 6:30-07:00.

The 15-min chart also shows the 09:45 candle closing at 1.46081. Price proceeded to bounce off the 50% fib and back above the Asian low. When we understand that these are natural bounces, we are not going to panic and immediately exit the trade.

One of the stop-loss options was (just above) the 23.6% fib level, which is about the same as the pivot high of 1.46364 on the 09:30 15-min candle. This made the risk about 30 pips, rather large considering the target options.

Fib action and probability has us targeting the 61.8% fib of 1.45966 as a safe exit level. However, the reward to risk ratio was not palatable if entered at 1.46081.

The HAS candles (not shown) were red from pivot, all the way to the 61.8, on both the 15-min and 30-min charts. The EFT also had declining strength at wider peaks. BAJA bearish divergence at top on Sunday.

[fxbaja]

Planetary SQ9 Indicator by Bumasoft

Plots planetary aspects in degrees. We found application of Moon and Mars to be particularly effective. Generally, we apply Moon and Mars at intervals of 90-degrees. Settings must be adjusted for currency pairs or instruments, and listed below. In the settings/edit function, make a set each for the Moon and Mars, with adjustments to digits and multiplier:

For EUR/USD and other USD Pairs Above 1.00000, Except USD/JPY

Planet 1 = Moon. The rest of the planets should be set on -1 (minus 1).
Angle = 0 (degree)
Digits = 5
Multiplier = .0001

Repeat the process 3 more times, but change each Angle to new intervals of 90, 180, and 270. This completes the Moon set of 4.

Now we must make a set of 4 for Mars. The Planet 1 setting should be 4. The rest of the planets should be -4 (minus 4). The other inputs are the same as above for the Angle, Digits, and Multiplier.

For EUR/USD and other USD Pairs Below 1.00000, Except USD/JPY

Digits = 4

****

For Yen (JPY) Pairs and USOIL Above $100:

Digits = 5
Multiplier = .01

For Yen Pairs and USOIL Below $100:

Digits =4
Multiplier = .01

If you want both on the same chart, you must make one set at 4 digits and 1 set at 5 digits

****

For XAU_USD (CFD for Gold Futures)
SPX500 (CFD for S&P 500 Futures)
NAS100 (CFD for Nasdaq 100 Futures)

Digits = 4
Multiplier = 1.0

Intervals of 45-degree provide more S&R for this instrument. Therefore a set of 8 angles for each planet are:

0, 45, 90, 135, 180, 225, 270, 315-degrees

****

US30 (CFD for Dow 30 Futures)

Digits = 5
Multiplier = 1.0

Intervals of 45-degree provide more S&R for this instrument. Therefore a set of 8 angles for each planet are:

0, 45, 90, 135, 180, 225, 270, 315-degrees

[fxbaja]

Attached is split screen of 30-min EUR/USD charts. The left has session colors and HAS candles. The right features PSQ9 and HAMa. Both have the same fib retracement plot as per last post.

Its been nearly 24 hours since this pairs has bounced down from the top at the end of the Monday Asian session, end 06:00 hour. We mentioned intermediate/advance entries at top or at pullback.

The 61.8% fib was exit for conservative intra-day. Price made a 100% retrace during the 19:00 candle period.

The purpose here is to show the difference between the candles. While the right chart has wicks denoting some choppiness, the left hand chart's HAS candles keep things smooth.

If the top of the HAS candles do not have wicks, it means the downside move is stronger.

The HAMa stayed read all the way to the 100% level.

The 100% retrace level is always very significant and excellent exit point. At the very least a strong bounce is highly probable. We can see that it did bounce up to the 61.8, which means the retrace was 38.2% (inverted ratio).

Another observation is that when we switch the left chart to the 15-min interval, we can see the European low as a breakout point too.

The money management part includes moving your stop-loss. It can be trailed by pivot highs or fib levels. The 15-min chart would be better for viewing pivots.

Here is info on Heiken Ashi candles:
Heikin-Ashi: A Better Candlestick

Note the attached chart uses a smoothed version of the HA.

[fxbaja]

Here is the bigger picture. Very simple fib retrace plot.

High = May 4th 12:00 1.49388
Low = May 23rd 08:00 1.39682

61.8% = 1.45680

We saw the retrace run above the 61.8 to the Mars 270-degree (red) Friday, as detailed before. The bounce down was supported at the 61.8.

Just very basic and easy to see S&R.

[fxbaja]

Continuing to track EUR/USD. The 1st attached 30-min chart illustrates the reversal off the 100% retracement level at the bottom and price action in relations to the S&R.

Price met the Mars 270-degree as resistance again, and bounced. Moon 180-degree also there. Support for bounce was the 23.6 fib, for about 20 pips. White fib channel's 261,8 also there at support level.

Once price hurdled the Mars 270 resistance, that same line acted as support, along with the High (0% yellow) and Moon 180. Pair made the hit to its 138.2 extension during the 14:30 candle period.

Focus your eyes out and include the deepest low, marked NFP, which was the time U.S. Non-Farm Payrolls data released. That is Point A of the ABC.

A = June 3rd 12:30 low 1.45301
B = June 5th 23:00 high 1.46559
C = June 6th 19:00 low 1.45560

FE 61.8 = 1.46842 (hit June 7th 14:30)
FE 78.6 = 1.47191
FE 100 = 1.47635

***

The 2nd chart is a split screen. The chart on the left is a 4-hour with SQ9(Price) indicator. We posted the start price = 1.39682 low of May 23rd, and pointed to adherence at the 360-degree level June 1st.

We labeled the left chart with blue Low, High, and 50%, denoting the same swings on the 30-min (right). The low is the same as the NFP. The 50% retrace on the 4-hour is the same as the 100 retrace on the 30-min plot.

The swings on the 4-hour chart hit SQ9 levels. This includes the 540-degree which is about same as the 30-min 138.2 extension level.

Repeat: We can take advantage of recognizing support & resistance (S&R), while trading intra-day OR swing/position trading. S&R is not a system.

[fxbaja]

And here is the same 4-hour chart with SQ9. This has ABC with Point A at bottom. This makes current price level at the FE 78.6.

[fxbaja]

Apply the Gann_SQ9 indicator with intervals of 360. In edit function Angle = 360. The "level" setting just means the number of 360-degree lines you want. Use a low number like 8 or 10 now, that will last a long time on the weekly.

The Andrew's Pitchfork Plot:

Handle = July 13th 2008 high
Higher corner = May 1st 1.49388
Lower corner = Jan 9th 2011 low

To get interior S&R lines of the APF, we repeat instructions; Rename APF to AL1 by editing in the "Objects List" tab.

Insert AML indicator.

We can see the swings are moving at intervals of 360, which was Gann's full circle theory. We of course have been also espousing his technique of using fractions of the 360.

The last pullback was to the 720-degree, where the AML's Upper ML1 intersects (dotted grey color). The label of AL1Upper_ML1 will appear when you mouse over that line. ML means Median Line. The Upper ML1 is the 1st line above the Median Line (middle fork).

Note that when plotting the APF for this example, the 2nd click after the handle must be the upper corner. That is how the APF is slanted. Otherwise, the ML Upper and Lower labels will get reversed. Not a big deal while trading, but to follow lessons, we need to reference the correct labels.

The last pivot low at that 720-degree is the same point as the 4-hour chart's low just posted. So what we're doing here is;

1) Look at weekly chart

2) Plot on 4-hour with SQ9(Price) for S&R going up. Plot subsequent ABC swings.

3) Go to lower time-frame chart(s) for intra-day S&R and trigger.

[fxbaja]

Take that same weekly chart and change it to a daily. Also change the Gann_SQ9 angle to 180, which means we want 180-degree intervals.

We can now see today's price action at the 540-degree level. We can also see how the daily candles refuse to close above the 1080-degree at end April, early May.

Now we can see the May 23rd low (at the 720-degree) candle close right at the AL1Upper_ML1.

[fxbaja]

Attached is a 3-way split screen with the aforementioned S&R. We used the 30-min on the upper left chart with HAS to show smoothed candles to keep trader calm.

The 1-hour right hand chart also uses same fib retracement plot (purple). There were 2 choices for the low. June 6th 19:00 1.45560 and June 7th 01:00 1.45625. Not much difference, since the Mars 270-degree line is where we want to exit, just above the 38.2% retrace level.

As it turned out, the market touched the 38.2% based on the June 6th selection.

The chart on the lower left is the 4-hour with the mentioned SQ9(Price) plot. We can clearly see the 518-degree line is the same level as previous high on June 5th-6th. This is also very close to our target.

And last, the fib channel's 261.8 also intersected at 38.2 horizontal fib.

This has been an approximate 50-pip retracement thus far.

***

FED chairman Ben Bernanke had his speech starting 19:45 GMT. We'll post our little review of that soon. Nothing he said was considered market-moving.

[fxbaja]

As the market awaits the high-impact EU GDP at 09:00 GMT, we have a 1-hour plot with the APF and ABC.

Handle = June 6th 06:00 high 1.46569
Upper corner = June 7th 18:00 high 1.46952
Lower corner = June 6th 19:00 low 1.45560

Change name of APF to AL1, then insert indicator AML.

ABC Plot:

A = June 3rd 12:00 low 1.44498
B = June 6th 06:00 high 1.46569
C = June 6th 19:00 low 1.45560

We can see the pivot low at June 8th 02:00 is supported by the AL1Upper_ML2.

Upper fork providing resistance with FE 61.8 at the moment.

We can add more lines (above upper fork) by matching up fib channel tool with APF's middle and upper fork lines. The red dotted lines are outer S&R generated by the AML.

They are equal in size/distance to the distance between the middle and outer forks. Therefore, the 1st red line above the upper fork is the same as a 100% expansion.