Trading Week 25/02/13

Saturday 2nd (7 am)

Stocks have risen on good US manufacturing ‘red flag’ data that came out at 2 am:

The USDX rose nicely up until the data release. It turned in the face of this good news and, also, given there is strong fib resistance above:

The EURX has managed to hold it together above the weekly 200 EMA: 
The currency pairs aren’t sharing the joy here as much though:
We’ve got ‘risk on’ with stocks but not so much with currencies. Divergence everywhere!

Friday 1st (10.15 pm)

There has been some negative economic data out of Europe. This kind of sums things up:

No signal yet on the S&P500 but I’d be looking for a SHORT signal later on…once the US comes on line. 

Friday 1st (7 pm)

The boys are home now and I’m about to pour a glass of wine. Just noting this chart of the EURX daily Ichimoku Cloud though. I’m wondering if this song is going to be relevant here at all:
http://www.youtube.com/watch?v=BZ1DhC3xn54
I’ll check in later but I’m not expecting any new TS signals for a bit.

Friday 1st (5 pm)

The USDX is still hanging around the 81.70 level and the EURX near the weekly 200 EMA. These are the two key levels to keep an eye on:

I’m very annoyed with myself. I entered the E/U prematurely yesterday before any possible TS signal developed. The TS signal didn’t form. So, that was bad enough. BUT…then I get stopped out by 2 teeny weeny little pips and the blasted pair reverses! This reflects poor patience and discipline on my behalf and that’s what has annoyed me.
There are no new TS signals on the 4hr charts.

The charts have been divergent and choppy now for the last 4 weeks. That explains some of my ‘itchy finger’ syndrome from yesterday I suppose! My TS system has worked well through these choppy markets as it has produced very few trade entry signals thereby keeping me out of many potentially poor trades. I just need to ensure that I follow my system properly and wait for full signals to form! Like I have often said here….TS is a great ‘horse’ but I’m still a rather dud ‘jockey’! The point to note though is that lengthy choppy periods, like we have been having, often go on to ultimately produce strong trending markets. One just needs to be vigilant and ready to pounce when the trends do emerge.

Friday 1st (1 pm)

Poor Chinese PMI data hasn’t seemed to have much impact on the currencies, for now at least. Europe may have a different spin on things.

Still, no new 4hr TS signals.

This is the chart I’m keeping a close eye on. The daily Cloud chart of the EURX. This is the only index chart still currently aligned for ‘risk on’. It does not have far to fall though before it would then align with the others for ‘risk off’:

Friday 1st (11.30 am)

I’m waiting to see what impact the Chinese data will have on the markets:



Friday 1st (9.45 am)

No new TS signals on the pairs I’m watching. I do note though that there were signals on the Swissie and Loonie.

The USDX is holding above the 81.70:

The EURX is clinging on to the weekly 200 EMA

The Chinese data at midday might move things. 

Friday 1st (6 am)

There has been some more positive data out of the US. This has helped to hold up stocks but, given they’re hovering tentatively under new highs, they’re not advancing too quickly:

The USDX is back above the 81.70 though:

The EURX has bounced up off the weekly 200 EMA….again: 
I don’t have any new TS signals. The Ichimoku Cloud charts are still experiencing divergence and this has translated in continued choppiness. It is a bit frustrating and patience is required. Something I’m lacking a bit at the moment. I jumped in too early on the E/U and I’m paying for it now. Note to self: I’m not perfect BUT I do need to wait for full signals!

There is red flag Chinese data out at midday today. That might move things.

Thursday 28th (5.15 pm) 74% ROIC on possible SPY trade!

No new TS signals yet.

Thursday 28th (3 pm) 74% ROIC on possible SPY trade!

Asian stock markets have traded up today. I’m also getting a signal trying to form up on the E/U. I’ll need the 5pm candle though.

Thursday 28th (10 am) 74% ROIC on possible SPY trade!

The daily candles on the EURX and USDX gave a strong clue that we might be in for some reversal to ‘risk on’. The daily candle on yesterday’s USDX was noted as a reversal style ‘hanging man’:

The daily candle on yesterday’s EURX was a reversal style hammer/Doji: 
The big question now is whether this is a full swing back to ‘risk on’ after a brief pause or, simply, a slow down in a wider scale ‘risk off’ pull back. I don’t know but, when the new trend kicks in, I will follow along. The lack of trend signals at the moment though suggests that no one else has much of a clue, or commitment, regarding direction either! So, I’m in good company and with lots of it!

Thursday 28th (9 am) 74% ROIC on possible SPY trade!

No new TS signals.

Thursday 28th (6 am) 74% ROIC on possible SPY trade!

Positive US data and Bernanke comments helped to lift optimism across stocks. Currencies have not joined this ‘risk on’ party as much though.
The USDX is still trying to hang on to the 81.70 level:

The EURX is still above the weekly 200 EMA though: 

I had noted yesterday the daily USDX ‘Hanging man’ candle that pointed to possible reversal. He nailed it…for today at least! 

As is the usual during these times of Cloud divergence, there are often great trades off the 30 min charts during the US session. It was a ‘no brainer’ following the good US data and Bernanke that one should look for a signal on the S&P500. A signal to trade LONG came through when the index was at $1,496.
Thus, rounding up, I would then look to buy the March $150 Call Option. This Option opened at $1.64 and increased to be currently at $2.85. That is an increase of $1.21 cents:

The ROIC = ($1.21/ $1.64) x 100 = 74% for just one trading session.
There is only one open TS signal left; the Kiwi

Kiwi:

Silver closed off

Gold closed off


I still don’t have any new TS signals. Maybe the markets are Chinese PMI that is due out tomorrow.
Aussie: the A/U got a boost along with risk appetite and stocks. The 1.02 level is major support for this pair. I would want to a close below the 1.02 on the daily chart before shorting this pair down here. This pair has been so choppy that it hasn’t given a clear TS signal of much lately. I was looking to capitalise on any downturn here though with a trade on the EUR/AUD. It has yet to give a signal though too!
So, we still have Cloud divergence up at this stock market high and we are seeing the usual choppy 4hr charts. At least it is all consistent, albeit frustrating. Good strong long lasting trends tend to come out of choppy markets though so I’m biding my time being patient.

Wednesday 27th (10 pm)

EUR/AUD still hasn’t kicked in fully. I’m wary tonight especially with Ben Bernanke and Super Mario Draghi speaking later. There is some red flag US data too. These all might kick start a clear new trend…we shall see. I shall see in the morning though!

Wednesday 27th (9 pm)

The Aussie is breaking down but without giving a new TS signal. It has closed below the key 1.02 S/R level though:
Thus, I was hoping the EUR/AUD might have given a new TS signal but, whilst close, it hasn’t formed just yet. Maybe by the next candle.

Wednesday 27th (6.30 pm)

A close below the 81.70 on the USDX would be quite bearish…me thinks at least…
The TS signals on Silver and Gold are up but I’d have stop to entry here too or take profit:

Wednesday 27th (6 pm)

There seems to be a bit of risk appetite so far this session. I’m glad I didn’t take the Kiwi and I’d have stop to entry if I did.

Wednesday 27th (5 pm)

Indices are little changed but the EURX is acting a bit bullish. No new TS signals yet. I’m reviewing Aussie stocks on my charting platform now…looking for technical patterns. It is amazing how many set ups there are out there!

The EURX might get some support from the daily Cloud BUT if price falls through this Cloud then both of the index charts, on daily and 4hr time frames, are aligned for ‘risk off’ so…watch out!

Wednesday 27th (1 pm)

No new signals. Aussie stocks are up though. I have noted that the USDX daily candle closed as a ‘hanging man’ Doji. These patterns are often signs of potential reversal:

Wednesday 27th (9 am)

The USDX is still sitting above the major support level of 81.70 and the EURX is sitting just under the weekly 200 EMA. These are proving to be key levels for both indices and market sentiment will be gauged by how each move from this point on:

The S&P500 closed as an ‘inside candle’ for the day. This also points to the indecision that is gripping the current markets:
There are no new TS signals after my 9 am candle. The only open signals are the Kiwi, Silver and Gold:
Kiwi:

Silver 

Gold 

Wednesday 27th (6 am)

Market sentiment picked up after Bernanke’s speech and some positive US data and earnings news.

Price on the EURX is back below the weekly 200 EMA though which isn’t encouraging for ‘risk on’ 

Stocks have actually chopped upwards:

The only two signals I had were Gold and Silver. These have moved up now:
Gold
Silver 

The only new TS signal I have is on the Kiwi. This has also broken below weekly support: 

The E/U is flat and hugging the daily 200 EMA S/R level.

This is the only Cloud chart still aligned towards any form of ‘risk on’. It is getting close its Cloud  and this might offer some support. It is the ‘amount of support’ that it might offer that is the question here though. Will this support be strong enough to hold price and reverse the momentum to ‘risk off OR will it fail and allow a full alignment towards ‘risk off’? I have no idea BUT I’ll be watching!

It seems like we have a bit of calm before the storm. I just don’t know what kind of storm we will have!

The lack of other ‘risk off’ signals has me cautious. The A/U might develop a signal on the next candle but the strength in Gold has me concerned here.

This is the only Cloud chart still aligned towards any form of ‘risk on’. It is getting close its Cloud  and this might offer some support. It is the ‘amount of support’ that it might offer that is the question here though. Will this support be strong enough to hold price and reverse the momentum to ‘risk off OR will it fail and allow a full alignment towards ‘risk off’? I have no idea BUT I’ll be watching!

It seems like we have a bit of calm before the storm. I just don’t know what kind of storm we will have!

Tuesday 26th (9.15 pm)

Still no new TS signals. Ben Bernanke speaks later tonight and there is some red flag US data.

Tuesday 26th (7.30 pm)

We are seeing some pull backs at the moment. Lack of a clear sentiment explains the lack of any TS signals.
BTW: I’ve updated my Stocks+Triangle pages with some Aussie stock results. I am also using this period of market choppiness to work through a watch list of stocks looking for new potential triangle + other trend line breakout trades. I have used the free watch list from the DRiP Investing site. @ http://dripinvesting.org/tools/tools.asp. This site lists 3 categories of stocks that increased their dividends, year after year, over a period of either 25 (Champion), 10-24 (Challenger) or 5-9 (Contender) years. They are some of the best dividend paying stocks on the world. I have imported these lists into my charting software and I’m working my way through and looking for potential technical breakout patterns. I will be posting these at a later date.

Tuesday 26th (5.15 pm)

Still no TS signals. It seems there isn’t much appetite for jumping into ‘risk off’….just yet at least! Things might change with later Europe and US session.

Tuesday 26th (2.15 pm)

I’ve updated my Stocks:Triangle pages with some Aussie stock results. Well worth checking out! 

Tuesday 26th (1.15 pm)

Quite interesting….no new TS signals. The markets are trying to hold onto ‘risk on’. Gold and Silver TS signals are up. The Cable is still sitting on the weekly 200 EMA fence!

Tuesday 26th (11 am)

The markets are sure spooked by the Italian election results and it may well prove to be a game changer for overall momentum. I’ve been looking at the stock indices again to see what I can read from these. Essentially, both the S&P500 and Dow Jones are trading within ‘ascending triangle patterns’ on their monthly charts. To me, these look like bullish continuation patterns. These monthly charts also show the bull support trend line in place:

S&P500 monthly

Dow Jones monthly

The weekly and daily charts show both indices trading within smaller upward trend channels within the larger context of these triangles. A closer look at the daily chart of both show that even a trend channel break with some pullback, even down to the support trend line, would not be out of place within the overall scheme of this upward momentum: 
Dow weekly

Dow daily

S&P500 weekly

S&P500 daily

I won’t be too worried about a major market correction with stocks until these monthly support trend lines are broken. In fact, a bit of a pullback would balance this chart pattern I’ve been posting and stalking:

Tuesday 26th (9 am)

The Italian election news has really spooked the markets overnight. I actually find this outcome nothing short of amazing and it has me wondering how such a serious political event could be treated as it has been. This may end up being the catalyst to tip the markets back into full ‘risk off’ alignment. The USDX is looking like it will close above the 81.70 S/R level.

I do not have any 4hr TS signals, even after these big moves. The usual pattern of choppy 4hr trading but good 30 min chart trading during the US session has continued again though: 

E/J 480 pips

A/J 270 pips 

U/J 240 pips 

EUR/AUD 150 pips

Tuesday 26th (6 am)

There has been a rather violent ‘about face’ with momentum prompted by projected results from the Italian election. The USDX is currently punching up over the 81.70 level and I’ll be watching to see if it closes above this.

The E/U was hit hard:
 Strangely, the Cable has held up through all of this mayhem overnight:
We may now be headed for alignment towards ‘risk off’. We’re not there yet though but I’ll be on the lookout for it and will trade it. There are no new signals yet though given this chopping around. 

Monday 25th (9 pm)

USDX: my H&S might just be forming up:


I don’t trade the metals through FX but am noting that I have had signals to go LONG on both Gold and Silver on the 4hr charts. This might help the Aussie:
Silver:
Gold:
The signal that is trying to form up that I am most keen on though is a new TS LONG on the E/U. I suspect it might kick in, if at all, whilst I’m asleep!

Cable: It has pulled back to the weekly 200 EMA but I’m still not keen to SHORT this pair here and now. I don’t like this pair at the best of times and I am concerned that if we do get a shift back to ‘risk on’ then this pair might just join in here too from these low levels.

Monday 25th (8.30 pm)

I’ve spent a bit of time tonight looking over the Dow Jones and S&P500 stock indices. Both of these indices are at major levels and this is prompting many to suggest that these levels will prove to  be market reversal points. I’m open to the idea of a pause, or pull back, as we have had over recent weeks BUT I’m not convinced that we are going to see a major reversal from this point. I’ve been suggesting for some time that the surprise just might be that the markets actually move higher.

S&P500
I have looked at the ADX for the previous market top periods of 2000 and 2007. The ADX on the S&P500 back then was caught off guard during periods of high momentum. The ADX now, though, looks to be just starting to gear up for an move higher.
Dow Jones:
The same type of ADX pattern can be seen here on the Dow Jones as with the S&P500. The ADX is only now starting to look like it’s getting ready to move up.

Thoughts: I’m not making a prediction here. All I am noting is that this current market top seems to be rather different in nature, from an ADX momentum perspective, compared to previous market tops. 

I am wondering now if both these monthly charts are setting up more as ‘triangle breakout continuation’ charts. I am keeping an eye on the USDX to see how risk appetite unfolds from here as this will dictate stock direction.

Monday 25th (7 pm)

I’m not sure where the ‘risk’ appetite is coming from. I am watching my charts though and wondering if this H&S pattern might be starting to unfold more fully!

Monday 25th (6.15 pm)

I’m seeing some ‘risk on’ sentiment creep back in during this early European session. Asian markets were mostly up today as well:

Monday 25th (5.15 pm)

No new signals just yet. Just the one from this morning on the Cable after the big gap down. I’m wary of this pair though and would only short from back at the weekly 200 EMA…if at all.

Monday 25th (1 pm)

Chinese PMI data was worse than expected but already there are warnings to be wary of this data due to Chinese New Year and, thus, to wait for the official data due out on Friday. The A/U has been hit hard by this though BUT I don’t have have a new sell signal here just yet. It may well evolve though. 
I have a new sell signal on the G/U BUT I’m more keen to short this pair back at the weekly 200 EMA level. These weekly 200 EMA levels tend to be like magnets! 

Monday 25th (11 am)

My index charts have just opened and both the EURX and USDX have gapped up higher! The 81.70 level is key for this week with the USDX. 


We still have Ichimoku Cloud divergence…and……we still have weird things happening and choppy markets. It ain’t ‘rocket science’ here guys! It does require patience though!

Monday 25th (9 am)

We had wild storms here over the w/e and they seem to have filtered through to the markets. There have been huge gaps on the Yen and GBP making for some big moves. Gaps often fill and they also skew my signals so I’ll be careful:

E/J

A/J

G/U

U/J: there is the major monthly support/resistance level of 95 just above current price here though:

EUR/GBP: this pair is getting very close to the upper trend line of the major monthly trend channel that I have been posting about here for the last few weeks. A possible break up and out might be in store!

I’m letting the dust settle, watching to see if the gaps fill and waiting for the Chinese data.

Monday 25th (8.40 am)

Forex Live is reporting open prices that are suggesting HUGE gaps from Friday’s close. Gaps often fill so I’ll be careful. I’m also waiting on Chinese data at 12.45 pm.