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Mercury

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Everything posted by Mercury

  1. @cryptotrader wrote (in Silver Bullet thread): "I've always thought that cryptos are completely unrelated to other asset types which is why they're so difficult to price. Everything else has the inter-connectivity between themselves (Fed IR effect USD 'value', which knocks on to USD denominated assets, which leads into equities, re-positioning etc) but always thought crypto is a world unto its own. Linked to cost of production - electricity, CPU costs etc." I think the notion that crypto is something apart from the rest of the financial world is a concept that pervaded the first internet boom; the idea that the internet was going to change the nature of business and society by providing free access to everything and there for traditional business models would fail. Instead the first internet boom failed, well hardly surprising as all those budding entrepreneurs forgot that you have to make money by charging for goods or services to become a millionaire (although a few clearly did purely off the back of selling out early enough - which is a watch out now on crypto for anyone invested for the long term). Out of the ashes rose the second internet (or tech) boom but interestingly the winners were those that effectively adopted traditional business models (i.e. the need to make profits and generate positive cashflows - duh!). The share prices are now massively over inflated of course but that is just financial market forces (the markets can remain irrational longer than we can remain solvent, kind of thing) rather than anything intrinsically wrong with their business models. Now that these businesses are profitable and hold masses of cash (masses!!!) they can withstand a major downturn, perhaps better than some other more traditional sectors, and be positioned well for the eventual recovery. It is this recover where I think we will see the really discontinuous tech disruption, the next leap forward. This is what happened after the first internet bubble burst. It is after the crash and clear out that we will see Crypto, or rather the blockchain type technology, become mainstream in terms of replacing physical cash, this is the end game, not some nirvana of a non FIAT collective new age hippie dippy free of politics currency (or set of currencies) that everyone will use free of government control - you might as well just howl at the moon as think that is ever going to happen. As regards you comment about Crypto being apart, well how do you buy or invest in Crypto? With cash of course. And how it is currently "valued" in the markets? In USD, hmm... The real problems at present for Crypto, and the reasons it will all end in tears until the next iteration are (for me): There are too many Cryptos, until it is mainstream (i.e. the tech backing electronic FIAT currency, which is the root of the concept of currency right back to the earliest days of non precious metal currency (i.e. the right to exchange a paper bill for gold) it is the wild west. Ordinary people are not using Crypto as a currency, it does not have wide adoption It will not get wide adoption until it is better understood and backed by something normal people recognise as sound (i.e. governments) There isn't sufficient liquidity for wide adoption and consequently the price of a bitcoin is too high for a normal person to use it (similar problem with Gold BTW, which is why I prefer Silver for true disaster insurance and consequently hold physical silver coins) The price is too high and too volatile, it is in the hands of speculators - hence it is a mania The idea that Crypto is a store of value is laughable. When the $£!& hits the fan people will buy Gold and Silver and USD and Yen, things they understand and can cling to in an uncertain world. They will not buy bitcoin. Even if they wanted to how can any normal person buy bitcoin at $50,000 per coin? Barking mad the whole thing - but this is what I expect at the end of the cycle so carry..!
  2. Mercury

    Silver Bullet

    @cryptotrader, comments are always contextual, in this case I was not commenting on Bitcoin pricing merely my view that it is being driven by speculation the likes of which occurs at the end of a boom cycle. The context is how this related to Silver, not Bitcoin per se. What I am suggesting is that Silver (and Gold) will go into a long term rally off the back of a collapse in that over exuberant speculation driven by greed, FOMO whatever (maybe Gold has already started, maybe not quite yet?). The back drop to this is central bank policy, which was originally put in place to kick start a failing economy but is now the drug that underpins the market. And people can't have it both ways on this. Either the economy is fine and so onwards and upwards or we need CB stimulus because it is not fine. The latter is the case in my assessment and at some point the market will realise all the stimulus in the world is not going to change the facts in the real economy and when that happens Silver will take off like a bullet as the spec boom/bubble/mania (delete as appropriate to each market) collapses. As regards you comments on Bitcoin, well I see you have opened another bitcoin thread so maybe I will answer (FWIW) there and keep this as a Silver discussion thread.
  3. EURGBP is poised for a drop through short term support on the back of this mornings GBP push while EUR ditters. The Daily chart Triangle line has been broken and failed a retest twice, the last one at Fib 76/78% retrace. The drop is strong but will not be confirmed until the short term support is broken. After that we look set for a sustained Bearish move, contrary to the Brexit doom mongers thinking. I do expect EUR to rally as well but not as hard as GBP and it may even go short term Bearish while GBP rallies today.
  4. Strong move from GBP this morning after a brief period of retracement. A break through 12,800 zone leaves not very much in the way of resistance until the potential Flag consolidation zone (Fib 50%) around about 13,400.
  5. The counter trend rally could be concluded, for now, but the further into this we go without a break through the 5000 support barrier the more complicated (convoluted even) the technical scenarios get. For now it looks like a classic A-B-C retrace turned just after the second price gap was closed. I remain a bit concerned about the final unclosed gap above (circa 6737) although you can only see it on the 1 hour chart so technically not a valid gap on the Daily, this distinction may turn out to be important. Looking at my 1 hour chart I have a series of recent 3-4s that conclude the wave 1 (Blue) with PMD at the turn. A-B (Brown) concluded with a 1-5 wave C up to 2 (Blue) turn at the price gap closure point and now a small 1-2 down off that resistance and break through a possible Consolidation Triangle formation. IF this is sustained without another leg up a retest of the wave 1 (blue) support level (5900) is likely. However, if we look at the Daily chart this is where things get more complicated as several scenarios are in play until a break of that long term support zone down at 5000 as follows: Instead of blue 2 it could be a wave A (Red) that would lead to a B-C and a higher retrace, possible to close that 1 hour chart gap. The above scenario could be extended to rise for another test of the Weekly Triangle line at 7800 - 8000 (i.e. the April turn was not the end of the counter trend rally and we are in a much larger A-B-C Wave 1 Blue is not yet done and wont be until the unclosed gap at circa 5860 is closed, after which we will see a retrace rally (# 2 could still hold in this case) Finally, the blue 1-2 is done and the market carries on down, with pace in a wave 3, to close that gap and break 5000 I favour #4 at present, but that may be because I am Short. My analysis does lean towards a Bear breakdown so I will monitor price action to see if I can pick up clues to support that, chief will be a fast paced drop that is typical of wave 3s. I will not be comfortable until that 5000 level is broken and we have a reinstatement of the Death Cross. For now though I do see a short term bearish move so am content to hold Shorts unless or until the other scenarios present in price action.
  6. So USD has finally broken to the Bearish side and most USD pairs are trending accordingly but how far can this go and what happens next? To make the most of a move I seek to identify the scenarios that may play out and for USD I see a period of Bearishness, several months perhaps, as stocks and bonds play out. At present I am not convinced stocks have much more to go, maybe 3050-60 on S&P 500. I am also not sure precious metals have broken out yet, although they could be driven up from here by USD weakness but there is bit to go yet before I would jump back on. I am also a bit concerned about Oil bearishness as there is a bullish scenario too so not keen to add to my Shorts there yet. So that leaves USD pairs and I am Long EUR and GBP, also a bit of AUD and Short USDCAD. But I want to put my bets on the best medium term (these are all retrace counter trend moves rather than long term motives) return markets and for me that is GBP and CAD. I see both of these markets as in wave C where as EURUSD is only in a wave A and doesn't have as much upside. But let me look at the potential scenarios for USDCAD medium term. Short term things are still as per my previous post (looking for and end to the short term rally to get short. Longer term (monthly chart) I see the following technicals: Market bottomed out with a 1-5 wave in 2008 then put in 1-2 (or A-B) between 2009 and 2011 and ran up to the 2015 high in a 1-5 leading us into the current move. This move looks like a Pennant consolidation to me that broke out in 2018 on USD strength but didn't storm away and now it is in retrace. A bearish period could result in either a retest of the Pennant breakout zone or the Pennant line. Looking at the Weekly chart for a bit more detail: There was strong PMD at Pink C, the likely end of the consolidation and Pennant Then a run up in a channel in a 1-5 form to a likely wave 1 (Blue), however it isn't a clear 1-5 and could be seen as an A-B-C as well so no help there. But the A-B (Green) was clear, especially on the Daily with a NMD) so we are now due a sharp 1-5 wave C (or maybe a more complex move but that's in the future). We have a breakout of the channel line, maybe we will see a retest before this market really gets Bearish. Bottom line is Bearish but 2 scenarios: Retest of the breakout zone (Fib 62%) on the recent rally before the market turns massively Bullish Retest of the Monthly chart Pennant line at the Fib 62% of the Monthly chart top before the market turns massively Bullish. To decide we will have to await price action and watch USD but if other pairs are not going to run as strong what could make CAD run harder and further? Well Oil bullishness could, so I am a bit concerned about where Oil might be going...
  7. As with GBPUSD (or even more bullish really) EURUSD is barely making any kind of retrace at present. This, together with the retest of the Weekly Triangle line and sharp rally away, is a signature of a wave 3. I believe this to be a wave 3 of a wave A of a medium term retrace counter trend rally. This is the rally I have been tracking for many months and now it seems it is finally here. It will not take as long to complete as the wave 1 did but it will most likely go in an A-B-C form so some reversal is to be expected part way through (impossible to tell where this will happen - my road map on this is indicative only). A swing trader will hold Longs below the Weekly Triangle line for the full retrace but take a shorter term view on any positions added above the line, basically looking to swing trade the A-B-C to conclusion but hold longer term speculative positions below the line. This is a vital difference between a swing trader and a trend follower. For the swing trader this is NOT a trend change, it is a counter trend rally and therefore trend following the rally will not work well. Things are a bit different on GBP, CAD and AUD though as these markets appear to be already in the wave C of the counter trend so will be trend follow-able until the end of the retrace. The only thing to watch out for is a flag consolidation point about halfway along the wave Cs, which will most likely occur when EUR is in it's wave B. Triangulating all of these related markets and the EURGBP Triad really helps to spot the zigzags and make sense of the entire market system, thus maximising gains and exploitation of the move. Critical also is to identify the end of the retrace to take profits and reverse to position for the much longer Bear market to come after the counter trend rally is done. I am currently expecting this to be correlated with a final end to the stocks Bull towards the end of the Summer or Autumn. Regardless of the future the current price action is certainly pointing to a strong rally phase against the USD. Buy the dips for sure but don't expect any deep dips until the wave A is completed. Ironically the better markets may be elsewhere on the wave Cs (i.e. GBP is about to become stronger and more consistent than EUR - I wonder why..?).
  8. Looks like the retrace was quite shallow (Fib 38%) which is consistent with a strong rally phase (Wave C type). We have just had price poke through the recent high to make a higher high and complete the A-B-C retrace and rally. If this is a 1-2 (which stacks) then next stop could be the 13,400 area for a possible Flag consolidation phase before the next run up to the 14,000 area to complete the retrace but lots to go before we hone in on that, for now I am looking for the next 2 resistance zones to be cleared in short order, a break above the 12,800 and we are game on.
  9. So looks like a turn just past the Fib 62% (half way between that and the Fib 76/78%) and right on the weekly Triangle line. Price ideally needs to stay below this line at the end of the week, although the lines are not that accurate so this is +/- of course. Price action looks good for a turn through with a small 1-2 retrace in play. A break below the recent low will be very compelling and if the turn is in then the following days and weeks should be very Bearish as this would be a wave 3. Looks like turns on EUR and GBP (and AUD) are also confirmed, with EUR in particular breaking above previous highs and associated resistance. May still get some retrace action on these USD pairs to retest near term support but for now all looks good for both a USD Bear and EURGBP Bear. Another leg up to the Fib 76/78% is still possible so care is needed but I would say the odds favour a drop.
  10. Apologies I have a correction to my charts. I had the Daily Channel lower line in the wrong place as a result of some scenario working. This is now corrected, please see both the Daily and hourly charts below. A retest of the daily channel (or Triangle) would more correctly coincide with the Fib 76/78% rather than the 62%.
  11. Mercury

    Silver Bullet

    Actually you are right @cryptotrader on SP500 at least, it looks like a technical ATH by 0.20. Could still stall and put in a double top with others staying below as a retrace but I wouldn't bet the house on it or anything. My combined lead scenarios: USD down; Gold/Silver Down; Copper Up; Oil Up kinda needs US large Caps to continue up for a while, albeit I do not expect stocks to hammer up, more a up and sideways crabing style price action until capitulation with non US large Caps to complete related retraces. I was merely pointing out that the alternative scenario set requires stocks to turn down, are we there yet? Oh and in my lead scenarios is also Bitcoin to top out at key resistance and fall away sharply to at least close 2 major price gaps. I believe the Crypto resurgence is linked to the overall Fed driven buoyancy (call it greed, complacency, fantasy whatever...) and may fall first as an indicator of things to come. 💀🤯
  12. As with EURUSD, it seems like GBPUSD has also made a turn but this time off a deep wave B retrace to the Fib 88% zone. EWT labeling up to a wave 1 (light blue) is sound (albeit another leg up cannot be fully ruled out) and there is NMD at this turn point. We are close to a retrace pattern right now, just need to drop below the previous short term low. Fib 62% is looking likely for retrace completion and this would fit with EUR and EURGBP where the 3 third side of the Triad is in a retrace rally (i.e. EUR is stronger OR lagging GBP for now). I think a turn on the EURGBP pair could signal a reversal of that lag and may be an advance signal of a retrace end on the two USD legs of the Triad. At present this is looking like it could resolve today unless there is another leg up. Barring that next week is set fair for a USD Bear.
  13. Mercury

    Silver Bullet

    PS: there is just one thing, what if US large Caps fail to make fresh all time highs...? ☠️
  14. Looks to me like a confirmed breakout of the Weekly Triangle now, gotta wait until the close of play to day to be sure but signs are positive with a failed retest of that line and an alternative 4 hour chart line as well. EWT labels look good for a wave 1-2 conclusions, which is a perfect scenario for a break and retest as after that comes a strong wave 3 rally away from the failed retest (AKA a scalded cat bounce). There was PMD at both the wave 1 (Blue) and the wave 2 (Brown) turning points and decent EWT labeling for both the wave 1 and 2 (Brown). There is a technical possibility of an A-B-C (red) but I have discounted that for now. A break above the wave 1 (brown) will negate that. However before we get carried away, the short term is likely to bring up at least 1 further retrace. I am expecting to see either a drop from here or another small leg up before such a drop. Maybe a 50-62% retracement and once done this market should rally strongly now that FOMC is out of the way.
  15. SO Gold is on a rampaging rally eh? Well maybe, maybe, but just like my views on Silver (see alternative thread) I am not yet convinced, and I am firmly a long term Gold/Silver Bull. Gold seems to be responding to USD at present rather than acting as a safe haven and no surprise as the safe haven facility would only be triggered if we were in global financial meltdown, are we? So Gold and Silver are merely responding to their own internal market dynamics for me and perhaps the rally has just reached its natural conclusion, for now. Markets move in waves not straight lines as we all know. Markets are chiefly driven by sentiment but when this sentiment gets too lob sided, without good reason (e.g. a financial meltdown) they tend to reverse. On Gold right now I see the following scenarios: This is the conclusion of a wave 1 (blue) rally with a pin bar reversal off key resistance (very Bearish but not yet confirmed with a day close) that will bring up a strong Bearish move that could carry as low as a retest of the long term support trend line around 1230ish. We get a short term retest of the 1360 zone and a rally away. The current price action is strongly Bearish, it could reverse later in the day but if it doesn't then I prefer scenario 1. A break back below 1360 will confirm. From a more fundamentals perspective we could be seeing a reversal of the Bearish bias on stocks as US large Caps approach fresh ATHs and the Bulls start to believe again in the never ending Fed story. That one will end in tears, and worse, and at that point precious metals will be into that mega rally I am tracking.
  16. Mercury

    Silver Bullet

    There is a lot of big talk about precious metal rallies of late and no wonder given the strong recent rallies. But markets don't move in straight lines and when there is too much one way traffic (inc rhetoric) a reversal is often on the cards, unless we are in a financial meltdown and Gold/Silver are flight to safety assets - are we there yet? I don't see it, even though I want to... Therefore the odds favour a Bull trap. I am long term bullish Gold/Silver, just read back over my 2 threads and you will see that clearly. Silver is my preferred vehicle. However I have a nagging sense that this is not the moment. On my chart below you can see my road map scenarios, which are as follows (see my Gold thread for the equivalent Gold chart): We remain in a complex form retrace whereby the market will travel down within the narrowing channel encompassed by the upper weekly chart resistance trend line (Purple) and the lower H&S neckline (blue). Oscillators are well over bought and we have just had a strong rejection off resistance and that trend line, unconfirmed as the day/week has not closed yet. The price action does fit an A-B-C concluded at 1440 (Blue labels), which would suggest a strong wave 3 rally, hence the excitement perhaps, but this could also be a larger wave A-B (red labels) that suggests a Pink 2 retrace conclusion would occur around 1420 at the confluence of the H&S neckline, the supporting LT monthly chart trend line and a Fib 88%. Very compelling BUT this fits my bias so watch out for that (note to self!) Alternatively we could see a short retrace and rally to break through resistance and beyond. This scenario is not strong on Silver from a technical perspective but can be seen better on Gold as a retest of near term breakout zones. I would not be looking to trade Long until I see these 2 scenarios resolve. There are other better trades than a quite risky Short here as well so I will sit on the sidelines and continue to monitor price action both here and in other related markets until more indicators click into place.
  17. EURUSD and GBPUSD may or may not yet be into a short retrace but EURGBP has retraced and hit the daily chart channel line with a failed test and rebound back down, as suggested in my previous post. This has, however, happened much faster and more sharply than I might have imagined and the price action gives me concern that another retest could be on the cards before the Bear gets going. Having said that a failed test on the Fib 50% is compelling. 2 scenarios then: another leg up to complete an A-B-C retrace with a failed retest of the channel line, maybe coincident with a retest of the Weekly Triangle line and the Fib 62%, seems compelling a drop through short term support to begin the Bear.
  18. @dmedin I use EWT on long term charts to identify where we are (or may be) on a cycle and what is left on the journey (up or down) in terms of waves. I use it on shorter term charts to zoom in on smaller waves within waves, which follow the same basic logic as the large scale patterns. I do not use it to pin point a turn or to trigger a trade but having a valid EWT label structure is part of the support indicators I require in order to place a trade. I also use it to manage my trades in flight by seeking to understand the likely patterns unfolding and either pyramiding or closing accordingly. The As & Bs I think you may be referring to are those on my USDCAD Daily chart from previous post. While the basic EWT pattern is 1-5 motive wave followed by A-B-C retrace and so on until there is a long term change in direction whereupon the pattern form reverses direction, the A-B-C retrace can follow multiple internal pattern structures. In addition, while Wave As and Wave Cs generally tend to follow a 1-5 structure the Wave B has no such generality, often exhibiting a lot of whipsaw action thus making it the most difficult wave to trade. This becomes even trickier in a so-called complex retrace, which is what I believe we have on USDCAD just now, in that all 3 waves can follow an internal A-B-C structure, rather than a 1-5. Wave C could be either. In this case I currently believe the Wave C is a 1-5, of which the 1-2 is posted. Wave A was an A-B-C and Wave B a complex A-B-C of its own. You can see all of this on the charts below. Currently I am looking for another retrace rally but this could be either in play or will occur after another leg down, perhaps to the Daily Fib 38%. Either way a retest of the Weekly channel line (purple) breakout or the line itself is my ideal scenario before another strong leg down. Naturally, at this point I do not know how far down it will go but I have some likely points marked up already and will decide on that as the price action unfolds. In order for me to decide a turn back into a rally phase is on the cards many factors will have to come together, including a credible EWT labeling for a retrace pattern.
  19. Similar to other USD pairs (and DX) this pair has retraced back to the Daily Channel line to put in a failed retest and drop away. The rebound has been particularly fast on this market though, which could offer a leading indicator for others. A break of the near term support will be compelling.
  20. EURGBP looks to have completed a top out of the retrace rally, right on the 76/78% resistance zone and Daily channel resistance line and Weekly Triangle resistance line failed retest plus NMD with a credible A-B-C wave 2 retrace form. On the hourly chart price has broken the daily channel line with a 1-5 wave 1 down and got stopped at the first short term support. I might expect a small retrace and retest of the channel line to set up a stronger move down. This is contrary to received wisdom that Brexit will mean GBP is weaker than EUR but received wisdom is often wrong and contrary positions are the best winners. I would certainly want to see a retrace of some sort to pile in and also a conclusion of similar retraces (Bearish) on GBPUSD and EURUSD to set up fast rallies.
  21. Weekly Triangle line is still holding (still need to get to the end of the week above) and with the FOMC behind us and the Fed seemingly set on reentering the currency wars with dovish policy we can be reasonably confident that it will hold. GBP seems like a hotter buy to me if an A-B is already in and the EURGBP Triad looks favourable to GBP.
  22. GBPUSD drops down to execute a turn on the Fib 88% to complete an A-B. If this holds (i.e. a break through the 12,430 support zone does not occur in the near future) we can expect a fast rally wave C. PMD and a credible EWT A-B-C retrace form supports the rally. Might see a small 1-2 before a large rally gets going, although I can see a bit more to go in the initial wave 1 yet. Buy the dips as the Fed reenters the currency wars. I am Long off the Fib 88% turn and stop protected just below against a deep 1-2 retrace.
  23. FOMC is done and no real surprises. DX has completed a failed retrace of the Channel (Triangle) breakout. Next stage should be a medium term retracement Bear phase that I might at this stage expect to carry to the Fib 62% and a retest of the lower Weekly/Monthly channel/Flag line at around (9100-200). A break below the 9600 will confirm.
  24. Price is currently testing the weekly Triangle support line (Purple) (this can drop below mid week but to remain valid it must return above by the end of the week). There is a lower shorter term trend line (pink) and the weekly channel (or flag) supporting line (Purple) is at the Fib 76/78% support zone. At this point it all looks like a breakout and retest of the Weekly Triangle but that retest could be a hard one in that it may penetrate through and pull back above during the course of the rest of the week. I am targeting that Fib 76/78% level for the turn with stops below the 11100 level. A break of this level would reverse the scenario to a Bearish one. The FOMC outpourings at 7PM UK time will be pivotal this time. I see similar set ups on a number of pairs and DX.
  25. Mercury

    Silver Bullet

    Check out my Gold thread posts for what I think about Gold. Don't know what you are referring to WRT a long overdue retracement (I assume you mean on Gold). With respect to Silver, and I have no reason to expect any material directional divergence between Gold and Silver at this time, I don't see a material breakout yet. I would want to see a break of 1540ish (the first weekly trend-line. However the crucial breakout point for Silver is the long term resistance trend-line up around 1700ish at this point (see initial posts on this thread for my analysis on this). My view, as expressed in the previous post herewith, is that there is another leg down of some sort on Silver BUT if I am wrong on that then the 1540 breakout may be a Long event. However I would also want to see congruence with Gold, maybe also Platinum, and a fundamentals case for a strong and long term sustainable rally on precious metals generally, and I don't think we are there yet on that.
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