Monday, October 29, 2012

Trading Week 29/10/12

Saturday 3/11 (6am)
The USD continued to soar overnight and has broken through key resistance levels. The EURX has broken down below key support:

I find this all rather odd though as the NFP report was better than expected as was some US factory order data. One would be forgiven for thinking that positive data might translate into 'risk on' but that has not been the case. That sort of underscores the perils of NFP though!

I still have divergence on the index Cloud charts so the usual pattern of great 30 min chart trades emerging during the London /US session has continued. There were some great low risk trades on the 30 min charts for the E/U, Swissie, G/U, Silver and Gold especially. (30 min charts below)

The 'risk off' TS 4hr signals noted from last night have continued on though too: The E/U for 50, Swissie for 40 and the G/U for about 70. The EUR/AUD from earlier yesterday is up about 50 after being up 70:

Note how the E/U 30 min chart gave a great signal though:


Note how the Swissie 30 min chart gave a great low risk signal:


Note how the G/U 30 min chart gave a great trade!


I also note that I now have a signal on the USD/SGD, only up about 10 pips:

The metals have been hit hard a bit as the prospect of reduced need for further stimulus makes Gold and Silver less attractive. I had signals for both overnight with Silver up 80 and Gold up 300!
Silver 4hr

Silver 30 min: note the great low risk signal here:

Gold 4hr
Gold 30 min:

I missed this action overnight BUT the strength and reliability of my TS system is of great comfort to me.

Friday 2/11 (8 pm) 
53% (max) return on a SPY trade! (see 7am post)
I've got 'risk off' signals on the E/U, G/U and Swissie but nothing else for now. I'm waiting until after NFP though before taking any trades.

Friday 2/11 (3.45 pm) 
53% (max) return on a SPY trade! (see 7am post)
There has been a spike in the USD and I can't see why. No news around just yet. That might be the end of my H&S though. I thought it would take NFP to get things rocking but we are seeing 'risk off' creep back in:

This was just posted now after I asked the question:
Early raid on the EUR/USD    Written by Pete Jackson
November 2, 2012 at 06:05 GMT 
Someone’s just triggered the sell stops through 1.2920 as EUR/USD tumbles to 1.2892 (down through the daily cloud top at 1.2896) from around 1.2930.
The 1.2880/00 level supposedly holds some sovereign bids and there’s talk of sell stops down through 1.2875. Below here should find some bids ahead of the 55 day MA at 1.2849,  and the  200 day MA at 1.2832
EUR/USD’s sitting presently around 1.2903

Hmmm. Probably should have taken the EUR/AUD short signal after all!

Friday 2/11 (3.45 pm) 
53% (max) return on a SPY trade! (see 7am post)
I don't expect the H&S on the USDX to evolve until after the NFP announcement. The EURX is still holding up well above the support of the daily 200 EMA and monthly pivot:

The S&P500 and Dow are both retracing a bit and now back up embedded within their respective daily Clouds:

The A/J looks like it's waiting to see NFP before deciding on which way to move:

This NFP might be worth getting up for!

Friday 2/11 (12 noon) 
53% (max) return on a SPY trade! (see 7am post)
No new signals just now. Poor AUD PPI data has stalled a potential new signal on the A/U. NFP might get things going, all around.

Friday 2/11 (10 am) 
53% (max) return on a SPY trade! (see 7am post)
Took my eye of this pair but it has just given a TS signal to short.  There is divergence on its own Cloud chart though but you would only need a small stop. Tempting:

Friday 2/11 (8.30 am) 
53% (max) return on a SPY trade! (see 7am post)
I've had an 8am candle close. The G/U signal went 50 pips and is still above entry for now. This pair is probably waiting for the NFP:

I have had a new signal on the 4hr A/J chart. It has also broken out and up from an ascending triangle but still might form a double top:

Taking a closer look at the daily chart shows just how strong the 83.5 has been in some form of resistance for this pair. So, I'd be waiting to see a close and hold above this 83.5 level before taking this trade, if at all. It is NFP Friday and a very risky day to trade:

BTW: I have posted stats for my TS system for October. The TS system did very well indeed, yet again. On a personal front, I only had a few trades as I was travelling a lot through October. I also made a few errors and this was also before my most recent and significant Epiphany. As a result, I have ended up with my first losing month. I know where I went wrong though and the travelling hasn't helped and that is the most important point. I'm fine with all of this as my system is proving to be very consistent and I'm becoming more and more familiar with it.

Friday 2/11 (7am) 53% (max) return on a SPY trade!
The H&S pattern might just evolve! It is struggling to get up and away from that 80 level

The EURX is still managing to stay above the support of the monthly pivot, 4hr 200 EMA and daily bull trend line.  

The A/J has broken out from the ascending triangle & 83 level but I'd now be watching for a possible double top? A bad NFP result could help produce this:

I haven't got any new TS signals apart from on the Kiwi. This came with a triangle breakout though:

The best trades overnight though for sure were on the stock markets. There was another great intra day trade on the SPY ETF possible. A very low risk: high return trade it was indeed. I got a TS 'LONG' signal on the S&P500 during the US trading session when the index was at $1406.14:

Thus, I would have looked to buy the Nov $141 Call Option. This opened at $1.98 and closed at $3.03. This was an increase of $1.05: 

The return on invested capital was therefore:
ROIC: ($1.05/$1.98) x 100 = 53%!

This is the maximum possible gain as it would all depend on the ETF price at the time of purchase but I think you get the picture here!

I've had another minor Epiphany with all of this action but I'm saving this information for the new web site!

Thursday 1/11 (8.30 pm)
GBP news was worse than expected and the G/U is suffering. Once again I'm seeing choppy short lived 4hr trends with index Ichimoku divergence.

Thursday 1/11 (8 pm)
The G/U trade is kicking on nicely. It is worth noting that this pair is trading above the Ichimoku Cloud on both the daily and 4 hr charts so, of the signals so far this week, this one always stood the better chance. More food for thought! I'd be careful here though as there is red flag GBP news out shortly!!!! Stop to 'entry' if in this now!!!

BTW I don't have a signal or trend line break on the A/J yet but it is also trading above the Cloud on both the daily and 4 hr time frame:

I'm expecting the action might kick in, if at all, during my night. This often happens when there is Cloud divergence!
Thursday 1/11 (6.20 pm)
Out of complete and utter boredom with the charts, I've gone 'looking' for potential patterns or clues. The USDX, currently having a little rally, has caught my eye. The current print on the 4hr might be casting out a potential H&S pattern, with the neckline being the weekly 200 EMA/monthly pivot area. I'm not predicting that this will evolve it's just something I'll be watching given nothing else is happening:

The TS signals (E/U, USD/SGD and Swissie) have mostly faded with the exception of the G/U but I'm wary of everything at the moment given the Cloud divergence.
Thursday 1/11 (5 pm)
Yawn....not much happening. Indices little changed.

Thursday 1/11 (2 pm)
I'm back in Sydney now. Not much happening across FX though. The USDX is still hiding under the 80 level, weekly pivot and 4hr 200 EMA. The EURX is looking like it is refusing to roll over below the daily 200 EMA, bull trend line and 4hr 200 EMA:

The A/J is having another go at the 83 level:

Thursday 1/11 (8.30 am)
The index 4hr Ichimoku charts show how price is trading close to the cloud:

The pattern of choppy short lived 4hr trends during Ichimoku divergence continues. I'm not interested in taking any signals until this divergence clears up, either towards 'risk off' OR 'risk on'.

Thursday 1/11 (5am)
The USD has continued to chop around. It bounced back up overnight to test key resistance in the 4 hr 200 EMA and weekly pivot; both of these lurking just under the significant 80 level:

The only other signal to kick in overnight really was the G/U. This joins the E/U, USD/SGD and Swissie:
E/U: was up around 50.

USD/SGD: never really got going. I'm liking this pair less and less and considering dropping it.

Swissie: was up about 40
G/U: up about 25

I warned last night that I expected the markets to continue to be choppy and they haven't disappointed there. I know when to expect more reliable trends and I'm waiting for that time to evolve, which it eventually will though it takes time.

Gold and Silver are trying to form a TS signal too. They have broken up and out of their flag patterns and are currently re-testing these levels; a fairly common phenomenon. It will be interesting to see if we get a bullish follow through:

The A/U is trying to break out and up from a smaller triangle pattern. there is red flag Chinese PMI data due out later today. This might get the A/U moving, as well as the metals:

S&P500 & Dow:
The S&P500 is trading in the bottom zone of it daily Cloud whilst the Dow is trading just below the daily Cloud. Whilst not looking exactly healthy, neither of them have made a clear break down from their Clouds just yet. They could just as easily bounce back up from these levels as continue to fall:

It may, as thought, end up taking Friday's NFP jobs data to get things moving. 

Wednesday 31/10 (8.30 pm)
The USDX has finally moved away from the 80 level in a 'risk on' direction. I still have divergence on the Cloud charts but they are currently moving back towards 'risk on' congruence. We could still have choppy markets until the congruence returns though:

The EURX has also broken out and up from its trading channel:

The  signals from this morning have continued. The E/U, USD/SGD and Swissie:
E/U: up 30
USD/SGD: up about 5

Swissie: up about 25

I have a few new TS signals trying to form up now as well. I need to see the next candle close though: 

The metals might be breaking out and up now too. They are worth watching:

Wednesday 31/10 (2.30 pm) Gold and Silver
I've been looking back over my Gold and Silver charts. They look like they could be forming 'bear flag' patterns on their daily charts. Now, most folk are Gold and Silver 'bulls' given the amount of currency easing that has occurred and I do understand that thinking. I'm just wondering though if we do get a return to 'risk on' and a bounce in the stock markets then I could see some possible weakness ahead for the metals, even if just for a short term period. Money might flow more into stocks, than into metals, if we do get some stock market optimism. I'm not making a prediction here at all..... I never do that. I'm just trying to rationalise the technical chart patterns that seem to be setting up on the Gold and Silver charts. They could also simply be forming 'bottoming' patterns too. That is where the trend line breaks become important. I'll be watching these trend lines to try to get a clue on which way they are going to move next. I will also be on the lookout for new TS signals:


Wednesday 31/10 (2 pm)
There hasn't been a whole happening today but that isn't surprising given the US markets have been closed. The USDX is still back down trading just under the 80 level. It sure must be finding security in this level. I've had more of a look at the indices and re-drawn recent support and resistance levels. The USDX looks to be trading within a flag pattern and, if you look at the daily chart, then this pattern looks like an almighty bear flag; well it does to me at least!

The EURX is still supported by a bull trend line on the daily chart:

It seems to be trading within a downward trend channel on the 4hr chart at the moment:

I don't have any new signals for the time being. The ones from this morning have chopped around as suspected. The A/U is starting to look a bit bullish though:

Wednesday 31/10 (5.30 am)
There has been a bit of 'risk on' momentum creeping back in after some positive data was released from Europe. Italian bond auction results were viewed positively and there were some good earnings releases. The USDX broke back down below 80 but is currently re-testing this level:

The EURX has bounced up off the daily 200 EMA:

This momentum has yielded just 3 'risk on' TS signals on the 4 hr charts: long E/U, short USD/SGD and short Swissie:

E/U: has also broken out and up from a bullish wedge pattern

USD/SGD: approaching some resistance in a major trend line

Swissie: a reversal pin bar and this pair has been choppy lately:

I still have divergence on the Cloud charts across both indices. I am perplexed as to why the other risk on' pairs have not moved much. I suspect the closed US markets might have something to do with this. My preference of the three would have to be the E/U though. I'm going to wait and see if the USDX closes back above the 80 level before taking a possible E/U. 

I'm getting very used to the patterns of the FX markets and that continues to be of great reassurance and comfort to me. Periods of divergence on my Cloud charts are accompanied by few and choppy, variable 4hr chart trades and reasonable 30 min chart trades during the London US session. last night was no exception. There was a low risk 50 pip trade on the E/U from the 30 min time frame:

Tuesday 30/10 (8.30 pm)
That pin bar reversal candle on the USDX seemed to do the trick:

The A/U is trying to break up: 
 The Kiwi is too:

I don't have any new TS signals yet. With divergence across both Indices, on the 4hr and daily time frames, I'm loathe to trade though anyway.

Tuesday 30/10 (4.20 pm)
The USDX is trying to break up:

The A/J is trying to break up too, contrary to moves on other pairs.

Tuesday 30/10 (10.50 am)
The USDX is still struggling to break up and away. That pin bar candle might just have done the trick.

The BoJ are rumoured to be making an announcement today re: stimulus. I'm tempted to LONG the A/J but that would be gambling! So, I won't.

I am travelling interstate and away for the next few hours.

Tuesday 30/10 (7.45 am)
The USDX continues to struggle breaking up and away from the 80 area. The condensed chart shows just how significant this area has been. The previous 4hr candle was a reversal style pin bar candle:

I'm keeping an eye on Gold and Silver at the moment. They seem to be still trading under a bear trend line on their daily charts. A continued rally with the USDX would most likely see these two continue on their down path. They would most like reverse up if the USD was to roll over though. I'm watching these as they impact the Aussie pairs and, also, I stalking some Gold stocks.

Trading might be thin for the next day again though with market closures due to Frankenstorm.

Tuesday 30/10 (6am)
The USDX has held above the 80 level but is struggling to make a clean break up. The EURX is also refusing to roll over:

I still have divergence on the Ichimoku charts on both Indices so, as expected, price has chopped around on most pairs:

As often happens in times like these i did get a TS trade signal on a 30 min chart during the late London /US session. This trade was on the G/U and gave a low risk 50 pips:

The TS signals from late last week on the Swissie and Loonie are still ticking along.

I did one get 4hr TS signal come through overnight. This was on the G/U. I won't take this unless price closes below the 1.6 level. I also have divergence on the G/U Ichimoku charts making me suspect about much follow through on this pair:

Monday 29/10 (8 pm)
I've just had an 8pm candle update. No TS signals on the 4hr charts. I'm not at all surprised.

BTW: E/U: I've relaxed the bottom trend line on the E/U a bit to capture the shadows of the 4hr candles. It hasn't really impacted the daily chart:

Monday 29/10 (7.30 pm)
The E/U is having a little spike down, most likely due to the significant fall in Spanish retail sales. No new TS signals just yet but my 4hr candles have 30 min until they close:

Monday 29/10 (4.30 pm)
A comment just in from Matt Jones at Capital 19:
".......I want to stand aside this week, and possibly next, as market sentiment has shifted to a negative bias. In addition we have the election next Wednesday that could cause some excitement. Excitement is not something I enjoy when investing so I am going to hibernate until things get boring again and it is easy to make money......." 

This kind of sits with all the divergence I'm seeing across the currencies and indices as well. It might just be best to "keep your powder dry"!

Monday 29/10 (4.20 pm)
From Forex Live:       New Twist in Greek Tax Saga    Written by Ed Thomas
October 29, 2012 at 01:34 GMT 
ATHENS—Greek authorities arrested a celebrated investigative journalist Sunday after his magazine disclosed the names of several thousand Greeks with Swiss bank accounts, including members of the country’s political and business elite, a development that comes as an embarrassment to the government and will put more pressure on it to crack down on the country’s chronic tax evasion.- WSJ

I guess arresting someone for data privacy law is more important than tax evasion laws.

Monday 29/10 (4 pm)
There hasn't been much change and, with some markets closed due to US storms, I suspect things might stay that way. No TS signals on 4hr charts.

Monday 29/10 (12 noon)
The USDX and EURX are both trying to rally at the moment!

I have very little expectation of any clean well defined trends developing this week. You will know why if you read my w/e posts. The divergence on the index Cloud charts means that I am expecting choppy markets.

I don't have any new 4hr TS signals. The Long signals on the Loonie and Swissie, from late last week, are still limping along. I'm not in these and won't be chasing either of them. I'd have stop to entry on them if I was though!

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