ALL USD pairs are shaping up for a bullish move in this coming up due to the possible result of NFP as well as over extended daily runs, therefore we can see a bearish momentum in GOLD as well in this coming up week. On this 4 hr chart, we are seeing the price action broke down the support trend line, and patiently waiting for a lower high to develop or a bearish flag to confirm the momentum down to 38.20 or 61.80%.
Understanding Modern Monetary Market is a must. Reading through it will bring a lot of anger, but it is a necessary pain. It will clear your mind of clutter and noise. It explains what has been happening over last 5 decades but it does not explain how it remained obscured by education and media peddling bullshit.
Additionally, read and listen to Richard Duncan who will explain supply side of economics and how deficit and sufficit exist simultaneously in modern world and how funding works.
For entertainment and good info read and listen to Mike Norman.
I wish you all every success.
The biggest change in today’s market compared to the one in 1930s is in the definition of a trend and counter-trend move. We have four major classes of market: Stock market, forex, commodities, and bonds. The Elliott Wave Theory was originally derived from the observation of the stock market (i.e. Dow Theory), but certain markets such as forex exhibit more of a ranging market.
In today’s market, 5 waves move still happen in the market, but our years of observation suggest that a 3 waves move happens more frequently in the market than a 5 waves move. In addition, market can keep moving in a corrective structure in the same direction. In other words, the market can trend in a corrective structure; it keeps moving in the sequence of 3 waves, getting a pullback, then continue the same direction again in a 3 waves corrective move. Thus, we believe in today’s market, trends do not have to be in 5 waves and trends can unfold in 3 waves. It’s therefore important not to force everything in 5 waves when trying to find the trend and label the chart.
2) Fibonacci
2.1 Introduction
Leonardo Fibonacci da Pisa is a thirteenth century mathematician who discovered the Fibonacci sequence. In 1242, he published a paper entitled Liber Abacci which introduced the decimal system. The basis of the work came from a two-year study of the pyramids at Giza. Fibonacci is most famous for his Fibonacci Summation series which enabled the Old World in the 13th century to switch from Arabic numbering (XXIV = 24) to the arithmetic numbering (24) that we use today. For his work in mathematics, Fibonacci was awarded the equivalent of today’s Nobel Prize.
2.2 Fibonacci Summation Series
One of the most popular discoveries by Leonardo Fibonacci is the Fibonacci Summation series. This series takes 0 and adds 1 as the first two numbers. Succeeding numbers in the series adds the previous two numbers and thus we have 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89 to infinity. The Golden Ratio (1.618) is derived by dividing a Fibonacci number with another previous Fibonacci number in the series. As an example, 89 divided by 55 would result in 1.618.
2.3 Fibonacci Ratio Table
Various Fibonacci ratios can be created in a table shown below where a Fibonacci number (numerator) is divided by another Fibonacci number (denominator). These ratios, and several others derived from them, appear in nature everywhere, and in the financial markets. They often indicate levels at which strong resistance and support will be found. They are easily seen in nature (seashell spirals, flower petals, structure of tree branches, etc), art, geometry, architecture, and music.
Some of the key Fibonacci ratios can be derived as follow:
• 0.618 is derived by dividing any Fibonacci number in the sequence by another Fibonacci number that immediately follows it. For example, 8 divided by 13 or 55 divided by 89
• 0.382 is derived by dividing any Fibonacci number in the sequence by another Fibonacci number that is found two places to the right in the sequence. For example, 34 divided by 89
• 1.618 (Golden Ratio) is derived by dividing any Fibonacci number in the sequence by another Fibonacci number that is found 1 place to the left in the sequence. For example, 89 divided by 55, 144 divided by 89
2.4 Fibonacci Retracement and Extension
Fibonacci Retracement in technical analysis and in Elliott Wave Theory refers to a market correction (counter trend) which is expected to end at the areas of support or resistance denoted by key Fibonacci levels. The market is then expected to turn and resume the trend again in the primary direction.
Fibonacci Extension refers to the market moving with the primary trend into an areas of support and resistance at key Fibonacci levels where target profit is measured. Traders use the Fibonacci Extension to determine their target profit.
Below is the list of important Fibonacci Retracement and Fibonacci Extension ratios for the financial market:
Elliott Wave Theory Fibonacci Retracement and Extension
2.5 Relation Between Fibonacci and Elliott Wave Theory
Fibonacci Ratio is useful to measure the target of a wave’s move within an Elliott Wave structure. Different waves in an Elliott Wave structure relates to one another with Fibonacci Ratio. For example, in impulse wave:
• Wave 2 is typically 50%, 61.8%, 76.4%, or 85.4% of wave 1
• Wave 3 is typically 161.8% of wave 1
• Wave 4 is typically 14.6%, 23.6%, or 38.2% of wave 3
• Wave 5 is typically 61.8%, 100%, or 123.6% of wave 1
Traders can thus use the information above to determine the point of entry and profit target when entering into a trade.