Still holding the options I bough. Looking for 570$ to be hit this week.
Looking for 1100 in SPX by Tuesday/Wendsday.
EUR/USD target 1.38 this week, 1.40 next week.
Posts Tagged ‘eur/usd’
Stock Market Direction. SPX, EUR/USD
January 27th, 2010After a 70 pts. pullback it looks like the SPX index is ready to take a break.
1085 is acting as a strong support and I would be looking for a rebound to at least 1113 in the next several days. The game plan is following – we might go to 1105 from here, then a pullback to 1100 area, and the another leg up to 1113 area.
Currencies also support this theory, with the EUR/USD unwilling to go lower and 1.40 acting as a very strong support. Looking for a pullback to 1.43 in this pair.
My only concern here, is that indicators don’t support my theory of a coming rebound – both Stochastic and MACD show no signs of any divergence whatsoever.
The Day after Tomorrow. Equities overview.
January 5th, 2010The current price action is inline with my expectations. The projection about Financials turned out to be spot on, with the general market rallying “only” 1,60%, while the XLF index has gained more than 2,00%. So, we can say that the banks are pushing the market higher.
I have no idea of how long this party will be going, so I am placing my bets accordingly. Looking to short SPX futures near the 1135 area or on a breakdown below 1130 (see the chart below). Looking to add on the way down, otherwise will close for a loss.
SPX is continuing forming its rising wedge. To say fair enough, the chances of the sudden rise and the sudden fall are equal. For now I’ll stick with my view of a sudden collapse and will be looking to place short bets at a 1125 – 1135 area (see the chart below). There is also a possible Wyckoff Formation in the making.
GOLD also indicates, that the current rise might be done. See the resisting trend lines above? So, if you are into gold trading, I would suggest to short at 1122-1130.
PS. GOLD and SPX are trading at exactly the same level right now.
What to look for in equity, currency and gold markets in year 2010.
December 31st, 2009This is the last post for the year. The price action for the last month indicates, that equities and currencies are not moving in the tandem as they used to. Despite the rise in the USD, equities were able to add more to their gains. So, my target of 1130-1140 has been reached. Now I am at the crossroads, as some indicators are pointing to a pullback in January, while others for a more run and bump price action to come.
The above chart of SPX indicates, that the rising trend we have witnessed since March, is losing its pace. The only thing that might help this thing to go higher is a violent buying, as one we’ve seen in July. Right now, nothing suggests that this is going to happen, in fact the there are good chances that we might see 1080 by the end of January. Using Wyckoff Schematics, I have 1030 as my second target. This is nothing outrageous, as 9-10% pull back would be healthy for this market. Though there are some things that suggest, that bull is not dead yet.
The first bullish indicator is XLF. Financials have been lagging during the latest rally but the chart below indicates that they have finally found solid support and have a good chance of rising as high as 15.50-15.75. This is actually a pretty save play, as you can buy at 14.40-14.50 and place a stop below 14.20, giving you a nice R/R.
It may sound odd though, but XLF is also the sector that may trigger the reversal of the broader market. In this case we need to watch 14.40-14.00 area losely, as a drop below 14.00 might lead to a sharp selloff.
Other indicators of the reversal are GOLD and EUR/USD.
To support the bear’s case, EUR/USD must stay below 1.4480-1.45. To get more confirmation, I would like to see 1.4070-1.4050 by mid January.
The same thing is about GOLD price action, as long as it is below 1110-1115 price tag.
So, all in all this makes me a cautious bear, as the chances of another run and bump action in SPX are strong. Who knows, maybe the big layers, have dumped EURs, just to accelerate the rise in equities later? I don’t know that, so as a trader the safest option is to trade what I see… But HEY, enough of this, there will be a lot of trading days going forward, as for now:
Use of multiple timeframes when trading.
December 14th, 2009We often see a lot of arguing what time frame to use while trading, some insist on using short term charts, while others suggest that short term price movements is just a noise and can’t be relied on. Although it depends on the strategy, whether you are a scalper or a swing trade, the combination of several time frames is still the best option of all. The reason for that is easy – while the longer time frames help you to determine the direction of the main trend, and major support resistance levels, the 1- or 5- minute charts will help you find the best entry point.
Here is an example with EUR/USD pair:
Even though the medium term chart has turned bearish, in the longer term we are still in the bull mode. So, you decide to go long EUR at some point. So, you start the analysis with a 4- and 1-hour charts.
On the chart above you see the first signs of a possible turnaround – a MACD divergence and that the price is testing resistance point. Being an experienced trader, you understand that if the price breaks above the resistance at 1.4680, then according to Wyckoff Schematics it can run as high as 1.4900. So, you don’t want to miss the train. You start looking for an entry point with the best Risk/Reward ratio and zoom to the 15-minute time frame.
The 15-minute shows us that a reversal is highly possible, and in fact the price has already tested the resistance at 1.48. Now it has pulled back to a 50% Fibonacci retracement, making 1.4650 a perfect spot to enter a long trade with a good R/R ratio.
The last step is enter the trade. For that you zoom to 1-minute chart and place a buy order somewere between 1.4652 – 1.4647. Then you place a tight stop of 15 pts.
The trade above has not only great R/R potential, bu it is also a stress free one:
- You know that your odds of winning are high.
- You have a predetermined stop in place, which protects you from further losses in case things go wrong.
- This short term trade has a potential to become a swing trade with more than 1/10 Risk/Reward ratio.
In conclusion, I’d like to add that this is the type of trades you want to make each time – stress free, with high reward potencial. There is no need to rush in every trade you see, just be pacient enought to look for the best ones, and you’ll see your account growing expotencially.
Buying Stocks here.
December 9th, 2009Due to the current divergence in both GOLD and EUR/USD, and the current support levels, looking for a rise in SPX to at least 1098. If we breach that level, then there is a good chance we will take out the 52-week highs. Just check out the chart below:
This looks like a possible Wyckoff Schematics in the making, in which case the latest 2-hour bar on the chart is the “Spring” (Check out my post about Wyckoff Schematics to find more). Though, we steel need to break above 1100 for this to be true.
My advice is to buy 1/2 of your initial position right now with a 5 pt. stop and add above 1100. Also, watch EUR/USD for hints any hins.
EUR/USD direction for December
December 3rd, 2009
EUR/USD is due for another rise. Every resistance has been broken, and despite the slowing pace, we are still a uptrend. Right now I would be looking for pullback to 1.5070-1.5150 and another push higher after that. My target is 1.5300 at least. This will also coinsede with the rise in the S&P index.
Market update (9.11.2009)
November 9th, 2009It 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.
Stock and Currency Markets Update (29 October)
October 29th, 2009
EUR/USD has broken down support area at 1.48 and went to the mid 1.46. Right now I’m expecting to see a bounce to the 1.48 (classical support turned resistance).
S&P 500 is also is due for a bounce up here. Several factors favors this case:
- Big put options open interest at 1080 in SPY.
- When the major trend line is broken, the price usually tends to come back to test resistance levels. We haven’t seen that comeback yet. My targets are 1055 and 1065. We might even go as high as 1070, but it will take awhile.
- EUR/USD pair is also indicating that we are due to some kind of rebound.
Stock and Currency markets update (26.10)
October 26th, 2009Using 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.
