EurGbp, Gold, EURUSD,CT and the rest ( if enough time)

Have a look at this simple chart of EURGBP

Below is a 30 m in chart showing action around the centre line and a Schiff fork( blue) off the pivots chosen. Below is the daily Ensign ( b-line template). There is divergence but no signal except the possibility of holding above the pink reaction line which will need a close above .8320.. if we fail we could still go lower but i have my eye on this pair in the coming weeks/months and this is in part of the worries I have over Pounds sterling. This is very vunerable in my opinion and shows great weakness technically at the moment and will sell any potential rally above 1.5400



Gold below has now got to break convincingly above 1650 and then 1690. Both these are critical. Draw some simple forks on a daily or 240 min chart and you see we have an ultimate target of 1750$. I still remain bearish overall but since this move has seen almost no retracement of any significance yet and still appears strong I am waiting to be convinced but price action is bullish at the moment but no one in their right mind would buy at these levels a whisker below 1650$ . I have not had time to look at potential resistance after 1650 and 1690 and we still have yet to get a leg up over this most important level (1650) and it could all go pear shaped still. I wait and watch. Remember using the multiple PF/RL method we found the absolute low a few weeks back.


Cotton is a buy but not at these levels a break over 97.50 9 March would be good or if we get down again to 93.50 but i believe this commodity has turned.
What about the EURUSD? Have we reached a level that reflects the true fundamental situation? I believe we have and would not go short here at 1.2680. If anything I am considering a long this week -depending on price behaviour.
Below is a chart with some long term ML's ( blue) and RL's in brick red that I am watching. There is little or no support under them. Also the Ensign chart clearly showing the market oversold.




Unable to post in depth due to time constraints this week.

Gap fork in Gold ( Gold continued)..continued

It's a beautiful thing when it all comes together like this! ( see previous posts from today). This should now lead to a retest of the previous low at 1605$. The bottom line here is that we have failed to pull up and away over 1620 convincingly. There is always the posibility we will rally again if we fail on the downside attempt ...so nothing is certain yet.
Below is another reaction line template but with a unorthadox fork ( in pink) using the first high in the swing which gives me the first set of reaction lines to see where price can fail or continue its trend and thus judge strength of trend. A similar unorthadox fork plus reaction lines are displayed on the ensign chart. please note that the centre line (in both forks below ( MT4 and Ensign) has no function in this type of fork regarding a failure or successful touch compared to an Andrews fork..it only serves to locate the first line of resistance offered by the reaction lines from the same frequency as a normal fork.


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Gap fork in Gold ( Gold continued)

The blue thin fork seems to have the measure of the frequency of the current market with P0 being the gap from last nights opening. Gaps have a power of their own that i do not fully understand as sometimes i find they work a treat ( as pivots) and other times they are less than useless but its always worth wtahcing where they are ( viz a viz important support/res from RL/ML's) and always try a fork off them.
Note the light touch( .618 Fib RT) on the centre line at the confluence of the green/black ML ( see previous post). I am in two minds here but will continue to hold with original stop levels rather than move to b/e due to the 50Cents spread...one of the pitfalls of CFD's.

Gold

It's still failing at small and large forks. Don't get sucked into what looks like a rounding top cycle in the 1 hr TF. Even if we see gold upto test 1650 area I will not change my short view.. after all we are struggling to keep above 1600 now and only a clear break upto 1690 with nice price action would encourge me to abandon my stance. I ask you this question.......After a historic rise lasting years why should we only expect a 3 month correction? Do we wish it and is this a reasonable expectation in light of past experience of other markets, the current pattern and the fundamentals.

DAX ..off the edge

Can you see the wedge shaped channel the the left hand chart? This is what i had hoped for yesterday and hence my disappointment in this mornings post. I will look for another short entry but it may not be suitable re risk/objective/etc. Next objective is a test of 5980 then 5875 where there is long term support BUT we have failed on the upside and will have to complete another cycle down before we find out if we hold or go lower or return up again to retest 6150

Sterling.....weak and vunerable in 2012

Below: One log scale the other arithmetic: The location of the reaction lines changes.

Below the MT automatic reaction/median line tool draws the lines after you choose the pivots and variables


These charts scream out to me (technically speaking!) weakness and its not just the fork shown and labelled in the Esignal chart as i am well aware that in a sideways market ( and that is what recent price action shows in the high time frames) it is not reliable to use the fork/centre line failure to determine future price strength or weakness. It is not unusual to see CL failures for up and down sloping forks in a osscilating market The fundamentals tell me that the UK is extremely vulnerable as is sterling that remains over valued and I expect to see 1.50 tested in the next months then lower. The short term daily stochastics point down like a trap about to snap shut but we may well come up for another small wave cycle where opportunities may present themselves for a short position.

Gold ...where from here?

Text to follow

DAX & + EurGbp @ .8248....time for a bounce?

I still maintain my view on the DAX that we will see prices fall and this is the upper limit of the current range. A convincing break above the structure seen here at 6150 would make me review my short outlook. My position was stopped out in profit as per yesterdays post at 6143 and the gap was filled before we moved higher and to some degree I am disappointed with the outcome as I took less than 30% of the total potential profit but now we seem to have hit a wall here as can be seen on 3 different templates below. All eyes are now on US jobs data due soon.




And EURGBP below:



. You can see (in the lower time frame MT4 charts) the downsloping reaction line that has brought price lower and that now we are on the other side and also have made contact with the centre line of the fork shown in the daily chart. We are also underneath a reaction line that can be seen in the higher time frame MT4 charts. Price often falls through a reaction line but will be carried higher on the reverse side. The first partial trade objective is the underside of this RL at .8275
I do not know if this is a major reversal point and only time will tell but one of the major objectives has been achieved but I expect a 'fight' around the thick black centre line. Price rarely tips upwards and shoots off immediately after a long run down and expect to see a period of consolidation below .8265 and with support at the CL at .8244.

Mind the Gap...continued - DAX (Mch12)...continued. cont

OK, i was stopped out on my additional long position ( 6131.5) with a very tight stop at 6137 but with a loss of 80 odd bucks. The high since has been 6143!! The open equity on the trade is over 100 basis points but i am moving my stop down to 6143. To protect some open equity but mantain my view we should go lower and fill the second gap.This is confirmed by the stochs in the 240 and daily chart
We have continued lower today but have now hit the LMLP of a active local fork at 6045 and have bounced. So far this is a shallow retracement and am still of the view that we are going lower but must break the LMLP and make a new low today or i may consider other options.
If we break this LMLP at 6045 and make a lower low then it would be another possible short entry on a retouch.
I am also watching Gold and EURUSD. The euro is due a bounce and i am looking to see if we hold at 1.2800. I am still short from 1.30 area but am considering taking partial profits. I also have a potential buy area on EurGbp just below the market. More charts to come.
My only other open postion is short 3 March mini Corn ( not CFD) at 655-00 (stop 657-50)
Also look at Copper (HG) Comex below.... its going to break out of the reaction line channel soon....lower is my guess back towards 310.00 and what does this mean about the whole metals complex? Lower? I think so and Gold is included. We all know that alot of folk piled in below 1550 and filled their boots and they all think that the Gold retracement/sell off is over. I do not.

Mind the Gap...continued - DAX (Mch12)...continued. cont

I have added another short .5 fractional lot ( remember this is the CFD not the futures) @6131.50/stp 6137 and show here another different template with two screen shots, 5 min and 1 min below). My entry viz a viz the short stochastics/bline and Macd/B-bands etc is also shown here on yet another template. This is a

Mind the Gap...continued - DAX (Mch12)...continued

Here are two charts. In the 15 min i have drawn over the blue line with another light blue line and the black with another black....now we drop down to the 5 min and you can see that the blue line has shifted. Try this in log or arith or any othe scale and you have the same. It reveals that there is more than one location for a line and price reacts to the same line in more than one location. Infatc i am almost sure that each line ( median, trend, reaction etc) has a location either side of it ie above and below. Try it out yourself and you will see the horizontal layered effect and how price makes small pivots as it moves sideways through it.

Mind the Gap...continued - DAX (Mch12)

While gold fights the 1600$ level and EurUsd does the same at 1.3000 i remain fixed on the DAX. This is a rare contratrend trade for me as usually i will try to pick up the first retracement in a new trend and trade it as an intraday or short swing trade but following on from this mornings post i wanted to show this chart which shows what i called the 'layered' effect of multiple PF's from high time frames ( daily and upwards) which supply horizontal lines when viewed in low time frames. The above chart shows the battle between the downsloping reaction line(from a unorthadox pitchfork) the royal blue CL form this daily fork (P0: 6436 on 16/3/2011 then P1 7623 on 2 may 11 and finally 4971 on 12 sept 2011). The reaction line IS DRAWN AUTOMATICALLY AND CANNOT BE TWEAKED, it comes form a 'local' fork and (uses a technique that is mine of not using the highest high but the first minor wave high of P0 to p1)...it works every time is always the first line of resistance that i trade off.
NOTE THAT IN THE DIFFERENT TIME FRAMES THE BLUE CENTRE LINE IS IN DIFFERENT POSITIONS...ONE SHOWING PRICE ABOVE AND ONE SHOWING PRICE BELOW IT HAVING BROKEN DOWN THROUGH.
As yet the support offered by the blue CL is still intact even though in the 15 min chart it appears below. Price will battle on between these two with lower highs as the reaction line draws price lower until a break out at the end point of confluence where they cross each other.
Look at the energy price gets when it hits the blue ML...it may well bounce with the energy held in that blue line ( and there maybe a trade in there for scalping) but i have seen this a thousand time. price will return to the blue line and each time it touches the energy will diminish until it passes down through (or breaks out above the reaction line).

Mind the Gap! short March DAX and other equity Indices

As they say on the London underground railway/Tube/transit system..."Mind The Gap"...this is when the doors open at certain stations and there is a gap between the station platform and the edge of the train and a recorded message warns you of the perils of falling down the gap.
In technical analysis and in particular median/reaction lines gaps are extremely powerful. No one understands exactly why markets gap but i have observed that they do so at significant reaction line and significant/critical median lines that are resisting/supporting price. There is always the knowledge that gaps in markets are always filled. The majority are filled quickly others may take months or years and represent critical turning point in market structure.
So imagine my delight over the last holiday week where with extremely light trading we have seen all equity markets gap-up. My long term view is undecided and i will offer my particular technical insights before next monday. However I am certain that as the curtain rises on 2012 we are not going to head north yet and that many questions have to be faced regardless of the USA's economic resiliance and encouraging data form the last quater.
My gut impulse is that we will fill this gap NOW. We still have gold/equities and currencies/USD moving in tandem and until we see the uncoupling of these markets perhaps in the second half of 2012, i am taking my lead from evident weakness in other markets to support my views on the DAX. A li nk to the trade setup for this trade will be posted here but look at the short stochastics ribbons in the 240 min TF ( not shown here). Also based on my own experience that price must hit the CL of all classic andrews forks drawn off both/all available lows and the fork with the highest angle, there is a failure here in multiple equity indices..eg in the 60 min TF DAX(H12) 5624.50( 19 dec) as P0,5974.50 as P1(21 dec) and 5773.50 as P2 on 28 dec.