Weekly Market Update 01/02/2012 – Harmonic Patterns
This weeks video update is looking at 4 pairs, AUDUSD, AUDJPY, NZDJPY and the GBPNZD that are showing nice harmonic patterns, Elliott Wave formations with associated Fibonacci percentages.
The AUDUSD and AUDJPY have formed bear gartleys, which are classic harmonic patterns. The AUDUSD bear gartley is currently challenging the X point of the gartley and is being confined within the upper trend line of a rising channel. It is also diverging on the daily RSI.
The AUDJPY has also demonstrated completion of a bear gartley 8 pips below the 88.6% PRZ and is now retesting this important Fibonacci perectage resistance area with RSI divergence, again on the daily.
Other harmonic patterns include the NZDJPY has formed bear bat. The NZDJPY bear bat is finding resistance at the 94.1% Fibonacci retrace of XA, with associated RSI divergence on the daily chart.
Again in our run of harmonic patterns GBPNZD has compelted a bull bat as it may have begun its countertrend reversal 13 pips above the 88.6% retrace of XA on daily RSI divergence. The harmonic bat patterns offer very good risk/reward, with low risk and high potential for larger reward. The bear gartley has a less favourable risk/reward but is a high probability win pattern.
Harmonic patterns work well when used in an Elliott Wave context, the GBPNZD may have completed wave 3, coinciding with the completion of the bull bat pattern in close proximity to the 88.6% retrace of XA. Elliott Wave counts for the AUDUSD and the AUDJPY bear gartleys are less clear. Elliott Wave count for the NZDJPY bear bat strongly suggests the high probability of a wave 3 completion coinciding with previous significant structure (X of bear bat) on daily RSI divergence.
Harmonic patterns with key associated Fibonacci percentages are clearly seen in this video
APPLE INC FORMS A BEAR BAT, POSSIBLE ELLIOTT WAVE 3 COMPLETE
Currently short Apple Inc. It has formed a bear bat on an overbought 4H and coming into overbought daily. This stock has been defying gravity for the past 2 years, as it has been diverging all this time. Elliott wave count suggests a possible top in place and completion of wave 3 blue, now within this possible correction there is the bear bat.
GBPUSD T1 HIT FOR 64 PIPS PROFITS, 2nd HALF POSITION STOP ROLLS TO BREAK EVEN
GBPUSD has now managed to complete three profitable harmonic patterns consequetively, bear bat, bull alternate bat and bear gartley. The last bear gartley has attained T1 for 64 pips profits and stop on 2nd half is now at breakeven.
GBPUSD 2nd HALF POSITION TAKEN OUT ON BREAK EVEN
GBPUSD rallied, after hitting taken T1 for the 1st half position, to take out the 2nd half position by 5 pips for break even. It did this with a long doji/shooting star type candle, then moved sideways and eventually dropped into some fib confluence of the ABCD legs. It's now exhibiting some bearish continuation on the 4H RSI.
