Jump to content

Mercury

Community Member
  • Content Count

    2,186
  • Joined

  • Last visited

  • Days Won

    6

Everything posted by Mercury

  1. Feeding from post on the "Great Bear is Upon Us" thread, where I posted the Daily chart for the Dow in the run up to Dec 2007 and the comparison to today's price action I now have a turn at the wave 2 (blue) point previously identified, which is a lower high than the 8 Nov high (it the turn and drop holds of course). The case for the top already being in is already made but just to briefly reprise (weekly chart below): The EWT count is credible for a Wave 5 completion (and super cycle wave 5 completion) at the Oct top The Oct top is an effective double top with the Jan top, just a bit higher, which is similar to 2007 The bearish move down to late Oct/early Nov is consistent with a 1-5 motive wave, which is suggestive of a trend change (unconfirmed) The rally back up to Nov 8 is an A-B-C form, which turned on the Fib 76% (very high but consistent with a counter trend rally). This adds to the notion of a trend change Now we have a lower high rally ending on a gap, which is about to be filled - over exuberance in a last gasp? There is NMD at the Oct top (and additionally divergence in other oscillators, which were all overbought on the weekly chart and not yet oversold - more to go in the Bear, phase 1!) The pattern is consistent with 2007, doesn't have to be but doesn't hurt... The volatility of the whole of the 2018 price action is suggestive of an ending pattern as bulls and bears slug it out. This means that the Bear camp is growing in numbers and power. The recent rallies are too strong. What I mean by this is that normally rallies build slowly at first if they are going to have staying power, this one burst out too quickly, expending all it's momentum and now may not have any more drive. For this current rally to have staying power it would be signaling a massive Bullish phase to come (from an EWT perspective). So I find myself having to either remain Bearish or seek a 5000+ point rally. I just can't get with the latter on a Fundamentals perspective (yet!). So where are we now? The charts below show the Oct Top on the Weekly and the pattern I have discussed before on the Daily, including the turn at wave 2 (blue). The Daily and Hourly charts shows the turn close up, which was on the Fib 88% (I have noted that recently we have seen a lot of 88% and double top/bottom retraces as things get volatile. On the Daily Stochastic is over bought again, which often happens at a retrace end. On the hourly, I have a set of channel lines, just broken this morning and being retested (however similar channels are not yet broken on other US markets). I have a credible EWT count for a retrace on the rally to yesterdays turn (albeit very powerful, almost straight up..!). Alas I do not have NMD, which I would ideally like but may not get owing to the strength of the rally, however this means I cannot yet rule out another leg up. The Gap is not yet closed, nor on other US markets. In summary then this is not ticking all my boxes but is a credible set up for me so long as other indices are aligning. And boy is the Nikkei aligning... I also have Gold and Silver rallying as projected, although that may have more to do with the USD at present. The USD bearishness is the only nagging doubt, however if you look at 2007 you will see that USD (DX) did continue down for a few months as the 2007 bear started and only rallied when the market realised the game was up on stocks, so perhaps this is also aligned... In the final analysis, in trading, you have to take a chance. The point of technical analysis is to help identify big picture turns and trends (together with Fundamentals) and to identify higher probability that 50/50 trading points. After that it is in the lap of the gods so good money management is required. If this works out the the Dow could offer 5000+ points Short in the first phase. This would dwarf any other set up (including Bitcoin and it's ilk) in my view.
  2. Mercury

    US Indices Short - the big one!

    The Dow has now broken through the next line of support below the H&S neckline following a brief retest of the neckline breakout zone, as noted in the last post as a possibility. There were several good Short opportunities today to add to the haul since the wave (2 blue) turn. Crucially we have another lower low through key support. Next up is the important Ice Line support on the 6 Feb 2018 wave 4 turn. However, it is important to look at other markets to check correlations. On the S&P500 (the biggest and most important in the world) price has made a brief visit below the Ice-Line at the close today. Not a close below so not yet a confirmed break but it is a significant signpost that the Bear is truly on. A confirmed break of this S&P500 critical level will surely herald the end of the Central Bank Bull. We are likely to get a fast move down once the break occurs on the rest of the US markets and the Nikkei (might well happen overnight in the Asian session) until we his a period of consolidation (maybe over the Christmas break) and then we should see the final stage of the initial bearish wave 1.
  3. Mercury

    bitcoin long period of consolidation

    And when did you short Bitcoin, what level?
  4. Mercury

    bitcoin long period of consolidation

    @TrendFollower what do you trade?
  5. I have been waiting for a USD Bearish move, which I believe will be a retrace rather than motive move (i.e. a counter trend move) for some time but so far it hasn't arrived. It goes to show that patience is a massive virtue when it comes to successful trading, that and careful money and risk management whilst seeking the right set up. I have re-looked at USD using the Dollar Index as a guide and come up with the following assessment. Long term (Monthly chart) the overall picture of a major USD rally remains unchanged at this juncture as nothing in the fundamentals or technicals has materially changed and a rally is consistent with my Bearish bias for stocks and the Euro (Fair warning on my bias!). The market bottom is the Head of a Head & Shoulders formation with the Neckline as the upper part of a coiling Triangle. The breakout of this Neckline/Triangle produced a very strong and fast rally. I think the long term chart now shows a potential consolidation Flag formation (very strong lower line in terms of unsuccessful retests of this line as a supporting trend-line), however the upper line is weak. If correct then we may expect the upper line or thereabouts to offer resistance that pushes the USD into a Bearish move. This Move could either return to the lower Flag line or bounce of nearer term resistance to set up a retest of the upper line. Looking at this on the Weekly chart you can see the latter retrace scenario in the form of a coiling Triangle 1-2 (pink), 1-2 (blue), which, if correct, may retest the channel breakout zone at the Fib 76/78% level before rallying away. However the Pink 2 could easily be a wave A that would result in the alternative scenario proving correct but I am not too worried about that at present as both scenarios as Bearish and price action should reveal which one is valid in due course. The Daily chart shows a possible road map for my lead scenario. A drop in a form that shows an A-B-C pattern that culminates and rallies from the Fib 76/78% would be a strong indicator that the big USD rally is on. I will be looking for correlations from other markets for this potential USD rally plus Fundamentals support such as deteriorating global economic conditions.
  6. Mercury

    bitcoin long period of consolidation

    Oh dear! So it all going to happen again and stock will run hot again eh? But thanks for proving me right there that Bitcoin is the biggest Mania of them all. Nuff Zed...
  7. Mercury

    bitcoin long period of consolidation

    I don't trade Crypto period! I consider that you have to trade what you are comfortable with. I have been watching and waiting for the biggest shorting opportunity any of us are likely to see and have Shorted that. It is about keeping your power dry for the right opportunity. Crypto is a Mania, I wouldn't touch it with a barge pole, neither Long nor Short, but that's just me.
  8. Mercury

    Is an edge important?

    All depends on what you define as an edge @Nelsy-Boy. There are plenty of people, including several on this Forum, who describe their approach as trend following or being a fast follower of the big boy professionals and market moving news breaks. Is this an edge? Perhaps it is about having a mechanism to identify when and how to execute against such a strategy and doing this well consistently (i.e. being profitable overall). You sort of described the edge as being over other traders but is this right I wonder? For trend followers surely it cannot be as the majority of the market money would be flowing into supporting the trend, wouldn't it? There are many different strategies and methodologies out there and many are valid in the right hands but one thing that strikes me when reading about successful traders is that they have all created a methodology that suits their psychology, also they have practiced and honed this methodology until they have full confidence in it and themselves when using it. This does not necessarily mean that they have invented something new, some of the best openly say they have borrowed and reformulated elements of well knows strategies into their system. It also doesn't mean they do not change and adapt their methodology and how and where they deploy it, they learn from each loss and adapt. So perhaps the way to think about it is less about trying to develop an edge vs everyone else and more about self mastery and mastery of the markets you want to trade. For me it isn't about trying to go against the well know methods, how can anyone know whether the market in general use EWT or Fibonacci or Wyckoff or trend following or technical indicators or whatever? There are too many of them to figure out which the herd is using anyway. In fact I would hazard that no single method or theory is dominant, there are sufficient vociferous naysayers on theories like EWT and Fibonacci on this Forum alone to evidence that. We can't even agree on the existence of a Santa Claus rally... So for me, if one needs an edge at all it is against the market that you are trading as a whole rather than other individual traders. And here retail traders in general have one critical advantage vs the professionals, we don't have to be in the market at all but can pick and chose where and when we go in. To leverage this edge we need a methodology that helps us identify these moments, one that suits us and NOT just by following someone, that is not trading. If you can do this you will have the edge you are seeking. Oh and it doesn't hurt to be contrarian and to think of possibilities that the mainstream either cannot conceive of or reject due to their inherent bias. For example, if hedge funds are wedded to their trend following then they will consistently follow it off the cliff. The big funds will be strong enough to reverse but the little guys will not survive the fall. This behaviour is known as being sheep. As another example If one is invested in something (be it a particular stock or a particular bias) then it is virtually impossible for them to countenance that thing failing, or even tolerate someone suggesting it might. They stick with it until they die. This is known as being an ostrich. Most people will know about Bulls and Bears but perhaps have not heard of Sheep and Ostriches (I didn't make this up). The Bulls and Bears don't savage each other (they are usually the same players who switch bias in time). They savage and gore the Sheep and Ostriches. Guess which category most retail traders fall into..? Better to be a Bear or Bull and be wrong from time to time than a Sheep or Ostrich, they are by definition wrong!
  9. Mercury

    bitcoin long period of consolidation

    Bitcoin et al continue to drop with no end in sight. It is a mania not a bubble. Who will buy bitcoins if they hit the Death zone? Everyone who is pro bitcoin is in and will be seriously under water...
  10. Mercury

    Crude Oil (WTI)

    I am fully committed to stock indices Shorts at present but it pays to keep an eye on other markets and keep reassessing the overall economic condition. I remain patiently waiting for a significant retrace on Oil before I would consider a Short as the risk of getting caught in a Bear trap after such a strong Bearish move is too high and anyway stocks offer a better probability Shorting opportunity at present. I have adjusted my Big picture Weekly chart set up to a narrowing channel (AKA Triangle) that was broken out of during the current Bear move. I am looking for a relief rally in retrace form to retest this break out zone (Fib 62%) but would also be watching price action as any retrace approached the Fib 50% area. But have we even seen an end to the Bearish move? On the Daily chart we have seen a bounce off key support after a fakeout and then a breakout of the upper channel line. This after a classic 1-5 EWT wave count down. On the 4 Hour chart I can see the potential Wave 1 turn (Pink), with PMD, followed by a series of 1-2 retraces inside a Triangle formation, known as a coiling triangle. A breakout of this Triangle either way would typically be fast and strong. I am leaning to this breakout being a rally because of the long term assessment (above) plus the fact that this coiling price action has posted a higher high and 2 higher lows AND everyone is Bearish. If I were to trade this market short term it would be to go Long on a breakout of the Triangle formation but watch out for a Daily Chart A-B (i.e. a strong bearish retrace, maybe to retest the breakout zone) before a final wave C rally. Because of this potential whiplash I will either not trade until a Short set up reveals itself of swing trade the A-B, more likely the former.
  11. Mercury

    US Indices Short - the big one!

    After the action of the past few weeks it is time for me to look at the long term charts again to check where we are. The Weekly chart on the Dow makes for interesting reading. I wont reprise my analysis of the market top out, except to point out that IF we have a head & shoulders top then the neckline has been broken on the Weekly chart this past week. Even if the H&S is not valid the line is still a supporting trend-line on the Daily chart so the breakout is a valid Bearish price action. Next up is an ice line off the Wave 4 bottom (23,000), which may produce a short period of consolidation pre or post before this Bearish move concludes with a bang all the way down to key support around the 19,000-20,000 area, probably concluding with a strong Bullish pin bar that sets up a retrace rally before the massive wave 3 Bear gets going. On the Daily chart you can also see the supporting trend line breakout after a large gap up was closed quickly (very Bearish) and hammered down to conclude with a fakeout on that trend line. Crucially this produced a lower low and then the retrace only made it to the Fib 38% with 3 pin bar failed tests of the Fib 38% zone (very Bearish in the context of the 2 previous rallies). Looking at the 4 Hour chart you can see the Fib 38% retrace and subsequent drop. I have a small 1-2 (brown) and then a consistent bear move. We may see a short period of consolidation, either as a retest of the neckline or a break and retest of the wave 1 (green) support zone before the market drops through to the key ice line support at 23,000. Either way the key signal here is a new lower low, which would be very Bearish and the a beak of the Ice line is game over for the Bull. My strategy now is simple, sell into the rallies and keep moving stops to break-even as the Bear move plays out BUT watch out for consolidation Flags, they can both trap Shorts but also offer great opportunity for new Shorts.
  12. Mercury

    US Indices Short - the big one!

    You didn't have to be a short term trader to trade both ways since Oct. The signals were there to swing trade, a months swing is not short term to me. Having said that, being of a Bearish bias, my sights were set firmly on finding the right long term early entry. This is important for my trading style as I use the early entries, stop protected at break-even to leverage further trades lower down at slightly wider stops. So long as I am net no loss and price actions is following my road map scenario I am comfortable. All my shorts are now break-even and will remain so (one of my cast iron rules is to never, ever move a stop back from an advancing market). If I get stopped out so be it I will then look for another entry. This means I now trade this market(s) (I am short Dow, Nasdaq and Nikkei) from a low risk position with profits in my account (unrealised). Thus any new Short is my only risk and is therefore a stand alone trade from a risk perspective. I only use spread betting for trading indices etc. CFDs I find better for pseudo investing in individual stocks. For pure betting on indices and commodities spread betting is the way to go.
  13. Mercury

    US Indices Short - the big one!

    First Support broken with a candle close below on the hourly. Might get a retest but set fair to test the second support. For the avoidance of doubt, I am SHORT SHORT SHORT and have been for a while now.
  14. Mercury

    Christmas Rally 2018 thread WIP

    Get where you are coming from there @Caseynotes but therein lies another bias difference between us because I believe we are in a Bear market, it just hasn't revealed it claws yet. If price action breaks through the 2 near term levels of resistance and records a new lower low it will race down to the 5 Feb 2018 low and a break there is game over for the Bull. That's 23,100, we are at 24,300 so not that far away. After that, or even in between the 2 lows I mentioned, and end of Dec rally will be a weak retrace affair at best. Anyway price action will reveal all in the coming days. I guess my overarching point is not to pin hopes on a Santa Claus rally this year of all years, owning to the price action since Oct...
  15. Mercury

    Christmas Rally 2018 thread WIP

    Ah! The FTSE is going to rally while the SP500 drops? Good luck with that. I wonder what suspended that "belief" in the years it didn't happen..?
  16. Mercury

    Christmas Rally 2018 thread WIP

    All good @psycho, I just think you could do the same analysis for other time periods and get similar results in a raging Bull market is all. The watch out I am offering is not that your analysis is wrong, obviously, but that in the Dec after a market top Santa stayed at home by the fire. My analysis on the market (outwith any Santa Clause Rally) is for this Bear to go mental if we get the breakout I mentioned in a separate thread.
  17. Mercury

    Christmas Rally 2018 thread WIP

    Why do you think there is a problem @Caseynotes? It is just an exchange of thoughts, there doesn't have to be a winner or anything. It isn't Maths, it is statistics. You like to quote Mark Twain, well I refer you to a Benjamin Disraeli quote Twain popularised in America, "Lies, **** lies and statistics"... It is ironic to me that someone who denies Fibonacci, a true Maths genius, believes in Santa Claus... 😉 BTW, I did submit some analysis in my original reply to @rimmy2000 but here it is again. This is the SP500, the largest market in the world, which @psycho himself says his analysis didn't really pan out on. My take is as follows: Since the Tech bubble burst in 2000 there have been 11 December month positives and 3 negatives but also 4 flats, let's say they are not rallies and that tallies 11-7 In all but 2011, 2012 and 2016 the December open was revisited in subsequent months (on only interesting for day traders maybe) In all the years where the market topped out prior to December there was a flat or negative December month Now look at December to date, hmm So maybe this is, in the final analysis a day trader vs long term trader bias. No long term trader worth their salt will give a shred of credence to the notion of a Santa Clause rally. No trader of any description should, in my opinion, do so. A gambler might... Merry Christmas 🎅🤶🧙‍♂️🧙‍♀️👼
  18. Mercury

    US Indices Short - the big one!

    Yesterday was a day of Bull/Bear tug or war, hard on the nerves but ultimately the Bulls were sent packing by the Asian markets overnight. The writing was in the charts on this, for me, supported by price action. On my hourly Dow chart you can see a retrace to the Fib 38% area as mentioned in the previous post as a possible turning point. It turned but then there was a lot of push back as you can see from the chart with a series of 3 pin bars before the Bulls eventually capitulated. I have a Triangle breakout and retest off the Wave 2 turning point (but note a larger scale A-B-C cannot yet be ruled out - i.e. the Wave 2 Green could be a wave A (red)). That is the only point of caution for me at present, otherwise the set up us pure bearish. I have a reverse direction triangle also broken through. We now come to a critical point with a retest of the Daily neckline support (blue line). Price has paused here several times of late and it has provided support over the past year. The recent fakeout and now retest could be seen as a Bearish warning signal. I will want to see a firm break through of this support zone and ultimately a break of the lower major support zone (which would be another lower low) for this Bearish move to really get going. If we do see this there will be no stopping this Bear until at least the 20000 level (remember markets move in zig/zags so sell the rallies will be the order of the next month or so for me if we get that breakout. I see similar set ups in all major indices, especially the US large caps and the Nikkei.
  19. Mercury

    Christmas Rally 2018 thread WIP

    Yeah ok @psycho, probably a good move. I could probably find other time periods that had an even better result, especially in the raging bull market we have seen since Bretton Woods. If you go back further than that things are different. Maybe there is an element of self fulfilling prophesy about the Santa Clause rally. Maybe it wont exist during the coming Bear market. I don't ever hear anyone talking about the Chinese New Year Rally, and why would the Chinese or Japanese have a Santa Claus rally..? The key point is whether the Santa Claus phenomenon (if it exists) is at all relevant. Well you can't trade it without signals so not relevant at all is my opinion. And this year we do not look like we are going to get one but if we do it will be a relief rally at best (which is in the so-what category). So ok for fun we discuss it but in reality it falls into the same category as received wisdom like "sell in May and go away". A pure distraction at best and a false life line to those holding losing positions at worst. Trade the price action, forget about the market myths.
  20. Mercury

    Christmas Rally 2018 thread WIP

    So you are Long @psycho?
  21. Mercury

    what do other providers do better than IG....?

    We hear a lot of complaints about IG and the industry generally on the forum and things are not perfect and perhaps there are some individual cases of stuff happening (I don't know) but short of buying a seat on an actual exchange, if you want to trade, then you have to use a market making broker so accept the way it works and work with it or don't do it is my view. A few general observations: People using services such as IG (and others) offer should fully understand how they work and set up their methodology accordingly. How can anyone, for instance, buy a futures contract and not know exactly when it matures and what they have to do to roll it? If you don't understand how it works then you are just asking to be a statistic. And BTW, it isn't hard to find out how it works, the info is all on the site or call and ask someone from IG to walk you through it. Many of the great traders out there have said that new traders often rage at the system, their broker, the market in general but actually it is a manifestation of their psychology. On the forum and in trading training and trading books psychology is often referred to. This is both the group theory psychology of the market AND of the individual trader. You have to get your head straight and realise the market is indifferent to you. I am not saying scams and poor behaviour don't exist just that it is not a general endemic thing. Independent traders still make money because they are good at what they do. They didn't get like that without a lot of effort and indeed losses along the way. And they absolutely became experts in the markets. I use IG because they are a listed company and the biggest operator and therefore the most stable and reliable. I do not believe IG act against their clients, that would be corporate suicide, they need us to generate earnings and they want us to be successful so we keep doing that. James already answered the question on how IG acts with respect to their risk vs their clients positions. I am comfortable with that. IG keep client money separate from their own, this is important too. There may be others out there that do bet against their clients, these I would not touch. Regarding IG as a casino, in the sense that all investment on stock exchanges is betting of a sort then ok but, as per the above point, we are not betting against IG as the house but the market as a whole. It is a zero sum game, if I win a bet then the person who took the opposite side of my trade loses. Trading is competitive, fact! Regarding the overnights spreads thing, it is a pain and I wish IG would look at not doing it. However if you are aware of it then adjust your stops accordingly and reset in the morning. The worst time period (e.g. for stocks) is the 22.00-23.00 effective close period. And you have to watch out for any stop in or limit orders you may have on too. If my stops were that close to the market overnight I would strongly consider closing my positions and seeking a reentry in the morning if only to get a descent nights worry free sleep...
  22. Another week another set of retail results with overpaid CEOs claiming unseasonable weather is to blame rather than themselves or the global slow down. This time it is the turn of SuperDry and apparently warm weather hit sales of under layer hoodies and jackets... People are talking about global warming as the end of all things but I didn't think it would be used as a scapegoat for CEO under-performance. OK he didn't actual cite global warming but he might as well have... And now the founder is throwing stones at the management, having recently left the Board, hmm... https://www.bbc.co.uk/news/business-46535682 Oh and it looks like consumers have stopped buying mobile phones as well... https://www.bbc.co.uk/news/business-46535702 If retail is a bell-weather for the economy then look out! I haven't heard a good news story on retail for several years. And has anyone else been getting massive pre Christmas promo action from Amazon..? And did anyone notice that Cyber Monday morphed into Cyber week this year..? I'm betting Christmas sales discounts are going to be massive this year and we all know what happens to retailers profits when they do that! But it's ok because economists consensus is that a recession wont happen until 2020 so we can all rest easy then...
  23. Mercury

    US Indices Short - the big one!

    Looks like an even earlier turn than I thought is in the offing... Nasdaq and Nikkei made Fib 50% and have now broken out of a Triangle formation (or are in the process of in the case of the latter). Other markets have also posted turns but at lower levels (the FTSE100 did hit the Fib 50% but on a different path than the US markets). I am looking for a new lower low to confirm but the turn certainly appears on and if it is confirmed then it was a weak retrace rally, which is Bearish for me after so many Fib 76% and 88% rallies thus far in this move since end Oct fall.
  24. Not clear on what I'm looking at there @Caseynotes. Is it %growth rates? Month on month? Month vs prior year? As an analyst it is important to look at the data in several ways to assess what it might be telling you. But look at the graph below, trend really doesn't say much but then it is an index too. One thing to note, there have been several recessions along this trend line but you would be hard but to identify it from this. Governments don't generally like to issue bad data... Lies, **** lies and statistics sort of thing.
  25. Perfect break and retest of the channel line there @elle followed by a massive break-away gap in early Oct and SuperDry returns to where it all started... Mind you it isn't a bad brand or a bad company so in due course it could be an interesting buy, but only after the dust has settled...
×