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!

My return

Hello all and I have returned after a long summer break from posting. It wont have taken more than a glance to see no new posts on here for some time and now it will be back to business as usual for the winter months.

I have an S&P500 update request which I will try and post this evening and will follow up with an over view of the other major pairs to get us all back on the same page and looking for whats logical and get close to the mind set of pro money.

Hope you all had a great summer, and those who are only now heading into summer in the southern hemisphere, try not to send us too much cold :)


Doc

S&P500

A brief look at the S&P500.


This is the weekly chart and we are at major supply. There has been many attempts to break through and after each fall in price, we have had to go deeper below to get fresh buy orders. This cannot be indefinite and early warning of price breaking this range and pushing much lower looks more probable with each passing day. Just look at those long tails, there are some heavy hitters at work there.

Daily chart.


I placed a red line on top to show supply and look how weak price is when it got to the upper portion of this wide range. compare that to the reaction, one sudden strong move away and this says sellers are present and in good numbers.

The last two candles including todays show no buyers showing up. Hardly a surprise given the power behind the sellers. A blue line is marked lower down and I expect no major buying to take place until we drop below this. And even then, any buying may be weak. There are other markets showing the same weakness all around this time, and when this happens the results can be spectacular.

Take a look at the tails on many of the candles on this chart, that is not a sign of a strong market and the regular and sudden spike lower to gain orders. 
 

AUS200

I will try and answer some questions in this post and perhaps in another if I can find some clear charts to post. There are jitters forming in the market with the UK voting on its future within the EU, and given the extent of the British reach around the world, this will have many ripple effects in many markets. Finding quality charts as voting day approaches will not be easy.

However, here I present the AUS200 Australian index. I have not covered this before and the economy of Australia is about to under go some tough times from what I can see. This should not come as any surprise, the mining industry was the first to send out warning signs, housing will following and folks already leaving for work abroad. Any politician in Government will do all they can to talk the opposite, but the charts dont tell porkies.

This will be a long term view of the AUS200 because of price action alone and day trading this is not good until it settles into full bearish mode.


Monthly chart.


Starting on the lower left, there is a point from where this market took off strongly during the boom times. Like many other countries the investors spent heavily and pushed hard. At the top we see supply that will have caught and burned many. There was warning of this before the top was reached with a large bullish closing candle with a large tail. The question you must ask when you see such price action especially on high time frames like the monthly is, if the market is so strong, how could price drop so quickly and violently. We know only pro money could do this and it was an exercise in taking out stops and grabbing more orders for the final push to the top. We also know that when price shot above the close of this candle where many got taken out, will have jumped back in again in full bullish mode. Greed takes over from the logical brain and such warnings tend to happen once and it is best to heed it once.

As price fell through 2008 it eventually hit the old area of demand and we see price reacting accordingly. The same traders who got stung at the top will have gotten stung here again, and the same warnings came up, a large tail which screams buyers coming in with deep pockets. A quickly test of this area came in early 2009 and price turned bullish into the near term supply I show on the chart. Of interest is the reaction in price, it got thrown into a relatively narrow range for around a year. We then see a large drop and terminating with a candle showing a large tail. If you think buyers you are correct. This was tested after a choppy ride back up into the range and price falls again but with much less force. Several times from the top of this range will fill more and more short orders and eventually weaken the area enough to where the bulls can spend a lot less money in turning the market.


After the testing area price finds enough willing buyers to push up through the range and even has enough orders to gap up, test quickly, grab more lower cost bullish orders and break the top of the range. From here we see a lot of choppy price action into the large supply candle from the left. I marked this with a blue line. I would not have been looking higher because the bullish candle to the left of this with the large tail has established itself as an area to keep an eye on.

Given we hit supply and now have fallen off, we want to see if nearer term supply is working as expected and in the last candle of the current month we see it is working so far.

Weekly chart.


A closer look at what is still very choppy price action and a sign of no strength from buyers. The area I marked off as run for orders shows how price was marked up to entice buyers and take additional time to fill short orders while price was above recent highs. Once price fell back into the range, we can see several areas where it was clear the bulls were not interested and the bears had a chance to take control. 

At the moment we have hit recent supply and price is falling. There may well be some day trading action we can take here and if the swings are within your means. 

I am looking for a target below the blue line, this is the best place to find clean fresh buyers and it is a good area untouched for some time. There is some buying below price, but none of it looks particularly strong. Time will soon tell.

 

Daily chart


Here you will get a sense of how choppy price has been. Very ugly nasty and account hurting for the small trader. But wait for the main areas to revisit and it gets real interesting and after a time you will see how price gets cleaner as pro money works in enough orders to show us a path.

The top red line is an area of supply. To the right we see a sharp stab through it and close below, just following on from that we see a close near to the top of the spike.....and the word to focus on is, near. Without a higher close and a continuation it was given price will fall back. But it done more than fall back, look at the days candle with a large red body closing on its lows, that is powerful and it formed in the right place. A retest of this is what we want and it came about a few days later and right now we are falling again and with good force behind it. 

You can see the retest was used to full plenty bearish orders and all timed so that price would not fall off a cliff and pro money allowed time to support this move. You would think they planned all this :)

And finally at the bottom I placed a box showing where the most recent buy orders happened and we can expect this to become their target. But I have my doubts it will hold up price for too long and at some point, price will march lower as is expected on the higher time frame charts.

 

EUR/USD

A new month and some Euro action showing signs of promise. Overall the Euro is bearish against USD and we are getting closer to what may be a final leg down. I have a very long term chart here showing the monthly time frame and where I expect to see a target on lower time frames.

The media will as I suspect play down the Euro to allow enough negative sentiment built around the currency and all commentators come out with silly talk of the Euro is a failed experiment, a failed monetary union and all sorts of other TV fodder. Pro money requires news to be bad and getting worse in order for price to fall to where they want it.

On this chart I have two small lines showing a clear area of buying back in 2002. What is unimportant is the time that has elapsed since the buying. It doesnt change history and where pro money felt the Euro was a good deal and bought into it hard for years.

Note an expected price range where support could have been established. This failed in dramatic fashion in late 2014. There is good intel from that fact, the Euro fails to gain support and therefore has to fall further and will do so into the next area of support and we are looking to short into that on lower time frames.


Now on to the weekly.

You can see where price blew through the area where support was likely to form. Price races away below and on this time frame has set into an approx 1000 point range. There was one large spike out of the top of this range and this achieved a number of goals. It got day trades long when there was no pro money support to be long, they same folks will have been stopped out, and any shorts from it will have been bored out of the market with weeks of poor price action. The net result was low cost short orders from pro money. Their efforts are clearly seen a little later with a brief retest out of the top of the range and a rapid retraction. The following day price collapses as one would expect.

The best trade in that range was the one I just mentioned and it pinned demand at the bottom of the range cleanly. At present we see a painful rise higher into that old supply, but it will become a weaker area to sell from and price action will become very choppy. Right now we are falling from near term supply and getting clean price action and targets will get harder the longer we stay inside this range.

 Next up is the daily.


I have marked up where price reached near term supply and has sold off. Also where it hit demand below, but the demand there looks weak to me and higher quality demand lay further down. To get there, price has a real mess to go down through.

Ultimately I want to see the bottom of this big range fail and price break through and continue with its long term bearish path in order to see a much longer term cycle in the Euro start from clean untouched prices for many years.
 

Final chart of the 4hr.


This is as close as I wish to go for the moment and even here price is looking very tired and taking laboured movements towards supply and demand. Over head there is some supply and none of it is real quality. The only good news I see on this time frame is that the best of the quality demand is all gone on the left. 

Something to remember, when you see daily price moves and daily squabbling that is meant to be news, all this is nothing but noise and taking any of it as the truth will put you on a loosing path. The media is not there to give you trading advice and you must be your own judge based on what the charts tell you. The media has to make money daily by conducting daily analysis.

Keep the big picture charts in mind at all times, they dont lie and dont have the intraday noise of unimportant news and commentators who make money by selling news.



 

EUR/GBP

A follow up on the last EUR/GBP post.


Here is the weekly and pay attention to the last closed candle. It has a range of around 235 points and it closed with around 95 points from its low. Supply has come in because we are at high time frames where the significance in the amount of supply shows up with greater effect. Note, we are taking one candle in isolation and little else on offer on this time frame, it will take another week before we know on this time frame if the bulls are either weak or interested. 

Any clued in trader will know that in order to get the best and cheapest price for your order, you will want to see most of the opposing traders no longer interested in going against you. Banks do this all the time and have the patience to wait, and if needs be, will trade in the other direction in order to get price back to where they can filter orders into the market. This wont be logical to many folks and takes considerable mental effort to get into the logic of pro money.

Daily chart


A much zoomed in daily chart to show you where we closed out the day and week. The 2nd last candle shows it hitting supply and the large spike on top will have trapped a lot of day trader longs. Such stupidity no longer surprises me because it has been like this for over 100 years and greed never ends, until the account ends.

The last candle is where we are now and clearly there is an engulf of the previous days emotional price action. Towards the close there was some buyers came in, but major looking on this time frame. Lets drop down another and see how it looks there.

4hr


This is as far in on the action as I like to get for a reasonable view on where to look next. I have 3 lines showing an area where price will have little difficulty in blowing through, very little in the way of demand is waiting and the next nearest spot is in the candle where I drew a horizontal line through. I expect something to happen there and a higher quality and more buy orders I expect to see at the top of the box on the left lower down. It is still clean and untouched for a long time and price has not been anywhere near it.

There is however one area I have not mentioned. The thick dark blue line is a major S/R area on the high time frames and it is acting as support at the moment. This is where you could see major supply broken and good reason why trading off that line is a bad move. I want to see conviction in the chosen direction and where some testing has happened even if on low time frames to allow one or two nice entries within the London session.