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Everything posted by Mercury

  1. Shell about to break the lower Triangle line? 
  2. Dax also breaks my lower triangle line (see post on SP500 & Daily FTSE). I'm short at 10052. Now have Dow, SP500, Russell2000, FTSE100, Dax and Nikkei all breaking Triangle formations down. Add to that Oil and Copper and we have something worth taking notice of. Gold is the fly in the ointment but it can go in line for a while, I anticipate a turn back up on gold faster than the rest, maybe between 1190 and 1200 (38% Fib). Chart: 
  3. SP500 has just broken my lower tramline with strong Neg Mom Div and a completed A-B-C count. The Top (yesterday) fell just short of the 76% Fib. In my view we will either get a significant drop in a Wb then back to Wc OR a more shallow W1 (1-5 count) then W2 retrace before the Big Short! Of course the all time high scenario can't yet be rules out but I am short at 2049 and will move stops to BE as soon as possible. FWIT, the Russell2000 hit the Fib 62% exactly. this market has been leading of late and is a decent predictor of where the larget cap markets wind up. Pity the min position (£50) is too large to trade it regularly. Here is the chart: 
  4. LOL! (Really I did!). If that happens I'm selling up and moving to an uninhabited island with a Sat phone for internet to wait out the carnage... Hopefully the markets will do what the so called leaders are unable to do and correct naturally and sooner rather than later. And also perhaps the electorate, though the thought of President Trump is troubling... Oh look, has it started already?
  5. You may not trade High Grade Copper but even if you don't it is worth keeping an eye on like Oil as the recent market drops have been commodity led and traditionally the recover is too... Many commentators in the Mainstream have called the bottom of the Copper Bear but I think we still have a leg to go. Either way we are due a pullback and perhaps we have just seen it this morning. My Daily chart has an A-B-C rally to the 38% Fib off the recent lows, which I have as a W3 end. Ideally I'd have liked to have seen the W4 higher up so can't yet rule out that his is a Wa end with a B-C still to go but let's see. I have strong Neg Mom Div on the Daily too. On the Hourly chart the price action has just broken through the bottom of a Bearish Triangle formation. Could get a pullback to he Triangle bottom and then a further drop or could just drop away, commodities tend to move sharply when they move. With Oil under bearish pressure too does this support a drop in main indices as well? Here are the charts: 
  6. Money Week issued an article today in which the Editor-in-Chief had a rant about an interview she did with an unnamed CEO and his rather blase attitude to his £2million pay; citing that other were paid more, he cant afford all the things he wants even on that (i.e. he wants more!) and anyway his pay is set by a committee... The jist of the article is that despite it being legal it is morally wrong to pay managers so much, they just manage they are not entrepreneurs. This is what the Americans call "pay for pulse". I remember an interview with some City bod a while ago who responded in the affirmative when asked if Bob Diamond was worth his pay package (in the region of £11million pa if memory serves). The idea being that shareholders need to pay top dollar for the best who will in turn run the company well and deliver great returns. But anyone who has worked near the top of a major listed company, as I have, will know this is preposterous! Management by and large is mediocre in my experience and such management thrives on strong brands and products just flying off the shelves (i.e. the work of others in the past who built the company). They drive the ***** out of the machine to maximise their bonus pots and are so short term focused they make crazy decision to meet quarterly and interim targets, never mind end of financial year stuff. That may be well and good in boom times (it isn't as lack of R&D and investment will catch up eventually) by when the economy is lackluster or worse what does all this translate to? Think financial engineering! Making the targets by hook or by crook, crazy M&A and share buybacks at all time highs to drive up the EPS (the normal measure for management remuneration...). Take about bad investments! And a ot of this is being financed by low interest loans (debt up to their eyeballs!). Since 2009 the market has been driven chiefly, in my view, by Central Bank interference: QE and low interest rates. The economic recovery from the recession has been sluggish, if indeed it has recovered. Many think, myself included, that by "saving" the banks the Central Bankers have merely postponed the inevitable and also that by doing so the crash, when it comes, will be even bigger and more painful (think depression rather than recession). Why did they do this? Self interest of course, just like the CEOs and CFOs. Mates in the banks, their own fortune tied up there too, political pressure and so on. You could call it corruption? Maybe, even though it is technically legal. But being legal doesn't stop something from being morally repugnant. So what does it all mean? Exec pay has been accelerating as share prices shot up but execs have had little to do with driving higher share prices except financial engineering and now it seems that share buybacks are at an all time high in the US. In fact some commentators say this is what is driving the market, not investors! I think share buybacks could be the next big scandal. For me this means we are indeed heading for a massive bust too clear all this out (both corporates and governments alike need a clear out). I may be wrong here but the last time this happened was in the late 1920s right? Fundamentals vs Technicals? Not even a question in this environment!
  7. Following on from yesterday's post re Triangle breaks and kiss backs my analysis shows a second kiss on the lower Triangle line. This is a very strong signal for me of an impending drop and I am Short at the second kiss. If price does rally up from here then something very different is happening in my view. This Short position is supported by weak US futures actions and also weak Nikkei over night action after a double kiss last night (I am Short there as well BTW). The only flies in the ointment that I can see are: Dax is quite buoyant this morning and hit a higher high, thought that may well be running out of steam as I write, and Gold is Bearish, though hitting support at the bottom of a Triangle just now. Gold can go down with indices of course, though not ideal and the Dax can go its own way behind QE and NIRP but I expect all global indices to track each other so keeping stops close on this until I see how the US opens. As always, love to hear comments, especially if you disagree! Here is the chart: 
  8. Yes, if only I could stop myself! It is sooo seductive to hit that top but experience tells me I'd be happier, and richer, if I had more patience. A work in progress I am! Understand the higher high take but at present I see that as the more unlikely scenario. At present my analysis is showing a lot of resistance out there so at a minimum I expect a pullback. The nature of this pullback may shed more light onto the situation and help us decide on new all time highs vs big drop. There is of course one addition scenario, that we are only at the Wa of an A-B-C that will plunge very low before rising strongly again but just failing to beat the highs before beginning the big drop. A lot to watch out for, I really want this Bear to be done so we can get back to normal (whatever that will be in a future after a massive recession, or even a depression...) Let's see.
  9. Welcome UKLiquidator. I wonder, does your pseudonym reflect your bias on the UK economy? You are right that investing and trading are different animals. For my money there is little to invest in at present, I am mostly in cash now, but trading offers lots of opportunities in both bull and bear markets. If you like books check out Thinking Fast and Slow by Daniel Kahneman (Nobel laureate in economics, though actually he is really a behavioural psychologist I believe). It was reading his book that confirmed what I really already knew, that day trading wouldn't work for me because of what makes us make snap decision in the heat of the moment (thinking fast) so long term or swing trading is what I do based on a clear analytical strategy. Now if only I could execute it well... Another book worth reading is The Big Short, by Michael Lewis (movie is out of course but the book has lots to offer). For me it point to why fundamentals trading doesn't work, because the markets are rigged by the insiders. All we can do is use technical analysis to try and predict what the market as a whole will do and trade what is in front. And as you quite correctly said, in my view, practice good money management because we will be wrong more than we are right. Good luck.
  10. True, but here is the thing, at any point in time there are always at least 2, usually more, possible scenarios that contradict each other so really it is all about assessing the likelihood (I don't say probability as that would suggest actual statistical analysis) of each one and making your call. For the Dax to head on up to the 11,000 mark the FTSE and US markets would, most likely, breach the early Nov 2015 highs and that would put us on track for new all time highs, rather than staying within the Bear market on the Dax. Assuming all the major global indices continue to track each other and why wouldn't they at this juncture? New all time highs is a valid scenario but at this stage my view is that the bear market is the more likely scenario. Even if you re a fundamentals trader there is little, other than central bank interference, about to support new all time highs. The rally from 2009 lows has been underpinned by QE and ultra low interest rates and a belief in China. I wouldn't believe a word that comes out of China in terms of economic stats... In fact history tells us that a key feature of Bear markets is very strong relief rallies that look like they will head to new highs but simply run out of steam. Under either scenario a significant pull back is overdue and when it comes that will be the time to profit from shorts and position for the big drop with close stops to guard against the new highs scenario. That and a good money management strategy. Currently I am seeing resistance across the map on stock indices, and Oil as it happens. I don't know whether this is the beginning of the next major wave down or just a pullback before fresh highs and my bias is Bearish so I have to have strategies to protect against the Bullish scenario but trade where my analysis is pointing me. Unless someone comes up with something much stronger to alter my bias, which hasn't happened since May 2015. Ya pays yer money, ya makes yer choice...
  11. it's tough trading conditions in these markets, retraces are going much further than normal, where 50/62% is usual we are seeing 76% even 88% a lot of late. Symptoms of a bloated market in need of a big fall? Some say so. Better to wait for a turn and take the 1-2 retrace.
  12. Now for something different: As Indices keel over there seems to be a common order to things. Often the commodities lead the way (Oil, Mining etc) followed by manufacturers then financial and finally consumer type companies. This time the same seems to be happening (except for UK supermarkets who were loosing out to discounters early on - that in itself is a wake up call I think!). Looking at the final "strong" companies like Unilever and the like I can see a lot still at all time highs and some making fresh highs (typical defensive stocks like tobacco - a fools play that one, tobacco is going down in the long term...) I recently noticed WPP near all time highs but my EW count has this as a very strong retrace rally to in a W1-2 and about to turn for W3. There is a nice Triangle on the hourly and a possible break and kiss back. Sure it could run up for fresh all time highs but I'm banking on the former set up and so have gone with a Short and close stops in case the latter is right. Here are the charts:
  13. Hi Welshman, Are we talking Dow or EURGBP here? The Chart was EURGBP but you also mentioned a short on the Dow (for my take please see separate thread on US Indices, just posted an update there). Re EURGBP, my EW count suggests we are in a 1-2 down off an A-B-C (24 Feb high). Of course you could easily be right re another leg up and the W4 of the previous wave down is a likely truning point in that eventallity, also coincided with down trendline on weekly and daily. I have my position stop protected at the 17 March High and we are currently getting resistance at the 88% Fib off that high so let's see which way it now goes...
  14. Similarly to the FTSE, are we seeing an ending Triangle break and kiss back on the S&P500? If so the Kiss will be a great place to chance a Short (and could signal similar on other main indices). Chart: 
  15. Touch and go on the FTSE? As per this mornings post thee FTSE has now come back to touch the bottom Triangle line, having recently broken it. This can happen twice so I'll be watching the US markets this afternoon to see if there is something similar occurring before committing but not a bad place to chance a short on the FTSE. Chart: 
  16. Mirror story to Brent Crude (see other post on Oil), with strong Daily chart resistance and a Triangle formation on the Hourly. It looks like we could be in a wave 1 drop and retrace (maybe to the 62%) but if the price breaks the lower Triangle line we are on for a significant drop. Here is the chart: 
  17. Brent Crude has just bounced back off my Daily chart tramline resistance with a Neg Mom Div on the Hourly and a nice Triangle formation in play. If the prive breaks the lower Triangle line we could be in a for a drop. How far depends on whether this is the end of the rally or just the end of the first leg up. Time will tell but I think we are in for a decent drop on Oil (and also oil producers - see my other post on Shell as a proxy for Oil) Here is the chart: 
  18. Re: EURGBP, I cleared my short (7862) for a small profit as I was expecting a strong retrace rally, which is what we got (are getting). The question is whether this is a relief rally preparatory to a stronger drop or the start of a new higher high? At present I am leaning towards the former with the GBP looking stronger against USD than EUR (despite the recent drop off on GBPUSD). My analysis suggests EURGBP may top off at the 76% Fib before it heads south again. The recent turn down was at the 88% Fib (on the Daily chart) completing an EW 1-2 and if it now turns at 76% (or falls short of retracing back to the 62% Fib) then we will have a 1-2 within the hourly chart and a strong W3 drop to come. Negative Momentum Divergence on the Hourly with the 17 March high and bearish signs on Stochastic and RSI currently supports the hourly chart EW A-B-C formation with a wave 5 up yet to be completed. the coming hours should tell the tale as to whether it will turn or power on. My plan is to take a short at the 76% Fib (yellow line on the chart). Here is the chart (Thoughts?): 
  19. Chanakya I used to trade on the 5min too but couldn't make it work consistently and found it too all consuming, constantly watching each 5 min move and jumping at shadows. I always seemed to be missing the bigger picture long term trend. Now I prefer to take bigger picture, longer term trades and let them ride for longer taking many more points (usually minimum 250 point but no max). Right now I am stalking what I think could be a massive bear and I'd want to be in that for the whole ride (that's 1000s of points). This morning the FTSE broke my potential ending Triangle in a big way. The break of such a formation is a great place to take a trade (I am short at 6115 with a generous stop to allow this room to develop and also short at 6231 with a tight stop, where I judged the top of this rally to be). These sharp breaks have a habit of retracing significantly and it is not unusual for a second touch on the lower Triangle line (i.e. above my second short position), which is also a great shorting opportunity. My plan is to take another short if this happens and ride at least 3 down on what I am anticipating will be a relatively short drop (a few days, maybe a week or so). After that, depending on how the drop goes (how strong, how far it goes, how long it takes and so on) I will reassess to decide if we have indeed had the top of this rally or if there will be another leg back up to a new high. At present I am leaning towards the former but we should still get a significant relief rally, which would offer a chance to take profits on most of the shorts I currently have and get into new ones when the overall direction is confirmed. Here is the chart: 
  20. Update on the FTSE. The US markets have been very buoyant and holding up the other major indices, I believe. The Dax, Nikkei and FTSE in particular have been more bearish but now the Us markets could be about to turn (see Trade of the Day post). I think we are also seeing a major turn on Dax and FTSE, the latter of which has also been benefiting from commodities relief rally with a higher proportion of Oil and Miners than other indices. To me commodities look set for at least a pull back if not yet another leg down (my medium term prediction). The FTSE is near 76% Fib on the Dec drop and a strong tramline resistance with negative Momentum Divergence (also on the hourly). There is a chance it could pop up to my red line, which is 50% Fib off the all time high, but I think this all depends on how the US markets and Oil do. Here is the chart: 
  21. Are the US stock indices about to make a major turn? I have been tracking and probing the Dow and S&P500 for some weeks from the 62% Fib on the latest rally. The rally has been very strong leading to many commentators talking of new all time highs and sentiment indicators off the charts. With no significant pullback we must be due at least that soon and perhaps this could be the beginning of a major bear move to cement the notion that we are in fact in a Bear trend. Looking a the Dow my analysis shows we are approaching the 76% Fib off the all time highs and also a coincidental 88% Fib retrace of the recent drop from 2 Dec 2015. Add to that a strong tramline and negative momentum divergence and it all smells like major resistance. If you look at the S&P and other majors you will see something similar. My medium term roadmap is for a drop in EW wave 1 of big Wave 3 followed by a retrace back (could be to almost parity with predicted current turning point) before the big one down. In the short term there could be a nice swing trade of the W1 and W2 but I'm holding out for the big one and getting in Short once I see what the US markets do. Here are the daily charts (please let me know what you are thinking on stock indices and why): 
  22. Hi Soni, (Re "the Trend is you friend") As Caseynotes indicated following a trend is a matter of which timeframe you are looking to trade from. If you are day trading (not at all my thing) the hourly, 15min etc is what you are looking for but personally I find it hard to consider a short term move a trend. I look for the long term trend and rarely bet against it unless I expect quite significant pullbacks and then I do what is called swing trading (looking to trade the ebbs and flows of a long term trend). In such a case I seek the long term trend on the Weekly/Daily and then use the hourly to catch the swing points. Whatever you do remember the rest of the saying, "til the bend in the end". Many people follow trends right off the cliff edge. A key objective for contrarians like me is finding the bend in he end and riding the next trend back or swing trading.
  23. Definitely worth practicing on a demo but be advised that the psychology of the thing only really comes into play when real money is on the table. Until then it is just like a computer game, you can always try again. When you do go live start very small in terms of position value and only have max 3% of your total account balance at risk at any time. Good luck.
  24. Is the FTSE100 approaching the moment of truth? The US markets have been ridiculously strong, it can't last, and now the FTSE is following, having been sluggish for a few weeks BUT is that a last gasp of a dying man for the FTSE (and other indices) or are we witnessing the continuation of the most phenomenal rally on to new all time highs? If the FTSE is to turn it should be now (today/Monday or over the weekend). A Triangle has formed on the hourly chart close to the Fib 76%. In my experience when a market gets beyond fib 62% anything can happen and certainly we don't need to get a hit on the 76%, it can fall short a lot. I am predicting a final touch (+/-) on the upper Triangle line to complete a valid A-B-C retrace rally and then let the fall begin (wont be that dramatic to start with but let's see it it turns before thinking about that). I think we will see something similar in other main indices: Dax and Japan have already run weaker (see separate posts) and Hong Kong was also weaker last night. Only the Yanks left to realise the game is up and they are overly optimistic by nature... Previously I was unsure on Wa vs Wc but now that most indices have run up to strong full retrace points I think this looks like a very strong counter rally without a significant A-B phase. Additionally I was tracking a similar A-B-C on Oil, which looked like a Wa and Oil appears to be the main overall market driver at present but now I have a viable A-B-C on oil too (see separate post). Gold has turned bullish again, another good sign that the Indices are set for a drop perhaps? Of course this could all got the other way, such is the nature of the beast, but overall I'd say we were at least due a significant counter trend drop on indices and Oil and it could very well be the end of a retrace rally preparatory to a big bear. time will tell... Here is the hourly FTSE chart, please do comment back, especially if you have an alternative view: 
  25. Soni, I aim to be a purely technical trader, and thereby take emotion or gut feeling out of my trading. I am not 100% successful and sometimes I also don't listen to my gut telling me to get out and regret it. On reflection of those moments it was actually the technicals driving my gut and if I had analysed more thoughtfully I would have seen it but this is all about mastery of psychology really. WRT timing of trades: It is all too easy to identify trades and get in but how many of them are good trades? I expect to take more losers than winners but aim to win big on the winners and lose small on the losers (using tight stops). To maximise the probability on this I analyse the market to death, looking at it from different view points to try an reduce confirmation bias (what you want influencing what you see) and I like to offer my analysis to forums such as this to see if anyone had a different take (again to try and reduce confirmation bias). WRT timeframes: I use a set method for analysis (Elliott Waves; Fibonacci retrace; Tramlines and triangles; supported with a few technical indicators to help spot turning points). In analysing the markets this way I come up with a medium to long term route map on the weekly and daily charts and refine this as we move forward using the hourly charts, the so-called 3 screen method. This approach indicates various turning points along the way and opportunities to take profit or hold for a longer trend. The key to it really is correctly identifying where we are in the trends, likely turning points and how much stop space you need to allow to avoid getting washed out of a strong trend. This is a major aspect of trading in my view and requires a clear and reliable analysis method, much practice and experience, and mastery of personal psychology and is many years, and many mistakes, in the making.