These are exceptional charts from the worlds leading economists and the outlook is not good. These charts are, in some cases UK orientated.
Wednesday, 14 December 2011
Chart Porn!
These charts are reproduced without permission (but with thanks) from the UK's BBC 2 Newsnight TV programme from December 13th 2011. To view the original context please follow this link http://www.bbc.co.uk/news/in-pictures-16090055
These are exceptional charts from the worlds leading economists and the outlook is not good. These charts are, in some cases UK orientated.
These are exceptional charts from the worlds leading economists and the outlook is not good. These charts are, in some cases UK orientated.
Tuesday, 13 December 2011
Gold closed and EURUSD shorts closed here at the CL
The gold position was closed ( sadly at the profit objective ) at 1664 but there was more in this move and look for it to touch 1649 but I am preoccupied with the EurUsd now we have broken out of last few weeks hellish range (25 Nov -9th Dec). I suspect that EURUSD is heading for this centre line bang on 1.3050 This is where i will close all my shorts in EURUSD
Short Gold @1672.84 (stp1674.25) obj=1664
It's a beautiful thing when you can match a small fork with a major reaction line like this one.
EurUsd . further weakness to come
The EurUsd appears still weak with my next set of targets being 1.3100 then 1.3085, 1.3060 and 1.3007. These are all reaction lines form HTF forks (with pivots values of over 80).
Strong support at 1.2960
Current upwards price action appears to be a retouch under a significant ML and the trigger line of the most recent daily fork. Simplified it looks like this.
1.3200 has also become a struggle to break above and all smaller time frame forks show failure.
US data due today could put a spanner in the works and a break above 1.3240 would raise the probability of price having a small cycle upwards perhaps reaching 1.3255 or even 1.3280. This would perhaps present an opportunity to sell into a failed rally.
The current centre line target is way up at just under 1.35! but this is highly improbable.
Here is more detail:
My personal view is we still need to continue the downside momentum in order for a true break lower into a new range reflecting the current fundamentals surrounding the euro and the uncertainty.
Now taking this one step further here is the Ensign verison of the top Esignal chart with the trigger line in salmon pink:
Now i add another fork called a 'GUY' fork ( i am not joking.... its my first name!)...the reason is that it uses the first pivot in a new trend. The fork A-B-C would have given Alan Andrews a heart attack!.....however look at the reaction lines. Perfect resistance and this fork works every time using the first pivot rather than the highest. This first pivot is very important and forks drawn off it will show the first line of resistance in the normal Andrews fork. The fact that it is the first HH is significant and the fact that there 3 other HH's after is not important. If you wish to see the first area of resistance after a change of trend use the first high as P1. The fact that it is the first HH pivot also means that the angle of the fork and its reaction lines will be softer or more shallow and of course the first reaction line that price will encounter in this new fork using the new low pivot of 'C'.This a great retrospective tool to use such as in this case.
Have a look:
and here in 60 min detail ..Look at the short trade setups off the yellow reaction line using the 2X B-line+ Bolly band system!
And because this Ensign template is not ideal visually for forks and reaction lines here it is in clean well scaled chart
Try it yourself!
Strong support at 1.2960
Current upwards price action appears to be a retouch under a significant ML and the trigger line of the most recent daily fork. Simplified it looks like this.
1.3200 has also become a struggle to break above and all smaller time frame forks show failure.
US data due today could put a spanner in the works and a break above 1.3240 would raise the probability of price having a small cycle upwards perhaps reaching 1.3255 or even 1.3280. This would perhaps present an opportunity to sell into a failed rally.
The current centre line target is way up at just under 1.35! but this is highly improbable.
Here is more detail:
My personal view is we still need to continue the downside momentum in order for a true break lower into a new range reflecting the current fundamentals surrounding the euro and the uncertainty.
Now taking this one step further here is the Ensign verison of the top Esignal chart with the trigger line in salmon pink:
Now i add another fork called a 'GUY' fork ( i am not joking.... its my first name!)...the reason is that it uses the first pivot in a new trend. The fork A-B-C would have given Alan Andrews a heart attack!.....however look at the reaction lines. Perfect resistance and this fork works every time using the first pivot rather than the highest. This first pivot is very important and forks drawn off it will show the first line of resistance in the normal Andrews fork. The fact that it is the first HH is significant and the fact that there 3 other HH's after is not important. If you wish to see the first area of resistance after a change of trend use the first high as P1. The fact that it is the first HH pivot also means that the angle of the fork and its reaction lines will be softer or more shallow and of course the first reaction line that price will encounter in this new fork using the new low pivot of 'C'.This a great retrospective tool to use such as in this case.
Have a look:
and here in 60 min detail ..Look at the short trade setups off the yellow reaction line using the 2X B-line+ Bolly band system!
And because this Ensign template is not ideal visually for forks and reaction lines here it is in clean well scaled chart
Try it yourself!
Monday, 12 December 2011
EURUSD...beware the 1.3225 area
Here we are approaching long term support 1.3218-25 and supporting RL's ( values 77.46 & 81.7) at 1.3197 so we either will see a short term bounce or a sharp penetration down through this area. This morning has seen a refreshing simple trend with several small short setups when combined with the visual representation of the reaction line.
Sunday, 11 December 2011
Gold..... a study in price weakness continued + the 'topping out' pattern
I am still moving towards reaching my goal of becoming a consistantly profitable trader but do believe that i have found a handful of overlooked observations that can be proved/discovered by anyone ( with enough time) which I have taken/ adapted and incorporated along with two or three other technical trading systems to produce my personal set of trading setup rules which work well but there is always room for improvment and often I am my own worst enemy pshycologically. These of course are not really based on my own theories rather observations on the theories of Alan Andrews and Babson and others who are mostly repsonsible for the large body of material i have mearly experimented with and tried to suit my style of trading. The truth is i am as much a contratrend trader (which is a dirty word for many and against many of the rules that you are taught) and as much as i trade continuations and continuation breakouts however I still tend to have more success with the contratrend approach. I try to anticipate markets highs and lows and changes in trend- not major ones as you never know at the time what is a major turning point and they are usually just another swing high or low. I have found that this best suits my character and once confirmed there is no need to pick th bottom or top but just catch the first retracement of the new trend.
This weekend i returned again (these posts. link2) to have yet another look at the gold market. A market that I have not traded until recently since early 2011 when it was at 1300$ and I posted this post on thursday 3rd Feb 2011.
The trouble with gold is we have been in a almost continious bull cycle for 10 year plus and as such i lack pivots to derive my forks and ultimately the reaction line from which i trade. My historical data for spot Gold goes back only to 1997/98 but Comex gold futures data goes back to the early 1970's and has all the major pivots that we need to produce a decent map of the market structure.
I use mutliple pitchforks and their WL/RL's selected using a mathermatical pivot formula to give a numerical value and end up with drawing a historical multiple pitchfork template which usually have predominantly horizontal reaction and median lines when viewed in lower time frames below the daily. These horizontal line are obviously not horizontal when drawn but as the time frame decreases their angle becomes slight. The angle of the line is critical and the probability of a horizontal reaction line ( from a daily/monthly or weekly fork) stopping/reversing price in the 60 or 240 min TF is quantifiably higher than reaction/median lines at 45 degrees for example.
Let me show you an example in the chart below where we have two forks ABC and ABD and also their reaction lines drawn at 50% intervals. These forks span over 20 years with their pivots and ( in my opinion) express only the relationship between these four pivots. There are other forks that should be drawn to reveal market structure but i am going to show you the effect of just these 4 pivots using 2 forks and their respective reaction lines.
Now below is the same chart in the 240 min time frame. It shows one the of the upper median line parallels from the blue fork ABD plus the two most recent reaction lines form both ABD and ABC. Not only does the UMLP of this blue fork describe perfectly the double tops and turning point of gold and the two reaction lines also show remarkable correlation with recent price in this 4hr chart plus this looks like a 'topping pattern'.
Now, once my chart is completed ( 2-5 hours manually for each instrument) and all forks
( 'historic' forks ( with pivots values over 65) and 'current' forks (values over 75) and 'controlling' forks values over 85) are added plus reaction and warning lines you end up with what i think is about as complete a picture of price structure as you can get. It may look very crowded in the daily time frame but if you drop down to the 5/15/30/60/240 min TF then you have a valuable tool.
Trend and direction are another matter altogether and that is why you have seen I combine these charts with usually at least two multiple indicator based systems across 3 charting/trading platforms.
Here is Gold today Monday 12 December during the morning London session just before the AM fix ( always a time to be alert) and my short 'bias' over the last few weeks was correct but i missed the move down overnight in Asia and now am looking to sell into strength ( a failed rally) if we see any. The outlook for Gold is bleak support at 1650$ then 1635, 1612 and 1600 are some levels just for starters. However a small bounce first perhaps today/tomorrow but watch the US$ and equity market performance. So how far will this market ultimately retrace? I would
be very surprised if we went back to the ABD centre line (Esignal monthly chart) at around
1500$ but we live in uncertain times and i would raise the probability of this option if the S&P/Dow/Dax/Ftse etc. should go lower than the late November lows.
This weekend i returned again (these posts. link2) to have yet another look at the gold market. A market that I have not traded until recently since early 2011 when it was at 1300$ and I posted this post on thursday 3rd Feb 2011.
The trouble with gold is we have been in a almost continious bull cycle for 10 year plus and as such i lack pivots to derive my forks and ultimately the reaction line from which i trade. My historical data for spot Gold goes back only to 1997/98 but Comex gold futures data goes back to the early 1970's and has all the major pivots that we need to produce a decent map of the market structure.
I use mutliple pitchforks and their WL/RL's selected using a mathermatical pivot formula to give a numerical value and end up with drawing a historical multiple pitchfork template which usually have predominantly horizontal reaction and median lines when viewed in lower time frames below the daily. These horizontal line are obviously not horizontal when drawn but as the time frame decreases their angle becomes slight. The angle of the line is critical and the probability of a horizontal reaction line ( from a daily/monthly or weekly fork) stopping/reversing price in the 60 or 240 min TF is quantifiably higher than reaction/median lines at 45 degrees for example.
Let me show you an example in the chart below where we have two forks ABC and ABD and also their reaction lines drawn at 50% intervals. These forks span over 20 years with their pivots and ( in my opinion) express only the relationship between these four pivots. There are other forks that should be drawn to reveal market structure but i am going to show you the effect of just these 4 pivots using 2 forks and their respective reaction lines.
Now below is the same chart in the 240 min time frame. It shows one the of the upper median line parallels from the blue fork ABD plus the two most recent reaction lines form both ABD and ABC. Not only does the UMLP of this blue fork describe perfectly the double tops and turning point of gold and the two reaction lines also show remarkable correlation with recent price in this 4hr chart plus this looks like a 'topping pattern'.
Now, once my chart is completed ( 2-5 hours manually for each instrument) and all forks
( 'historic' forks ( with pivots values over 65) and 'current' forks (values over 75) and 'controlling' forks values over 85) are added plus reaction and warning lines you end up with what i think is about as complete a picture of price structure as you can get. It may look very crowded in the daily time frame but if you drop down to the 5/15/30/60/240 min TF then you have a valuable tool.
Trend and direction are another matter altogether and that is why you have seen I combine these charts with usually at least two multiple indicator based systems across 3 charting/trading platforms.
Here is Gold today Monday 12 December during the morning London session just before the AM fix ( always a time to be alert) and my short 'bias' over the last few weeks was correct but i missed the move down overnight in Asia and now am looking to sell into strength ( a failed rally) if we see any. The outlook for Gold is bleak support at 1650$ then 1635, 1612 and 1600 are some levels just for starters. However a small bounce first perhaps today/tomorrow but watch the US$ and equity market performance. So how far will this market ultimately retrace? I would
be very surprised if we went back to the ABD centre line (Esignal monthly chart) at around
1500$ but we live in uncertain times and i would raise the probability of this option if the S&P/Dow/Dax/Ftse etc. should go lower than the late November lows.
Friday, 9 December 2011
Gold trade (S&R) continued
OK, as per my previous email the break came up and through the d/s RL. We took a profit on our short and have reversed trade direction and are long at 1712.73 (stop 1711) and profit objective is the CL at 1721.50 to 1722.75 area. If we fail this CL ( and we might) we will take a protective profit stop at 1716
Gold failed again at 1708$
I have seen this a thousand times. A channel created but a horizontal reaction line ( providing support) and a down sloping reaction line ( resistance) which pushed prices lower with lower highs but with support keeping us from seeing lower lows. You cannot guarentee which way price breaks and i still favour the downside however we will go up and test the reaction line again and will eventually break out either way. Break up over 1715.75$ would be a buy....or we may find price chanelled down to the 'corner' where we see a break either way. Whatever happens it will be a decent move as this pattern always ends in such a way. ML's/mini forks are of no use once this pattern is underway so cannot be used to predict price direction as you will find that if you draw micro forks they are always 'fails both upsloping and down sloping.
Short Gold
Looks very weak. Sold at confluence of two reaction lines however..... Beware we could rally sharply if we repeatedly fail to break the reaction line at 1708$
Perhaps a big move today?.......EURUSD post coming...its a sell EUR + USD view
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