Can I Put You On Hold ?

One of the reasons I don't like trading during a FED meeting or report out, is I have seen things like the wave that is shown below on the cash chart of the EUR/USD pair - the rough inverse of the U.S. Dollar.

Eur/USD Cash - 15 Minutes - Channel

Anyone who sold the pair into the FED meeting lower-low was quickly reversed. (I did not, and that is why I feel like writing up this observation). OK, the turn-around might be understood as a typical whipsaw. But look at the upward wave - 1,2,3,4,5? Where is the 50 - 62% retrace for wave 2? Where is the clear non-overlapping extension for wave 3? To me, such a wave is the reason wave counters often make statements like, "well, anything 'can' happen - but let's see what is most likely". 

I mean, if this wave was the "thrust from a triangle" then it might be more understandable. But is even the clear (e) wave of a triangle here? Not present - at least not in any reasonable proportion. No, if you measure the retrace percentages, the largest single retrace is the first one in the channel at 23.6%. That is astounding.

Rather, I have become more and more convinced that the reason for waves like these is that the so-called "trading algorithms" are being employed more aggressively. The market-makers know there are wave analysts out there, so they must serve them up something that is very difficult to understand. A computer can keep track of how many people sold at the low, in what size, and how to get the most out of them. A human simply can not. A human waits for the retrace to enter the trade. The computer does not provide one. 

Yes, stops and reversals may prevent ruinous losses, or even recouping or turning around and profiting on the trade. But, it's not that. Look at the pattern. That is the item of concern. Why are such clear squeezes occurring? How can volatility be so compressed? Who is operating systems that slice-and-dice every tick to keep patterns like this in such tight control?

I do think a pattern like this - that puts one on hold until it breaks - is largely A.I. driven. A similar pattern is now being made in the possible ((c)) wave of the ES and NQ futures. And just like Nancy Pelosi and Mitch McConnell can keep the country on hold waiting for economic relief, and like Boris Johnson can keep the U.K. and the Eurozone on hold pending the definition of a Brexit deal, apparently traders just "must wait" until - for whatever reason - until the algo's have squeezed out every ounce and can't squeeze out any more.

In fairness to Elliott Wave, such a pattern might be an extended fifth wave of a third wave, or it might be another one of those out-sized B waves. But, is it worth one's capital to try to discover which? The pattern is bumping up against its upper daily Bollinger Band. Just how long will it bump?

At some point soon, the Dollar and the Euro may turn. I'm looking for a "painful" turn - like an outside key reversal day or something similar. But, until the pattern breaks, it is what it is.

Have an excellent start to the evening.

TraderJoe