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Mercury

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Everything posted by Mercury

  1. For those wondering about the correlation between Oil and Stock Indices, I guess that is now resolved in that they aren't. Oil placed a kiss on my Neckline this morning (will Shell do the same with the Triangle line?). Looking for a drop away over the next hour or two. Here is the chart: 
  2. Can't tell which way this is going yet so I'll be waiting to see if we get a retrace followed by a rally or a major turn. Will be tricky to judge.
  3. Double Top bounce off the 88% Fib with negative Momentum Divergence suggests a significant drop.
  4. Wow! Fast move but it made me realise that my line position was incorrect so here is the corrected one, at the 76% Fib this time. I am Short at the Fib line. 
  5. Just a quick update, Head & Shoulders necklines should be drawn through the congestion zone rather than the tail extremes so the neckline, if in play, should be positions as follows: 
  6. I guess Yellen opened her gob and the USD when into temporary insanity mode (Gold up, Commodities up, most USD FX pairs going against the USD) but Fed pronouncement moves have been short lived of late and I'm wondering if the Russell2000 might be leading the way? This market is smaller cap than the S&P500 and has led the larger cap markets in moves of late. The Russell jumped today before the others and is now in an interesting place in terms of resistance. There has been a Triangle formation for a while, which was broken on 23 March and followed this up with a kiss back on the line. Often you get 2 of these and we have just had the second at a junction with a downsloping tram and the Fib 62%. It could go back up for a third at the 76% Fib but there is Neg Mom Div building and supporting RSI and Stochastic overbought signals as well. If you want to trade the Russell then a Short at the line is a decent bet with stops above the 76% Fib. If not track it to see if it gives us a sense for where the other indices may go. Here is the chart: 
  7. While the stock indices and Oil are sorting themselves out I was looking at GBPUSD cross and have come to an impasse. Overall my assessment is that the market is in retrace prior to a final leg down, maybe as far as past lows (13455ish). But where are we now and what will happen next? On the one hand the retrace could have concluded on 18 March and be in the final run down with a W1-2 about to conclude. On the other the current move could be an A-B (concluded) and just moved in to a Wc up. The Daily chart seems to indicate the latter with Stochastic supporting a Wb conclusion with a nice "Junction" at 14690ish. I call a confluence of 2 or more resistance lines a junction (there are 3 here). On the hourly it is looking like a short term fall is happening, maybe a W1 of Wc up (we should now get a drop back to a suitable Fib retrace before the main surge up if true). Anyone got a view on where Cable will go short term and longer term? Here are my charts: 
  8. FTSE just made a fresh lower low on the hourly chart. I have a valid (I think) EW1-2 (1-2) setting up for a strong W3 down. Could get a small retrace yet as the US opens but otherwise it looks set for a significant drop from here. Anyone disagree? Please shout if you do. Here is the chart: 
  9. Ok good but I guess I am interested in the reasons for your thinking. Why will Vix stay low (though I must say I think the Vix is more a lagging rather than leading indicator here, I do watch it). Do you track US Gov 10 year yield? I think that is a bit more leading, although these days with interest rates so low, who knows. Why will May/June see selling, is it the "sell in May and go away" adage? BTW, I tend to agree with you, although I do expect a first bout of selling off against the recent rally gains during April with a retrace (quite possible a strong one) into end April/May and then either a push to all time highs or the sell off you are think of. Cheers, M
  10. OK I get that, and can't follow it myself, but how do you set the 300 pip target? Is that just a standard thing or does your analysis set out a target for hoow far the market will go, hence backing into a total pip amount?
  11. Interesting, where is your end target for the move at? I currently have a position on 250 point credit from the 23 Mar turn ar B/E stop preotection but I think I'll hold that for the medium term (or at least until I see a bit more clarity on the move). Got another 100 points from 9am this morning (2 positions) and mulling a split bet approach such that I would cash 1 and hold the other at B/E. I think there is a bit more to go on this move before the US market begins to come alive and may provide a bit of a rally before another more significant drop. What is your analysis telling you on the Dax?
  12. Anyone interested in Head & Shoulders formations? I must admit I use these infrequently and usually only at major turning points so this one may very well not be significant but if it is then we could see a pull back to the neck line (blue line) between the 2 shoulders (blue circles) for a kiss and the drop. Such a moove would also confirm the wave down, but not whether this is a Wb or a W1 down of a bigger move alas. Here is the chart: 
  13. Hi Rich88, Interesting! Yellen, Oil, bullish months! What are you thinking behind this? I think we have seen solid correlation across all the major stock indices with subtle differences for index make up. ironically the Nikkei and the Dax have been weaker with very similar chart profiles despite continuing QE and NIRP (or maybe because of this?). The S&P500 and FTSE are similar (if you factor in the FTSEs high proportion of mining and oil). The Dow is an oddity because it is made up of a small number of big blues so could diverge from the rest but if we are indeed in the grip of a bear I doubt it (or at least it will be a short lived jump to big blue alleged safety). Oil and indices have been correlating of late but that isn't a continuous thing. Oil dropped hugely over the past year or so with indices remaining largely unaffected, but where Oil and commodities lead stocks are sure to follow eventually I think... Not sure I really buy into seasonality in markets as such (with the possible exception of the Santa Clause rally) and you have to compare apples to apples (i.e. does the same seasonality occur in a Bear as in a Bull?) Interested in your thinking.
  14. Having just had an interesting discussion with Caseynotes and others on Levels vs Indicators and the difficulty of using indicators where mentioned I occasionally use alternative indicators I thought I would share this on Oil. Someone I know uses MACD and MA on Oil as well as primary EW/FIB etc and recently posted that Oil would hit 200MA and rebound. If you look at Oil (Brent or WTI) on the daily charts you will see that is exactly what happened and with MACD keeling over the conclusion is that a pull back is on. But is the rally over or only half way? In EW terms it looks like the Wa of an A-B-C and in MA terms Oil may pull back to the MA50 before moving into Wc rally to complete the move. Such a scenario would result in a drop to the area of $37 (Brent) and a rally towards $60. Interestingly $37 coincides with the Fib 38% retrace (18 Mar high - Jan low). If Daily Stochastic also moves from over bought to over sold in line with all of this then the odds are good for the A-B-C scenario and a Wb conclusion in or around $37. If not then the A-B-C is already done. Looks like the $37/MA50 is a potential telling point. This would also indicate where Shell Oil might go. Let's see...
  15. It does. Just a different mechanism that I have not familiarised myself with. I am wondering what the diffference is between using options and DFB trading is.
  16. Kiss back on lower Triangle line achieved. Good place to try a short with Oil showing bearish tendancy at present. Am short at the kiss. Here is the chart: 
  17. Does this early price action have the making of a "red" day? Price has poked up near the 50% Fib (18 Mar high to 24 Mar low), together with gathering lower lows and lower highs, negative momentum divergence at the key turning points and strong upper resistance it all looks to me like it is keeling over. Time to chance a short? Here is the chart: 
  18. Hi Rich88, Too short term for me so maybe some others can comment for you but as for me the only thing driving the FTSE today is the US market. What do you see on the US? I would be a bit wary about placing a trade before we see the mood when Europe wakes up tomorrow and perhaps what Asia does tonight but in general I thing the trend for the next few weeks is down.
  19. Yeah, It try to ignore the noise. I can't tell you how many times I have exited a good position listening to noise... So if I understand you correctly you are using options kinda like a Stop in working order? Placing it below the current pricing at a point you feel comfortable the market will have turned?
  20. I seriously doubt a flatline, not really on any scenario I have, Might get that at a EW3-4 (complex) but that is not where we are. No I think we have indeed seen a turn and for a while at least the Bear is back. Question remains, is this the beginning of the end of the post credit crunch rally of just another pretender. Time will tell but for now I think we should see, at a minimum, a decent pull back.
  21. Dow hit just under the 88% Fib (17624) on the recent High/Low, which is consistent with recent past bearish moves on the Dow. I think we have just seen the conclusion of a EW1-2 and now should get a significant move down is right.
  22. There are a few points that we should keep in mind when thinking about so called fundamentals: First what is a fundamental really? Economic data like how well the economy is growing or how much it is contracting; supply/demand data like retail sales or Oil stocks; Central bank monetary committee minutes (or actions!); company trading statements and reports etc? All of it? Really it depends what we are talking about and against which market and where in its natural cycle. Second, the market has copious analysts pouring over this stuff with reams of data to support their assessments all to predict what fundamentals will do and what they mean when they become apparent. One reason why fundamentals often seem to provoke the reverse reaction to that which is logical (erm, whatever that means...) is that the analysts try to predict and run ahead of fundamentals to get an edge. This is where the saying "buy the rumour, sell the fact" (or vice versa) comes from. Third, a lot of data and Central bank actions are politically motivated not free market actions. For instance I would not trust any data coming out of a centrally controlled country like China. Also the decision to sell Britain's gold was a political one not an economic one and certainly not a traders decision... So what does that prove except that politicians shouldn't be in charge of this stuff. That the stock markets have been fueled by central bank interference since early 2009 is now received wisdom. The stock prices have run far ahead of the economy and now the economy, quite apart from catching up, looks likely to reverse and leave stock prices dangling. Central Banks are trying to continue their failed policy of propping everything up but ultimately the market is free to make its own mind up and I believe Mr Market now smells a rat. For years central bank interest rate drops and QE and even hints of drops and QE has fueled the rally but now the reverse is happening because what it really means is "*****e! After 6 years it's not working so lets ramp it up." This is a prime example of Einstein's definition of insanity. For 6 years bad news was good news for stocks but now bad news is becoming bad news again in the form of no confidence that the Fed et al know what they are doing or that the economy will catch up. In that sense alone I agree with looking at fundamentals but my take is that they are so far behind the market, and going into reverse, the the mother of all crashes is imminent. Is that fundamentals? I don't know but fundamentally I thing if it looks like lemon and smells like a lemon then it must be a lemon. And I think this lemon is rotten. So until we have a major crash I think Fundamentals are a lemon and so is the market right now.
  23. That would be some rocket rally if it goes all the way to the 88% Fib without a significant pullback. I'd have to put that in the unlikely category but who knows in this market. What do you mean by flatline? Crabbing sideways in a trading range?
  24. Gold appears to be in a EW3-4 retrace in a classic A-B-C structure. Price is now approaching the Fib 38% (Daily chart) of the whole move up from the bottom (assumed at this stage). Stochastic on the Daily is potentially nearing buy indication. On the Hourly chart the EWc is nearing conclusion with Pos Mom Div building. Another leg down, if it hits the Daily chart Fib 38% resistance zone, could present a Long opportunity and that could run up to the 1400 price level to complete the large Daily chart 1-5 (or super large Wa). Even if you don't trade Gold such a surge must indicate stock indices falling right? Here are the charts: 
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