In earlier charts it was mentioned that the push up out of the 3/31 might serve as a useful model for how this push up out of 8/20 would behave. In both advances it was in the third week up ( blue boxes ) that price reached the inner edge of my proprietary S/R Band. The white arrows compare where price was when the Stochastic used to show the Multi-Week Rotation began to roll over. The white circles show the area of recent behavior compared to prior behavior at a similar point in the rally. In each instance the arrows mark a day with a strong up close, followed by reversal day followed by a recovery day, both of which found support on the blue dotted 5 day SMA. In the prior push higher "day 4", the blue arrow, put in a new daily low but closed on the 5 day ma. This is significant because when the MW Stochastic turns lower, the support represented by the 5 day ma would normally break. Notice that this "day 4" was 16 days into the advance. The historical average for the Multi-Week rotation is 15 days and a few days after "day 4" the Stochastic turned back up, signaling the start of a new MW rotation. Tomorrow is this advance's "day 4". The blue arrow points to the level of the MD ma which is also at the level of the Weekly Pivot, a significant area of S/R. So, if the same bar behavior is going to persist then this area of MD support will not break. There are two factors that complicate this outcome. First, tomorrow is day 13 of this advance while the prior "day 4" was day 16. Second, trading on Monday was closed and this can alter the dynamics of this move. The important marker for this comparison is how price behaves when and if it tests MD support. If price behavior continues to match the prior behavior then there is reason to expect this similarity to continue. If price breaks MD support in a significant way then a test lower to 1.17980 - 1.18070 becomes a possibility.

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Rather than cut and paste from the prior comment it would be better if you re-read what was written with the benefit of the associated charts to appreciate the significance of what this chart is telling us.




In the earlier comments the importance of the 5 day ma in evaluating if the pattern of the prior 3/31 advance would be repeated was pointed out. A caveat concerning the Monday holiday was brought up suggesting this might have an effect on how this comparison play out. On this chart the Middle of the MD S/R Band represents in this instance the last level of MD support that needs to hold to avoid a test lower to the bottom edge of the band. Notice the Uptrend line from the start of this advance is in this same area. Notice the POC of the MD Period on the right hand MP is also right here. And, you can see the MP volume bulge on the bars themselves as price entered this area.

Multi-Week rotations typically are comprised of three Multi-Day rotations and the Stochastic is marked to show this indicator is looking for the 3rd MD Rotation Low.

So what does this tell us? Clearly there is interest in this price level and several indicators are providing an explanation of why that is the case. If price were to lift out of here then in hindsight we would say "Look, it was just ABC pattern correction in the on-going uptrend." But will it?

At the Close of today price was finishing off a 24 Hr Rotation Low which suggests there will be an attempt to push higher in the Overnight trading. Serious resistance will be encountered on the 1.18640 area where the earlier support offered by the MD ma and the Weekly Pivot broke and may now represent resistance. If price has found the Low of the MW rotation ( 3 rd MD Low ) then this resistance will eventually break.

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09/06 " If price breaks MD support in a significant way then a test lower to 1.17980 - 1.18070 becomes a possibility. "



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Someone has mentioned to me that the concepts I have been discussing are hard to understand.
My response is that the overwhelming majority of people attempting to trade will ultimately fail and this reality argues that learning how to trade will be difficult. So if you encounter concepts that explain how price behaves but you find them difficult to understand, this might suggest that you are on the correct path.

But I could be wrong.

Perhaps someone else will come along and pick up the 6E ball.

Good luck.

glennts 

09/06 " If price breaks MD support in a significant way then a test lower to 1.17980 - 1.18070 becomes a possibility. "

Price broke support and headed to the next level of support on a higher timeframe, exactly the area marked on your chart. So far it seems like it's found support there.

Thank you for taking the time to share your your charts and insights.

I have found them very useful for explaining what is going on with the 6E and what price is likely to do next.

This is an update to the Monthly chart posted on August 25th... new contract, same story. Much of my long term analysis is based on repeated behavior recognition, trying to see if what price is doing now is similar to how price behaved in the past trying to discern the extent to which this replication will persist. If you go to the earlier chart and read the comments it will help you understand what this chart is suggesting. I've marked the bars that tested the parallel uptrend lines at 17 months. Compare the 18th bar on the left with the current bar and notice the position of the 1 Yr Pivot. Make you own decisions about how / if this similarity is significant.




This weekly chart shows a tentative H&S bottom pattern...tentative because until it breaks the neckline it is not a valid H&S pattern. I have been expecting more out of this bounce and this pattern leans in that direction however the markets are not here to fulfill our expectations and we must take and trade what it gives us. If corrections in an ongoing trend are typically of the ABC variety then that has yet to occur and a neckline break will go a long way to accomplishing that. The 1.195 - 1.2 area would be a reasonable target if / when this were to push higher. Other wise, if price follows thru on the Monthly chart suggestion, price is ultimately going lower.

Good luck, be careful.

If you have followed the earlier posts then you can see that in the last few days as the Monthly Bar came to a close it continued to match the earlier behavior from 2018. This chart looks back to 2014 and highlights additional points of comparison between recent and prior behavior. Earlier was shown how the average interval of rotation was determined. When I apply indicators to charts it is always with this average interval in mind. On this chart the Stochastic does a fairly good job of representing the Multi-Year rotation of the Euro. I use a strict formula for the Stochastic inputs derived from the average interval of the rotation. The Period K value is 1/2 the rotation interval. The Period D value is 1/2 the K value. The Smooth factor is also 1/2 the K value. Added to the Stochastic is an additional MA which I refer to as Period E ( white ma ) and this is equal to the K value. Arrows have been added to show that in each instance of this significant turn in the Euro, the Month that broke the uptrend lines coincided with the crossing of the Period K and Period E plots. So, the inputs for the Stochastic on this Monthly time period are: Period K = 16, Period D = 8, Period E = 16. Smooth = 8.

In the earlier posts I've used the term price rotation but in truth, I am referring to cyclicality in price behavior. My experience has been that Cycle Analysis is a loaded term that often triggers the naysayers so I have avoided that term in the belief that the usefulness of this approach would speak for itself. Look over the observations made during this series of posts and the assumptions made about future price behavior and draw your own conclusions.

This is a thread with a long history and it's followed by a lot of people, but lately @glennts has been pretty much alone in posting.

He has expressed a concern to me privately about wanting to see the level of participation go up. I am sure there are many traders who are trading 6E, and who might want to be not trading all alone in their vacuum. Also, the thread is getting views, just not many posts, so there is an interest.

Well, you can lead a horse to water etc, so if no one wants to, or has any ideas or thoughts on the Euro, or any ideas or thoughts on matters that affect the Euro (which is hard to believe), then they won't drink, I guess.

But if anyone is trading this contract (we can include the micro as well) and would like to be in a conversation about it, or to put up some charts and discuss them, well, the thread's here and waiting.

Bob.

glennts 

Look over the observations made during this series of posts and the assumptions made about future price behavior and draw your own conclusions.

Great analysis @glennts.

It can be a bit daunting with a lot of indicators on the charts and several chart with different bar lengths, so based on my understanding of your work over quite a few years I will take a go at a simplified analysis of some of the multi day and multi week rotations mainly based on the multi day (5 days) and the multi week (15 days) simple moving averages and how price interacts with them. I am not going to go far back in time - just a few weeks - keeping it very rudimentary. Doing a full analysis would make this a very long post, so I will just post some highlights.

First just a quick recap. You have mentioned that there are several rotations in the market, and among those the multi month, the multi week, and the multi day. Saying it another way there are many rotations in the market with different lengths, and because they are of different lengths these rotations (or market moves up and down) are obviously also nested inside each other. The larger rotations will impact the shorter rotations and push them around, either translating them to the left, center or right. Or put another way - measured from rotation low to rotation low - the rotation high/peak will either be found left, center or right of the total rotation length.

A 5 day moving average will "average out" all price movements being 5 days or shorter. A statement we can make is that the 5 day moving average provides support on the upside of a multi week (approx 15 days) rotation, and resistance on the way down into a multi week rotation low. When price manages to break the multi day average then that is a significant event, and it says something about the direction of the multi week rotation.

The attached chart is a 1440 minute chart with a custom session template ending at 15:30, and I put on the 5 and 15 day moving averages.

1) The daily candles are trading below the blue MA, so the market is looking for the low of the multi week rotation. At 1) price moves above the MA, starting a new MW rotation to the upside.

2) It hits the green MW moving average, and gets sent back down below the blue MA. So we are backside of the multi week rotation again - looking for a rotation low. So this MW rotation was very short to the upside, and got sent back down again (left translated MW rotation). This makes a statement about the next larger rotation - the multi month. For the MW rotation to left translate (i.e. it is only able to go up for a short amount of time compared to how long it spends on the downside looking for a low) the multi month cycle must be rotating down looking for its low.

3) The 5 day moving average keeps providing resistance, showing us that the market is trying to push down during this multi week rotation. It cannot really progress though, and the move above the blue MA shows us that a new multi week rotation to the upside has started.

4) This time the multi week upside rotation even manages to take out the swing high that the previous MW rotation put in. But then upside rotation runs out of steam and rolls over and the multi week rotation is pushing way down into a new swing low.

5) Another (short lived) attempt to rotate higher on the multi week

6) but gets sent back down by the multi week MA.

7) With the short lived multi week rotation (5-7) to the upside (left translated) I would have expected a long move down on, i.e. long multi week rotation to the downside. That did not happen though... This was a short MW rotation, and at 7) it starts a new MW rotation to the upside.

8) Here the daily candles try to retrace down into a multi day rotation low, but really just go sideways to test the blue multi day MA (support) before starting a long MW rotation to the upside. Compared to the MW rotation out of )3 this rotation is very "right translated" to the upside, indicating that something bigger (multi month) is rotating up with it.

9) The blue MA stops providing support, and we are on the backside of the multi week rotation again.

10) Even the green multi week moving average had turned up out of 7), but it too rolls over here - making a statement of the next larger multi month rotation. The multi day MA provides resistance, so the multi week is rotating to the downside looking for a low.

11) Here the daily candle closes above the blue MA, trying to start a new multi week rotation to the upside, but it immediately fails and the market moves down hard. This would be a very left translated multi week rotation to the upside, which quickly fails.

Right now - without leaning on other analysis methods - I can only say that because we are below MD resistance the multi week rotation is still looking for a low. The market found something 1-2 bars ago though - it is the low of a multi day rotation. So currently the multi day rotation is to the upside looking for a high. What happens at the blue moving average (i.e. MD resistance) will provide more information about what the MW rotation is doing. If the MW rotation is still down, then we can expect to find a high around the blue moving average. If, however, the MW rotation has found its low and is now rotating higher, then the blue resistance will break and a move up the green MA is likely.

With this post I wanted to show that it is possible to extract a lot of information about the rotations (cycles...) by just using simple moving averages. Using only the SMAs on the charts building "rotational arguments" (or with other words performing cycle analysis) is in my opinion a good way to get into the core concepts of what glennts is discussing.

2021-10-04 futures io

Geir 

....Right now... I can only say that because we are below MD resistance the multi week rotation is still looking for a low. The market found something 1-2 bars ago though - it is the low of a multi day rotation. So currently the multi day rotation is to the upside looking for a high. What happens at the blue moving average (i.e. MD resistance) will provide more information about what the MW rotation is doing.

Several thing to notice on the Monthly chart at the start of this week. At the break of the white uptrend line, a parallel to the 2017 - 2018 uptrend line, price found support on a black dashed line that is a lower parallel to the similar descending trend line across the Jan and June Highs. On first glance this suggests that a channel is possibly shaping up and the price's next move will be a bounce off this 'potential' channel bottom. There is a black ma that I consider the backbone of these Multi-Year Swings... it is clear how it was Resistance for several years of the prior decline and then became Support up out of the 2020 Lows. With the test at last week's High, it has demonstrated that it is once again Resistance, further confirmation that the Multi-Year rotation has rolled over. It has been my observation that the slope of the valid channels that form tend to align with the slope of this "backbone" ma. Black dotted lines have been added to show how this aligned channel would appear. Notice the bottom line crosses the bottom edge of the S/R Band and although I do expect price to eventually fall to that edge and likely push lower, I don't necessarily expect it to happen immediately... but that is dependent on price holding the current lows. If you look at how these Monthly bars interacted with the "backbone" ma you can count a 4 - 5 bar rotation on or around the ma. Last week's High is a candidate for the last 4-5 bar (month) contact and if that stands then price has no reason to push higher to re-test that level for the next few months. And that of course suggests that the current Lows will not hold.

At this point this analysis is just a reading of tea leaves and a lot will be revealed by how this week plays out. As of this post, price is pushing up to test the resistance of this week's Pivot at 1.15970. In a strong downtrend, Weekly High's will typicaly be made on a Monday or Tuesday and the Weekly Pivot is as good a place as any to find that High. If price breaks the Pivot and pushes up to a Thursday - Friday Weekly High then this is likely a push up out of a Multi-Week Rotation Low and if the 1.161 - 1.162 area can be broken then 1.165 - 1.17 becomes a possibility.

That being said, I will not hesitate to sell a break of these Lows.

Good Luck, Be Careful