Monday, November 26, 2012

Trading Week 26/11/12

Saturday 1/12 (5.40 am) 
It seems that we are in a holding pattern. I do believe though that there might be another H&S pattern emerging! This time I'm seeing one on the USDX 4hr chart:

The EURX is holding above the neck line of my bullish 'inverse H&S' pattern:

It has been a choppy week and I'm not at all surprised on 2 accounts:
  1. There is still divergence across the Cloud charts.
  2. There is Bull/Bear rising tension as the market tries to decide how to unfold from here. Is this just a small pull back as part of a bull movement OR the beginnings of a more severe bear rally?
The Vix is up a bit today but still just under 16.

What gives with this Boehner dude? I can't believe he let loose with such controversial comments on such jittery global markets knowing full well the impact that these comments have...again....two days running. The outside world is looking in on the US with some disbelief.

Friday 30/11 (7 pm)
Well, for those who laughed at my flag patterns...this is for you all!

Note: we are getting very close to having both of the indices, on 4hr and daily time frames, conforming to 'risk on' momentum. This is a rare event and one that generally produces hundreds of easy pips from easy signals. We're not there yet so there are no guarantees BUT we're getting closer. 

Friday 30/11 (4 pm)
I've been out for the day and back for 5min now before heading to the hospital.

I see the E/J is building to signal a 'LONG'. Will probably do so after the 5pm candle. I'll update again when I get back.

Friday 30/11 (9.30 am)
Washington went into damage control after loose cannon, Mr Boehner, wrecked market havoc earlier in the trading day. The major stock indices all managed to close above key levels; the Dow above 13,000, the S&P500 above 1,400 and the NASDAQ above 3,000. The markets are jittery though.

The currency indices are sitting tight at the moment but the EURX is holding above the neck line of the bullish inverse H&S pattern:

There is not much point discussing further technical patterns at this stage when the markets are being driven by news and press release statements.

Friday 30/11 (5.30 am)
Things seemed to be going along ok with some positive US data until this bit of press was released:
"Based on where we stand today—first, despite the claims that the President supports a balanced approach, the Democrats have yet to get serious about real spending cuts," said Speaker John Boehner in a press conference. "And secondly, no substantive progress have been made in the talks between the White House and the House [of Representatives] over the last two weeks."

Mr Boehner would be off my Christmas drinks list for sure! Talk about a party pooper! On a serious note though, I wonder what his motivation was for releasing such negative comments to such jittery markets? Many trading commentary services have noted how news driven these markets are at the moment and last night was a classic example of that. This makes 'Technical Trading' currently very difficult.

The indices have chopped around on these remarks:

I will be watching the EURX to see if it can hold above the neck line level: 

Stocks are still higher before close but momentum stalled in the wake of these comments and continue to chop around:

The NZD/USD signal closed after these comments for -20 pips:

The EUR/AUD gave a signal after my 1am candle. 

I'd be waiting for this pair to close above the daily 200 EMA though first:  

I did get a TS signal to LONG the E/U but it quickly faded after the Boehner comments. 

The E/U is sitting right under a weekly bear trend line that dates back to April last year. I'd be expecting some choppiness on this pair anyway. I'd also now be looking for a break, close and hold  above this level:

The G/U has broken up and out from the flag pattern BUT I don't have a TS signal here yet:

The A/U is down BUT I don't have a TS signal to short this pair just yet either:

The A/J is down but more undecided than the A/U. I've amended the upper trend line here but it is still a bullish pattern:

The Swissie gave a momentary short signal but this faded quickly too in the light of the negative Fiscal Cliff commentary:

Silver is up 170 from the 'Cup and handle' breakout:

Gold is back to the breakout level after having been up 220:

It is hard to trade any technical pattern with such news driven markets, especially if you're asleep through the US session where these comments tend to emerge from of late. I'll be looking for renewed sentiment from the signals that have been given and towards the EUR/AUD pair. A point that really strikes me as odd is that the VIX is quite low at near 15 and trading down even lower today.

Thursday 29th (9 pm)
All a bit odd. I've had trend line breaks from some of the flag patterns but no full TS signals on the pairs except for the Kiwi. This signal came through earlier but i'm not trading the Kiwi at the moment:

Thursday 29th (8 pm)
It is looking like it might be time to 'get ready to rumble'! The 'risk on' flag patterns on the indices seem to be unfolding:

The EURX is back above my bullish 'inverse H&S' neck line: 

A TS signal is building on the E/U along with a possible flag breakout:
Ditto for the E/J: 
Ditto for the Swissie: 

It is getting closer to a situation where we have both indices, the USDX and the EURX, aligned for 'risk on' trading across both the daily and 4hr charts. This will be a very significant period of trading if this does unfold!

I'll update again in 1 hr after the 9 pm candle update.

Thursday 29th (5 pm)
I'm still waiting to see if there is going to be any 'risk on' follow through on the index flag patterns:

No TS signals just yet. Asian markets were broadly up in 'risk on' trade. European stocks are expected to open higher too. US markets are up in pre-market trade as well. Patience required here now.

Thursday 29th (1 pm)
The flag pattern on the indices seem to be unfolding into the 'risk on' patterns:

Asian stock markets are all trading higher too at this stage.

I still don't have any new TS signals on the currencies yet though although some pairs are pushing at the trend lines of their flag patterns. It may take European or US sessions to get these going.

Thursday 29th (11 am)
It is only early in the Asian session but it looks like some 'risk on' might be building and that we're getting some flag breakouts and TS signals. I need the next 4hr candle close at 1pm to confirm.

Thursday 29th (8.15 am)
FYI: from Forex Live:
Gold: The gap down in gold happened in seconds. There was talk of options related trades and/or a fat finger as the culprit. Still no clarity.

Thursday 29th (6.45 am)
Poor US data was tempered by positive Fiscal Cliff comments to result in choppy trade overnight. The Index flag patterns are still holding for now:

The currency flag patterns are also still holding for the most with some lines relaxed a bit:

The S&P500 has scrambled back above the $1400 level but there is still over an hour until this closes:

Silver took a hit with the rising USD
Gold took a hit too:

The 'Cup and handle' patterns may still continue to unfold further and add more pips though:

Silver weekly:

Gold weekly: 

I don't have any valid TS signals on the 4hr charts.

Wednesday 28th (8.30 pm)
Risk off seems to be building up across the pairs but there isn't confirmation just yet on the indices:

I'd want to see a clear break on the trend lines first.

The Swissie is getting close to breaking maybe?

Wednesday 28th (7.15 pm)
The A/J and E/J signals have faded.

Wednesday 28th (5 pm)
I have got new TS signals to SHORT the E/J and A/J but I'm waiting see if these break out of their flag patterns first. (see charts from earlier post). The lack of other 'risk off' signals makes me suspicious about these 2 moves though especially as they are coming so early in the European market. I've got a TS signal trying to form on the E/U as well.

Wednesday 28th (12.45 pm) Flag Patterns Galore!
I am aware that the S&P500 closed below the key support of $1,400 BUT, in the wider context of a weekly move, I'm not convinced just yet that this break will spell a complete reversal. 

There was some choppy action after the previous S&P500 weekly channel breakout before the rally kicked in so I wouldn't be shorting just yet:

I've had a look at the indices on the 4hr charts and they look to me like they could be forming into 'risk on' flag patterns.

I see a possible Bull Flag on the EURX:

I also see a possible Bear Flag on the USDX:

I'm not predicting at all which way I think things will move. I just look at the charts for patterns and, at the moment, I still see a confluence of patterns pointing to more 'risk on' potential than 'risk off'. Trend line breaks on the above Flag patterns will help to inform about the next momentum move.

These potential 'risk on' patterns above are also supported by a falling VIX, a lack of TS 4 hr 'risk off' signals across the currencies, possible Bull Flag patterns on the E/J, A/J and G/U and also on Gold and Silver to a certain extent too. Momentum could shift very quickly though if there is poor news released about Fiscal Cliff debt talks.

I will trade 'risk off' signals though if or when they come.

BTW: The A/U signals from this week gave 65 pips. I've closed off the signals on the USD/SGD for -10 and the Loonie for -30 though.

NB: I'm finding of late that, of the pairs that I watch, the best trends are coming from the E/U, E/J, A/U and A/J. I will still assess the others but these four remain my preferred trading pairs.


Wednesday 28th (5.45 am)
This chart best sums up trading today...choppy!

The $1400 is holding up on the S&P500 for the time being. The USDX has pulled back a bit and is currently negotiating strong resistance in the daily and 4 hr 200 EMA and weekly pivot: 

The EURX has slipped to be just below the neck line of my weekly inverse H&S pattern:

I've been stopped out for profit from my E/U trade. This pair has pulled back whereas the E/J, A/U, A/J and G/U are all holding up fairly well. 

E/U: the best 'mover' at the moment.

E/J: a bull flag forming?


A/J: another bull flag candidate?

I don't have any new 'risk off' signals with this latest pull back on the USD. I also note that the VIX, or fear gauge, is down further today. All rather odd! I had noted over the w/e in my posts that we still have Cloud divergence across the indices so I was expecting choppiness. Well, what you see is what you get. 

I am traveling home today and will update later.

Tuesday 27th (5.45 am)
The markets are still trading sideways as they wait for some direction by way of Euro or Fiscal Cliff news:

The S&P500 is holding above the key $1400 level for the time being:

I am expecting sharp moves on any news release. I'd have trades with stops to entry and profits locked in where possible.

I am away for the next two days. I may not be able to update again until tomorrow.

Monday 26th (9 pm)
The indices continue to chop around:

It appears that the markets are waiting on some Euro news before deciding which way to trend. Momentum should move one way or the other once some news is finally released. It is anyone's guess at the moment as to which way that will be though!

Monday 26th (6.40 pm)
Hmmm...I know it's only early in the European trading day but it almost seems if my 'neck line' is forming a floor for the EURX.

I'd still be cautious though. These markets can turn in a heartbeat on any whiff of bad news!

Monday 26th (5 pm)
The indices seem to be 'treading water' waiting for some news, good or bad, to kick them along on their way:

The E/U has just gone sideways today. It is not clear whether this is the start of a reversal or a pause and bull flag forming:

The A/U may end up bouncing back down within its triangle: 

We need some direction from either Europe or the US trading sessions.

I'd be locking in profit and moving stops to entry ASAP on any new trades in case there is bad Euro zone Greek debt news released from today's meeting.

Monday 26th (2.45 pm)
The EURX is being tested a bit here at these levels ahead of European markets opening:

The next momentum move will most likely be driven by news. There are Euro zone meetings to discuss Greek debt and the ongoing debate about how to address the US Fiscal Cliff. So, technical analysis may all be moot in light of these weighty news events.

Monday 26th (11.30 am)
Asian markets have opened positive with 'risk on' being obvious, although it is only in the early stages of trading.

The EURX is paused just above the neckline of my inverse H&S pattern:

I am not sure whether this 'risk on' momentum will continue but there are a couple of key levels I'm watching over to help me assess this situation. The first of these is the USD index. This index has opened a little bit higher this morning:

The daily chart shows the intersection of three major S/R entities at the 79.7 level. These three being the weekly 200 EMA, the monthly pivot and the weekly bull support trend line. This level may prove too difficult for the USD to navigate through and, if this level is respected, it might void my bearish 'inverse H&S pattern' so, it is a key level to watch!

A break of this key 79.7 level though would leave the 78.8 level as the next key level to watch for. This 78.8 level is the 'neck line' of my inverse H&S pattern and the 38.2% fib retrace level from the last major swing high back in mid 2010.

The other index I'm watching out for, apart from the USD index, is the S&P500. This index closed above the key $1400 level last Friday and I'll be looking to see if this level can hold up this week:

I am aware that we still have Ichimoku Cloud divergence across the Index charts so I am expecting some market choppiness to continue.

I've locked in some profit on my E/U trade but have given it some room to breathe.

No comments:

Post a Comment