The USDX is having a lot of trouble pushing down through the Cloud:
This chart shows how the USDX is now trading under the weekly 200 EMA and this may offer resistance to any return to moving back up:
The EURX looks like it has decided to camp at the daily 200 EMA for the w/e:
I mentioned last night that the S&P500 might be setting up for a trade and, it seems to have come through. An 80 pip move. The Nov $143 SPY Put went from $2.33 and is now at $2.48. (It would have been higher earlier!) That is an increase of 0.15 cents. That then equates to an ROR = (0.15/2.33) x 100 = 6.5%. Not a bad return for 1 day! (commissions not included)
The currency pairs haven't done too much. I'll update them in my w/e post. It's sunny here.
I got up early to roll some Puts. I just love the way a losing Option trade can be rolled to make more cash and bring in more profit. This type of trading seems to defy the Laws of Nature.
For now though, the boys are off to cricket and I'm heading to the beach.
Friday 12/12 (7.30 pm)
The USDX is making a go of getting down through the Cloud. Next week might be interesting:
So, to sum up the TS signals so far for this week:
A/J short= 0, G/U short = 100, EUR/AUD short = 140, A/U long currently up 15, E/U long currently up 25 pips.
S&P500: This looks like it is setting up for something...
Not much has changed from my 7am post. Check that out.
S&P500: Thought for today: A decision needed soon!
ThS&P500 will most likely bounce back up off the Cloud if the USD keeps falling. A rally in the USD though will most probably send this index down and into more choppiness within the Cloud. It is decision time for this index now...as per Mick Jagger....'get off my Cloud' OR get on with it and plough through it.
It's been a quiet Asian session with everything, except the USD/SGD, trading sideways. In 'waiting' mode...as per noted this am.
So, the USD fell, stocks ended pretty flat though, there was positive US data, fear (VIX) is falling but volumes were light. Not a lot to go on? My trading observations can explain all.....read on!
The USDX fell until it ran into the weekly 200 EMA
The EURX rallied until it ran into its daily 200 EMA
These were pretty good moves yet the only signal I got after this was on the E/U and a very weak one (I'd ignore) on the A/J. So, why wasn't there much more momentum on other pairs? Well, if you ask me it is all VERY clear why. You might just quip...it's due to low volume but I see it as being more due to the divergence on the daily vs 4hr Cloud charts. The USDX is trading below the Cloud on the daily chart, a 'risk off' kind of position BUT, whilst it is falling on the 4hr chart, it has yet to penetrate down through the Cloud. This is what I see as the reason behind the failed momentum to date:
The EURX is trading above the Cloud on the daily chart, in a 'risk on' manner and has just pierced back up through the Cloud on the 4hr chart, although it looks like it is struggling to stay above there:
So, I have NO expectations of any convincing moves until there is agreement between the time frames on both indices. This is very liberating, from a trading point of view that is!
The other exciting observation for me is that there were great trades possible last night off the 30 min charts during the London/US session on both the E/U and E/J. The E/U gave up to 60 pips and the E/J gave up to 100 pips! I am finding this pattern repeated over and over. That is, choppy 4hr chart trades = better 30 min chart trades! This predictable pattern, so rare with other FX systems, is hugely encouraging and very exciting!
So, I'm still feeling like Moses must have ..... in control of those 'Tablets'......
I'm watching the Clouds! A break and hold on the USDX below the Cloud will be hugely encouraging for some potential 'risk on' moves.
All of this turbulence though could just be a major re-adjustment before a major down move too. I'm not making any predictions, I don't do that. I simply watch the charts.
I'm just home and dog tired. the 'double top' seems to have evolved now though:
The A/J is seeming like it's setting up for a signal soon.
So, too, the USD/SGD:
The G/U as well:
The E/U and E/J too BUT I'm way too tired to wait up though.
Thursday 11/10 (6 pm)
A bearish 'double top' is still a possibility on the USDX:
The 100.5 S/R level is supporting the EURX making it look a bit bullish:
The A/U seems a bit undecided now after its move from today. I'll wait for a break of the 1.03, daily 200 EMA and the trend line:
Gold could still be forming a 'Bull Flag' which would possibly help drag the A/U up:
No new TS signals in play. It is still just the EUR/AUD and the A/U.
I'm out for a few hours now.
Thursday 11/10 (4 pm)
No real change. I'm still waiting to see if the USDX forms a 'double top':
No new TS signals. The A/U (that I missed overnight) is still going:
It is looking like we may be getting a double top on the USDX. I really want to see a break of the 4 hr 200 EMA before being convinced of a rally with the USD:
I had missed a TS 'Long' signal on the A/U overnight. I would have waited until after the employment data anyway. For now, I'm waiting for a close and hold above the 1.03, trend line and the daily 200 EMA level:
A wait for the 1.03 level would also probably see the A/U get back above the Cloud on the 4hr and, possibly, the daily Ichimoku chart. This would bring the A/U into alignment with a 'risk on' trend for the USDX and, also, for the A/U charts:
The USDX is still aiming for a possible double top or breakthrough:
The Aussie data whilst poor showed some promising trend in job growth so has actually boosted the Aussie pairs for now. My missed signal on the EUR/AUD is now up around 140 pips!
There was a great opportunity last night for US traders to trade the S&P500 ETF, the SPY:
The US session on Wed 10th October provided another great low risk opportunity to trade the SPY ETF intra-day on the S&P500. A clear TS signals to ‘short’ the SPY came during the US session when price was at the 1432.50 level. Thus, I would then look to buy a November $143 PUT. The PUT cost was $2.23 and this closed at $2.53, an increase of 30 cents. This represents a ROR gain of 13.5% for the low risk, short trade for just one day!
- Buy Nov $143 Put at $2.23
- Sell Nov $143 Put @ $2.53
- Profit = 0.30 cents
ROR = profit/risk
ROR= (0.30 cents/ $2.23) x 100
ROR= 13.5%
NB: I actually don't see the 'risk' of this trade being the full $2.23, or what ever the cost of the Option is. The reason being that this Option is not likely to go to zero during one trading day. yes, it might well go down but it would not go down by the full amount of the cost of the option.
NB: This gain shown above represents the maximum possible gain on this $143 SPY option ETF for the day. I have used ‘end of day’ and midpoint data to illustrate this example.
Thursday 11/10 (10.30 am)
The USDX continues to gain strength again. I'm watching for either a double top or a clear break and move higher above the 4hr 200 EMA:
I made a typo in my E/A notes earlier. Corrected now.
Hmmm. Maybe the USDX is simply forming a bull flag though. A break, and then hold, back above the trend line, monthly pivot and 80 level would be rather bullish:
US stocks retreated overnight amid concerns of a global slow down. Strangely, though, so too did the USD. That bearish 'Dark Cloud' pattern evolved and did spell a bearish move for the USD:
The EURX bounced back up off the 100.5 previous S/R level:
There wasn't a huge move in currencies and I wouldn't have expected to see much just yet. The reason being that we still have divergence on the USDX Ichimoku Cloud chart on the 4 hr and daily timeframes. Continued 'risk on' momentum, if it is to evolve, will need to have the USDX break back below the Cloud on the 4hr chart. The Cloud isn't far away from current price and it isn't too 'thick' to navigate either:
Note how the Cloud supported price on the 4hr EURX chart!
The Aussie pairs haven't done too much but I suspect they are waiting for employment data due out here later today:
Note how the fall on the EUR/AUD has paused. This has moved 90 pips since the TS signal and looks like it might be forming a bear flag pattern. A continued bearish move would probably be boosted by a positive employment result. It is one to watch on the data release as well for sure:
The E/U has bounced almost 40 pips off the support level of the daily 200 EMA after the 'Dark Cloud' evolved:
The G/U is still hanging around the 1.6 level:
It seems like it is wait and see mode whilst the Cloud charts play catch up, one way or the other. I'm expecting continued market turbulence until such time evolves.
The USDX 'Dark Cloud' bearish pattern (discussed earlier) is still looking like it is going to form up. 2 hrs to go on the candle though!
The A/U and A/J are trying to form TS 'long' signals but they're not quite there yet. Both of these two are trading under their Ichimoku Clouds on the 4hr and daily time frames so, a rteurn to any kind of 'risk on' might not be smooth sailing for them.
It will take some time to confirm the bearish 'Dark Cloud' pattern on the USDX (see previous post). I had though, prior to spotting this, re-drawn trend lines on the G/U 4hr to reflect its recent trading levels. It now seems to be in a bullish falling wedge. Hmm. This would dove tail in nicely with the Dark Cloud pattern, if it evolves that is:
AND...is that a bullish Inverse H&S pattern forming on the A/U...me thinks so for the moment at least!
BTW: folk who trade off bounces...that's so not me! would be jumping over the E/U, E/J and G/U at their current levels. I stick to my trade plan...TS signals.
Hmmm. There is an interesting pattern setting up on the USDX 4hr chart. It is called a 'Dark Cloud'. These are bearish patterns. I need the next candle to close to confirm this pattern:
I said before that a failure to hold above the bear trend line, monthly pivot and Psychological 80 level would be a bearish signal for the USD. This pattern is lending weight to that observation...at the moment that is. I need the current candle to close first though to confirm this pattern. Something to watch!
Source: http://www.investopedia.com/terms/d/darkcloud.asp#axzz28sXmcEo0
In candlestick charting, a pattern where a black candlestick follows a long white candlestick. It can be an indication of a future bearish trend.
Essentially, the large black candle is forming a "dark cloud" over the preceding bullish trend.
The dark cloud must have a closing price that is:
1) within the price range of the previous day (candle), but
2) below the mid-point between open and closing prices of the previous day (candle).
Wednesday 10/10 (4 pm)
We've had a close on the USDX above the bear trend line and the psychological + S/R level of 80 and, also, a pull back to test this level. It remains to be seem if price can hold above this level though:
The pause in the USD rally has led to a corresponding pause in the EURX slide. Check out where the EURX bounced though!
BTW: My G/U short was going nowhere so I've closed it. I should have just taken my original TS signal here as it went for 100 pis!
The USDX is gathering strength and is attempting a triangle break out. A close above this trend line and, also, above the daily 200 EMA would be very bullish for the USD and bearish for stocks etc. Conversely, failure to break out and hold will be bearish for the USD:
There is already divergence on the USDX Ichimoku Cloud on the daily and 4hr chart.This might be coming on the EURX too with this index heading towards the Cloud on the 4hr chart:
The E/U is slipping, as is the G/U:
The Swissie has marched on with its break out too:
The Aussie pairs though seem to be waiting, stubbornly so, for tomorrow's employment statistics. No TS signal or much movement here yet:
Likewise, no TS signal on the Kiwi:
The USD/SGD has done little too and no TS signal here either:
Not much doing at Loonie town either and no TS here:
I missed this TS signal on this pair, yet again. The cross pairs might be the best bet at the moment. This EUR/AUD TS short is up 70 pips:
Now this range of activity, or lack there of, for me, was to be expected given the divergence on the USDX 4hr and daily charts. This is 'keep your powder dry' kind of stuff although, having said that, I am 'short', again, on the G/U albeit with a tight stop.
Curiouser and curiouser!
Ok, so here we sit. There is huge resistance here for sure: USDX monthly pivot, trend line, 4hr 200 EMA and with the daily 200 EMA not far above this either:
There isn't any red flag news tonight so we may sit there a bit longer. That is, unless the US get excited about the Alcoa and YUM results. Markets (Stocks) usually tend to drift higher on 'no news' nights. The Aussie pairs are trading sideways, probably will do so now until tomorrow's employment data news which is expected to be poor.
Cat amongst pigeons! Alcoa and YUM earnings better than expected! Hmmm. Let's see how this is digested! G/U is pulling back up, trying to closed above the 1.6 level on the daily.
Wednesday 10/10 (7am)
Well the USD did hold above the weekly 200 EMA, and then some too! It is trading up near the bear trend line that has been in play since July, the monthly pivot and psychological number of 80! The EURX has retreated in sympathy:
The USDX is now well above the Cloud on the 4hr chart which puts it at odds with the daily chart:
So, what does this mean, expect to see choppiness and divergence. well, that's what I'm seeing:
The E/U has fallen but, as per usual gave a good and easy trade on the 30 min charts from the London/US session:
The Swissie has also taken off and has closed above its bear trend line but is currently trying to navigate through the monthly pivot and 4hr 200 EMA:
The Aussie pairs are holding up though ahead of the Alcoa and Yum earnings reports:
Any favourable news from these will boost the AUD; Alcoa, being resource based with obvious implications for the commodity AUD, and YUM, with its investment in China, will be seen as a pulse for China.
The G/U is desperately trying to cling up to the 1.6 area:
The only 2 clear signals I have had this week were on the A/J, which is now back at entry, and on the G/U, which is now up 90 pips having been up 100 though!
I don't have any clear new valid TS signals. This is telling me something for sure! The ADX is yielding on some pairs but I don't use this alone for my signals. The divergence on the USDX Cloud 4hr and daily chart is also making me respectful and cautious of any moves.
Bring on the Earnings! I think this will help the USD make or break that bear trend line.
Tuesday 9/10 (8 pm)
Well, we're getting in the habit of seeing the 'Draghi Spike'. I'm sure we'll find this term in Investopedia soon!
Strangely, or not so strangely, there are no new TS signals. The switching from 'risk on' to 'risk off' is making 4 hr trend trading rather difficult.
Anyway, my USDX 4hr chart doesn't close for another 2 hrs BUT I would see a failure of the USDX to close above the weekly 200 EMA as a rather bullish signal for 'risk on'. We'll see.
Asian Stock markets were mixed, Europe is down and the US pre-markets are signalling down for the moment. I still think Earnings for both Alcoa and Yum will be dictating terms today.
I probably should have stayed in my G/U short. It is currently trying to stay above the 1.6 level:
Tuesday 9/10 (5.30 pm)
I'm back from Monty Python, sorry, I meant my son's Cadet's Parade. http://www.youtube.com/watch?v=_pmiiBUF71I&feature=related
Little has changed as yet. No new trend evident so no new TS signals....one is trying to form on the Loonie. There are some Euro and GBP red flag news items due out later as well as a President Draghi speech but I really think it will be US Corporate Earnings news that will shift the USD and, thus, the currency markets.
Little has changed as yet. No new trend evident so no new TS signals....one is trying to form on the Loonie. There are some Euro and GBP red flag news items due out later as well as a President Draghi speech but I really think it will be US Corporate Earnings news that will shift the USD and, thus, the currency markets.
The USDX looks like it might be about to roll over again. If so, it is heading towards a test of the bull trend line that has been in play since early last year:
Similarly, the EURX is heading up to test a bear trend line that has been in play since early last year too:
I would expect to see some TS signals form soon if this momentum does indeed continue given that the Index Cloud charts are in sympathy with such a trend on both the 4hr and daily time frame.
Alcoa and Yum kick off the earnings today and I think that the slightest bit of any kind of good news will be embraced by 'risk on' momentum. Overly poor results could tip momentum the other way just as quickly though too.
I'm out for a few hours at my son's Cadet End of Year Parade.
No new TS signals. Check my 11.40 am post for new Index charts.
'Risk on' seems to be the flavour today, in spite of the IMF downgrades.
I've drawn in new trend lines on the indices to show the most recent levels of S&R:
USDX: the previous wedge channel completed and so I've removed it. It is trading within a triangle pattern on the daily/weekly:
EURX: the lower of the two bear trend lines has been relaxed up a bit to show recent resistance levels. Triangle pattern in play here too:
The USDX 4h Cloud chart: price seems to be attempting to get down from the Cloud. Should this evolve, then we will have 'risk on' type chart set ups on the daily and 4hr EURX and USDX again.
Like I say, I see it but I don't understand it.
I had taken the G/U short but I have now bailed on this trade. It is still below the broken daily trend line and the 4hr 200 EMA but, with the indices looking like they're setting up for more 'risk on', I'm not confident. I would look to get back into a short here though if 'risk off' returns but I'd wait for a break and close below the 1.6 level.
Yet again, price in the Ichimoku Cloud had warned of choppiness and I should not have traded the G/U on a 4 hr trade given this fact and, also, given that there was divergence on the G/U daily and 4hr Cloud charts. This period, when price on the indices is stuck in the Ichimoku Cloud, again, is proving to be a safer one to trade off lower time frames and during the London or US sessions. I'm finding this over and over so, that, in some weird way, is of some comfort to me. The G/U was a classic example of this last night. The 30 min chart below shows how a fairly low risk set up was able to yield up to 70 pips!
Will I ever learn????
I want a clear picture of the new trend direction before trading further.
The markets chopped around in light volume overnight. Sentiment was poor though with continued concern about a possible poor earnings season and continued Euro zone worries.The USDX climbed up until it hit the weekly 200 EMA and the EURX scrambled back to safety above its daily 200 EMA:
The USDX is now back in the Cloud on the 4hr chart although the Cloud is rather thin:
I would be expecting choppy markets, based on the above observation, and that it was we had overnight. The A/J did fail to close below the 79.5 level:
The G/U has now closed below the trend line and 4hr 200 EMA and moved about 60 pips from the initial TS signal. It is hovering just above the psychological 1.6 area now and will need to clear this:
I do not have any other new TS signals but this isn't surprising.
'Risk off' has continued this afternoon The EURX is trying to stay above the daily 200 EMA and the USDX is trying to break back up through the 4hr Cloud:
I've had only 2 signals at this stage. Short A/J and G/U BUT both are at significant S/R levels (see below). The lack of signals doesn't surprise me. The recent move is 'risk off' yet the Ichimoku charts and Cloud patterns support 'risk on' moves more so at the moment. This may well change...for sure but, until it does, I'd be expecting choppiness and indecision.
A/J: The A/J is at the hugely significant 79.5 area that I highlighted over the w/e. So, I'd wait for a clear close and hold below this level. This trade has the added confluence of trading below the Cloud on both the 4hr and daily charts though:
G/U: The G/U is approaching the trend line support and the 4hr 200 EMA. Also, there is divergence on the 4hr and daily Cloud charts so I wouldn't be taking this trade:
There is still a bit of 'risk off' happening but not a lot of momentum here. No TS signals have formed but the E/U has had a close below the key 1.3 level:
The EURX is still holding above the daily 200 EMA for the time being and this might help to hold up the E/U:
Daylight Saving has started here so I only get my first 4hr candle close here on a Monday at 12 noon now. My 4 hr candle closes are now at : 8am, 12 noon, 4pm, 8pm, midnight and 4am. My Index charts are on a different platform and now update at: 10am, 2pm, 6pm, 10pm, 2am, 6am.
I haven't had an index 4hr candle close yet but not much is happening, maybe some slight 'risk off' movement if anything:
A/U: I thought I might get a new TS signal to short the A/U with this 12 noon candle close but it has not evolved as yet. Price has bounced off the bottom trend line to fill the gap from market open. I'll be watching for a continued fall and trend line break with this pair though:
Gold: Gold is tumbling a bit this morning so this might drag the A/U down a bit. Silver too:
E/U: This has pulled back to test the 1.3 level which is not surprising. I'm still LONG this pair with my stop at b/e:
NZD/USD: this pair looks interesting too. No TS signal yet but it won't be far away if the 4hr 200 EMA level and monthly pivot is broken:
No other new TS signals looming anywhere else just for now.
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