Long ES @ close

Took a long position into the close today. Tight stop 2 pts below LOD.

Sorry for having been MIA but between travel and being a bit sick have not had much time to post but following every day. We are setting up for a nice divergence again on the decl/adv ratio on the daily, so we have a high chance that todays LOD will not be broken.

However, on the bearish side, this is a perfect close for a nice GAP down below support and strong follow through lower for tomorrow. So I am playing it a bit on the cautious side here as I do not want to get caught holding a looser.

Expanding Triangle with Time Fibs

This is something I have been playing with the past few days. A very unlikely scenario but one that could be used for a trade with a limited amount of risk. Why limited?

So take a short at those levels (anywhere from 1140-1150) with a stop around 1180. If market keeps on trucking towards 1170, double down on position there and get out on retracement (you dont need much of a retracement to exit position at break even or with small loss).

If the market retraces back towards 1100, then it gets a bit tricky. Depending on how it bounces (likely back to retest 1130) and how the coming rally will resolve technically one can make some great calls on whether this pattern will come true. On break you can double down on your position likely around 1080 with a stop at the recent rally high (the rally off 1100).

This could turn out to be an extremely low risk trade with a potential for some really nice gains. As this is a longer term trade you can start position sizes quite small without too much pain if we are wrong.

In terms of giving this pattern credit here, I would say maybe 3 out of 10, so its not something I feel quite strong about but the risk/reward makes this a bit more interesting.

Also take a look at the time relationships here - from top to bottom, 38% hit the first top, 61% could be inline with our upside targets towards next week right between 1140-1150.

USDJPY - really?

Well, my third try yet again ended without much gains. We did test a key area in the 85.6X range today which is quite significant. At this point, I am going to hold out before another attempt to see how today develops on this pair. Three tries, no profits, but no losses either which is great.

Based on the intra day chart we may be forming a continuation pattern here that will lead prices to possibly below 85 where I will give it a try again. We have been making new lows but very marginal on each new push lower. Advances are getting smaller, much smaller, and declines are getting a lot smaller as well. Its coiling here nicely and could still go either way. Many things are pointing up but the hesitation to breakout of the very tight channel towards the upside has me a bit concerned that we may have a big washout coming before finally making a move higher - whether this will be a retracement on the daily chart to continue lower or of course a bigger leg towards the upside.

Sorry for having been so focused on FX markets recently. I will be posting more SPX updates soon as well.

Third try on USDJPY

As per twitter I did two more attempts today at USDJPY. The original one from 2 weeks back was closed out with minor gains. Unfortunately today I got caught again by having my stop a tad too close (yeah yeah but currencies I am afraid for a wide stop). After seeing the reversal I jumped right back in (this time with a much larger position) and hopefully this was it. We have some nice bullish divergences on this pair in addition to the bollinger support and of course the big bullish descending wedge. So three signs of a good long trade here and we are getting close to completing the wedge. Either a breakdown lower or of course a breakout of the pattern to move towards higher targets.

Of course this could be a technical bounce due to quite a run down in the past 3 days. We have to determine how this unfolds during the day today. If we can recapture the 86.45 range before noon we should have more room on the upside, If we stop there and are not able to get above it by mid afternoon it may make new lows below 86 and move towards the big 85 (round and middle).

Two more attempts left after this one. I'll be sure to take some partials this time though to try to balance out the stop from today.

9:55AM: talking about swift reversals lol - recaptured the 86.45 range here and hopefully moving higher. This here could be the breakout of the steep 3 day down channel if we can get to 86.9 next.

3:50PM: well it looks like 86.45 is proving to be quite difficult to overcome. I still think this position is good (well of course I am long) but need to see a strong close above 86.45 on Monday with a test at the 87 range at least (and exceeding todays rally high around 86.7).

Have a good weekend all.

I guess it was blue !!!

Well, much to my dismay we broke out on the upside. Why dismay? Because I was not able to put on my long position again. I had been looking to re-enter my longs that were closed out around the 108X SPX range. Now you know how much I love double FIBs and I totally missed that one. Take a look at the blue circle there - double fibs are areas of big importance and it slipped through my fingers.

Now we have a big band of resistence ahead as you can see from the wide blue rectangle but this is supported by a nice cup/handle, double FIBs and the proper pull backs to break on the upside now. Now we pulled back 50% off our highs before bouncing in the last few days - I hate 50% retracement because you never know what it really is until the move has resolved, now we know.

At this point, I have no choice but to wait for this to unfold towards its upside targets. I strongly believe that going into the weekend and of course our big sunday night many shorts will not want to put a position on here so the only sellers are bulls to take profits, but those are no-where to be found as many are expecting a break here. And yes I know, if everyone expects it - well it wont break. That of course is always a possibility but this market has made a point here - and looks ready to go to the moon even if we have some last hour weakness.