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!

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.