Thursday, 28 February 2013

emini S & P,,,, double tops spells trouble

Its not really a double top but more a failure to make a higher high but the effect is the same. There is a high probability of price eventually going higher but how deep will this RT be? a .618 at 1499 is possible but we could hold a 1510 which is also possible short term. GBPUSD is sill set for a breakout perhaps?

GBPUSD. 1.52 fails again but dont give up. This looks a good + entry level

The green line in my MT4 platform below is showing the above fork (Esignal) in green and as a untouched CL. I guess this is in part due to the broker feed but whatever its a promising entry area  for asmall 10 pip stop. This is a long position with original 10 pip stop at 1.5162. Theres no need for anything deeper stop as a deeper penetration of this green CL would indicate further weakness.

Wednesday, 27 February 2013

GBPUSD continued with 'gap fork' plus Emini S & P

I still suspect we maybe building a low pivot here if 1.5080 to 1.5100 holds. 1.5100 failed repeatedly to break this morning but we have also become range bound with the high 1.5180's proving too much. After dropping nearly 15 cents or 9% since Jan 2nd 2013- and for good fundamental reasons-the trend looks slightly tired. I make no case for a change of overall trend but the probability of a 3 or 4 cent bounce must be growing. My case hinges on structural historical median lines you can see cutting across the above chart in black and red plus the potential pattern you see there with the candles and the higher low today plus the multiple stochastic/MACD patterns + divergence plus the gap from Sun/Mon this week after the 'triple A' fiasco Friday evening- How much of this news/weak data + bearish sentiment is already discounted in the price?
I am certainly not long but a break towards and over this d/s blue fork would wet my appetite.
ES H13:  Trouble around the 1512 area and a retracement will be needed after today's sharp bounce but i suspect this market will spend a few weeks oscillating around this area before moving higher.

Tuesday, 26 February 2013

GBPUSD......subtle change afoot? Don't give up on this fork yet

The horizontal red and dark blue liles are historical ML's from the weekly/monthly time frame. The Gap fork in black has shown a good correlation with price this morning but I suspect that this market is in need of a higher  high pivot . So far we have come from just under 1.6400 to 1.5070 in less than 7 weeks!  The objectives ( pitchfork) are all forfilled unless we are going back to the low 1.40s which i do not think. Having taken a real beating since Jan 2nd  I am looking for a spike upto 1.5350-1.5450 or around a .25 Fib RT.

Thursday, 21 February 2013

GBPUSD....Touch down !.. Is this a turning point

I am not sure if this is a new low but we have seen poor old cable hit hard recently. When any major forks CL is hit it is not unusual to see a bounce. Its the strength of this bounce that will determine if we have a new low pivot.
Here it is in Esignal with the horizontal ML belonging to fork AA/B 94.M... they dont get much bigger and important than this one which has provided support in the recent( viz a viz weekly TF since 2009) sideways pattern along this 'base' line.see below:

Wednesday, 20 February 2013

ES continued FOMC and angle of RL!!!!

Emini S&P. Reaction line effect and angle of any pitchfork etc

 Continuing on from yesterday and the relationship between the angle or pitch of a ML, RL and the effect is has on price action, i saw this excellent illustration today to post: Its the emini S&P and the blue fork is the one we are interested in for this example.See the extreme angle created by the pivots used in the blue fork and the almost vertical RL?
 Here it is again and this time we have dropped down to a lower time frame. I also have drawn over the RL
 ( which is drawn automatically using the MT4 custom indicator tool) with a segment line bang on top of the RL as it appears in this time frame
 As we drop down even lower suddenly you see that the original automatically drawn RL has moved and yet the simple segment drawn on top of it in the previous chart above remain in situ.
 Finally we drop to the 1 min. This problem of actually understanding where lines are in individual time frames is due to the constraints of charting. We all use bars, candles or other styles to represent the raw market data graphically, however the anomalies of such a data presentation system always have limits and a deep understanding of what I call 'line location' is essential. Sadly there is no one single time frame that reveals the truth and i build up a picture of the linear market structure using all time frames using historical PF's (ML's) and RL's. What someone may call a 'multipivot line' I will always be able to know what its exact location is as part of a historical PF or RL from a higher TF. Lastly people ask me "is it not true that the most recent past effects price more efficiently ( as in the case above) than the distant past and thus we should confine our efforts to drawing in the daily time frame and lower"? The answer I believe is that the higher the time frame the greater the magnitude of effective pivot formation.

Tuesday, 19 February 2013

E mini S&P plus how the angle of Reaction lines effect price

Well ! No downward correction seen on the ES H13 and a healthy burst of price action. I am still unsure of this move and have no short term long this week. A missed opportunity- perhaps and price (in theory) should carry higher to the high 1520's. At the time of writing we have a high of 1524.75 and 1523 trades. Are these two forks centre lines pierced on your platform cos they are not on mine

 Now how about the angle of a reaction line? The angles depends on the pivots used in the fork and on the time frame (as the lower the time frame the shallower the line) depending on scaling etc unless you use a 1:1 ratio. Here we use MT4 and autoscaling and have a look at the acute angled RL's and the effect on price. OK, it's not on every RL but its one of 28 patterns i have seen. including Andres observations such as zoom thru etc

 Gold below: see the different effect of the lines?

Monday, 18 February 2013

Emini S&P. pre-corrective behaviour grows during US mkt holiday

I feel it in my fingers
I feel it in my toes
The 'risk'  that's all around me
And so the feeling grows
This is that song that seemed to never go away some years back in the 1990's -it being a film soundtrack at that time. I have substituted the word 'Risk' for 'Love'. Immature behaviour on my part? Of course and no doubt my wife would say it is extremely childish, but I suspect that if I ever reach my golden years -70's or 80's she still say I am immature and childish then as she eventually slips/buries me into the ground. So why have I wasted a perfectly good paragraph on this? The reason is I spent most of Saturday,Sunday morning going through all my long term Equity index charts and creating new studies from scratch. Not just the usual suspects mini Dow, S&P, TF but also other US and European indices plus the VIX. This is not about gut feeling or any growing doubts I may have. Its simply about price behaviour and linear analysis and for the record I remain still bullish for Emini S&P and think we MAY have at least one more high to come. However we are in desperate need of a new low pivot and a retracement back to 1500.00. Last Thursday and Friday we saw a pattern of technical behaviour that I have seen before. Namely, wild and sharp swings(rally-then sharp decline) within a sideways pattern and framed by horizontal median line/pitchfork and reaction line organic structure. Please don't misunderstand me. I would like nothing more than to see a strong continuation of this trend and as i have mentioned before I rarely trade ES form the short side and I am not advocating a short-yet and I remain with all my long term positions- most from about the 1480's and 90s.
So whats changed?
1. momentum ( what i call trend momentum) has stalled.
2.Price has failed to reach the CL in 'local' simple Andrews forks that you can draw using Thursdays and Fridays bars/candles. This is not sideways consolidation behaviour either where forks drawn are often useless and you observe CL failure in both up and down sloping forks.
3. In several charts CAC40, Dax and cash SPX and DJII we are sandwiched between supporting ML's and resisting RL's. Heres the cash Dow and this crucial area is bang on 14000

 Heres belows the 60 min cash dow in arith scale
 Here below in log scale
 This above is just one of the anomalies I have found but even though the lines may be present in one chart and not another or in effect have more than one position they will still effect price depending on how they are viewed. If you are confused by the Log and Arith business here's the difference below in a simple fork with one click of the mouse to change from Arith to Log. Here's another link about this large subject: LINK , Link2
 To be continued. (ran out of time)

Friday, 15 February 2013

Emini S&P, beware the retracement brewing? plus USDX & Gold

USDX:Following on from yesterdays and previous posts on the USDX these ultra reliable reaction lines have created a huge sideways pattern -perhaps it could be seen as a pennant and/or diminishing topping pattern? Whatever it is we know that a break out either way will spell out the long term move for 2013 onwards.
We are now approaching the previous upper resistance limit created by the two descending reaction lines

 (as seen in log scale). We either will have a pop up towards 81.00 or see the start of a new high pivot being formed. It was exactly one week ago on Friday that we saw price touch the lower line. It's fair to say that my target for EURUSD is still some way off (1.3150) but we are on the .382 Fib RT level ( viz a viz the Nov 12 low to recent 1.37 high). However Cable has my attention if we hit 1.5450 today which shows a major horizontal ML from the monthly TF.

ES H13.. I am becoming weary about further upside gains in the short term but remain bullish. A subtle change of behaviour is perhaps starting to be noticed. There is always a limit to how many HH and HL's any trend can have and perhaps today we will see a break down after a spurt upwards?

Gold: temporary support at $1615

Tuesday, 12 February 2013

Cable breaks loose!

After one of those FX trends that to me seems to be on steroids- the recent large move down on GBPUSD from 1.64 then  more recently another leg from1.58- has perhaps found a base at the important psychological area of 1.5600. We saw early European session trading down to the 1.55725 with a further pin bar/pop lower to 1.5571. Watching the day bar by bar revealed the frantic activity around/ above and below 1.56 and the subsequent break out to above 1.5650. While all eyes have been on the Yen and EurUsd i have been waiting and watching (as painful as it has been to see the recent and seemingly endless deterioration of Cable across all major pairs). This looks an important area to watch over the coming days and theres perhaps a chance to see a retracement tomorrow morning should you believe we have further upside potential.

  The detail below in 1 min TF using two separate reaction line templates(dashed brick red) and coloured ML's as per above in the Esignal charts plus assorted other ML's