ESU2017 - The Alchemy of Harmonic Analysis
I posted a prediction, two of them actually, several days ago which relied on simple harmonic analysis. Someone commented that they had no idea of what they were looking at or what I was talking about. I wish to rectify that.
This missive is not an in-depth treatise of the dark arts, don't expect to find that here, or at this time. These arts are dark for a reason.
But consider this as more of a brief explanation that I can refer future readers to.
What we're looking at is the foundation of the analysis that I conduct. I usually start by identifying corrective B-C moves, which remedy the trend, and then work backward to find the A-B impulse leg which produced them. I like to think of them as echoes of the energy produced by the original move. Be it buyers or sellers, exhaustion sets in and a rebalancing must occur.
Looking at our ESU2017 chart above, the B-C corrective move up starts from a low of 2430.25 (on 8/11) and ends at the high of 2474.00 (on 8/16). The time frames of the B-C leg and chart time slices must also be taken into consideration, but that's a tale for another time.
Scanning backwards (look to the left - past is often prolog), I try to discern the impulse leg which is usually a few good thrusting bars which must show some sort of conviction. For those playing at home, these bars are RED within the A-B impulse, and there are more than a few.
Additionally, for the A-B impulse to be legitimate, it must surpass at least two other prior impulses of lesser degree. These have been called out in the graph. This is the A-B section of the pattern.
Here we locate A at a high of 2488.5 (on 8/8) and it terminates back at where we began, B at a low of 2430.25.
Once A-B-C waves have been mapped, I simply use the Trend Based Fib Extension tool to project future price targets as to where the harmonic should complete the A-B-C-D pattern.
This method is deceptively simple and there are a lot of details that I've neglected to explain. But the accuracy is astonishing. Our C-D projection was hit precisely at 2415.75 on 8/21 at 10:00:00. There was not even a penny difference between ESU2017 low and the Fib extension projection.
This missive is not an in-depth treatise of the dark arts, don't expect to find that here, or at this time. These arts are dark for a reason.
But consider this as more of a brief explanation that I can refer future readers to.
What we're looking at is the foundation of the analysis that I conduct. I usually start by identifying corrective B-C moves, which remedy the trend, and then work backward to find the A-B impulse leg which produced them. I like to think of them as echoes of the energy produced by the original move. Be it buyers or sellers, exhaustion sets in and a rebalancing must occur.
Looking at our ESU2017 chart above, the B-C corrective move up starts from a low of 2430.25 (on 8/11) and ends at the high of 2474.00 (on 8/16). The time frames of the B-C leg and chart time slices must also be taken into consideration, but that's a tale for another time.
Scanning backwards (look to the left - past is often prolog), I try to discern the impulse leg which is usually a few good thrusting bars which must show some sort of conviction. For those playing at home, these bars are RED within the A-B impulse, and there are more than a few.
Additionally, for the A-B impulse to be legitimate, it must surpass at least two other prior impulses of lesser degree. These have been called out in the graph. This is the A-B section of the pattern.
Here we locate A at a high of 2488.5 (on 8/8) and it terminates back at where we began, B at a low of 2430.25.
Once A-B-C waves have been mapped, I simply use the Trend Based Fib Extension tool to project future price targets as to where the harmonic should complete the A-B-C-D pattern.
This method is deceptively simple and there are a lot of details that I've neglected to explain. But the accuracy is astonishing. Our C-D projection was hit precisely at 2415.75 on 8/21 at 10:00:00. There was not even a penny difference between ESU2017 low and the Fib extension projection.
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