Expected Path on S&P

This is what i expect to happen on the S&P over the next few days...Of course, nothing in the market is ever certain, and stops are always a must..!!

July 1, move stronger than expected, adjusting my count..

Updates, June 30

Here are some updated charts on the recent posts made during June...(Please click on the links to see the actual posts made at the time)

June 9, we posted that Gbp/Chf is expected to fall to 1.3264 and start a strong rebound from that level for no less than 1000 pips...

June 16, at 1.4072, it was posted that the Euro had bottomed out.

Then on June 23, at 1.4125, we posted again, that the Euro was to start a strong move higher.

June 19, i posted while Crude Oil was at 93.3, that we would go down to 89.6 and bounce from there..

June 27, it was posted that the Eur/Chf cross had likely bottomed out at 1.18, and set to start a new wave higher.. Today, 1.2240 was traded, which is an almost 450 pips gain in 3 days..

June 28, at the lows of 82.72, i had a post calling for a move higher on the Usd/Chf cross, which had been falling for what seems like forever...

Crude Oil Update

After hitting our target of 89.6 exactly!, Crude Oil has begun its first wave up.. Im expecting a correction at the 96.02 level, but any dips to around the 91.5 - 92.50 level should be bought in my opinion, with a hard stop at 90.5.

Expecting a strong bounce on USD/CHF

This is the weekly chart of the Usd/Chf cross... A few minutes ago, we saw 82.72 trade.. I believe this cross right now can be bought for a long play, targeting no less than a 1,000 pips.

If the Swiss Chf weakens in the days to come as i believe it will, there will be many looking for 'News' to explain the turnaround.. I will try and post those news articles (if they come out, and if the cross works like i think it will)..But i just wanted to point out 'in advance' that i am buying here with no regard to any news..

Crude Oil, ready to reverse

Crude Oil has tested the 90 level three times so far, and failed to break to the downside. This is a clear message that this level is well supported. A triple bottom is a well recognized bottoming pattern. Crude oil is very volatile, but can be equally rewarding should you manage to catch a good move. As im typing this, we are on the verge of breaking out, starting 'in my opinion', the final move higher. On June 19, this level was identified as a very high probability reversal point.

Eur/Chf..Possible 4th wave bounce starting today

The Eur/Chf cross today morning hit 1.1804, co-inciding with our target on the Gbp/Chf cross of 1.3264. (posted on June 9). From here i believe both crosses should reverse to the upside in a 4th wave of no less than a 1,000 pips, before commencing in the 5th and final wave down.

Here is the Eur/Chf cross..The play is to go long with a stop under the low of 1.18 (50 pips), and hold for a swing target of at least 1.30. (1200 pips)  raising stops gradually if the play progresses as planned..

Euro, looking ahead..

Risk assets (almost everything excluding the US $), tend to move simultaneously. That means that the Euro will likely top out at the same time the S&P makes a major top. Of course, the relationship between the different assets is not exact, but rather rubberband-like.. There will be variations and divergences on certain days, but in general everything tends to move against the safe currencies (US $, CHF, Yen).

This is why the Eur/Usd cross is so important. It is the barometer of 'risk taking'. A crashing Eur/Usd will take down everything with it, and that includes the precious metals, commodities and stocks...

This is a rough version of what i think lies ahead for the Euro..I will smoothen out all the waves soon, but for now, i think we're going higher.

Euro Update





 

8 hour chart, showing a continuation pattern. However, expect the unexpected as always.



30 min chart, not expecting it to break its lows, but its a possibility. Either way, i think the Euro is going higher in the near term.





5 min chart, showing the wave count that im seeing. Time to buy is after a full 5 wave count.

----------------------- Updating the Euro chart, expecting some quick moves to the upside soon.



Big Market sell off....Buying all the plays

Today we saw a massive sell off, with the Euro crashing over 330 pips, the SnP dropping close to 2%, Gold & Silver seeing and 2% and 4% drops respectively, and Crude Oil down over 5.5% at one point.

Today we saw panic selling. It is on these days that one has to take swing positions, and wait till sentiment reaches the other extreme to liquidate.. The 'News' on Crude oil, i.e: the reason being given for the drop is being attributed to the International Energy Agency releasing 60 million barrels of oil to make up for a loss in Libyan Oil exports. 

Of course, proper traders know that this is rubbish. Oil was going to hit its target of $ 89.6 one way or another, and it was posted here just a few days ago..Click on this link, then see the chart.

Another trade mentioned, regarding the GBP/CHF play has reached maturity. I believe people who buy this cross, and allow it room to breath (100 pip stop) can see big gains in the weeks ahead. The Target in the post was 1.3260, but i think it is buyable right here at 1.3360, with a target of no less than 1,000 pips.

The Euro, i mentioned last week that it had bottomed out at 1.4072, and im sticking with that view . I am still very much in favour of going long the Euro, and believe 1.4112-1.4140 should be enough to hold this move, and see it reverse. The bigger picture 'technically on the Euro', is beginning to show a triangle, which is usually a continuation pattern. If that is the case, expect the Euro to break 1.5 in the next month or so.

Update on Euro

Yesterday we got a mild sell off on the general markets as the Chairman of the Fed, Mr. Bernanke talked about the steps being taken with QE2, cooling off plans on further Govn. stimulus. The Dollar rallied, and the other 'risk' currencies, such as the GBP and the Euro saw a sharp drop. Im quickly updating the path i see ahead on the Euro.  On the recent Euro charts, my estimate for a rebound zone was the 1.4240 area. I am still a buyer at that level, but fine tuning the chart today, i think we could drop to 1.4212. Stops, are a must! as always.

Trade the News at your own risk

An ongoing debate I have with family and friends is on the effect of 'News' on the Financial Markets. I was hoping to prove them wrong, and today i got my chance.. I made the following comments  in a previous post, and posted this exact chart:

Note: there is a big announcement on the Greek situation to be released tonight. 'News' traders will be eagerly awaiting the results to adjust their positions. No matter the news, the Euro will hit 1.4429 and start to fall. I say this without having a clue what tonights outcome will be.

Sure enough, the news came out that the Greek government, seeking to avoid debt default, (a scary prospect for the European nations and the Euro) was given a vote of confidence by lawmakers. Bullish for the Euro, right?   Not really. It was priced in, as is usually the case. Here is the updated chart,

The point where it got rejected, 1.4429.  Expecting the correction to coninue into tommorow. Stay tuned.

Crude Oil's final wave up!

A few times a year, the market presents to us a gift, a chance to hit a homerun. The trendlines align perfectly, forming the final pieces of a puzzle that was once vague, leaving no doubt that a masterpiece is in the making.

Crude Oil is now close to completing a $25 decline that started near $114.8 just 6 weeks ago. My target zone for the rebound is btw 89.2 and 89.6. (highlighted on the chart with a blue line). If my analysis is correct, we will hit the 'buy zone'  Tuesday or Wednesday at the latest. From there i expect a rebound to start that can see Oil move upto 107 as an initial target, and 110 &122 as more ambitious targets.

Stops are a must, and should be placed around 88.7.  But a break below 89 is enough to signal that something is wrong. A trader need not wait for his stop to hit. Once an important level is broken, wait for a bounce and exit with minimum loss.  It is also important to note that our buy zone is just below 90, a round and psychological number. You can imagine that many will have their stops there. A break of $90 and retailer investors will be running for the exits, which often happens just before a trend changes.  Successful speculation is anticipating the anticipations of others." - John Maynard Keynes

Needless to say, this play offers huge potential and can make you alot of money relatively quick. The hardest part of course, is the waiting. Very few will be able to take a position and then simply wait, and endure nerve wrecking volatility until their target is finally met. But the market rewards those who are patient, which unfortunately is a trait that few humans have.

-----updating this post quickly, Crude has managed a good rebound from the 91.5 level (about $2 higher than my estimated target). We are now at 94.3, having hit an intraday high of 95.07. I am not buying yet, as Im not convinced we have bottomed out. I choose to wait and risk missing a good play. An opportunity cost lost is always better than capital lost. Never chase a trade, let it come to you.

-------- June 24, and our target was hit, almost to the pip!!  The bounce off the 89.69 level today was quite powerful, adding to my confidence in this trade. That said, a stop must be placed. My stop would be around the 89 level, but once Crude moves past 93, stops should be raised gradually to protect the position and lock in gains (just in case). The hard part now, for those long crude is the waiting. Patience!!! will pay off.

Euro has bottomed out.

In my last post, i was expecting the Euro to bounce from the 1.4280 level, but it has continued to fall breaking all supports.. This is why stops are so crucial, and more importantly is the placement of stops 'at the same time' when placing the buy or sell order. The market can do anything at anytime, and complacency with this regard can be dangerous. Often, the times a stop is not used (because you feel so sure of the trade), are the times when the market is in a position to really punish you, and it rarely disappoints.

The Euro today has continued its free fall and just hit 1.4072. I am fairly confident it has bottomed out. Still a stop has been placed 30 pips below...


---------------------------Just updating this Euro chart, which bottomed at our 1.4072 level, which was posted here as it happened. Im seeing two possible paths for the Euro from here, outlined in the chart below in different colors..

Sometimes, you feel in harmony with the market. Sensing every move before it happens and with great accuracy. In the chart above, we foresaw a drop then rebound from the 1.4190 level.

 Rebound from the 1.4190 level, and then an 80 pip drop from the 1.4382 level (as can be seen in the next chart). The move to 1.4240 has not happened yet, but i doubt the Euro has enough gas to continue much higher before a bigger move down. Adjusting the chart slightly,  anticipating the move lower to start from the 1.4429 level.

Note: there is a big announcement on the Greek situation to be released tonight. 'News' traders will be eagerly awaiting the results to adjust their positions. No matter the news, the Euro will hit 1.4429 and start to fall. I say this without having a clue what tonights outcome will be.

Euro correction almost over..

Trade of the year

This is the weekly chart of the GBP/CHF currency pair. This cross is in an advanced stage of a bear market, and the fall lately has been parabolic to the downside, much like silver was on its way to 50 recently, only to the downside. The play obviously is to go long, and immediately the famous market cliche comes to mind as i say this, 'never catch a falling knife'.

The potential however for a monster bounce at these extreme oversold levels is too tempting. A small position can be established near the level mentioned, with a stop 50-70 pips lower. If the currency pair reverses to the upside, and starts showing profit, one can add to his winning position, while protecting the first position with a stop at BE (breakeven price), keeping risk of loss low, and magnifyinig the profit potential.

 Easier said than done though, the trick to building a big position lies in knowing where to place the stops. I see huge potential in this play, and think this is one of the best opportunities of the year. I might be getting a little ahead of myself at the moment, as we might never get that low (1.3264), still about 500 pips away..But its important to keep the idea in mind in order to move fast if the opportunity arises within the next month or so..

----------------------------June 24, and updating this post. At time of posting, this cross was at 1.3750 approx.. Today, almost 2 weeks later ,we hit 1.3356 and i believe the time to buy is Now !  Massive potential on this one.

-----------------June 27, and the target of 1.3264, given on June 9 was hit almost to the pip. Today morning we saw 1.3274, and a sharp rebound immediately followed from that level.

3 days ago i thought maybe we would not come down this far, so i recommeded buying at 1.3360.. A clear example of how impatience can cost you money in the markets...Patience in entering and exiting trades is the the difference between being good or great...

8 hr chart showing the sharp rebound from the 1.3274 level, mentioned almost to the pip on June 9.

S&P 500, and the next leg up!!

The S&P lately has been impossible to trade. Large swings in one direction, then even larger swings the other way, burning anyone who tries to play counter trend. Yesterday, we saw a low of 1277, and a bounce to 1285. It has since started grinding lower again and is now back near 1281.  I think we'll see a final low either Thursday or Friday by the latest.  When that low is in, expect to see a powerful move upwards which will leave no doubt that the next leg up has begun. One of the most valuable lessons i have learnt in the markets is this, when i initiate a trade off a certain level and the move i expect to see off that level either 1) doesnt materialize, or 2) is weaker than anticipated, the right play was always to get out immediately or at the first bounce.

Which brings me back to this play on the SnP. We hit a low of 1277 intraday, and are currently sitting 3-4 points over that level. (overnight).  If this level is as strong as longs would like it to be, we wouldnt be hovering just barely over it --> which is a sign that somethings wrong.
I think the final low will be put in within the next 36 hours, and my bet is on the 1267 level. If we see a strong bounce from there, then chances are the next leg up has begun, which will take us past 1400 over the next two months.

-----------------------------------

Just updating this post now, 1267 not looking like its going to hold....I have lowered the target to 1251, and this is the line in the sand for me. Any lower, and i will begin to have serious doubts about a bounce happening. Note: we are currently around the 1267 level as i  type this, but if this level was as strong as i had hoped, we should be higher. No need to wait for my stop to hit, i can exit here at cost, and wait for a better entry.

Correction on Euro expected near 1.4685

As im posting this chart, tv pundits on Cnbc are mentioning that its all clear skies ahead for Greece, and that the outlook is once again bullish on the Euro. As a true contration, we need to ignore the 'news' and focus on the charts. The trick, as always, is waiting for the right moment to strike. A little too early, and u might get burnt just before the correction begins. As im typing this, the Euro is at 1.4630, and most shorts have capitulated.

----Just updating this post now, which was made 5 days ago..The Euro managed to get to 1.4693 before starting a decline of around 130 pips (down to 1.4563).

 It is said that traders need to trade what they see on the chart and not what they believe (opinion). Having an unbiased outlook on the market is one of the hardest tasks a speculator faces. People who are holding a position usually make the mistake of falling in love with the trade, which is dangerous because when the market turns on them, they will be slow to react. Although i was betting on a significant top here on the Euro, the decline today suggests otherwise.  From the look of things right now, i think the Euro might have some upside left, this is how im seeing it right now...

----revising this chart slightly, we got the sell off from the 1.4650 level. But it looks like its going a little lower than my previous estimate.

Expected road map for Crude Oil, June 1 2011

This is my best guess at the moment. For now, still looking to buy the dips with the view that crude oil is heading back higher to break the highs of $114 seen last month..

----Updating now the chart above...Not exactly as i had drawn out, but pretty close.

Euro update, June 1 2011.

Yesterday, i was expecting a pullback from the 1.4460 level approx (see last post). We got the pullback today 6 pips exactly from my target, and the Euro plunged over 150 pips. Where to from here is a little unclear at the moment, as the markets saw a very dramatic sell off today due to some negative news. (or at least thats what i keep hearing).

Personally i dont believe in the notion that 'news' moves markets, rather that this sell off was coming today no matter what the news brought. I had no idea yesterday when i posted the Euro chart how the days news would play out, yet still the forecast was accurate.