Tuesday, 31 January 2012

Another historical fork..cont

This is about as good as it gets and although there was no planned trade set-up here to share with you, I hope it illustrates the power of historical PF's/ML's and more importantly their reaction lines- a study of which has lead to the development of a encouragingly profitable system.
Price may well rally to gain enough energy to pass down through the line- so watch for an exhausted uptrend- or fundemantal news to take us lower.

Another historical fork

Try this yourself...price has already previously bounced off it like a pin at 1.3026...perhaps it will again. P0 1.0614 1991,P1 1.4535 March 95 & P2 .8225 Oct 2000)

EURUSD...It's magic!!...log vs arith and DAX H12

Ive talked about this fork so many times and yes, it predates the euro and is compiled using the ECU which is calculated largely by the DM value

This is is a bit of fun but have a look at this one simple fork in monthly EURUSD
P0 sept 1975
P1 oct 1978 (or you can use the right hand high pivot of 1980..it makes no difference).
p2 Feb 1985

Here it is in all it's glory using arithmetic scaling.

and here is the same fork using Log scaling.........Impressive ehhh!! If you revert to Arith scale & then replace each of the three lines ( 4 if you connect the B to C) that make up this fork with single trend line segments or rays and then switch back to log scale you do not get the same result.

and heres the detail of the same log daily chart below!!!!

This is obviously astounding stuff but has an alltogether more important application in my trading charts.....truely where is the true location of any line...trend, median,reaction etc? The answer is that any one line has more than one location and yet will quite possibly have more than one reaction.
here below is my DAX CFD March 12 15 min chart ( arith scale) from this morning. Look where the black ML line is and where the reaction lines are.

Here is the same chart/template (same arith scaling) but 5 min TF. I have drawn a small black line where price was on the 15 min. My long entry is on the poke bar through the D-sloping RL.

Thursday, 26 January 2012

Gold...OK it looks strong enough to get to 1770$ & soon!

...Thats enough for me. After yesterdays posting whiel price was at the crucial level of $ 1650 we saw classic price rejection of lower levels. It has intersted me so much that i reproduce some of the the charts here again in the light that I learn something from it as I was considering a short on a break below the reaction line at $1648 as it turned out I did not trade Gold as I am 'margined out' on other positions ( + Corn) but I was shocked to see such a strong market and have looked at a possible entry. In the chart below/above we see price had sold off from 1670$ in the European/London session and quite sharply. We hit the green ML and then cycled sideways and price was giving all the signs of going lower. After 5 trys - each time being supported by the green line and resisted above by the reaction line we basically made a pennant/flag pattern ( in the 1 & 5 min TF) and broke lower. The reaction line and the big psycho 1650$ level was being tested at the very moment i was writing the post. What happened next took me by surprise (as the Fed news hit). We spent a few seconds at 1648.50 and then bar by bar we rose immediately above 1650 then above the green CL to 1655 and then a retouch on the green CL then a 'poke' bar which took out the previous high an then another long range bar. I think the second bar ( highlighted) at 1657$ should have been an entry. But there no point looking back....Where is gold going? The daily chart shows us that 1775-1785 is where the current Andrews fork objective lies and this usually proves to be a good yardstick of trend moves and this ccan be seen in the top left hand small chart...however if you use the 20th October low of 1608.40 as P0 (instead of 1626 on 26th Sept) then you get a simple Andrews fork that has a centre line time/price target of 1764$....allmost where we are now. Sadly I would not consider a long until after a pullback but this market has refused to do so since we touched this target a few weeks ago. So with Gold i will watch and see.

Wednesday, 25 January 2012

Gold...This ($1653) is an important level and we are going lower

It became apparent this morning that we were seeing more than usual activity in the gold market. Price seems very tired and laboured and the effort to touch 1670$ was the tipping point. We fell to the CL of the green fork (P0 1560.06 on 15/Dec2011, P1 1641 21/Dec 2011 and P2 1522.55 on 29Th Dec 2011). Price shows us that it is weak in many ways. A Schiff fork drawn off the pivots along the line was a failure then we see that the energy from the line caused price to bounce but the upwards limit was defined by overhead resistance from the down sloping reaction line you can clearly see.Timne and time over price made wild spikes higher ( just as we have seen in the EURUSD at the recent highs above 1.30) and these sharp moves ( in the 1 min charts) can only mean one thing...Price gathers energy like a coiled spring to push down through the line. I counted 9 cycles before we broke lower and now we are at 1650$.
Will we go lower? I believe so and it is ironic that the last few days we have seen the usual analysts on CNBC/NBlomberg and other newswires all telling us what a safe bet Gold is now it has its familiar steady climbing habit of sucessive days with higher highs and closes etc. There is support at 1649 seen clearly on my chart form a reaction line with two more underneath.A break lower here would mean a return to the low 1600's. Also look at the Ensign template for the futures in a daily chart...the short term stochastic ribbons look ready for a tumble. I am not saying that Gold is finished as it surprised me with the endurance it showed int he recent price rise but we are definately overdone and as yet have seen no retacement or lower low. 1621$ would bring us to the LMLP of the green fork seen above and a .382 Fib RT and that would be a good start.

Heres the 240 min again showing the last few weeks action and look at the 2 x as well as the falling B-line

Multiple historic PF trading... EURUSD...one simple fork

Here are two simple Andrews forks in the EURUSD monthly TF. Part of my trading approach is to give each important monthly/weekly/daily pivot a value which is done using a formula. This is simply to only draw forks that will have the most profound effect on price. This actually depends on more than just the total pivot value for each fork but also variables such as the eventual angle of the fork and reaction lines. In this shot the black fork is rising/up sloping at about 8 degrees above the horizontal and it's reaction lines are shown to effective. The second shot is
EURUSD 15 min and shows the resistance offered by the same black CL which is almost horizontal in this TF - horizontal lines offer the most effective resistance.
Outlook? A break and daily close above this line would mean we are set for another important line at 1.3100but a fail here would mean a return tothe mid to low 1.20's
Here's the weekly of the same chart below showing the D/S reaction line:

My 'Multiple PF' maps have somewhere between 10-15 historical forks( M,W & D) and approx 5 intraday 240 and lower TF 'local' forks plus a reaction line grid/fork off the daily/weekly controlling swings. Here below is a fully completed spot Gold (CFD) chart showing just ( in this case) one or two ML's in green and blue) the rest are all reaction lines plus there are Bolly bands. Onto this I load a indicator template or use a seperate platform.

Will price hold at the 1650$ area on the reaction/Median lines seen here? Can you see the correlation with price/ reaction lines and the symmetry of the lines viz a viz price behaviour?

Wednesday, 18 January 2012

Gold.... Corn

Corn's ( Maize) having trouble going below 600.00 ( March12). I have been short but am becoming nervous and have closed my short ahead of the Chicago session. Stuck at 599 in the globex session and with multiple stochastics in multiple time frames indicating its very oversold. Perhaps a dip below and then a rally or will we go lower and touch the 580-590 area. Reaction line support is shown here in the Esignal charts. USDA report last week shows just how bearish supply/demand is but fundamentals apart there is a huge gap to be filled from last weeks limit down move....sometime soon we will see this move up.

Gold is still to break above 1670 and seems comfortable in this range with no big retracements as yet. Here are a set of reaction lines from a fork not seen here. I have highlighted the reaction lines in the second shot.

Monday, 16 January 2012

Short Gold..continued

Is Gold running out of steam here? There are a series of down sloping reaction lines approaching.- some of which i attach great importance to. I know that today is a US holiday but since the USA is not the leading cash market for gold (and although the USA futures are shut today) i would venture that we may BE TOPPING OUT HERE. We still have seen only very slight retracements from this move...none over .382 and yes this is a bullish sign but all the time we are seeing the possibility of this trend being/beconing exhausted.

I think that there is a high probability that we are on the edge of a retracement tomorrow when US mkts reopen and have taken stock. We still see a nasty/unhealthy correlation with other markets/assets which i thought Gold was begining to loose. I am still short BUT i am prepared to be wrong and a convincing break ( daily close) over 1670 would have me converted. ... but make no mistake this is a crucial level and a failure here would mean the green shoots of recovery are over and we still have more turmoil ahead or if we make it through here I am only too happy to look for a long position on the way up.....But it's not over till the fat lady sings!

Short Gold

I have held this half lot position since Friday but have decided to let it run- for better or worse.O/E is under 450$ and the stop is a whisker under b/e.

Friday, 13 January 2012

Small technical glitch.

Major software problem with winsig.winros ( Esignal in conflict with Ensign in conflict with MT4 in conflict with everything)!! No charts until later

Thursday, 12 January 2012

Corn ( March 12) Limit down......you have got to love this!!

Errrr, Small hiccup in the grains today and ref my recent post. This the March/near contract of Corn or as the Europeans call it Maize This is a classic reaction line contratrend trade. LINK
PS: I was stopped out of my mini corn last week but had a incremental 1.2 lot (CFD) position since earlier this week.

EurGbp, Gold, EURUSD,CT and the rest ( continued)

All eyes on Gold at 1650$. Serious resistance must be overcome here. 1655$ is the significant resistance from the previous reaction line that can be seen below

EurGbp below seems to have picked up as per yesterdays post but we are hitting major resistance at .8320 (as per yestyerdays post this is a critical level on the daily chart with reaction
line resistance and must be broken.

EurUsd ( below) has the same reaction line as before to contend with...This could be a top but i remain long from yesterday- for the moment.