Sunday, October 21, 2012

Trade Week Analysis for 22/10/12

4 TS signals gave 460 pips last week!

Last week: My TradeSpotting system excelled again last week. There were 4 clear TS signals and these yielded a maximum of 460 pips! That equates to a month worth of pips for some traders who aim for just 100 pips per week! 

My most recent Epiphany moment for the Ichimoku Cloud and my TS trading system has been supported by my trading results this week. I had been cautioning for some time that I was looking for a particular alignment with the Ichimoku Cloud charts on the Indices and this came through last Monday. Thus, I was confident with my ‘risk on’ TradeSpotting signals. The A/U, whilst not delivering a clear TS signal as it was too broad based, did deliver 120 pips on a clear trend channel break. The USD/SGD also gave 120 pips on its bearish wedge breakout that started last week.

I consider that I have made another major leap forward with my TradeSpotting trading system. 

BTW: I have removed some pages of information from my blog site as I prepare to roll this into a more functional form of a web site. I have also made a brief update to my Stocks: Oct page. 

This week: The key instrument to watch at the beginning of the week is the USDX. This is trading near a major trend line where a break up might spell ‘risk off’ but a failure to break up might spell a return to ‘risk on’. See my FX Indices Review post for further information here.

Price on the Ichimoku Index charts is still in an alignment that is more conducive to ‘risk on’ momentum though BUT there are some warning bells tolling for me here. Price on the daily USDX and EURX Cloud charts is edging closer towards the Cloud. This means that there could be a re-alignment towards ‘risk off’ building and I will be watching for that. I’m currently noting the possibility for the USDX to re-trace and you can read more about this in my previous post on the FX Indices. All of this means that, as ever, I am open to trading either ‘risk on’ or ‘risk off’ depending on what the markets present. 

E/U: Price broke out from trading within the symmetrical triangle on the weekly chart last week and this gave a reasonable trade of around 80 pips.  The bullish inverse H&S pattern on the monthly chart is still valid here too for the time being.  Last week’s candle, like the week before, was another ‘inside candle’ and these represent consolidation or indecision. This candle was a bullish print though.  It also has a slight ‘hanging man’ appearance to it too which is a bearish sign when they appear at the top of an up move.  Price is above the Cloud on both the 4hr and daily Ichimoku charts which is a bullish sign although price is retracing a bit. The 1.3 level is still significant as it is a whole number and psychological level. Price retreated to end the week just above this 1.3 level.
  • The E/U gave a TS signal ‘SHORT’ late last week and this is up about 30 pips.
  • I will look to LONG the E/U on a new TS signal, if ‘risk on’ returns and if price breaks out and up from the trading channel.





E/J: Price has broken out and up from trading under the bear trend line on the monthly chart that dated back to August 2008! This move gave a fantastic haul of 150 pips last week!  Last week’s candle was a bullish engulfing candle. This is at odds with the E/U which is noteworthy. There seems to be a bullish pattern printing on the 4hr chart being either a ‘bull flag’ or a ‘descending wedge’. I will be looking for a TS signal, either short or long, that occurs along with a trend line break from this trading channel. It is important also to note that, unlike the E/U, I don’t have a TS signal yet on this pair. Also, price is trading above the Cloud on the daily and 4hr now which is bullish.  
  • I will look to LONG the E/J on a new TS signal, if ‘risk on’ returns and if price closes and holds above the flag pattern.
  • I will look to SHORT the E/J on a new TS signal, if ‘risk off’ returns and if price breaks down from the flag pattern.





A/U: Price broke out and up from trading within the downward trend channel and this gave a fantastic 120 pips last week! Price has since retreated a bit and looks to be trading within a descending wedge of flag pattern, much like the E/J. I find it interesting that this pair did not retreat as significantly last Friday, amid all of the bad news, as some of the other pairs. I also find it odd that I did not receive a TS signal to 'short' here, as I did with the E/U because, of late, the Aussie pairs have been more ‘risk’ sensitive than the Euro.  Price is trading below the Cloud on daily chart but above the cloud on the 4hr chart so a reversal may be in progress here. Price action is still printing a bull flag pattern on the monthly chart. This pair will benefit from any Chinese stimulus news. A word of warning here though: Gold is currently trending down and, if this trend continues, it may pull the Aussie pairs down so, keep an eye on this metal.
  • I will look to SHORT the A/U on a new TS signal, if ‘risk off’ returns and if price breaks down from the trading channel. 
  • I will look to LONG the A/U on any new TS signal, if ‘risk on’ returns and price breaks up from the trend channel.  





A/J: Price broke out from trading within the downward trend channel and this gave a fantastic 180 pips last week!  I don’t consider the bearish H&S pattern on the daily chart valid anymore so have removed it. Price seems to be forming a ‘bull flag’ pattern on the 4hr chart. Price is now trading above the Cloud on the daily and 4hr chart. This pair will benefit from any Chinese stimulus news and, also, from BOJ Yen intervention so is one to watch for sure. Keep an eye on Gold here though too: Gold is currently trending down and, if this trend continues, it may pull the Aussie pairs down.
  • I will look to SHORT the A/J on a new TS signal, if ‘risk off’ returns and if price breaks out and down from the flag pattern.
  • I will look to LONG the A/J on any new TS signal, if ‘risk on’ returns and if price breaks out and up from the flag pattern.





G/U: Last week was bearish again and the weekly chart still shows we’ve had a double top for 2012 with price from last April. I’ve currently got price trading within a descending broadening wedge pattern though which is a bullish pattern.  Price is trading within the Cloud on the daily but below the Cloud on the 4hr chart so the G/U may continue to be a bit choppy.
  • I will look to LONG the G/U on any new TS signal and if ‘risk on’ returns. I would want to see price on the Ichimoku 4hr and daily chart trading above Cloud first though too. 
  • I would look to SHORT the G/U on THE new TS signal, if ‘risk off’ sentiment returns and if price breaks, closes and holds below the daily Ichimoku Cloud chart. 





USD/SGD: Last week’s candle was a reversal style pin bar candle so this pair may be on a move back up.  Price is trading below the Cloud on the 4hr and daily chart so needs to move a fair bit more to be bullish here. I’ve had a TS signal here but it has been rather weak and unconvincing.
  • I will look to LONG the USD/SGD on THE new TS signal, if ‘risk off’ returns and if price closes above the Clouds on the Ichimoku charts.  
  • I will look to SHORT the USD/SGD on any new TS signal and if ‘risk on’ returns. 




Swissie USD/CHF: Price broke down and out from trading within the symmetrical triangle on the daily charts last week but only yielded up to 50 pips; a disappointing ‘risk on’ move for sure! Price is trading below the Cloud on daily and 4hr chart. 
  • I will look to LONG the USD/CHF on a new TS signal and if ‘risk off’ returns.  I’d like to see the Ichimoku charts in agreement here first though.
  • I will look to SHORT the USD/CHF on any new TS signal. 



Loonie:  USD/CAD:  Price broke out and up from the smaller symmetrical triangle on the daily chart last week but in a rather disordered and random way. This was out of sync with the USDX for some of the move. Price is trading above the cloud on the 4hr chart and just emerging from the Cloud on the daily chart so a reversal may be in progress here as well. This pair gave a TS signal late last week that is already up 50 pips.
  • I MIGHT look to LONG the USD/CAD on any new TS signal and if ‘risk off’ returns. 
  • I MIGHT look to SHORT the USD/CAD on any new TS signal and if ‘risk on’ returns.




Kiwi: NZD/USD: I’m not a huge fan of this pair but I’m watching it again anyway. Price broke out and up from trading under a bear trend line last week but there was little follow through. The ‘spinning top’ from the previous week warned of this indecision! Price is now trading within the Cloud on the daily but just below the Cloud on the 4hr chart so is likely to continue to be choppy.  I would want to see alignment on the 4hr and daily Cloud chart first though before trading this pair in any direction. Last week’s candle was an indecision style ‘spinning top’ candle.
  • I MIGHT LONG the Kiwi on a new TS signal and if ‘risk on’ returns.
  • I MIGHT SHORT the Kiwi on a new TS signal and if ‘risk off’ returns.





EUR/AUD: I started watching this pair again recently. Price is still trading above the Cloud on the daily but within the Cloud on the 4hr so it may continue to be a bit choppy. I’ll watch this pair more with the next round of AUD interest rate news and if Gold/Commodities continues to fall.
I probably won’t trade this pair this week. 




Gold/Silver: Both look now to have formed more of a ‘double top’ on their daily charts. The daily 200 EMA might help to hold up price though. I watch these to give me clues on the Aussie pairs.





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