Wednesday, 30 November 2011

Ouch!!!!!! If you were short you were wiped out or stopped out????

This intervention is a game changer for many commodities/equities and currencies.......It's the day to have a rethink. Liquidity problems over but fundamentals the same...ECB rate cut would be the iceing on the cake?
Current/recent US Data shows that the USA is actually in pretty good condition. We could see the rally in the S&P uptil Xmas.

I saw the black fork this morning but dismissed it as a day-dream.... after all It's CL was 100 basis points away and the UMLP 200 basis points!!!

Tuesday, 29 November 2011

- Eur+ Usd

several entries along the reaction line clearly seen here from a daily fork which is not seen.
The touch back on the mini fork also provides an entry which also has a CL failure.

Monday, 28 November 2011

EURUSD: Glorious failure at 1.34 ( Double tops?)

Don't hold your breath but this is a start but support at 1.3370 shows me a potential new pivot before another try at 1.3400 but my goodness isnt the euro weak?
I hope that you value patterns as much as I do....the proof is in the results

EURUSD: Glorious failure at 1.34 ( Double tops?)

This is by no means certain but price is at a critcal level

Sunday, 27 November 2011

Gold...A study of recent price failure

OK, I have been meaning to post this weeks ago when Gold was stopped out in the high 1780's where i was long with a 4.25 $ stop. It made me go right back to the charts and review this market as obviously something was wrong in my appraisal. Perhaps i had become psychologically susceptible to the hype that surrounds Gold and in particular since the equity markets started to tumble in late summer .Certain pundits were talking about it not being unreasonable for Gold to reach $10,000.
I had also been aware of a growing correlation between Gold and Equities and was aware that many markets were starting to trend together with equity indices such as Copper,grains and others. Meanwhile those same pundits (we have all seen them on CNBC/Blomberg etc-who are paid far too much) were touting Gold as the perfect diversification/hedge instrument! This market correlation of markets has always been a sign of more than has in the past been a reliable warning sign of underlying profound fundamental weakness (as well as technical weakness).
In this i am convinced that we will see some terrific moves in the months ahead and a massive shake up. Anyway...back to Gold.
I the first chart below i present to you the most important recent pivot since the e/o summer. Pivot A was indeed the first significant lower low we have seen for years ( since November 2009). What confused many was the next marginal higher high at C ($ 1920). However i always use Schiff forks off a rising market and this one was 'in play' within weeks when we saw pivot D formed soon after.
I should point out that pure exponents of Andrews would gasp with disgust that i have used pivot B as it is a lower high than C, but I have had the luxury of indulging myself for over 7 years in this theory and am sure that all any fork does is express 3 single pivots- no more and no less. There is no wrong way to connect 3 pivots with a fork, infact there is a totally new bizarre way of connecting a range of pivots to produce the most shallow angled reaction lines that are the most effective of all reaction lines. This is for another post at another time altogether.
I have proved to myself beyond reasonable doubt that there is no wrong fork in this chart.....ABD or ACD. Both are important. ( for me) The most important fact is that of the periodicity of a fork. Infact any one single fork rarely has more than one or two touches on it's upper and lower MLP's or indeed its centre line which makes me wonder how anyone can trade using a single simplistic fork. Only forks of great distinction have the ability to continually influence price and they are usually what i consider to be 'controlling forks' ....drawn off a distant controlling swing ( important market highs and lows) that continues to influence price long after these pivots are made.

Going back to the Gold ....we(I) have drawn below two simple forks ABD and ACD. What i have come to realise ( and i only realised this by accident) was that price must take out both centre lines- or fail. It matters not 'one jot' that the mauve CL of ACD is reached if the CL of ABD is not reached. It still counts as a failure. back test this on any chart with any instrument even with a irregular fork like this. Here you can see the failure to reach the dark blue CL of ABD...This is the fork where P1 is behind P0....This is not a bona fide fork regarding Andrews but it works as well as any fork (as does its reaction lines) and logically i cannot see why it should not work .All it does is express the relationship between three pivots...It does not express a whole swing even.To express a whole swing you must use multiple forks.

On the template at the bottom which has multiple forks (and their reaction/warning lines) from multiple time frames (where each pivot and thus each fork is chosen using a mathematical formula to give a value to each pivot and a similar numerical value or 'score' to each fork- this is essential when trading using multiple pitchforks/reaction lines or you just end up loosing control of the chart where you have no idea which reaction or median line possesses what/which value and what your expectations are for trend reversal/continuation etc).
I noticed on the chart that a particular reaction line from some years ago had a great correlation with price behaviour and the fork is shown below in both daily and 240 min. I guess this could be loosely called a controlling swing but strictly it doesn't tick all the boxes for me. Anyway who gives a fig if the reaction line works? In the bottom charts the reaction line is in a slightly different position but the point is that i should have seen it sooner ( before i went long perhaps?).
What can i deduce about the technical position of Gold now? We have closed the week on the original centre line which has provided support-so far but I have drawn many smaller lower time frame forks that are all failures. I do not think it is unreasonable to see Gold back to test support at 1650, then 1600 and ultimately 1500 where the UMLP of this long fork is lurking. You could also look at this from another point of view. When price passes through this reaction line it will indicate a change of health /trend back upwards towards the heavens where we are told
( normally by someone from the IGC) gold is heading. For the moment with the current correlation with the stock indices i would not want to be long gold unless the big figure was above 1800$/Oz. I suspect that there is at least another 10% or 150 bucks on the downside perhaps more.

At the end of the day...spare a thought for Gordon Brown...Britains ex-prime minister ( and perhaps one of the dullest men to hold high office in my lifetime) who sold 400 tonnes of the old Empires Gold in 1999 at an average price of 280$/oz when he was Chancellor of the exchequer. It puts my 1500$ loss a few weeks back in fact i am smiling as i write these last words!

Lastly Monday 28 Nov ( below) we have seen a bounce off the centre line shown above and we are currently trading at 1714.... however i am not convinced. Today stock markets and the euro have all opened higher but i am looking to short a failed rally in both equities and the Euro perhaps on wednesday or thursday this week. Gold i suspect will make it to 1750-1760 and when it gets there i will be waiting & watching to take its pulse and pescribe a possible short.

Thursday, 24 November 2011

DAX ( Z11) and EURUSD ( trade setup continued)....Has Christmas come early and Please can someone tell me what does an ORDERLY EXIT really imply?

More quality trade opportunities ( i use the word 'quality' carefully & rather than 'high probability' which is much over used and means nothing and everything -regarding each traders subjectivity/objectivity) and than i have seen for days...Perhaps it's that the US is having a day off that the trends are that much purer today?After all it is Euro Zone orientated fundamentals at work here.
PS: For greater clarity about the trade I added these two charts at 5.30 euro time.
Method: I combine the visual representation of reaction/median lines with the combination of Jimmers 2 x and Buffy's B-line. The Ensign template is a bit out of date ( circa 2004) BUT it works for me and the newer templates are simply too much for me as i am always cross referencing the reaction lines plus the Ensign 2 x B line template in multiple time frames ( 1min or 2 min or 34, 89 or 144 tick in the latter). In this case ( in addition to the reaction line setup- retouch on orange ML and failed re-penetration of red dashed reaction line ie: retouch) the Ensign template we had divergence in MACD, Bolly band touch thru and falling B-line and in the 2 x window the long term stoch (21-10-4) has ( not perfectly) kept trend direction down. The next bar after entry is a LL and takes me below the MA's. Stops never more than a few pips. This system was originally intended to trade Emini S&P but i have adapted it to my needs with certain settings tweeked. It works for me across many markets and in high time frames BUT you must use only the classic setups in these TF's and let the long term stoch and the Bline be in the trend direction ie no counter trend trades in 240 min HG Copper in conjunction with a ML/RL for example!

EURUSD...1.3400 a problem i think?

Wednesday, 23 November 2011

1.3325 area The low for today i think?

EURUSD- 1.3384Where are we now?

OK, so at last we have seen a drop overnight and this morning into new territory but today at least i favour the upside. So far the 1.3370 area is the low and i expect to see a retracement back up to 1.34 figure but perhaps we will go lower after that and wait for the US data.

Tuesday, 22 November 2011

Shoot out at 1.3500...continued

Thats what i call a move of quality! However. will it be another failure? What goes up can come down just as quickly as a 'spire' formation to gather energy and momentum to push down though 1.35 figure. The battle continues!

Shoot out at 1.3500

Trouble going lower? Trouble going higher?...we have a battle! Price refuses to go without being pushed so we may see a move of quality...either way but i favour can feel the tension mounting......

Another week another $ ( EURUSD & USDX)

As i sit watching the EURUSD( Tuesday 22 Nov Lunchtime euro time/pre US data) I am begining to think that price is making very heavy weather since yesterday when we saw support at 1.3450 and the chart formation is (at least in the 15/30 and 60 min TF's) a healthy bottom with repeated attempts to penetrate below 1.3420 being frustrated . Now we find ourselves just above the 1.3540 area and i am begining to get nervous and am staring a repeated centre line failure in the face.. Price has a basic ML/centre line objective of over 1.36 and at a sharp angle which looks too high without an enormous burst of energy. I was certainly expecting to see higher prices but now am worried. I have long since given up trying to rationalise the fundamentals behind the Euro crisis and this is in part because this is not a purely financial problem but a political problem. In a perfect world that reflected(my personal) true value then EurUsd should be languishing somewhere around 1.30 to 1.31 but doubts are now turning from Europe to the US and their budget issues and the Euro seems to be drawing a long breath before we see a new trend....or of course a continuation down to a level where every fibre of my body tells me we should be at.
We are stuck in a band/group of up sloping reaction lines that emanate from monthly forks ( you can draw them yourself). These reaction lines can be directly attributed to the current range. If you look in a high time frame the trend is down and we have held firm at the .75 Fib RT level but are in a fib dance between the .618 and the .75. I do not trade using Fibs but always check the retracements for additional confirmation or in this case a flag which tells me "Beware"! The following forks are of special interest as are their reaction lines
Fork 1: 1.2520 4th March 2009,1.5143 25 Nov 2009, 1.1875 4th June 2010 ( these may be slightly approximated btu are un-missible pivots)
Fork 2: Using the same P1 and P2 then use a P0 by using the lower low of 1.2333 on 27th Ocotber 2008

Thursday, 17 November 2011

EURUSD..short trade against RL using 2 x + B-line

Using the reaction line ( and confuence from reaction lines eminating form the RL grid ( dashed red) plus the important horizontal thicker line we have a visual reference for prices support or in this case resistance having made lower lows and lower highs in this trend down form 1.3490. Using the Ensign template we can combine the visual MT template with our reaction lines (and some ML's- only one visible in this chart) and take the entry based on the '2 x' and 'B-line' stoch setups. In this case a classic 'slingshot'. Entry on the top of the band with a tight stop and exit on the reaction line at 1.3440.. then wait for bounce.... and possible next short.

Tuesday, 15 November 2011

Cocoa ( Arith vs log scale) Coffee/Cocoa

The top chart is Cocoa log scale and the same chart in the middle is Cocoa arith scale and the bottom chart is also 60 min arith.

short Dec coffee @ 235.20/Stop 235.90