Click on the chart to enlarge it.
Here we see a weekly chart of the Aussie Dollar, and once again the chart seems pretty busy. From the monthly and two-week charts we know that we're looking in the late July to early August 2002 period for a potential Ocean based setup and buy signal. I've marked that area of the chart (see NMC2 pane) with the label “Setup Being Studied” to isolate it amid the other annotations.
The NMC2 ZeroHit occurred on the bar ending July 26th and was followed by two additional bars (weeks ending Aug. 2nd and 9th) where no Ocean-based rules allowed an entry.
Finally, during the week of August 16th a buy signal occurred and we entered the long trade. Additionally, an NMC ZeroHit developed just prior to our entry, reinforcing the validity of the trade (arrow in NMC pane).
Also notice that prices were trading above their NMA and Fast NMA and were finding support at the time of the ZeroHit (labeled NMA and Fast NMA Support on prices). Also note that the NMM ROC was generating a Slingshot formation at the time of the ZeroHit setup, another clue that the trade would have impressive energy should an entry be triggered.
An additional important item to point out pertains to the situation surrounding the entry. First note that a prior NMC2 ZeroHit setup and entry has occurred during February 2002 (see NMC2 Zero Hit in NMC2 pane at far left edge). When a setup or multiple setup occurs, it's useful to know that it's occurring within the context of a pre-existing setup and entry signal that is already in force.
(This is the end of Part 5. Go to Part 6.)
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