Silver walk through

In giving this view of Silver it will be of use for other instruments and reading their charts.

This is the weekly chart of Silver.

The immediate task is to determine if price is in a trend or in a range. What we see was a bearish trend that slowed down, the pulled back up into supply and is now going back in the direction of the original trend. Our bias on this chart on its own is bearish.

Daily chart.


On the left you see a strong move up out of what will look like resistance to day traders and given it lasted a number of days, there will be break out traders, new bullish longs each day and all delighted with their entries. The real danger was in not reading the big picture. The idea was for pro money to get price back into an area where they can filter in more short orders while the herd is in full buy mode. Lots of orders get filled without price moving much against pro money. And that is the ideal place to be. This method has not changed since instruments have been traded. Too many day traders get caught in the moment.

As price made a poor fall away from supply, there was a considerable period of time taken before we eventually reached the most near term demand. But note how the area was pierced deeply. That shows little in the way of bullish support and has setup a small range. Lets dig deeper.

4hr chart.


From this time frame a clearer picture is emerging. We can see price falling and hitting what looks like support. But its support in an unusual place, but never the less we will still call it 'come kind' of support because price did bounce. We also see that the buyers are not there in great numbers based on price action alone. The most recent jump in price where the 2nd last candle shows buying...was no more than pushing price into the supply area. And the very last candle shows sellers stepping in and taking it lower, and from a place where I would expect genuine selling and not herd control by pro money.

There is a range of around 60 points in this and plenty room for the pro's to consider taking it lower. There is nothing to show serious buying and the bias is still bearish.

And finally the 1hr.


This is about the only reasonable attempt I can give on an active market. We clearly see the supply on the top left and reaction to it on the top right. All is behaving normal here and as I type the last candle is near closed and is pushing down to its lows, all good signs of pro selling and the London close is upon me in 10 minutes. Given it is late in the day it wont surprise me to see price go back up with profit taking and the real bearish move happen another day or if the NY session can get back into 1hr supply and then go back down.

There is a small area below current price marked by a red line. I am expecting something to happen here. It is mid range and if we can break it, I hope the horrible price action below it can get taken out and the bottom of the range tested. Ideally in the longer I want to see Silver and Gold fall a good deal further.

It was October 11th when the sellers first showed up and its taken a full week for price to get back there and more selling take place. The time within these two events is when you need to learn to be patient and let price do its thing and work its way into an area where we become interested. You can never force a trade and trying will burn you. Within ranges is also where you do not trade.

The actions of pro money are not complex, they only become active when the price is in their favor and they typical shed orders slowly into mania that the herd react too. Such as break outs that turn out to be false, news events which are complete nonsense and no pro trader ever reacts to them. Little catches pro money off guard.
 

Pro money filter in their orders where you wont see it until price is moved by them. Eventually their activity is so over whelming that they can no longer get more orders placed, or larger orders get placed by additional traders that creates the move away. If you do touch trades you have the highest reward and also the highest risk, if you wait for price to retrace you get a lower reward and a lower risk, but there is pretty much always some form of a pull back or retrace if you wait for it. Such as what we saw in the Silver chart.

Last trade of the week

Last trade of the week.


I briefly mentioned this in a previous reply to a comment and here is the last trade taken this past week. It was a eur/usd short and I closed it manually because I was called away prior to the market close and did not want the trades to remain over the weekend if my target did not get hit before the market close. 

I decided that the 12 point loss of profit was better to take than giving back the previous 160 points per trade. The price may now bounce close to where I had my target and my expectation is that price will continue lower at some future time from there. But we must wait and see if this is the case.

The bottom of a range wont be much further below the target area and while shorting in that makes sense, be fully aware than major buying did come in earlier this year. Some of those orders and interest will be long gone, but some will appear again and keep your eye on them.

Long John Silver

With a title such as that, there may be the makings of a new Pirate movie in this post, but alas, it is merely said in jest as it to chase fools Gold listening to what comes out the media mouth pieces.

A little history lesson to show where we were when the media and their pay masters told us to buy. The daily chart shows all the major details we need.

At the top of the chart is the infamous area where the expert in Silver trading told us all to buy because the price was shooting up. At the time I called doo doo on this and history has shown my words to be the most reasonable. Experience teaches us all valuable lessons and this one was in my eyes, a real class and expected message from a trader who was in desperate need of getting him and his fellow traders out of their long positions. Good trading advice neither comes for free or from the media. Buying at high prices goes against what pro money does and should also be against what you do. You only ever buy low and sell high if you can see room for profit, clear targets for stop loss and profit and only after pro money show they are involved.

The initial move up on this time frame has recently been hit by falling prices, but look at the reaction. Price has fallen well into the area where pro money finaly pushed price up out of a range, and now the weekly and daily chart show weakness. The very last candle close of the week shows some selling into the close. We will zoom in closer on this next.

4hr chart.


Looking at the most recent price action there was a strong move down and bought into, but the buying was sustained over a period of time indicating pro money wanted to stop the down move and pull price back up. When price moved back up in reached near term supply on the 3rd last candle. As expected sellers came back into the market in larger numbers. I say sellers with regards to the amount of sell orders.

A reaction to this selling was more buying and we closed near the high of the last candle. We know the main force behind silver is short and the amount of buying gone in needs to be further tested for the presence of selling. If the top of the 4rd last candle is tested and no sellers come in, then price is likely to rise further and potentially into the blue line I have drawn in. This looks like no mans land, but its a major area of interest to pro money if the 3rd last candle is broken.

Pro money needs lots of opposing orders to get the cheapest entry price and make it appear price will continue to rise. None of us know how long it will take for price to climb back up to where enough sell orders have been placed into the market. But using some logical thought, we know the main use for Silver is an industrial metal for plating in electronic etc. Looking at that sector I do not see (and pardon the pun) any silver lining and the main US trade indices  do not show much growth or good news there either. So the value in silver is pretty much for the bears at the moment.

The blue line is NOT a fixed price, it is an price area and there will be some wiggle room around it. As price gets into the area where pro money are interested, price will become erratic on lower time frames. That is order flow, plain n simple.

And for some show and tell.........the 30min chart ahead of time.

My blue line at the same price area.....and what do you know, a little price are where price took a double step before falling lower in the past. So you too watch this area if price makes it back. This is part of the price area where I will watch with great interest. The indicator traders out there will see their whizz bang stuff telling them to buy, media pimping silver is on a tear and we on the other hand, sit and wait to see will sellers come in and if they do, we will know where and why. Its better to get to watch a story unfold where you almost can see the outcome before hand.
 
So now, you watch wait and be patient. The trade will come to you if you let it, and trade what you see and not what you think.

Euro trades

The eur/usd has been a nasty to a lot of folks lately, but there was a few choice moments where price did what was expected of it, or more to the point, pro money came alive where I expected them to show up.

Here are two trades taken this week with an average of 60 points per trade and enough room in that point count for pro money to be interested.

This one taken a few days ago and I took the pic just before the target was hit. The entry was just as the mid section of the chart shows a very strong up move getting its support broken. We are in bearish territory for a long time and no way was the up move ever going to keep going, it was emotional testing for the herd and the fools will have bought into it. I mentioned it many times before, if you see price shooting for the sky or the floor like this, it wont keep going. It is a means to a nasty and sudden end. Strong markets and trends dont setup like that, its just a trap.

The euro has been trying to break out of a range and is very slowly climbing up with incredible pain. The near term swings within the ranges can be traded if you look for activity at the right time. Any price thats mid range should be left well alone and let it play out to one extreme.

A 1hr chart of the eur/usd showing another trade close to its target. The emotions of the herd will have been long and stopped out for this one too. A deep spike down a few hours before this trade was taken took my eye and I watched how price would fair when it next came close. I know buyers cannot be there in big numbers or else price would not be back down there again. The spikey nature of the pair meant leaving my stop well above price as it fell. The original stop was above the top of the red candle with a tall wick where my entries were clustered. I later moved it down after the first good sized bullish candle showed up, that was minor profit taking and also provided another nice place to reenter given support was broken, tested and no buyers showed up. Any pro bear would have thrown the kitchen sink at that trade and it shows up in the fall price took.

I didnt target the usual place for a target, which is the origin of the tall green candle. There was a slim chance pro money would buy there is large amounts and I held on for the very base of the tail. The last few points did take a few more hours after I took the picture. But patience is in my nature and my stop was in a safe place and so I left it alone and rested easy.

You can now look into the 4hr chart of the eur/usd yourself and mark out some areas and compare my entries and targets to what you see, and if it makes sense to you. I know those who are only starting out would be confused by this, so do take some time to wrap your logical brain around how pro money think and where it makes best financial sense for them to become active.

S&P500 update

As promised here is an update to the last posting I made on the S&P500. As you are aware it is not possible to give continual updates on any financial instrument without this blog sounding like a forum or means of driving advertising revenue. I post pure trading data and nothing else, if you want more frequent updates, then thats taking my time and we all must make best use of our time to earn a living and also spend time taking life at an easy pace.

I still get asked about a forum etc and if I am going to set one up. The answer is a simple one, if you need that amount of regular input, then pay the piper!

Anyways, onwards to the S&P500.

Here is the weekly chart. To give you a hint of what I make of this I am going to rename it the weakly chart.

The ten mile high view shows price pushing up through historic highs with good momentum, then running out of steam and coming back to test the break out. What I dont like is the tail that formed down into what should be support. If buyers were truly interested in buying, they either missed the opportunity (unlikely) or they are not committed to taking this higher.

In recent weeks following the candle with its tail into support, price managed to get back into the origin of the rapid bearish candle that hit support. That is the largest candle closing on its lows. But, the last few weeks since that shows selling starting to show up and its coming off very near term supply in what should have been a test of support. We know its now not true support and we could say that pro money are questioning the strength of buying again.

As I type this the weekly candle is not yet closed, but not far from it and I dont expect any major change in the final candle shape or range. We have to trade what we see and price wants to come down and we need to wait and see what happens when/if it hits support again. Will it hold, will it bounce, will it go through, will it range. These are all questions that must be answered and as yet I cannot find a reliable crystal ball to give me the answers and I have to wait for the only 100% accurate way to know for sure........I give it time.

Daily chart.


Here we get a little closer in on the action and the details start to emerge.

The blue line is support/resistance area which has been tested and held. Where I placed the diagonal black line is the most recent supply and the horizontal black line next to it shows price coming up into near term supply and reacting in a manner that is not bullish. Warning to prospective bulls when you see that, a strong bullish market would and should have broken it. As a result of price falling, we see a real messy range forming where buyers at the bottom of the range are trying to push it higher, likely herd activity from day traders and at the top of the range we see the higher prices cannot break above the previous and is showing more and more weakness with lower higher prices at each peak. Or if it helps to understand it better, place a diagonal line over the tops of the price peaks and you will see the line falls from left to right. Price is getting squeezed into a smaller range. 

4 hour chart.


This is the S&P ugly picture we have come to dislike. There are no opportunities on this chart for us until we break out of the mess created by others. The black diagonal line points to a tiny green candle. Sellers came in by the boat load following this, the sharp and dramatic fall has not got a single candle showing even profit taking until the second last candle. It went far too deep to be considered a shake out. Confirming its non shake out status was the reaction. Major push higher and failed just as dramatic. But pro money did step in at the lower light blue line, which is where they should have come in as its the cheapest price and enough room for profit above.

But I think they had a rough ride because most of the herd will have been burned badly and price action shows little in the way of fools left to filter pro money orders into the market. Price took a long meandering course and a longer period of time than expected to get to the line I marked resistance. There would have been a small short off that area as it was established in the past, price reacted as expected and there was a clear target below. But after that the chart is a total mess.

There is minor support but it wont surprise me to see this fail. And there is no fresh places to buy even below that support, we saw three places where some buying came in and none of it I consider to be quality.

Perhaps some news driven event will help pro money move the market out of the ranging mess they created and let us get a piece. For the near term, just watch it and keep well away from it because it will bite you bad if you dip your toe.

We are into the final quarter of the year and typically not a time of the year when earnings show great news and reason for stocks to be bought into in bulk. There is no real good news in most sectors, energy is bad, tech is only fair, finance is bad, pharma slightly good and metals bad.

Remember the old post I made about gold and silver?....where I mentioned the talking heads on TV were saying to buy gold and silver because its cheap and the dollar is going to hell. I did call is BS at the time, and now look at where gold and silver are, and where the dollar went?...proof enough to not listen to the mass media and instead, trust what you see on a chart, they have yet to tell lies!