Click on the chart to enlarge it.
Here we're looking at a two-week chart of the Aussie Dollar to see how it fits in with our previous analysis of the monthly timeframe.
The Genesis platform allows us to combine the ranges of bars to create unique timeframes that other traders can't see. Here we've combined the range of each two-week period to create a single bar, thus a two-week chart.
Remember that at the monthly level we were looking at a Cross Kiss ZeroHit that began at the end of July 2002 and extended through September. Therefore on this two-week chart we should focus on what was happening after the end of July in order to see if we can find a solid Ocean setup to reduce risk and improve entry.
And we see that NMC is generating a Cross Kiss ZeroHit on this time frame as well. We weren't aware of the monthly Cross Kiss until July 31st. Here the two-week chart began a Cross Kiss ZeroHit sequence on the bar ending July 5th, with a repeat setup on August 2nd.
Based on a very precise set of Ocean entry rules, no entry occurred on this chart between the July 5th setup and the Aug. 2nd setup, nor on the following bar, ending Aug. 16th, so while the monthly setup was in force we've got an identical setup developing here on the two-week chart.
Of course, should we find a setup and entry on a lower timeframe any time after July 31st (the earliest possible signal from the monthly) we will be acting within the Ocean rules to honor the entry signal and take the trade.
Additionally, many of the supportive Ocean formations are confirming the validity of this setup. Prices have rallied above their NMA (magenta) and are finding support there, while the Fast NMA (green) has crossed from below to above the NMA for the first time since February 2000 (almost 2 years).
As we saw on the monthly chart, the NMA Bands (dashed magenta lines) have pinched down. Only twice in the last decade have they been any tighter (indicator to quantify this not shown here to save space). The bands have begun to expand out, leading the way to an increase in volatility in the direction of the anticipated trade.
Finally, the NMM ROC (bottom pane) has formed the Slingshot formation by violating its lower boundary, implying a powerful advance if a buy signal occurs. This is a very simple analysis of the two-week chart but it tells us all we need to know to want to dial down yet again, hoping to finesse our entry even more.
(This is the end of Part 4. Go to Part 5.)
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