Trade Week Analysis for 15/04/13

And…for something completely different…..not!……choppy again!

Last week: We are still in to our 3rd month now of mostly Cloud divergence, choppy markets, few TS signals yet some good 30 min chart trades during the US session.  Again, there were only a few TS signals but they were slightly better: A/U = 130, Kiwi = 240, E/G= 0, G/U = -40
This week: The Ichimoku Index Charts are still divergent but I’m on the lookout for the next wave of alignment. There has been more of a shift back towards ‘risk on’ over the last two weeks but this is no guarantee that this alignment will develop. I’m watching out for it though!
The EURX broke out and up from the Bull Flag pattern. It also broke up and out from the daily Ichimoku Cloud, albeit only briefly. I’m watching to see if it can break up through the daily Cloud again  and, then, through the next barrier of the 108.5 S/R level:

I’m also watching to see if stocks and currencies fall back into an aligned trading rhythm.
Stocks:
The S&P500 has made new highs and many are predicting a pullback or correction here. The Elliot wave on my charts agrees with this. As would the adage of ‘Sell in May and Go Away’. The ADX does not support this though and I keep noting how this ‘top’ appears quite different to those of 2000 and 2007. I’m not ‘predicting’ anything at all here, merely ‘noting’:

S&P500 monthly chart:

Last week was actually a ‘bullish engulfing week’ for the S&P500. Strangely, the run up before the last two pullbacks, in April/June and Sept/Nov, didn’t reveal any chart divergence but the recent run up does reveal some divergence! All very odd:
S&P500 weekly chart:
BTW: I have made a brief update on my Stocks: April page.
Some key events to watch out for include:
  • Monday 15th : Chinese GDP
  • Tuesday 16th : AUD monetary policy minutes, GBP and EUR data.
  • Wednesday 17th : NZD CPI, GBP data.
  • Thursday 18th : GBP retail sales, US data.
E/U: Price has continued to rally after breaking out from trading within a bullish descending wedge pattern. I’m watching to see if there will be a new 4hr TS signal following this breakout but there hasn’t been any sign yet. Price is still trading just below the Cloud on the daily but is now above the Cloud on the 4hr Ichimoku chart which is divergent and suggesting some further choppiness. The weekly candle closed as a bullish candle.
  • I’m watching for any new TS signal.

E/J: Price rallied all week up to the 131 level but then stalled there. Price is trading above the Cloud on the daily and 4hr time frame which is bullish. The weekly candle closed as a bullish candle but with a touch of reversal style ‘inverted hammer’ to it. I’m thinking that any more bullish momentum might have its sight set on the 140 level. This is the area of the 61.8% fib pullback from  the last major swing high (see the monthly chart).
  • I‘m watching the 129 level.

A/U: Price rallied all week and temporarily broke out and up from a major triangle pattern. Price action has been choppy since making the triangle break and actually closed back within the triangle. It is trading above the Cloud on the daily and on the 4hr chart which is bullish. The weekly candle closed as a bullish engulfing candle.
  • I’m watching the 1.05 level.

A/J: Price rallied all week up to the 105 level. Price is trading above the Cloud on the daily and the 4hr chart which is bullish. The weekly candle closed as a bullish candle BUT, like with the E/J, it closed with a touch of reversal style ‘inverted hammer’ to it. Price isn’t too far away from the 108 area highs from back in 2007.
  • I’m watching the 103 level.

G/U: Price chopped upwards for most of the week and appears to be trading within an upwards trend channel.  It is still trading in the Cloud on the daily but above the Cloud on the 4hr chart so might continue to be choppy. The weekly candle closed as a bullish candle. I am wary with shorting this pair though given that the March candle closed as a pin bar reversal or ‘hammer’ style candle. This suggest a reversal to the upside….just to confuse us! The daily chart has a bit of a ‘Bear Flag’ look to it though!
NB: Go Market charts have an error for my weekly 200 EMA with the G/U. I have advised them about this.
  • I’m just watching this pair at the moment.

Kiwi: NZD/USD: Price rallied all week and gave a TS signal off the 30 min and 1 hr charts but not the 4hr charts. It has broken out above the bear trend line of a major triangle pattern. Price is now trading above the Cloud on the daily and on the 4hr charts which is bullish. The weekly candle closed as a large bullish candle. This might take off if ‘risk on’ returns! Price pulled back a bit on Friday but the 4hr chart simply looks like a ‘Bull Flag’.
  • I’m just watching for a new TS signal.

EUR/AUD: Price chopped downwards all week.  It is trading below the Cloud on the daily but above the Cloud on the 4hr time frame which is divergent and suggesting further choppiness. The weekly candle closed as a small bearish candle; almost a ‘spinning top’.
  • I’m just watching this pair at the moment.

The Yen: U/J: Price edged up for most of the week to just below the major psychological level of 100.  Price pulled back a bit on Friday but did not give off a TS signal. Price is trading above the Cloud on the daily and on the 4hr chart which is bullish. The weekly candle closed as a reversal style ‘shooting star’ candle. I’m thinking that any continued bullish momentum might have its sight set on the 103 levl. This is the region of the monthly 200 EMA and also near the 61.8% fib retrace level from the last swing high. (see the monthly chart).
  • I’m watching the 100 level.

Metals: There is so much talk of manipulation with these markets that any discussion about ‘technical patterns’ may be totally moot! I’m putting in 2 cents worth though:

Silver: Silver has broken below the long term monthly support triangle trend line. Price chopped upwards earlier during the week but then had a major fall on Friday. This fall gave a great 30 min trading opportunity during Friday’s US session. Price has now closed below the major support level of $26. The weekly candle closed as a large bearish candle. This may be a major turning point for Silver. The next major support seems to be down at $15 in the monthly 200 EMA.

Gold: Gold has also broken down through major monthly triangle support that dates back to early 2008. That was a major break down for the metal. This was a bad week for Gold having major falls during the US session on both Wednesday and Friday. Price has now broken down through the major support level of $1,525. The weekly candle closed as a large bearish candle. The next major support seems to be down at $1,440, being the weekly 200 EMA, and then there would probably be some at the whole number, $1,000 level and, after that, at $850 in the monthly 200 EMA. There might be some pause or even retracement this week though on both metals given that price is outside the Bollinger bands on most time scale charts.


Oil: I’m still just keeping an eye on Oil too. I’m noting how it is conforming to a triangle pattern on the weekly chart; for the time being at least. Oil is another commodity that gave some good 30 min chart trading opportunities this last week: