Weekend Review -Part 1

COPPER






Simple Reaction Line work can reveal critical approaching support/resistance/reversal levels but the harder task is the interpretation of price action as it encounters the reaction line. What does price tell us about its energy and momentum/direction. What patterns are discernable ,if any? What are the indicators telling us such as volume? Here is a typical example. HG Copper (Comex) has seen a strong trend since early 2009 . The weekly chart shows a bunch of regular and Schiff and mod Schiff forks.I have used two set of RL's of the aqua blue up-sloping fork and as i commonly find the most recent low pivot ( piv 2) tend to produce the better RL.
Also the Schiff or mod Schiff forks with a horizontal attitude tend to have reaction lines and median lines with a higher probability of effectiveness. This is in part because of the angle of
45° seems to have a dramatic effect- a fact not lost on Gann. The weekly chart never yield much result but when you drop down to the daily TF chart you can see exactly how powerful these lines are and remember these are drawn and measured by me (by hand) so have room for error.
Price has now reached two modified Schiff UMLP's and has made nearly a 100% Fib RT from the lows of late 2008. The previous double top pattern ( May 2006 & April 2008) still remains to be broken. From my experience it is highly probable that price will now take out these two previous highs and i can think of few examples of triple tops with such a formation as we see here. However dropping back to the daily chart it would be and should be now highly probable to see price fall back below the 400.00 ¢/lb level back to hold support at the RL at 360.00 before resuming its advance in 2011. The indicators show me a market that is overstretched but the skill we all desire is to know if this is a sell (against the trend) at this UMLP and what entry method/ setup can be used if price action starts to confirm that we are in the process of reversing.


T-Bonds






Here are the T-Bonds. Yes, I know that weekly & daily chart looks like a birds nest but it is meant to be viewd in 240 or 60 min TF.
I would be surprised if we did not see this market retrace more than the .618 Fib RT we currently have just exceeded. The destination/objective is the lavender coloured CL at around 114.00 but we are today bang on the purple CL (at 121.10 ) of the modified black Shiff fork. The mod Schiff fork being purple and only visible in he big daily and 60 min chart.

USDX & Euro$ to follow.