Tuva- This is my fault for not setting ground-rules in regards to posts on this thread.
Regardless of your experience level, you should take a look @ the level of discussion previously held.
Posting 3 or 4 incomplete sentences w/ no charts, and the beyond-blatantly-obvious analysis of “New trend is up or down” is simply not going to receive any serious attention.
Please clarify what you are seeing, and why you feel the way you do.
Again, this is my bad for not specifying exactly “what this thread actually is”, so you get a pass the first time around.
Going forward, I’d like to please ask that you come prepared w/ more than “I bet up trend is coming”.
Admittedly, this thread is still under construction.
Couldn’t agree with you any more. I’d be shocked if we don’t at least breach this pattern before the end of the week. The case for this longer-term bullish trend is just getting stronger and stronger each week.
We’re holding above this swing point and carving out a very bullish breakout structure.
Still long UGLD, VXX.
Booked 160P on USDCAD (got the “no-brainer” retracement to that double-tap-rally I posted last week, then the market sold off right back to the original low).
Flat on the FX front right now.
Fundamentals have not changed, and I’m not buying this S&P rally- literally and figuratively.
Clear breakout of psychological level @ 2000 (blue horizontal ray + final yellow square).
Yellow zones confirm this level.
50FIB acting as overhead resistance.
Pink channel over larger timeframe w/ key swings @ black arrows.
Yellow rectangle is where we’re trading now- on the underside of ascending channel.
Last 2 arrows are of utmost importance due to how clean they held.
Bulls: Looking to get back above 1950 for a run @ 2000 and ATHs (all-time highs). Bears: Looking to suppress 1950 and sell into rallies to test the D1 20 EMA around 1915 w/ deeper targets @ 1840.
H4 chart- Key bounce off 1.4 zone FEB11 (yellow circle). Horizontal line dropped @ 1.4.
Some sellers got trapped after impulsive exhaustion into this zone.
A corrective price channel formed (blue parallels).
Breakout of 1.4 zone candle marked (gray box).
M5 chart from today (MAR1) showing trade.
Breakout zone off to left (marked w/ label).
Key false break above our level trapped buyers (yellow rectangle).
M5- You can see trapped buyers here more clearly.
Look how clean the structure held (yellow circles).
Entry was red circle, covered @ green circle for ~60P.
A better price could have been had, but I wasn’t on the charts that early today so had to settle for a less-than-perfect entry. This is fine, b/c I was confident in my analysis that as long as the structure held, we’d look to test the origin of the swing up.
Major failed breakout @ ATHs (All Time Highs) leading to heavy one-sided selling (Point 1- Leg 1 to 2).
Positive retest failure of ATHs- Leg 2 to 3; failure to breakout (lower high @ Point 3).
New lower low established (Point 4).
Markets that have been essentially straight up rarely stop on a dime to reverse.
Time/effort are needed to unwind.
I’m not going to comment on the fundamentals, but from a pure tech snapshot it looks like we have the foundation for a deeper correction (possibly even the generation of a new bear market) in place for the S&P.
It feels like the OIL correlation is overdue and may break down.
Tomorrow’s NFP print may be a huge piece of event risk.
Effectively seen we are already in a bear market since years beginning by the simple definition of bear markets. Yes fundamentals are a big chunk at the moment, one to know is completelyenough to be honest:
FED/ECB pumped up inflationary stock prices to a maximum and now that FED started to reduce the “help” for the stocks these summs are getting pumped out of the market again. FED was pretty much the only reason the stocks went to a new all time high and now that its stopping they are comming back.
Aswell important point: people are sitting on their stocks for years now starting from 2008, sooer or later everyone wants to cash out even the people with patience and nerves out of steel. buy a house or a car or whatever. Noone holds for stocks till their death.
Me personaly, i cant wait for the next bigger correction or (praying to god) for a new nice crash to mix the stack of cards again a bit.
Another good indicator of things changing into new direction is the volatitly of the last few months. The last 7-8 years you had movements of 300 points in the dow jones only when major problems occured or in a crash, now the daily average moves are around 300 points and hard days can go up to 500-600 points.
Over the years, I’ve come across countless discussions on trading forums regarding chart timeframes and the concept of “noise”. Personally, I feel those who think faster timeframes are “nothing but noise” are completely incorrect.
Here’s a quick and perfect example of why.
I posted the above D1 chart, showing my analysis of the SP500.
As I’m sitting here watching today’s price action on the M5 chart, I see this:
Look familiar?
The D1 chart originally posted is about 2 months worth of price action; The M5 chart- 2 days.
Using “faster timeframes” is not about analyzing the chart candle by candle. It’s about chunking data and being able to recognize patterns of buying/selling.
Taking a look @ the USO (’‘United States Oil’’ ETF that tracks WTI- West Texas light, sweet crude oil) today.
Really clean price action illustrating the fundamental concepts of impulsive vs. corrective moves in a market.
The general theory is that an impulsive move will be followed by a correction, which is followed by an impulse covering roughly the same distance as the original impulse, in the original impulse’s direction.
This concept is the fundamental cornerstone of all price action trading and has existed since times of the ticker tape. Without being able to identify these specific types of moves in the market, you are @ a unique disadvantage from the mere standpoint of not positioning yourself w/ order flow @ your back.
Just think about what the terms IMPULSE and CORRECTION mean from a purely logical standpoint.
The word IMPULSE should conjure up notions of aggression and a decisive and strong desire to act.
The word CORRECTION should conjure up passiveness and indecision leading to friction-based actions.
How do we identify these moves? Simple- candlesticks and a moving average.
Agreed on essentially all accounts.
I think the FEDs ‘experiment’ w/ QE is starting to rear it’s ugly head- basically, it doesn’t work in the long run. It’s a short-term solution with inherently adverse long-term effects.
When you have a market that basically rallied for 7 years due to cheap money (artificially low interest rates) and the FED propping up the system w/ their printing press, and you take both of those away, you’re left with literally nothing. And, the charts don’t lie.
You can read 20 stories on the web about how the US equities market recent pullback was just a correction, and the SP will yield double digit returns this year.
You can then read 20 more stories about how the party is over on wall street, and there is a 50, 60, 70, 80% chance of recession, and, not only a chance of recession, but, the fact that the FED actually raised rates DURING a recession. Recessions are only recessions in hindsight.
My advice would be to pay attention to the headlines (because it’s part of the job), but, carry out your own due diligence in analyzing the markets- In other words: Do the headlines reflect what is actually happening (i.e. on a price chart).
At the end of the day, trading is all about being able to rely on your own analysis of the market and feel confident that as long as you approach the charts systematically, day-in and day-out, the only opinion that will ever matter to your bank account is your own.
I think market participants are more confused now-then-ever. The FED is in the corner and no one knows what will happen next. Can the US economy survive 1, 2, 3 rate hikes for 2016?
-Mulit-Year High
-Followed by a lower high
-Followed by a bottoming pattern off the heels of impulsive selling (primarily seeing head and shoulders, some double bottoms)
-Followed by a relief rally
-Ended w/ where we are today- @ key price levels
XLF, QQQ, EEM, DJIA, SP500, JPN225 (Granted there are risk-on correlations here).
Then look @ XAU- all the gold miners and XAU-tracking ETFs, GYEN, GEUR.
Yes, volatility readings are low right now, but don’t forget equities rallied 12 out of the last 16 days (the SP went bid @ a clip of 3:1).
As I’ve been hinting @ for quite some time now, I’m starting to get the sense more and more that the macro investment bias for risk is dwindling. Not seeing clear risk-aversion just yet, but the pieces continue to line up.
Clearer picture market dynamic wise. Everyone want’s to short gbp but yet it’s going up on good NFP numbers?
That’s a short squeeze, very obviously so.
Talking of Gold, I’m not too sure either. I am front running the consensus here but I believe commodities are back and are going to climb higher. So CCY is a buy. Look for RORO scheme, it’s crawling back.
Narrowed sell zone down (yellow rectangle).
Sold @ red circle.
Aggressive entry, but, aggression has paid w/ the JPY recently. Double-tap on the sell zone confirms.
Plan was to exit @ 1st green circle (20EMA crossover).
Exited trade @ 2nd green circle for small gain.
Gray box points out zone where short was filled.
Price sold off ~60P.
Two logical TPs existed.
The plan for this trade heading in was (as originally mentioned) to cover @ the first green circle on the second chart, which corresponded w/ a logical place to take profits. However, I got a bit greedy on this one and moved my limit down to the deeper target. IMPORTANT: moving my limit came w/ moving my stop.
In essence, this was a risk free trade as soon as I decided to target the deeper price. The stop was moved to break even + a logical price where buyers shouldn’t be able to test. This position was stopped out to the exact pip, and price then continued to retest the original target. This happens. It’s part of trading.
The mistake I made was that I consciously decided to overlook the fact that volatility still exists and targets need to be tight as a lot of whipsaw price action has been common. However, that trend will eventually relax a bit, and I felt this trade may have been one of the first where volatility calms down and deep profit targets can be achieved.
My original bearish bias still exists, so I sold the pair again. Obviously @ a worse price, but nonetheless I’m sticking to the plan and now seeing validating price action that the deep target can be on the table again w/ a tight stop.
