Trade Week Analysis for 20/08/12

NB: there seems to have been a problem accessing my new page on 'TS and the Ichimoku' indicator. It should be accessible now though I hope!

Last week was yet another quiet one for trend trading and TS.  Many traders have been complaining about the choppy markets for the last two weeks or so. I had some warning of this at least thanks to the daily Ichimoku charts of the indices. Stock markets have continued to trade ‘risk on’ though and the S%P500 has closed above the key psychological level of 1400 and just under the major S/R level of 1420. 1420 is the area of the triangle trend line break for the weekly chart of the S&P500. Further ‘risk on’ trade sentiment will most likely continue to be choppy and I remind you again of last April and how the whole of that month was choppy. We may be in for a similar session here again where trading is best taken from either bounces off key S/R levels or from trading the shorter time frame charts.

NB: I will be very cautious with any ‘risk on’ signals due to the ‘Cloud’ resistance on the daily Ichimoku USDX and EURX charts. See my FX Indices Analysis for further explanation here.

E/U: Trading within a symmetrical triangle still. I’ve moved the trend lines a bit to reflect the latest S/R. The weird thing is that if price continues to climb back up from here then the inverse H&S that I've had on the monthly chart for some months now will still be valid!

I will look to SHORT the E/U on any new TS signal, if ‘risk off’ returns and if price breaks out and down from the triangle pattern. 

I will look to LONG the E/U on any new TS signal, if ‘risk on’ sentiment prevails and if price can break, close and hold above the triangle.

E/J: Price has broken out and up from its symmetrical triangle pattern. This pair already gave a TS long signal earlier. I won’t chase this trade though.

I will look to SHORT the E/J on any new TS signal and if ‘risk off’ returns.  The monthly pivot, previous trend line and 4hr 200 EMA are in the way of price falling though.

I will look to LONG the E/J on any new TS signal and if ‘risk on’ sentiment prevails.

A/U: There is still a possible bull flag pattern in play on the monthly chart. Price has broken down below a daily support trend line though. Price could fall 500 pips from this point and still conform to the monthly bull flag pattern! The A/U gave a TS short signal late on Friday.

I am SHORT on the A/U on the new TS signal.

I will look to LONG the A/U on any new TS signal and if ‘risk on’ sentiment remains.

A/J: Price has hung around the 83 level all week. This is a major level of previously strong S/R. I’ll be watching this level closely again this week. Price is still trading within a triangle on the monthly chart.

I MIGHT SHORT the A/J if ‘risk off’ returns but there are lots of road blocks in the path.

I will look to LONG the A/J on any new TS signal, if ‘risk on’ sentiment returns and if prices breaks, closes & holds back above the 83 level.

G/U: This pair has continued to bounce around. I still want price to clear some significant levels before I’ll trade it again.

I would look to LONG the G/U on any new TS signal, if ‘risk on’ remains and if price holds above the daily 200 EMA.

I would look to SHORT the G/U on a new TS signal, if ‘risk off’ sentiment returns and if price breaks and holds below the 1.56 area.

USD/SGD: The strong S/R level of 1.241 was too difficult to pass and price has rebounded back up from this level. I have moved the bull trend line a bit lower to reflect these new S/R levels. This means the triangle break from last week has been cancelled.

I will look to SHORT the USD/SGD on any new TS signal, if ‘risk on’ sentiment remains and, especially, if price can hold below the 1.241 level. 

I will look to LONG the USD/SGD on any clear new TS signal and if ‘risk off’ sentiment returns.

 

Swissie USD/CHF: Price is trading within a symmetrical triangle and is right on the weekly and monthly pivot and 4hr 200 EMA.

I will look to LONG the USD/CHF on a new TS signal, if ‘risk off’ returns and if price breaks up and out of the triangle. 

I will look to SHORT the USD/CHF on any new TS signal, if ‘risk on’ returns and if price breaks down and out from the triangle.

Loonie:  USD/CAD: Price has now broken down below the bear trend line of a symmetrical triangle on the weekly chart dating back to October last year. This could be signal to a further 1000 pip move down if triangle break out theory holds true!

I will look to LONG the USD/CAD on any new TS signal and if ‘risk off’ returns. 

I will look to SHORT the Loonie on any new TS signal and if ‘risk on’ returns.