NO MORE EASING?

As anticipated in my previous post THE EURO DEBATE, the Euro has entered its last violent decline and since Monday has so far fallen an astonishing 270 pips! Looking closely at the tower-top pattern, we can see that the market has tested the 1,3365 level six times over the time span of a week before it collapsed after the FOMC meeting. W. D. Gann has written that if a market does not break a level four times, it probably never will. Also, he says, “Sell at old tops”, which is quite different from today’s standard technical analysis mantra “Old support becomes resistance”, meaning sell at old lows.

A correctly scaled “squared out” chart will show us that a specific pink vector is repeating over and over again. Looking even CLOSER we identify those vectors as geometric angles, with price action now following the most aggressive 8x1 angle.

If we continue this trend with a ruler, we will very soon be at a value of zero; However, no market moves in a straight line forever and there will be corrections along the way. If we are not in already, we must wait for the market to come to us for a trade. Looking forward, it is quite likely that we will encounter strong resistance around 1,3070. If we just shoot by there, we will confirm the down trend at 1,3000 and be very soon at 1,27. 

Keeping things in perspective, we still have around 56 trading days for this trend to end (given by the cycle and the triangle apex). Therefore, despite this rapid breakout, there will surely be more trading opportunities in this range over the next three months.