- Price broke all important lines in last 2 weeks, but most importantly last week it has attempted to break the Kumo too. Whatever the reason was behind the pull back (reasons are not important at all!), Price finally showed impressive recovery in terms of points and %. However if we check what this correction was enough for in terms of (or western type averages), well, it is less impressive.
- The weekly setup is neutral, with serious bias: Price belo Tenkan and Kijun, is located in the Kumo, weak Tenkan/Kijun cross happens above Kumo, Chikou Span is below past candles.
If you compare this setup with the Oct/2014 picture, then no need to explain further what is the difference and problem here. Further confirmation would be: weekly candle close below Kumo, lower low below 1815 and by then Chikou Span/pas Kumo cross.
- The upside seems to be limited, as there is quite a thick Kumo ahead (and above) price, which means you can consider this mkt as again only if it trades back above 2095!!! Until then, it is simply neutral, or below the Kumo it is bearish!!!
- Interpretation of gets a bit harder as jumped and forward Kumo adjusted quickly. Right now I'd say we are back to neutral ard 1980 "equilibrium" level, where we have Kijun and future Senkou B lines as major averages.
However as previous supp/res level is a lot higher still, the bias remains . It is obvious, that only above 2050-2090 we could call this mkt again.
- Heikin Ashi has an important message: consolidation ard the level of Kijun Sen, where short term momentum started to drop. As the bias is , we have to look for sell signals.
- It is difficult to determin proper sell levels, but I think below 1960 selling would start to accelerate again. Maybe we should wait for few more days to see how consolidation goes, see if it makes a higher high or not. Anyway, I still have confidence that we have to think about re-enterring shorts, as sooner or later we'll see a next leg down.
(Actually I already did some on friday on the spike).
So the trade is short. This mkt is not at all. The question is how much and when to sell. Don't let your accounts to be killed by increasing , too tight stops, too big positions, or in fact with the combination of these.
The most important message to you again:
Adjust your traded position size! ATR(20), which I use as measure to calculate and always adjust position sizing (1 trade unit size as I call) has doubled in last two weeks! This means that with same capital on risk and same X ATR initial stop loss, I can trade appr. half of the size now, compared to what I had few weeks ago.
By the way if this weekly close will take place within the Kumo, and prints an inside bar Heikin Ashi weekly candle, then there will be chance for further consolidation. Bears will lose control and Bulls will try to push it back above 2000-2020. Be cautious, use trailing stops!
We never know what market will really do.
I am paying special attention to monthly Kijun - during last Monday decline, as wave 3 surpassed the 2,618% projection, I realized the 4,236% projection was in confluence with monthly Kijun, so I entered long, with all my body shaking... :-)
If an Heiken Ashi candle closes below that Kijun, and the following candle makes a lower low, target becomes the monthly cloud... and then one should look for EW and S&R confluences, as usual...
So, overall, at the moment, we are still in a bull market, even if the weekly cloud doesn't hold price and chikou, and even if we get a bearish kumo twist, cause all that would mean (for now) a confirmation of a deeper wave 4.
If then the monthly cloud doesn't hold... we will be entering in the scenario I've posted... and then "ladies and gents, please fasten your seat belt"...
Yes this is quite an advantage of Ichimoku that you can find fibonacci built into it as well :-). That's one reason which proves it can be a system on its own, no need to add more indicators really.
Also very smart to look for confluences via multi time frame analysis! And it is not a problem to go counter long, until you know your risk, and you know your chances.
Well, it depends from the point of view... it is not really a Bull mkt any more... I rather say it is neutral mkt with lot of tension between bulls and bears. It will be decided once we move out of the Kumo on the weekly chart.