Monday, December 10, 2012

Trading Week 10/12/12

Saturday 15th TS Week tally now at 1020 pips!
The USDX has finally broken down below the weekly trend line and weekly 200 EMA. It seems that possible double top on the EURX is no more! Yeah!

Most signals have kicked on. The Yen signals though have stalled in the lead up to w/e elections.

The open TS signals are below:

E/U now up 200. Price has broken out of the 1.31 barrier and out of the triangle.

E/J stalled but at 280! 

A/J also stalled but at 170 pips: 

Swissie now up 80 pips 

NZD/USD now up 240 pips. This pair had a signal to 'close' overnight though: 

EUR/AUD up 50 pips and sitting under that daily 200 EMA

Friday 14th (3.30 pm) TS pip tally for just this week= 860!
The USDX is still clinging on to the trend line. The longer it hangs there without rejecting support and bouncing back up then the more likely I think it will be to continue to break down:

The 4hr TS signals are still going and the tally stands at: E/U = 130, E/J = 280, A/J = 170, N/U = 220, Swissie= 20 and EUR/AUD= 20. I'd have stops to entry on the last two ASAP though.

E/U: I've been looking at this pair again and looking for new trend lines and support/resistance levels. I've drawn these in on the charts below and there is a clear bear trend line coming down over current price and in at the 1.31 level. There are no surprises there as this is a psychological whole number and previous strong S/R level. Continued 'risk on' momentum might help this pair to breach this level and, if it does, there isn't too much resistance in its path except for the weekly 200 EMA at the 1.3353 level, some 250 pips away:

Friday 14th (3.30 pm) 750 pips and signals still going!
The Chinese data was positive which bodes well for continued 'risk on'. The USDX is still hugging the trend line for the time being though:

The Japanese elections are being held over the w/e so I'd lock in profit on Yen trades in case of extra volatility.

Friday 14th (8 am) 750 pips and signals still going!
The USDX is still paused at the support trend line and weekly 200 EMA. There is big 'red flag' Chinese PMI news today out at 12.45pm Sydney time. This may get things moving one way or the other. There was positive US data last night but the Fiscal Cliff woes have dragged on the broader markets.

The A/J signal did not end up closing. The G/U and A/U will give new entry possibilities though if 'risk on' does continue at all.

The open TS signals remaining are; E/U, E/J, A/J, NZD/USD, EUR/AUD and Swissie.

Swissie: The Swissie signal is in profit and this pair broke a major trend line, re-tested this and is now starting to fall away.

EUR/AUD: I only noticed this signal this morning but I would most likely wait to see if breaks the daily 200 EMA anyway. I wouldn't be surprised if the Aussie rallies again, along with the Euro, if 'risk on' does continue. The Chinese data today might impact here.

I am travelling home today and will update later this afternoon.

Friday 14th (5.45 am)
Fiscal Cliff fear seems to be back on the agenda as the indices bounced sideways. The USDX continues to bounce around the weekly 200 EMA. This is a huge support level and this choppiness here is not unexpected.:

A few pairs and signals just bounced sideways except the A/U which had more of a pullback and its signal has now closed off. This reversal started yesterday and has triggered a long with the EUR/AUD. This signal came through yesterday but I missed it:

The G/U signal has also closed:

The A/J looks set to close too:

I noted over recent days that stocks would struggle and be choppy as they were at the top of their daily Clouds. This is evident from the current daily Cloud charts:

This may be just choppy action before the next move with further 'risk on' OR it may end up being the start of a reversal. I have no idea. I'll just keep watching for the next momentum wave. I do note though that the index charts are still aligned for optimum 'risk on' across all time frames. For the time being at least. The possibility of a Christmas Rally isn't dead yet:

Thursday 13th (9 pm)
The USDX is struggling at the weekly 200 EMA and the weekly support trend line:

Thursday 13th (5.50 pm)
The indices look to be gearing up for some more 'risk on' momentum:

The potential 'double top' on the EURX has just been run over! price might reverse over it though:

Check out the E/J! I'm a little annoyed I chose the E/U over this pair:

I don't have any other worthwhile signals. We've got the fastest horses in the stable right here already! Put the crop away and just keep riding. Lock in profit or move stops to entry as the markets are still capable of a big about face!

Important note: We now have the situation where the EURX AND the USDX are both aligned to be more suited for 'risk on' momentum on both the 4hr and daily time frames. I will be happier though if the USDX closes a bit lower on the daily chart and further away from the Cloud:

My experience in the past has been that when there is Index Cloud alignment such as this that trend trading TS signals are highly reliable and, more importantly, very profitable!

Thursday 13th (8.30 am) TS pip tally now = 750!
The USDX is re-testing the broken trend line. This is to be expected even if the move does continue to follow through:

I am always open minded with all things trading though. I do see a potential double top on the EURX whilst the USDX has its pause.  

I do think that it is more likely that we will see a follow through with 'risk on' momentum given the rhetoric from Ben Bernanke today.

I am out for most of today and will update later this afternoon.

Thursday 13th (7 am) TS pip tally now = 750!
The USDX has actually closed just a smidge below the weekly 200 EMA.

This is a major breach and I wouldn't expect this to head smoothly at all from here. I'd have stops to entry or be locking in profit in case of a reversal. Price has bounced back from this level before.

The Dow and S&P500 have stalled at the top edge of their Clouds:

Thursday 13th (6 am) TS pip tally now = 750!
Risk on continued overnight with news of more Fed easing. The current 4hr candle on the USDX is trying to break down through the weekly bull trend line and the weekly 200 EMA. I'd expect some strong resistance here at a minimum:

The weekly USDX chart shows how critical this level is. The next stop, if this level is breached, is the H&S neckline that I've had in now for months:

The pip tally keeps growing:
E/U 120
 E/J 180
 A/U 50
A/J 110
 G/U 70
 NZD/USD 220

The Swissie has now given a TS signal and a trend line break too:

Stocks were a bit choppy but that was expected given their attempt to move out from the daily Cloud. Both indices, Dow and S&P500 look like closing out from these:

There is 1 hr to go before my 4hr index charts close BUT it is looking like the index Cloud charts will be aligned for optimum 'risk on'.

Wednesday 12th (9.15 pm) it again!!!!! 470 pips worth of signals!
The TS signals are powering along....
E/U up 60
E/J up 90
 A/U up 30
A/J up 70
 G/U up 60
 NZD/USD up 170

There looks to be another SPY trade looming on US market open:

The Swissie looks to be trying to form a TS SHORT.

I'd be locking in profit, or at least have stops to entry, as the markets are still very jittery. The USDX is approaching support in the form of the weekly bull trend line and the weekly 200 EMA. Price could bounce back up here like it did before. A breach of this level could bring on a huge 'risk on' rally:

We are moving back to a situation, if the current momentum holds, where the index Cloud charts will be aligned for optimum 'risk on'. This has not evolved just yet, and may not evolve, but I'll know when it does and I'll report it here!

There is FOMC news looming as well as Chinese data on Friday. Keep an eye on your calendar and...hold on to your hat!
Wednesday 12th (6 pm)
The main trend still seems to be intact for the time being:

The Bollinger bands have opened which is a bit encouraging.

All of the TS signals are still up: N/U, E/U, E/J, G/U, A/U and A/J. 

I'd be watching trades closely for reversal signs though given the level of stocks in the Ichimoku Cloud:

Gold looks like it might be starting to break up too.

Wednesday 12th (3 pm)
The indices have paused. There is still divergence across the indices so I'm expecting further choppiness:

Wednesday 12th (6am)
Well, Dover certainly moved it's 'bloomin' arse'! The USDX has continued with the 'risk on' wedge breakdown and the EURX with its wedge break upwards. Note the Bollinger bands that both pairs are running into at the moment though. This may slow or, at worst, reverse price action:

The TS signals from last night have certainly kicked on and the Aussies have joined the party:

The NZD/USD signal is now up 150 pips:

The E/U is up 50 pips

The E/J is up 50 pips

The A/U has given a signal ( confession: I jumped in this early)

The A/J has given a signal but it is just under a major bear trend line that dates back to 2007 so I'd expect some resistance here:

The G/U gave a signal too on my 1am candle:

Stocks have rallied to. We just might get that Christmas Rally:

The S&P500 is reaching the top of the daily Cloud and there could be some resistance at this point: 

The S&P500 did end up giving a great trade off the 30 min chart for SPY directional trading overnight. My TS signal came through when the S&P500 was at $1421.  

Thus, I would have bought the Dec $142 Call. This opened at $1.65 and is currently up 0.70 cents at $2.35:
The ROIC for this trade is as follows:
ROIC = (0.70 / $1.65) x 100 = 42% for just one session of trading!

I would have stops to entry on all trades ASAP given those Bollinger bands on the indices. Also, we are approaching that weekly bull support trend line on the EURX again. Price bounced off this once before and may do so again. The chart is messy but you get the idea:

I've got stops to entry on the A/U and E/U. These are very jittery markets and can turn in a heartbeat. I'm driving interstate today and will be away for the middle part of the day. Watch your trading calendars closely.

Tuesday 11th (9.30 pm)
I would want to see a break out and hold from this channel before being confident in the E/U signal:

Tuesday 11th (9 pm)
My Fair Lady seems to have worked! Index breakouts seem to have started.

I've had very new TS signals form on the E/U and E/J. Signals are trying to form on the A/U and A/J but will take the next 4hr candle at 1am to form up. The NZD/USD TS signal from last week is moving again too. It is now up 120 pips!

The SPY is looking good for a trade too when the US markets open:

There is red flag US Trade Balance data out at US market open. This could affect these new TS signals so it might be best to wait until after that to trade them.

Tuesday 11th (8 pm)
I'm glad I went to the movies....diddly squat has happened on the currency front. No index breakouts just yet. The US session might give some moves and/or some 30 min chart trades. No TS signals. I think they're waiting for 'The Fiscal Cliff' matter to be dealt with.

We need to clear the Cloud...up...down...don't really care...just move! We have a saying in our house...from My Fair Lady.......when we want someone to get cracking......."Come on Dover...move your bloomin' arse". So guess what I'm saying?

So, I'm listening to this whilst I watch and wait.....was in the movie.....

BTW: The move on the Swissie is due to news and Swiss Franc selling: From Forex Live
EUR/CHF ticks higher   Written by Gerry Davies    December 11, 2012 at 07:23 GMT 
Amid talk the major Swiss bank will begin imposing negative interest rates on swiss franc balances starting tomorrow.

Tuesday 11th (4pm)
No flag breakout just yet but it seems that 'risk on' pressure is still building for the time being:

I'm out for a few hours and will miss the 5pm candle update. The only signal that looks to be be forming up at this stage is on the G/U.

Tuesday 11th (1pm)
The indices have broken out from their trading channels overnight and are currently in flag patterns:

No new TS signals anywhere after my 1pm chart update.

The metals are retreating a bit today

BTW: I have updated my Stocks: Dec page following some trades placed since the w/e.

Tuesday 11th (11.55 am)
I'm keeping an eye on the EUR/AUD in these choppy markets. Some weak AUD data boosting this pair today:

Tuesday 11th (10.20 am)
Dean Malone just posted this video on the Kiwi:

I'm seeing the same divergence Dean mentions. I didn't take this signal but would probably lock in profit if I had:

Tuesday 11th (8 am)
Stocks are at interesting levels. The Dow and the S&P500 have continued to rally and are both back to butting up against their respective daily Clouds. They could meet some resistance here:

The technical possibility of a Christmas rally is still viable though based on previous patterns:

This flows on to currencies as well. 'Risk on' with stocks should, and usually does, flow on to 'risk on' with currencies. You need to have a handle on both markets to trade either of these instruments.

The 'risk off' TS signals from last week have pretty well faded now and the signals though are still in profit or at b/e.

The 'risk on' signal for NZD/USD seems to be holding for now:

Silver is waning though:
Gold is ok...just:

Tuesday 11th (6 am)
It's at times like these that I smile to myself and remember those nasty few who sledged me online for my belief in 'technical analysis'! The EURX and USDX were both setting up overnight for classic channel breakout patterns towards 'risk on' and these have now evolved. Follow through is certainly not guaranteed but I'll be watching for continuation patterns:

The US President is about to speak and this is being watched by many trying to gather further clues as to the progress with Fiscal Cliff negotiations. This may swing the indices. These channel breakouts may continue reversing or they be the start of continuation flag patterns. Either way, I'll be watching for trend line breaks.

The shift from risk off to on has turned some of the currency pairs and some are just bouncing sideways so there are no new TS signals on the 4hr charts as yet. These will need more time to build on greater momentum which is fine by me. I'm not keen to be part of any whipsaw.

The choppy action even gave two possible SPY trades on the S&P500 30 min charts overnight. The first was a marginal win but the second trade would have been better:

I've been advising on a friend on helping her brother who started a 'Juice' shop business in LA. Juices sold just fine in the Californian summer but weren't doing so well as the weather turned. I suggested that they explore offering healthy soups for these cooler months. They have done so and these are doing well and helping to spread profit across the calendar year. Trading isn't all that different. Choppy markets on the 4hr charts do throw up opportunities on other time frames. You've just gotta think ahead, look for the opportunity and, then, take it!

Monday 10th (9 pm)
Concern about Italy have reversed the sentiment in European trading. The indices have yet to close outside their respective trading channels:

Gold and Silver have given new signals but I'd want to see both hold over the next candle before getting involved:

No other new TS signals at this stage as there is no clear, new direction just yet. There are narrow daily ranges on most pairs and it will probably take the US session to get things going, if at all!

Monday 10th (7.20 pm)
No index breakdown on the 7pm USDX candle close but the new candle is under some pressure. This will take a while to close though :-(

Monday 10th (5 pm)
No new signals on the currencies BUT I have had a very new signal to LONG Silver and a signal is trying to form on Gold. I don't trade these except through stocks. This is interesting. Will this cause a spill in the USD or is the rise out of increased fear and going to tag a rising dollar???? The VIX is low so I'm not sure it's the 'fear' scenario. Hmmm.....I'll just have to keep watching the trend channels on the indices for clues.

Monday 10th (4.45pm)
The Chinese Trade Balance data was worse than expected so this has put any 'risk on' momentum on hold. There have been rather narrow trading ranges across most pairs today so there might be some good trend trades off the 30 min charts during the later London and US session.

I've got the indices trading in narrow trading channels. I have to say that, to me, the USDX channel looks a bit like a bearish ascending wedge and the EURX looks like a bullish descending wedge. Time will tell:

Monday 10th (1 pm)
The USDX has gapped up above the daily 200 EMA but is stuck near the monthly pivot:

The EURX is hanging near the whole number level of 102: 

No new TS signals yet and no clear direction. Still waiting on Chinese Trade Balance data.

Monday 10th (9am)
The Euro has gapped down a bit on open. The TS signals that have carried over from last week are all in profit BUT I would have stops to entry, or lock in profit, if trading these as things may turn.

The E/U is down to the monthly pivot and the TS signal is now up 50 pips:

The E/J is down still too:

The Swissie trade is up to but about to hit resistance in the form of the bear trend line and daily 200 EMA. A close above these would be rather bullish though! 

The EUR/AUD trade is still up in profit too:

These 'risk off' signals above diverge from the 'risk on' seen at the moment on the Aussie pairs:

The Kiwi signal is holding up too:

The Loonie is trading down though in 'risk on' sympathy too

So, continued divergence to start the week....curiouser and curiouser!

My USDX and EURX Index charts don't open for a few more hours and my first 4hr candle close is not until 1pm. There is 'red flag' Chinese data out at some stage today too. This may move things. More later then!

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