CTA means CEREBRO Thinking Aloud
I am currently preparing for my final CMT Level III exam which I expect to do in May 2014. In the meantime I think I can use this seeking alpha blog to my benefit by sharing my technical analysis to the wider audience, with the expectations of certified technical analysts or just even followers of technical analysis to critique my work.
My first post will be on GBPUSD. I was looking at it to short as the RSI was repeatedly above the 70 line. However, just because the RSI is overbought doesn't mean that the trend will change, but further upside is limited. The trick is I believe is to check past chart movements to see how long the security was over 70.
I am also realizing that using momentum indicators is not enough. As such I will begin to incorporate Elliot Wave Analysis into my trading. This will slow my trading substantially but it should be beneficial in the long run. Initially I got the count wrong.
Wave iv went into the region of wave i. So that made my analysis null and void. I think this is the more appropriate count.
I only did the move recent price movements and am only focusing on daily charts at this point. As I continue to do more analysis I will expand to both Weekly charts for a more long term view as well as the 4-hour and 15 minute charts for a much shorter view.
GBPUSD appears to be in a double zigzag corrective wave formation. I believe that it is in the second part of the double zigzag, with wave a' being completed. Wave b' may end between 1.595 (funny enough in the wrong count I was getting this as a target) and 1.561. From there I believe GBPUSD can go to 1.6775 where I wave c should end.
If GBPUSD enters this region next week I will exit my short position that I have on GBPUSD @ 1.61595 and monitor to take a long position.