Click on the chart to enlarge it.
This is an analysis of the Australian Dollar, beginning at the monthly level. Let's take a moment to briefly go through the entire chart and then turn our attention to the 2002 setup in question.
This is a busy chart because the bars have been compressed so that an entire decade of price action and Ocean formations can be seen. Note that in 1994 (far left) the Ocean Cross Kiss ZeroHit developed simultaneously on both NMC and NMC2, setting the stage for a 2+ year advance in the Aussie Dollar.
As is often the case when a ZeroHit is forming, prices had crossed above both the NMA and Fast NMA and they were providing support for the anticipated advance. Notice also that NMS (bottom pane, dark cyan) had crossed above it's moving averages (Fast NMA in blue, NMA in red) and was crossing its zero line, all textbook Ocean developments.
After the Cross Kiss signals there were two very clean and profitable add on trades during 1995 (shown with arrows in NMC pane). Then in mid-1996 the entire monthly range formed above the upper NMA boundary (labeled Price Extreme), indicating that the advance was over-extended and prices were likely to weaken.
As detailed in other examples, any subsequent price deterioration from here would be grounds for an exit. The price weakness did in fact appear and an exit would have been triggered, allowing us to get out very near the top. Of course multiple timeframe analysis would probably have allowed us to more skillfully craft an exit, but that's not part of this example.
(This is the end of Part 1. Go to Part 2.)
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