30M AUDUSD Sequence from 12/7 - Analysis and Endpoint Forecast
Updated
The AUDUSD sequence we'll be looking at starts on the 7th at 12pm at the 30M time frame. To preface the analysis, I should mention that I'm using a counting framework called 'Magenta', as well as an 'event locator' to provide an objective foundation for our count, and a tool that automates the counting and tracks the processes we'll be analyzing...
The current high of this sequence is .68138 and it may look like a single trend, riding and fluctuating the rising trend line, which by the way, is based on the low of the 2nd FCT (Fractured Counter Trend). (TIP: If you base you TL's on FCT points, you'll find that they're much more accurate. And fluctuating the TL is common behavior, esp. when the sequence/trend begins to wane...). So this sequence is actually a combo of 3 trends. The first runs the span of the large 131 pip highlighted box, the second runs from the high at point 37 to the low of the 57 pip box, and the third is in the process of playing out.
How do we know this? In Magenta, there's a process called 'the cycle' that consists of a repeating 2/4/6 count. This count can have a prefix and postfix (also called type/antitype). The T/AT uses the values 6 and 4. These can come in X or X/X form and can repeat. So the values 4, 6, 8 (4+4), and 10 (6+4) are all valid 'types.' If we repeat 6 we get 12, which is the cycle (2+4+6) - so that wouldn't be considered a T/AT but just another repetition of the cycle.
Trends have ways of communicating the type - which will always appear in the first or second pushpull (waves 1-4). In this sequence we see that the first FCT ends at point 4 then immediately goes into the second type value of 6 (points 5-10). A DMC (Double Marked Candle) ends the X/X type at point 10. Now the second rep of the cycle ends at point 26. So if we add our 6/4 onto that (now it becomes the 'antitype' - notice the elongating of the 4 compared to the 6 count...) we end at point 36 which is where another Magenta process ends - this one is called the 'prime' count. In this case it starts at 0 and repeats 12... hitting at 12, 24, then 36. We want to pay attention to points where processes converge... So this is what caused me to short this trend between points 37 and 38 at the level (.67913) and time indicated. The resulting drop may not look like much of a trend change, but technically it is. It contains a FCT (points 44 to 49) that runs in the opposite direction of the FCT's in the preceding trend. This makes it a downward structure.
What's interesting about this move down is that it continues to use the 6/4 values from the previous trend. We're counting down now so point 37 is zero, 38 is '1', '6' hits at 43, we skip 44 since it's an FCT terminal, 45-48 is our 4 count, 49 is also a terminal and so is skipped, and the trend ends at the DMC low. Then, in a volatile move up, price regains the trend line, starting to fluctuate it once again... I've seen this happen before and when you have these downward and upward 'topping sequences' - they often use the T/AT from the larger sequence. If that happens here, we'll see a 6/4 move up (which I believe is currently happening). The 6 count looks to be spread over pushpull 1 (waves 1 and 2). The final box (far right) may be the final FCT, so our count skips the terminals... If point 56 is the FCT low, then we should see a 4 count and then a new high (absolute highs/lows are never counted in Magenta). We should then see a directional change for the entire sequence, breaking away from the current trend line.
The size and length of future movements cannot be forecast with any existing framework, which is why I give no profit targets. But if it plays out as above and you decide to trade it, then enter as I did after point 37 - wait for a high, then a spot in the following candle where you know that another new high is not possible unless a new event is created (which would put us beyond our 4 count and invalidate the forecast). Place your stop 2 pips above the absolute high.
The current high of this sequence is .68138 and it may look like a single trend, riding and fluctuating the rising trend line, which by the way, is based on the low of the 2nd FCT (Fractured Counter Trend). (TIP: If you base you TL's on FCT points, you'll find that they're much more accurate. And fluctuating the TL is common behavior, esp. when the sequence/trend begins to wane...). So this sequence is actually a combo of 3 trends. The first runs the span of the large 131 pip highlighted box, the second runs from the high at point 37 to the low of the 57 pip box, and the third is in the process of playing out.
How do we know this? In Magenta, there's a process called 'the cycle' that consists of a repeating 2/4/6 count. This count can have a prefix and postfix (also called type/antitype). The T/AT uses the values 6 and 4. These can come in X or X/X form and can repeat. So the values 4, 6, 8 (4+4), and 10 (6+4) are all valid 'types.' If we repeat 6 we get 12, which is the cycle (2+4+6) - so that wouldn't be considered a T/AT but just another repetition of the cycle.
Trends have ways of communicating the type - which will always appear in the first or second pushpull (waves 1-4). In this sequence we see that the first FCT ends at point 4 then immediately goes into the second type value of 6 (points 5-10). A DMC (Double Marked Candle) ends the X/X type at point 10. Now the second rep of the cycle ends at point 26. So if we add our 6/4 onto that (now it becomes the 'antitype' - notice the elongating of the 4 compared to the 6 count...) we end at point 36 which is where another Magenta process ends - this one is called the 'prime' count. In this case it starts at 0 and repeats 12... hitting at 12, 24, then 36. We want to pay attention to points where processes converge... So this is what caused me to short this trend between points 37 and 38 at the level (.67913) and time indicated. The resulting drop may not look like much of a trend change, but technically it is. It contains a FCT (points 44 to 49) that runs in the opposite direction of the FCT's in the preceding trend. This makes it a downward structure.
What's interesting about this move down is that it continues to use the 6/4 values from the previous trend. We're counting down now so point 37 is zero, 38 is '1', '6' hits at 43, we skip 44 since it's an FCT terminal, 45-48 is our 4 count, 49 is also a terminal and so is skipped, and the trend ends at the DMC low. Then, in a volatile move up, price regains the trend line, starting to fluctuate it once again... I've seen this happen before and when you have these downward and upward 'topping sequences' - they often use the T/AT from the larger sequence. If that happens here, we'll see a 6/4 move up (which I believe is currently happening). The 6 count looks to be spread over pushpull 1 (waves 1 and 2). The final box (far right) may be the final FCT, so our count skips the terminals... If point 56 is the FCT low, then we should see a 4 count and then a new high (absolute highs/lows are never counted in Magenta). We should then see a directional change for the entire sequence, breaking away from the current trend line.
The size and length of future movements cannot be forecast with any existing framework, which is why I give no profit targets. But if it plays out as above and you decide to trade it, then enter as I did after point 37 - wait for a high, then a spot in the following candle where you know that another new high is not possible unless a new event is created (which would put us beyond our 4 count and invalidate the forecast). Place your stop 2 pips above the absolute high.
Order cancelled
Looks like the market has something else in mind... maybe next time.
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