Simple's Green Room

[pennies2007]

Always follow the larger time frame on TDI setups, not the smaller ones. When you have two opposing TDI patterns, you have to look to the larger time frame to figure out what's happening.

Also in play here is my knowledge of Elliott Waves. Corrective patterns during bull runs that begin with a tight falling wedge are always counted as Wave A. These types of patterns give way to a temporary reversal that goes back to between the 61.8 and the 78.6 fib retraces. Then they drop hard. The target is 1.618 times as long as the initial Wave A. So basically, if we use SG's fib boxes, we're looking for a move down into the second fib box with a targeted hit at the lower trade level. In this case, that's the 1.45923 mark so I'm aiming at 1.46 as my TP.

Here's the hourly chart. You can see the TDI trendline retest and it's already curling back down after it formed a negative divergence at the last high.

So the odds are really good that we get a deep retrace. After that, I expect EA to rally and make new daily highs so I'll be looking at long positions after this pattern is complete.