Premium Members Chart for DX_F for 7/24/13

7-24-2013 DX H

DXU13 has been riding down an Andrew’s Pitchfork channel, currently at confluence of an Ideal AB=CD and 25% Pitchfork channel line.

What defines an AB=CD Harmonic Pattern?

There is an impulsive move

  • A retracement of that impulsive move
  • A continuation of the impulsive move in symmetrical movement
  • The retracement offers a target of either the same symmetrical distance or an extension like 127.2 or 161.8

In this instance, DXU13 retraced the impulsive move 61.8%, this offers a reciprocal target derived from the BC leg, notice how the 161.8% BC extension (cyan color) correlates with the 100% extension fib

The ABCD pattern is the Harmonic interpretation of Elliot Wave’s ABC

No matter what you call it, the symmetrical move with confluence offers a definite scaling point if already in a short position, or offers a potential long position.  Because it is an important support test, it makes a statement when price cannot bounce off it … the statement implying the bears are still seeking new value to the downside.

So 82.015 is the important support test, a close below this level AND a resistance test that holds offers a conservative short opportunity to the ABCD extension targets 81.704 and 81.307.

A hold above 82.052 (it’s ok if price breaches this level, the key is does it hold/close above this level) implies price is stalling or offering a bounce into resistance, the Pitchfork midline being the initial target, followed by the level where the B point was formed at 82.475.  A hold above there implies retracement mode of this Bullish ABCD Harmonic Pattern.  And a hold above the Pitchfork strengthens the probability of upside bias.