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Mercury

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Everything posted by Mercury

  1. So looks like Gold is approaching a potential break out to a rally point.
  2. High grade Copper (AKA Dr Copper - because it has a PHD in Economics...) often preempts stock indices moves (alas not always, not crucially in 2011 but that has as much to do with central bank interventions as anything else). The 4 hour chart seems to be showing a Flag break to the upside (TBC) but if this does break and then breaks the near term resistance levels then stocks may not be far behind... Always worth checking this out even if you don't trade it. Thoughts as ever keenly sought
  3. Agree @Caseynotes although sometimes markets just meander through, as happened on the Nasdaq yesterday. Received wisdom is for at least 3 failed attempts to register significance for a turn but there are, of course, exceptions to this. Still I would not expect too many failed attempts if we are to see a push on short term. I can't tell yet whether US NFP on Friday will be a catalyst for a short term break of resistance (and therefore we stay in consolidation below for the rest of the week) and move up to a major turning point or a catalyst for that major turning point. Can only wait and see and keep my positions stop protected.
  4. Agree @cryptotrader my projection is for a break of the resistance, short squeeze maybe, either way a rapid move up followed by choppy waters until a significant turn down. Big picture I see this significant turn down as a retrace not a market top (bur let's see what price actions reveals...). Elliot Wave theory would suggest a 3-4 retrace followed by a final rally to conclude the current overall move up. Whether that is then the top of the market or not remains to be seen. I'll post my Dow/SP500 analysis separately.
  5. Also agree with all that @Caseynotes, I am at least consistent in my doom mongering... I am happy with it though because I trade price action on the markets rather than my long term projections. Bias is a killer for trading in my view (different for investing!). Still it is helpful to have some long term road map for me, to keep me from over extending into a late rally. One things though, how many crashes and recessions were predicted in the mainstream ahead of time? Answer, none. They are inherently black swan events and typically occur when sentiment is at a peak and data looks good. So what you say about the US economy fits exactly into my thesis. Trouble is it also fits into the thesis for an ongoing never end rally ("it really is different this time folks"). One thing I definitely agree with you on is the notion that there are a bunch of people wringing their hands because they didn't jump onto the rally bandwagon and/or buy into the never ending rally theory. We will likely see these people jump in to create an exhaustion buying spike that will signal the end. I'll be looking for a pin bar or up/down action to give a clue to this blow out if it happens near a high probability end point and results in a sell off. As I write this I notice Indices falling back a bit. Probably need to see the Dow close it's price gap before the rally resumes (if it resumes...)
  6. Agree with all of that @Caseynotes but in my view the economies of the world are not booming. What you said has been true since Bretton Woods in the 1970s and especially so since central bank interventions in 2009. However the entire boom was fueled by debt related money printing (literally creating money via issuing debt, which could only happen when the gold standard was lifted). At some point you have to pay for this, not pay back the debt, that will never happen because it is impossible. You pay with economic contraction and if, as you say, all that GDP growth made its way into the markets then during contraction the reverse happens, well we know all this from history. Labour participation is as all time highs but the quality of the jobs being created is poor and many people are slipping out of the stats as they do not report either being employed or taking benefits... And wage inflation is paltry, especially compared to actual inflation, fuel prices inflation and house price inflation. This is unsustainable. Consumers have enough of everything and the credit cards are maxed out. The credit crunch actions taken by regulators was supposed to have eased the pressure on household debt but it hasn't. There is still a debt time bomb ticking. House prices are slipping but so many people have gone in on ultra low fixed rates. As they come off these rates the reality that they have overpaid for housing and cannot afford the interest payments will sink in. This is exactly what happened in 1987, albeit with very different market dynamics. And now Central Bankers have decided they just cannot continue to keep rates low and pump money into the economy (they knew the game was up ages ago in my view but the politics of the situation stayed their hands). With real market rates rising (bond yields) the central banks had to follow or look ridiculous. Expect this to continue. Looking just at the UK we can already see the signs of recession looming. I am talking about retail. Every few weeks brings another tale of a well known retailer either going into administration or calling in advisors to help or reporting profit warnings or moaning about Brexit impacting their business. There are almost constant sales and promotions now. I know some people who work in major shopping centre ownership businesses (i.e. landlords) and they tell me many of their tenants are really struggling. Retail is the apex of the economy, consumers drive everything. A hit this Christmas will be catastrophic. Maybe Black Monday will be a damp squib? For the record I am a perma-bear when it comes to stocks, and have been for a few years now but that doesn't stop me trading indices, it just makes me wary. I am NOT invested in stocks anywhere in my portfolio.
  7. GBPUSD makes a fresh low on this bearish move but I still believe this to be a retrace prior to a stronger rally to complete a larger time-frame retrace back to about 13,800. If I am right about the Flag breakout then this is roughly halfway, which indicates a termination of this move around 12,800 (but could end sooner). Whereas EURUSD has a decent Positive Momentum Divergence (PMD) on the 4 hourly we don't see this so clearly on GBPUSD, which added weight to my view that GBP will turn later and/or go deeper than EUR. If this all works out then there could be 1000 or so points in the offing on GBPUSD in the coming weeks prior to a resumption of the Bear.
  8. Fully understand your perspective @Caseynotes and agree, that's why I don't day trade. However you touch on an important point, it is vital that people understand where anyone who is making a comment or offering perspective is coming from (i.e. their natural bias) to put said comments/perspective into context. For my part I am a long term swing trader and hence I look for major market turns into long term trends. I put a lot of effort into analysing scenarios through various time-frames to make sense of the markets and devise a likely road map. I will take short term trades (still over several weeks duration) only when I am fairly sure of the likely road map within my longer term view. Crucially, my view point that news releases and things like Brexit zeitgeist doesn't matter is based on this approach. Clearly major data releases such as US NFP and Central Bank interest rate decisions do impact over the short term and may even occur at or near major turning points but are not necessarily the only reason for long term moves and major turns. In the end the important point here is if you are looking at any of my posts you have to recognise and understand my views on these things, which is the only reason I give them. If you take a different approach news etc may be very important and both can be equally valid and can even co-exist harmoniously.
  9. I agree @TrendFollower that if Gold breaks below the recent lows and my long term trend-line then 1175 is the next line of resistance, however it is even more likely, in my opinion, that this market will drop lower than that if the rally doesn't materialise. If and when stocks do capitulate the Bull gold will return to favour as a safe haven I am sure, even if only because of habit and herding instinct. USD will be the other safe haven, maybe also CHF, linked to gold. Perhaps if crypto had a few years to mature it could be an alternative but it is not mainstream and is too volatile and unknown for most people, other than the early adopters. But I am not a fan of Cryptos and predicted the Bitcoin drop, I'm sure there are some archived old posts of mine on the subject from before, so you have to take my comments in that context. I do believe that the Crypto bear is not over yet and am not sure Crypto in it's current first generation will survive, although block-chain probably will. As you say it will be interesting to see but I won't be trading it...
  10. US Indices rocking back a bit from fresh all time highs (on Nasdaq) and Flag breakouts on SP500 and Dow. FTSE trapped in Flag consolidation. Time to sell out? Not yet for me. The Nasdaq is the market I am using as my primary directional indicator. The Hourly chart shows the Flag breakout, fresh all time high (just) and current retrace. It is quite normal to get a retrace and retest of a Flag breakout and also normal for a price gap to be closed before the dominate direction of travel is resumed (unless it is a reversal or breakaway gap). This one is just a small standard gap I feel and I will not be surprised to see it closed. On the Nasdaq a gap close would occur at Fib 50% of the small rally off Friday noon turn and rally. at the bottom of the Flag. A retrace to the Fib 76/78% levels would be a retest of the original small Flag breakout levels, also acceptable in a bull continuation scenario. Factors opposing: Double top on Nasdaq? But not elsewhere and other markets don't appear to be showing similar top out points Negative momentum building but you would expect that as we approach a potential major market top I suggest we should see retests of Flags and rally away coinciding with a Flag breakout on the FTSE100. However if we see a break back below the Flags this scenario may be negated. I will be giving this a bit more room to develop before making a call on my Longs. Thoughts anyone?
  11. Nice. I can tell you, being Irish myself, that the hard border issue is a total non issue. There has never been a hard border on the Island of Ireland, even during the worst of "the troubles". How can there be when you can walk across a field from the South to the North and not even realise it? This is an issue that has been created purely as a negotiating position in the Brexit "talks". What both sides really need is a dose of pragmatism but these are politicians so don't bet on that any time soon. Cue a down to the wire game of chicken with either a last minute deal pulled out of the fire (which will be curiously well prepared and ready to implement...) or a no deal exit, which will be worse for Europe and the UK both economically but especially politically (in my opinion).
  12. LOL @cryptotrader but it depends where you are going on holidays I suppose. If it's the US then yeah you need to buy forward but if elsewhere then maybe ok. Note that I suggest Brexit is not a major driver but I don't discount it totally. I suspect it is a short to medium driver of sentiment but by overall contention is that it will prove NOT to be significant in the face of larger geopolitical and global economic forces. Perhaps we need a separate thread on this particular topic. Note that Brexit doom mongers point to a falling GBP as a problem for UK economy but this is incorrect in my view. a weaker pound is good for exports and is a natural reaction to a poor trade deficit position, which is what we have. Perhaps, we will look back and that the stars for Brexit if the EU collapses in on itself, the Euro collapses (as I believe it will) and the UK successfully opens trade deals with the commonwealth nations and others that, together with a weaker pound fuels export trade. In such a scenario the UK becomes, what it has historically been very good at, a trading nation. Food for thought... PS: if you are planning holidays to Europe you will probably be fine, in fact I'd hold off buying Euros for a while yet to see which way that Triangle breakout goes (see EUR/GBP/USD Triad post)
  13. Ha! if ever there was a more timely object lesson in keeping an open mind than EURGBP just now I don't know of it. Reminds me yet again not to trust H&S on low time frames. In any case the over picture remains intact until the past lows are broken, let's see what GBPUSD does next...
  14. Whatever caused the GBP spike: rumour, speculation whatever, Eur didn't follow suit and US indices are heading up (Nasdaq just off 7700). IF this continues I doubt GBP and FTSE100 current direction is sustainable but let's see how it unfolds before passing judgement. My biases remain unchanged at this juncture.
  15. Quick update to my original post, current 1 hour charts showing a much faster retrace than I previously reflected but still within the overall assessment. In fact on Gold it is better because the market is currently showing a retest of the support area and bounce away. If this holds then the break of the Daily tram-line could be swift. There was a similar breakout and retest of support/resistance on Silver, not yet confirmed as a failed retest but one to watch as it is path-finding for Gold at present.
  16. Thanks @elle I tend not to use H&S in lower time-frames myself and even in higher time-frames only with certain conditions and so hadn't seen that but I take your point, especially if you also look at the recent up/down as a higher high (just) and higher low, so it all seems to stack as a bullish move set up (at least ST). And with GBP and EUR turning down again, and if my assessment that EUR will not fall as far as GBP in this move, then EURGBP should rally. I would like to see a firm jump soon to confirm.
  17. I like to look at FX Triads to keep my analysis honest (or at least to identify where something doesn't look right). Not always easy to assess, especially when the two main sides to the Triad (in this case EUR/USD and GBP/USD) are going the same way. I am looking at EUR/GBP with a contrarian bias (Warning! I have a bias here but at least I recognise it...) in that I believe the majority view that Brexit is doom for the UK to be misguided. People will point to GBP/USD as proof but I believe this will turn out to be confirmation bias as if you also look as USD across the board you will see USD strength and others do not have Brexit issues to contend with (EUR, CAD, Yen, etc. etc). Anyway back to the only data that matters to me, price action. On the weekly chart I have a very strong Triangle consolidation formation since the 7 Oct 2016 market top, which I believe to be a wave B top leading to a strong Wave C Bearish move (check out a Monthly chart to see this more clearly). The alternative assessment, aligned to the anti-Brexit viewpoint, is that the Euro will charge up against GBP and that this Triangle consolidation is building toward this move but I find it hard to see such a strong move against GBP if the Euro also drops heavily against USD. Either way when there is a breakout of this Triangle it will be a trading opportunity, especially if it is to the Bearish side (more potential points in that scenario for me). Looking at the Daily chart I see a Flag formation (blue lines) that has been broken and now the market is seeking to retest that Flag resistance. It is possible that this has happened already on Friday 21 Sept (my Brown A label) but I believe we will see another rally to the Fib 76/78% area where it intersects with the lower Flag trend-line to complete an A-B-C retrace. If we see a rebound back off this area of resistance then a Bearish move could be on. This could coincide with a rally in both EUR and GBP vs USD (as I have indicated in other posts is my assessment) OR a full on Bearish move in both cases with EUR getting hammered faster and harder (trade wars anyone?). Looking at the Hourly chart I see a potential A-B retrace completion with a breakout of the upper tram-line. If you like to trade short term there could be 100-150 points on offer here. I prefer to keep my power dry for the Short side of this market, unless the breakout from the Weekly Triangle is bullish of course but in that case I would seek better market opportunities elsewhere. Anyone have any thoughts to offer on this market? I'm really very keen to hear challenges especially.
  18. Spike in GBP/USD probably @Caseynotes, there seems to have be some inverse correlation of late, doesn't last of course. I don't pay too much attention to that stuff anyway. However on the hourly chart the 8am pin bar rejection of the bear move and subsequent Flag breakout (not yet fully confirmed) is a bullish signal. A fresh high on this rally phase (i.e. break of Thurs 27th high) would seal the bullish move for me and then I will be looking for the major turn on all indices for an exit and reversal.
  19. Thanks for the comments @elle I am not sure if your chart is supporting my assessment or suggesting a bounce off your hashed line is showing a Bearish move. It could certainly be the case that GBP (and EUR) has put in a more shallow retrace and is now on it's way into that LT motive Bear move I was talking about. A break of the recent lows would confirm this for me. At present I still favour a higher retrace for both EUR and GBP but let' see... Right now we are seeing some buying pressure on both GBP and EUR but I am not sure yet if the Wave B is done. Got to be patient as these moves develop and wait for the trade triggers...
  20. Re FTSE100 I agree @Caseynotes in the sense that a short term rally is in play in my opinion. This falls in line with my assessments of the US indices. Right now I think we may be seeing a Flag/Pennant breakout rally on the FTSE100 (1 hour chart). If correct the FTSE100 has quite a rally in it, probably more so that the US indices if it is going to make another all time high before end times... You can see similar set ups on the 3 major US indices also, in fact Nasdaq has already broken a Flag and has just poked above the previous all time high on 30 Aug. All looks bullish in the ST to me as we move towards US NFP on Friday, if we make it that far before a reversal...
  21. I see a similar pattern in GBPUSD as in EURUSD so overall it looks like GBP, like EUR, is set for a retrace rally, which, if correct, is already underway. When this concludes the Bear should get it's claws in again as USD rallies strongly across the board. Looking at the GBPUSD Monthly chart we can see that GBP has been in decline for a long time, in fact a steady decline since the early 1900s but we don't have that much data here. In more recent times GBP crashed down to almost parity in 1984, something I expect to see revisited in the relatively near future and perhaps a breakthrough to below parity this time? One thing of note is that GBP was falling significantly well before Brexit and therefore I do not subscribe to the notion that Brexit is a major driver because macro global factors are much stronger. Not that it really matters much to me what is driving a move, so long as I recognise a move and get in... We can see on the Monthly chart that recent price action has been in consolidation in a Flag formation, hard to trade due to whiplash effects. However there has been a significant breakout to the Bear side now and I believe this market to be in a short term retrace (or relief) rally that will set up a strong motive wave Bearish move soon. The Daily chart shows the Flag break and current retrace more clearly. This appears to be moving in a classic A-B-C form and is mirrored in EUR and AUD (probably more too but note CAD and JPY are on different paths). By my reckoning the Wave A is done and now the markets are moving back down to complete the Wave B before rallying hard to complete the overall relief rally. I am looking for such a rally to come into the resistance zones around about the point at which the Flag was first broken through (probably beyond that for AUD as it happens). This would be in the 13800 area for GBP/USD. Actual turn point can only be pinpointed by price action of course, so this is only a guide. Hard to pinpoint a Wave B termination, they are unpredictable in nature as the market forces slung it out between Bear and Bull sentiment. Sometimes they run fast to closure and sometimes there is a lot of whiplash. Of note it looks to me that GBP will drop more heavily than EUR in the coming week or so. If price breaks the 15 Aug low then the retrace is already done but I think the likelihood of this is lower (at this point). Trading: I was long from the tram-line breaks off the Wave 1 turn (mid Aug) but cashed near the Wave A top I am short from the wave A turning point and holding stop protected at break even until I see a Wave B turn (otherwise can hold if this is already the Bear continuation) Upon seeing price action moves into a rally phase I will seek to cash shorts and go long up to the previously identified retrace terminus zones Then it is about beginning a long term (several years) Shorting campaign (Long USD) Any one see it differently? Let me know your reasoning if you do.
  22. So if Indices are close to a top, as I have suggested in other posts, and USD is closing on a strong rally phase (maybe a month or so to go) what of Gold/Silver? Of late these precious metals have been impacted by USD (travelling inversely to the dollar) but if Indices do begin a major Bear phase then the flight to safety would push both USD and precious metals into a strong rally. In fact I believe USD has already started a strong long term rally and of late has been in a natural retrace prior to a major push north (see my post on the "are Indices over-valued" post. But what about Gold and Silver. The monthly Gold chart shows a very long term support trend line, which remains strong. We can see the major rally to the commodity highs in Sept 2011 and since then a classic A-B-C retrace. If this holds (i.e. if the market does not break below the LT trend line) then we have already seen a major 1-2 wave move pointing to a huge motive wave rally to come. The Weekly chart shows a series of 1-2 retrace moves [Purple and Pink labeling] within a large Triangle formation with the LT supporting trend-line as the bottom line of the Triangle. Furthermore there is a potential Head & Shoulders formation (blue circles) and a very nice associated neckline, which is also the top of the aforementioned Triangle. This is a strongly Bullish set up in my opinion, which will only be negated by a significant break of the LT supporting trend-line/Triangle. Zooming in to the Daily we can see a pair of tramlines [green] on the retrace move down to the recent bottom where a significant reversal pin bar can be seen on both the Weekly and Daily charts (very bullish). And it looks like the LT trend-line is still strong with a short term 1-2 retrace completion {blue labels} that occurred on Friday. My hourly chart shows this move in more detail. I am expected another 1-2 retrace either before a breakout from the tram-line or afterwards with a retest of the tram-line. Either way a breakout of the tramline is a Long trade trigger for me. I am long from the LT tramline and looking for confirmation of the move to add a long term rally campaign. Out of interest Silver looks to have already broken out. I will be waiting for a retrace back to support levels to seek a Long on Silver also. Thoughts?
  23. Regret is a killer in my view. It is hard to do but you have to let missed opportunities go and focus on something else or they will eat you up and make you trade on emotion. Similarly chalk failures up to experience and move on, with learnings of course.
  24. Agreed  if you are a day trader re things going how you expect but staying out to avoid the whipsaw affect. For longer term traders such days are both good and bad: good because they bring about what you may have been forecasting and bad because you miss the turn, especially if it happens over night. However overall they are good if they show the long term direction has changed. Still need to confirm with a new low on stock indices but it is looking good.
  25. Happy Anzac day Zero, gald it all worked out ok. I think the Yen is in for a little bit of strength but this current weakness against the USD isn't over just yet.
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