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@Mercury

You raise valid points in your first paragraph. 

In relation to your second paragraph, I am yet to be convinced that Gold and Silver look bullish. I would need further positive upward price action for me to accept any confirmation of Gold and Silver looking bullish. I think if stock markets were to tumble further downwards then you could well be correct in your assessment of Gold and Silver. I agree it certainly is very interesting. 

I will personally see any crash in stock markets as an opportunity to invest lump sums into such large corrections. I invest monthly into equities but would supplement this with lump sum investments should there be a large and rather aggressive downward drop like one would see in recessions. I did exactly this during the Financial Crisis and it amplified my profits when the upward move came. I shall be doing the same should a similar scenario present itself. 

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That's the thing to do alright @TrendFollower but the trick is to figure out where the bottom is.  For my part I am taking a different approach this time because I think this is going to be much more than a correction so I am all in cash until the dust settles...  Will take a few years I think

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@Mercury,

Figuring out bottoms is extremely difficult. Also if you are a full time investor / trader then fine but if you work full time then to have the time to even try and find bottoms is extremely time consuming. When one tries to find bottoms they can end up missing any major upside that usually occurs. Time out of the market can sometimes be costly. 

I invest monthly using 'pound cost averaging' strategy. I then only invest lump sums on any major corrections / downturns. Otherwise my monthly payments just get invested per month. On those major corrections / downturns I will make a judgement and usually I have not invested right at the bottom but generally I am not too far off. That is fine for me as my investment strategy is for the long term. Also I am not a seller looking to sell anything. I am only looking to invest and build up my investment side of the portfolio for long term wealth creation. 

I am not suggesting my method is right or anything. It seems to work for me as this strategy as enabled my investment portfolio to always be in profit overall and my annualised return each year has always been in double digits but your method may be more prudent and sensible. I would not want to be out of the equities market for a few years. If equities had a major drop over the next few years I would want to be accumulating on each of those large drops as predicting bottoms will get you a 'slap'! 

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I think that is right @TrendFollowerand certainly the professional advisers will say the same.  Over the past 30+years this was exactly the right strategy, just look at a price chart.  However, what happens if there is a depression?  I was busy writing on this here but thought it better to open a new thread.

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Feels to me like one more leg down to test the bottom channel line (weekly chart line so could push through and back and remain valid) before any possible relief rally.  I need a completed 1-5 wave form ideally and PMD on the hourly to support a bounce off the supporting channel line.  Obviously a confirmed break through means a reassessment but for now I am still expecting a relief rally, markets do not go in straight lines (at least not until strong wave 3s, which this isn't).

For the avoidance of doubt, I am tracking a counter trend rally and NOT suggesting the big picture trend is anything other than down.

Brent-1-hour_211118.thumb.png.7dd8ec432f10861ea1a288ddb5effe0c.png

Edited by Mercury
for to add a final thought

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I suggested in an earlier post how the US and Trump wanted lower oil prices to help the US economy and around the mid term election period.

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No doubt @elle, @TrendFollower, but the midterms are over now.  Trump is suggesting it all has something to do with him and his new buddy the King, despite alleged assassination of NY Times journo.  I am sure his own oil producers will not be thanking him and where does he get his tax revenues from?  The Green lobby will be setting their hair on fire as Trump is basically telling gas-guzzling America to get their noses further into the trough, and this aligns to his environmental nay-saying stance.  Quite apart from his lack of concern for long term environmentalism, it is his apparent lack of strategic intent that raises my eyebrows with such utterances.  He seems to have no idea what to do other than keep pushing the America first, America is great ideology that won him the protest election.  He is a one trick pony.

That said, what do I care?  America has to sort out their own mess, we have sufficient to sort out in Europe and UK, especially now that the uber EU-phile, Ken Clark, has come out in favour of May's plan...  I would venture to suggest that he views it as staying in the EU mostly, which it is, but paying 40billion for the pleasure of being a captive downgraded member!  You couldn't make this stuff up!

Now on to actual trading matters, the above tweet from Trump is exactly the kind of thing a contrarian like me looks for as a signal to go the opposite way, well that and all the other signals of course, but this is the cherry on the top.  I would also bet we will see articles from the MSM on why Oil is heading lower from here.  Cue rally!

 

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@Mercury,

First of all, after such a drop it would not be too difficult to predict that there will be a rally in oil! A rally normally follows such a large drop. The question is whether there is further downside left and it bottoms and then a slow rally upwards begins or there is a quicker rally which is imminent. 

Secondly, let's test your assumption and see if the evidence (as in price action / behaviour) validates your assumption. Lets see if there is now a rally in Oil as per your cue. 

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On ‎14‎/‎11‎/‎2018 at 06:58, elle said:

Decide for yourself, but looking at these, I would say price is "reacting" to those lines

Capture oil.PNG

 

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On ‎21‎/‎11‎/‎2018 at 12:51, elle said:

lower then

Capture oil.PNG

 

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IG have posted this on the front page of their website under 'News Analysis'. 

Trump takes toll on oil price, pushing it below $60 as supply swells

https://www.ig.com/uk/news-and-trade-ideas/commodities-news/Trump-takes-toll-on-oil-price--pushing-it-below--60-as-supply-swe-181123

I have commented on this before so I will not repeat myself but whether one likes or dislikes Trump, one must certainly not underestimate him. 

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Some pullback !   I wouldn't like to pick a bottom, would prefer to wait until the moving averages on lower time frame charts are "on my side"

Capture cld.PNG

Capture cl1.PNG

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@elle,

May I ask why you have not traded oil, short? (Apologies if you have) but you seem to post a lot of charts and seem in tune with the price behaviour so would expect someone on the IG Community to have shorted oil and profited handsomely from such a trade. 

I am just curious and please do not feel that I am picking on you or anything like that. I am just curious as there is very little discussion on anyone placing a short trade on Brent or US Crude and profiting from such a trade. I just wonder how effective certain technical analysis strategies are in relation to profit maximisation when certain rules and strategies do not allow you to trade such a nice short trade?

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Quite apart from trading Short, I went Long recently on a potential overshoot set up.  If this concludes with a return back north of the long term supporting trend-line (it will also have done so on the Daily supporting channel-line) then the retrace I have been patiently waiting for will most likely emerge.  Any Long trade would appear to be counter trend and once the retrace is concluded (I am targeting the Fib 62% or a retest of the upper trend-line breakout (price action as always to decide) shorting this market could be on once more for those who missed the previous top and turn.  If this happens then I believe we are in for a long Bearish move, maybe even back to modern days all time lows (inflation adjusted) of 1998.

Brent-Daily_261118.thumb.png.66c88074dbfb9310e637d4f5c243a041.pngInkedcrude-oil-price-history-chart-2018-11-21-macrotrends_LI.thumb.jpg.9622c35b03320e7771ed4379f282fa30.jpgBrent-Weekly_261118.thumb.png.ac5c16d8725efee4cdeac8cb38317619.png

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@Mercury,

I shall be following your analysis on Oil to see how this plays out. I am intrigued. 

Out of interest in your personal opinion if there is a long trade on what sort of price do you think it could hit? I am looking at it from a points/profit potential. 

I have a feeling that whilst Trump is the US President then Oil prices will remain on the lower side so from a fundamental perspective I do not envisage higher oil prices for now or the short term going forwards. There can be 'incidents' which could cause the oil price to spike upwards but I would not be surprised to see Brent hit $50 and US Crude to hit $40.00. 

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for those interested this kicks off in 40 minutes and will be available after the live show. If you want to submit any questions please do so on that link below as I won't be checking this thread.

 

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Didn't get to see the live show, must have been good because Oil started to rally...

Looks to me like we could be about to get that retrace rally I have been seeking.

Technicals:

  • On the Daily chart price looks to have bounced off long term support, this goes back to a Wave A turn down on the previous LT rally (weekly chart), a typically good support/resistance zone from an EWT perspective.  The bearish move down conforms to a 1-5 motive wave (direction of the big picture trend and indicates next move will be counter trend relief rally).
  • We have now had a couple of potential overshoots of the lower channel line (red) and overall the whole move containing these 2 would be an overshoot of the weekly chart LT support line (let's see).  Oscillators are over sold.
  • On the Hourly chart then we can see those 2 overshoots and I have a clean 1-5 count down to the Wave 1 Pink (potential) turning point.  So far the small rally is in a 1-5 (15 mins chart to see this clearly) and there is PMD at the Wave 1 (pink) turning point.

Trading Strategy:

  • I anticipate a small A-B-C bearish move to complete the first 1-2 of the rally at which point a speculative Long trade could be on with stops just below the wave 1 Pink low.
  • Alternatively a Long on break of the over head resistance, once we see the above could be good
  • The most secure would be a break of the upper Daily channel line but stops would have to be wider to guard against a hard retest of the line, although Oil often seems to move fast at such junctures.
  • I would be targeting the Fib 50% initially but the 62% a retest of the LT weekly support line break out could also be a strong candidate.
  • Oh and USDCAD seems to be falling in correlation.

 

Brent-Daily_291118.thumb.png.b25e4d15e974a41068b363172c211605.pngBrent-1-hour_291118.thumb.png.79e0540fe0a37eb6525ee7e9dce69173.png

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On ‎24‎/‎11‎/‎2018 at 15:30, elle said:

Some pullback !   I wouldn't like to pick a bottom, would prefer to wait until the moving averages on lower time frame charts are "on my side"

Capture cld.PNG

Capture cl1.PNG

 

Capture cl.PNG

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@elle

I envisage Brent going to $55 and then testing $50 which may provide a strong correction and trend reversal. Trends love round numbers and psychology plays an important part. There will be speculators and Hedge Funds adding to their short positions as the price declines, further amplifying the move downwards. As one can see there is a strong downward bias.

This is only an assumptive view and therefore any short trade based on this view would be a speculative trade based on current price action but with possibly better odds and probability in your favour. Also you would be trading with the trend rather than against it. That said Oil could at any point carry out a sharp trend reversal stopping out a lot of trades so it certainly is not easy at this juncture. 

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I 'm sure many others see these levels. I thought crude would go slightly lower yesterday , as the low in WTI was made outside US trading hours. I still think therefore the low will be tested. There is a lot of support just below in my opinion, so if it were to go lower it would have to either chop through it ( doubtful) or zoom through it.  

Capture brent d.PNG

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Brent is now approaching (well poking through) my upper channel line.  I have been saying for weeks that this is the point to consider that a counter trend rally may be on.  We still need a close above to confirm but sometimes the breakout can be fast and it looks to me like we are in a wave 3 (strong move).  The EWT counts align to a wave 1 completion on 29 Nov with a small overshoot of the lower channel line after a previous fake-out.  I have PMD at Wave 1 (pink) and a strong retrace and retest to Fib 88% (Wave B/2 Green) before a rally away and smaller retrace, which is where I got Long).  We then gapped away and I thought we might see a close of that gap yesterday but Oil is a fickle beast and so far it looks more intent on closing the higher up gap (Monday 19 October) first.  I'll hold my Longs from below but wont be adding because this could be a bit choppy yet and I prefer EURUSD and Dow to this move but when it tops out and turns there could be a very long and fast bearish move on offer.

Brent-1-hour_041218.thumb.png.73ccdf153fedd15e3e009339bd5a7193.pngBrent-Daily_041218.thumb.png.fabd94e700acb6e4ad4d8ccec6e8fb1b.pngBrent-Weekly_041218.thumb.png.f2b5377e537f66ac811974abfe2944e3.png

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Looks like we might get a fakeout on Brent but looks (at this point) like a retrace off a 1-5 wave up to maybe close that gap after all.  I would be more comfortable with the gap closed...  Due to the uncertainty I decided to cash and wait, shifting margin usage to stock indices as a better bet.

Brent-1-hour_041218.thumb.png.2ad0fbf04020c4bf2dfd82b0858c6863.png

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