-We’ve sold off hard to start the year; very one sided momentum with volatility (counter trend buyers) increasing toward the middle of JAN.
-A key near-term-bottoming pattern forms on the H4 chart- low, lower low, higher low.
-Market breaks the neckline, trades in a tight range, and sellers absorb.
-Buyers try to prevent the third low (“higher low” - 3rd blue curve) from being taken out, and fail (long stops triggered).
-1820 is now under pressure.
From a purely tech standpoint, the bias is neutral-downside, with more emphasis on the latter. The fact that buyers couldn’t A) rally above the neckline for higher prices and b) prevent the neckline break to the downside, followed by further selling, is very revealing to order flow. The failed bottoming pattern is bearish- anyone buying that neckline break, which is a very common bullish setup, is now trapped with stops likely sub-1820. 1820 is on deck for sellers, but who is trying to catch the knife there?
George Soros revealed he is short spx. So good luck bulls trying to catch that falling knife…
My gut says price will crumble lower and run 1800 over, no sweat no retrace.
Fundamentals really only play a key component to my trading when times appear to be very uncertain. Given the levels global markets are currently trading @, I’d say it’s safe to conclude no one is safe right now. This is why I’ve been urging fellow traders to keep an eye on the newswire nowadays, more-so-than-ever.
I can’t tell you why the EUR caught a bid.
Not because I don’t want to, but because I simply don’t know!
We know these markets move up and down, up and down, up and down. Honestly, it looks like the EUR just [B][I][U]wanted [/U][/I][/B]to carve out a near-term bottom (as I was writing about last week) and market participants are continuing to drive higher prices.
That’s the great thing about reading price action- [B][U]the only component I care about is who is in control[/U][/B]. Once we catch the direction of the [U]wind[/U], we know where to [B]set our sails[/B].
Watch the [B]Nikkei[/B]- 15800 under [U][I]serious[/I][/U] pressure.
Very similar intraday bottoming pattern here that I analyzed earlier on the S&P. The only difference is that sellers have been much more aggressive, leading one to ask if 15800 could even be defended…
Took an aggressive USDJPY short today seeing that macro conditions are not improving for risk trends.
Oil, the Yen, and Nikkei are all highly correlated right now.
XAU is catching a serious bid.
Where will WTI bottom out? I don’t know if serious buyers will step up until $18.
As mentioned, this was an aggressive entry, but our stop was never threatened above 115.
Downside bias still continues to exist, but these moves to start FEB may be a bit extended right now.
Really looking to get even more aggressive to round out this week, as there are opportunities everywhere.
Global markets are on edge, and the trend is very macro right now.
Aside from reading my previous analysis, can anyone figure out my entry/exit logic?
Hint- stops and limits are tightened b/c of market-wide volatility.
-Failure to get back above this key trendline may force breakout buyers who are trapped to sell.
-Those who sat on the sidelines and waited for a reason to sell the USD have had many all February.
-Now, seeing late-comers trapped @ the top, aggressive selling can lead to bulls puking-out, further fueling downside momentum.
-A single trendline break is meaningless w/o a contextual backdrop, and is never a signal in-and-of-itself to take a position.
-This does however provide a simple bias against the majors.
-Retail traders maintain net-long-USD positions.
JPY traders- keep a close eye on the Nikkei (*JPN225) and WTI (*USOIL).
Risk sentiment is holding hands with every single $0.01 fluctuation in WTI.
Is this a major shift away from the USD as the safe-haven currency of the world?
Where do investors seek yield if that’s the case? JPN? EUR? Equities??
Is there an opportunity in 3x leveraged XAU ETFs?!
-Horizontal zone @ 7175 is key to watch.
-Intraday corrective channel carved out, after heavy selling off that level earlier this month.
-Sellers may look to protect, for a test of 7125 and 7000 extended.
-Short-term, I’d be selling rallies into 7175 w/ tight/moderately tight stops above. But, keeping an eye out for signs of a breakout, with options to go long if 7175 looks like it will fold.
-Mid-term trend is still down, but it’s been volatile, so, tougher to trade.
-Near-term I was bearish/neutral as mentioned above, but cautious due to volatility.
-Longer-term, I’m calling for tests of 7200 and 7300.
-Two areas to focus on: the angle of buying off the lows @ 6800-6900 zone. The first attempt to defend 7000= 1st green trendline.
-After putting in a new low around 6800, I took the first green trendline, duplicated it, and projected the new potential angle.
-However, buyers were nearly 2x as aggressive scooping up the AUD, as seen by the new pink trendline. You can see the angular difference between the first swing low demand vs. the second.
-More and more, the pair is giving signs of a potential breakout and run.
From risk/reward perspective there isn’t any signal to get long just yet.
If this pink channel line is broken, then we’ll need to re-assess our bias medium-term.
Global fundamentals have not changed, but overall I think we need to be bearish on the dollar.
-First and foremost, the pair has been very erratic as of late, trading w/ increased volatility off the 1/21 lows.
-It looks like a pretty straightforward bull flag, but, the floor of the range @ 1.44 was cleared out.
-However, we have yet to test 1.42 and 1.41 extended, so buyers may still be in control here.
-Getting price back into that channel would be bullish and likely lead to sellers letting up a little bit.
-Here’s a diff perspective. As mentioned, really interesting price we’re at right now as there are multiple trendlines converging @ this point.
Bulls would be looking to get back into the channel formation (1st chart posted above) and hold.
Bears could gain confidence w/ a breach of the 1.42 swing point (1st rectangular zone closest to price in 1st chart above).
I feel (in one aspect) like we’re kind of trading in no man’s land right now, so the market can really move either way. I did take a position @ 1.43 earlier today and would look to add if we can move higher. If we get cleared out here, I’m not sitting around and waiting to be proven right. Stop is tight, initially targeting the bearish breakout zone of 1.44. Risk / reward is about 1/2.6.
Great analysis.
I was long g/u inside the triangle from 1.4446 targeting 1.4500. But got shaken out. I anticipated a bounce from 1.4500 cluster and a break lower (6 touches of the triangle were enough anyway) but was too slow to react.
I didn’t get a fill on Aussie either.
So all in all done lots of analysing and very little trading today.
-Nice breakout out, and rally double tap (two red circles) to get short.
-Ideally would be looking for something like this to set up as these are no brainers.
I was keen on an Aussie short. Nothing long term but a good daily squeeze. Got my entry and went out for good money.
Went long earlier gbpaud 5m 2br trend line bounce no brainer! Can’t post charts just now but cleaned up. I’m starting the weekend early and won’t trade Friday as I’m busy but good luck with cad.
I am keen to see what happens with Goldusd. My gut feeling says it’s gonna drop hard.
Aussie has been very volatile and tough to gauge- no action for me there.
GBPAUD though- are you talking about the breach of 9950? That def looked like a solid trade to me with a nice tight stop. Do you take a retrace of that pattern or enter on a break?
I don’t trade that pair, personally, but nice and clean looking setup to me with some exhaustion ahead of it- nice job!
Can’t say I agree w/ you at all on the XAU front.
I know this leg off the 1050 zone has been nearly parabolic, but I think that speaks to the overall global environment we’re faced with.
Personally, I think we’re seeing the resumption of the longer-term XAU bull market kicking off.
As long as we hold 1190, I don’t see any reason why a retest of 1300 would be out of the question.
Parabolic moves like this can sometimes signal exhaustion, but, they can also signal a frenzy. Traders who like to wait for a pullback may actually never get one due to short-covering and greedy demand, so, people will start to chase and push price higher and higher.
The pattern above is a common head and shoulders bottoming/reversal signal. The fact that the market rallied up to the origin of the pattern, and not only cleared out any offers stacked @ 1190, but breached, retested and shot up to nearly 1300 is very bullish in my estimation. This is not simple short-covering and buyers nibbling.
We’re trading above the 1M 20EMA for the first time in 3+ years. I’m predicting we’ll see a FEB XAU settlement above 1200. 1300 is the line in the sand to me, and likely where a very large number of stops are sitting. Trade and hold there, and welcome to the resumption of the 25+ year XAU bull market.
