It is obvious now that we won’t see any Head & Shoulders forming. The pullback is done for now, and the next target is 1020 in SPX. One of the reasons for the current selloff is continues weakness of USD, which may go as low as 1.52.
I personally have exited all longs this morning. Will be looking for any pullback to enter a trade.
Gold is a pretty save bet right now. We have a strong support at 1020, which is a Fibonacci 50% retracement and a strong resistance turned support level. I would suggest accumulating full position in a 1020-1030 price range, using a 10 pt. stop. First price target is 1045.
The trading plan would be as follows:
We have traded to as low as 1065, EUR/USD ahs reached 1.4850.That was close enought to my initial call. Right now, I would suggest closing shorts and enteriong small long positions, as the chances of rebound are pretty good, besides this is a good R/R area right here.
Using EUR/USD as an indicator for future movements in the Stock Market has been a very helpful. Here is what they indicate in the near future.
The price action is very toppish. After reaching 1.50 target, EUR/USD has been trading in a thin range. This means only two things – this is consolidation before another leg up or distribution. Only time will tell which is which, but I personally believe this is distribution and the next target for the pair is 1.48.
As for the SPX, for the bear case to stay intact we need to trade hold resistance at 1087-1088 area. If this area holds, next target is 1060. For those, who are interested in a bigger picture, a 30 points up or down may mean nothing, and a weekly chart is more of an interest, which looks also threatening for the bulls.
First of all, there is a huge resistance from that 2 year old trendline. Second, we have 2 bearish candlestick hammers. Third, it looks like the rising wedge has reached climax point.
So, all in all, playing on the short side right now is going to be more lucrative than on the long. Still, there is a good chance that bulls are not going to surrender easily, so I suggest to use smaller positions and tighter stops.
Hello Ladies and Gents,
Yeas, we are approaching a climaz point here. I am expecting some by stops to be hit all the way to 1111 in SPX, then get ready to short. Check out a chart below (hint - the gaps are usually closed):
Here is a list of good short candidates in the near future with a potential return 15-20%:
AA, AAPL, BRCM, GS, TSL, WYNN, LVS
I must admit, that not all of the stocks look like that they are ready to plunge. Some, are painting a very bullish pattern and are ready to take off:
Ok, we have had a nice run in GOLD, but it looks like it comes to an end in the near future.
I would suggest shorting the precious metal here at 1068-1070 with 10 pts. stop. My target is 1020. So, it’s 1/4 Risk/Reward.
Remember my other posts suggesting that the top is near. So, right now, SPX is at 1083 and EUR/USD at 1.49. Another 1-2% move up should do the trick. Right now I am sitting on the sidelines, will be entering short positions in SPX as we approach 1100 mark. Planning to build a huge position and to hold it longer term. Will keep you updated.
Looking for a pullback to 1050-1060. Will be buying in this area.
OK, so despite all the sense, we are facing another leg up right now. This should definitely get us to over 1100 in SPX. A pretty dangerous zone, if I might add. As I have written in the previous post, current market condition start to look like in 2007, and we all know how that ended.
Still, as a trader, you have to play both sides. The price action for the next month favors bulls, meaning you should be a buyer for now. Some people say, that it is October, the odds are, that the market will selloff pretty hard. But, remember – the whole year of 2009 is against the odds.
The charts are pretty bulllish, right now we are facing a breakout from widening wedge – a bullish pattern. My suggetion is to wait for a pullback and but at 1040-1045 area, with a 10 pts. stop and a target of 1100. Atretty good 1/5 Risk/Reward play.
P.S. I think that the top might be 1111. Its like the bottom in April was at 666. This big guys have some sence of humor.
It looks like the current downleg for the yellow metal is finished. Check out the chart below.
I would suggest to buy gold here with a 10-15 pts stop and a target at least 1030-1050. That is a pretty good Risk/Reward trade. The main reason, is that this pullback is natural and it happens in slow motion. It is already seen, that the pace is slowing (look at MACD). This is also a high probability trade, because:
We have finally seen some reversal action in the world equities markets. Commodities and stocks have retraced pretty nicely. Yet, I strongly believe this move isn’t finished until we some more downside on the EURO. Here is the chart:
I am planning to enter short position in EURO, as we reach 1.4700. This will be a right shooulder for the H&S pattern on the bigger time frame. This H&S is about 200 pts. tall from top to the bottom, so my price target is also in this range ~1.4500.
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