!00% on forecast, very clear double distribution day
I have to say that I’m impressed so far for a couple of reasons. Folks know that I was a student of a fellow who got a lot of bad press on Baby Pips the last several months. I thought and still do think that his approach to the markets brought one closer to the truth of what was really going on, which I perceive as the markets being moved in pre determined directions. I think this becuase of how precise the role of Fibonacci percentages are in the markets. Price is a circus animal being directed to walk back and forth, and I’m happy to be the fly that lands on it’s back and enjoys the ride if I can.
In texting with Dennis so far, I really like the method he is discussing because it also seems to be aimed at getting to the truth of what is really going on in the market, meaning what those who are moving price are really doing and when. He mentioned a trade idea last night that would have been very profitable if I’d taken it. We’ve just started, but I really do like the approach we’ve discussed.
H, hello, I am responding to your post in the melting pot. A couple of ideas, no NDA info here.
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COT analysis should only take a few minutes, all you are looking for are big divergences from one report to another. The fact is that the powers that be were going to stop giving this report because there just isn’t the interest in it anymore, the only reason they kept it was because a bunch of LW followers started crying about it.
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Try looking at the VIX for EUR/USD, there is a reason it is called the fear index.
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You might want to try to stop figuring out why, and focus on what and when.
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I have found if one draws enough lines on a chart one can totally obscure the price action, not good, main big moves only.
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Be careful in summer trading, take only the best setups, some summers have good structure to trade in others, like it appears this one, are low volume sticky markets. Big long tails on 60 min charts can be evidence of this, at least that is the rumor.
Just some random thoughts
The Ever Respectful VIPER
I did not catch the Cable short this morning. I totally admit that. But this was a highly doable trade if one had been looking for a short, and I’d like to make a case as to why and how.
First of all, when the US markets are closed, but Europe is open due to a holiday we often see some type of interesting price action. Secondly, if one had checked the BP calendar, it seemed like due to the weight of the announcements, today would have provided some type of liquidity offering potential for an interesting daily range.
Market structure had clearly been down in the cable lately, and yesterdays attempts at punching through 1.53 clearly seemed tepid looking at the candles. We could find other reasons looking at Fibonacci to indicate potential bearishness, not to mention pivots indicating bearish action as well. Additionally at the start of the day NY time, there was great divergence between Fiber and Cable, with positions of some kind apparently being accumulated in the Cable.
I had noted potential strength when looking at the dollar index this week which led me to suspect Tuesday’s fiber decline, which also would have been a contributing factor in the dollar gaining strength. Not to mention that the British Pound futures contracts had also been indicating Pound weakness.
In looking at all of this, a case for GBP weakness was very reasonable. See the divergence below:
Now, I wanna go watch fireworks on TV with my wife and daughter and to be fully disclosing, pizza may be involved. The best entry would have been found on a 5 minute chart at 3:25 AM on a penetration of 78.5%. Look at the chart below, and see how targets (Fib respect) could have been predicted in advance. THIS CANNOT HAPPEN IN A MARKET UNLESS ITS BEING MADE TO HAPPEN!
Price did not move as a result of news today, it was MOVED in concert with it, and although these moves are hard to catch (especially by sleepy accountants not sitting at their computers) they can be caught with practice.
There was a very interesting trade opportunity this morning in the Cable that demonstrates the usage of tools that I think are very sensible. The trick to it was going into today with a short bias. Yesterdays daily candle closed with a small pin, but not enough to make one bearish (though the four hour pin-bar was more solid) in itself. The high of the daily pin bounced (more like nearly grazed) the low from last week, which adds strength to the bear argument. The monthly and weekly charts also show the cable being in an area where supply is more likely then demand in my view. I’d also note that a change in direction seemed likely due to the bounce off of the weekly R1 that occurred yesterday at a 61% and 70% (depending on the high one uses) retracement level. There are some other Fibs that can be found that add weight to the argument, if one takes a look.
For me, developing a daily bias is easier (not easy) then finding entry points. However, we can make money by only being right sometimes if we really control risk. However, in this case, the entry point(s) were easier to find then the bias.
So last night, if one were looking for bearish opportunities based on above, the question becomes how do we get into the market. I’m a slow writer, and even slower at posting charts, so unless anyone wants to see a chart, I’m just going to leave it at comments. My chart which is set up with NY time, showed resistance at today’s daily pivot. The first time this happened (15M chart) was at the 1am candle and again at 1:15, when both candles together made a bearish pattern (railroad tracks I think.) More testing of this point around 3am, and I’m sure many got in at this point as it was also a Fib retracement that stayed below 100%. However, if one waited for the next retracement, around 6am (again NY time) there was a 70% retracement that was supported by divergence against the RSI. The hard part was that if you just missed the 3am candle to stay patient for the 6am retracement. By the way, notice the first two highs that occurred on the 15 chart (after midnight NY time) as the market was moving up. Every day traders were being enticed to go (in continuation of the weekly move) long, which was even more confirmation of a bearish opportunity, as the Commercials were trying to attract buyers to sell too.
Of today’s range so far, there were at least 60 pips that could have been pulled from the market by using some very easy to use tools. Today’s bias was a little tricky, and an argument to go long could have been made last night, but this was a very doable trade, and to me this is when trading is fun.
Another interesting day today in Cable. Comparing last weeks high, to this weeks low, we see that the high of this week hit almost exactly at 70% re-tracement before going back down the last couple of days. Some good entry points today if folks were looking to go short. A couple of interesting candle patterns, Fib entries after getting up to the mid point between the daily pivot and R1. After making the low at the daily S2, the market finished with a kiss at S1.