Mercury

I know you like a bit of gap-age there @elle , as do I, but to me that gap looks more like a breakaway gap from the previous medium term rally. The close of it would therefore not be significant in the greater scheme of things for me (not saying it wont be closed, I believe it will eventually as the Euro capitulates and the global financial world flees to USD but that is for later perhaps (although who knows when right?). I still feel we need to see a relief rally (against USD, Bearish phase for USD) before we get that capitulation. In terms of the technicals I thing we are once again at a pivotal point on FX, which has been a long and protracted move, very unlike the beginning of a major bearish phase, which is one reason I think that is yet to come. If the current EURUSD weekly trend line holds (and this is consistent with a similar line on USD DX) then we will probably get my long awaited rally to set up that fast and furious Bear. If it breaks then the gap will be closed I have little doubt. After any relief rally I believe the gap will be closed anyway so really we may only be differing on the timing and the route, assuming I am right in thinking that you see it going straight down to the gap via your channel? It is interesting to note that a number of USD pairs are at pivotal points in addition to EUR. GBP is fast approaching the wave 2 retrace I have been tracking; AUD is at a support zone; JPY may have already turned again (this one I think we are aligned on from memory). Whatever is to happen should happen in the coming days I feel so we wont have to wait too long for resolution I feel.

First off I was answering the original question, not giving dmedin advice. Second what I wrote is agnostic of type of trading etc. Third, a person can only be helped if they want to be helped. Finally, any post is a free gift, as I mentioned before, if not treated as such it is abused and posters stop posting. I have nothing further to add to this discussion, I hope @AbDXB1345 got something useful.

I really have no idea why you are here. Good luck with whatever it is you are seeking.

OK @dmedindo it! For me the chances that the run ends are too high. What happens to buy and hold when that chart reverses? Will you get out and cut losses? That is not the strategy of buy and hold so what you will do is hold on and eventually sell out at the bottom and lose everything. With trading we look to cut losses much much earlier than that and trade with the trend. Only in trading can you Short the market. Seriously it is horses for courses. You have the facts and the logic from people who have traded consistently for more than 5 years in this and other threads. Do you need anything else to make up your mind?

You get dividends on trading too, I got a massive one last night on the Nikkei. For most people, and the stats bear this out, your thesis is correct. If you don;t think you can make a success of it and are not willing to put in the effort to become successful then chose a different path. For those who have the capability the route to success is as I and other have laid out. Not sure what your point is over and above that really? I posted to try and help answer the original question from @AbDXB1345. I assume he wants to give it a go. However if he doesn't fancy the journey better to quite now.

Well as I have already put in my 5+ years @dmedin now it is more a question of good judgement than good luck, which was the heart of my point. The other main point was: if you don't want to put in the time and effort fair enough then don't. Start a career as a doctor, or whatever else; put your money in the bank (good luck getting a decent rate though); buy and hold stocks (good luck when the markets crash though! Don't think there is no risk with buy and hold, there is exactly the same risk as with trading, it is just a different method). If you think there is another way, a short cut to success trading, then be prepared to join the 80+%. Pretty much all the long time posters here on the forum say the same thing in this regard, it is probably the only thing we all agree on. The short term posters may not say this because they are no longer here or have only just arrived.

Good job @DSchenk, although I don't trade like you do so maybe not the most qualified to opine. As I mentioned previously, I think the rally will run to new highs and take a month or so to get to the next major turn. Of course there will be a few twists and turns along the way.

@AbDXB1345, forgot to mention the most important point. Regardless of how frequently you post or whether you post or not at all on the forum or even access the forum (I know several traders who avoid it like the plague because of Troll like behavours that are sometimes exhibited) and regardless of the size of your account you first need a solid system that you follow mechanically (and therefore trust). You must do this without overlaying personal emotional feelings about what a particular market might do or not and ignoring comments that others make, especially negative criticism, of your system if you do post. You must see positive points gains over an extended period of time, some have posted recently, and I believe correctly, that this could take upwards of 5 years to crack. You must have control of your own emotions and not lay the blame for your losses at nefarious actions but squarely on yourself. You must ensure you understand why you lost and have a learning loop (like a Deming quality cycle - Plan, Do, Check, Act). You must not put unjustified pressure on yourself to make money fast. In short, if you want to trade for a living (i.e. make a profession out of it) you need to act professionally and treat it as a business. Few successful traders (or businessmen) are successful from day one and most require a lot of failure and training/mentoring to learn to be successful int he long run. The only people who could claim to trade for a lining, consistently and successfully, have done all of this and earned the right to be successful by putting in the hard yards.

@AbDXB1345, a few of thoughts for you: I imagine few retail traders can give up the day job with the stats as they are, for me I use it as a means to grow capital in a world where normal investment seems too risky, but then that is the root of my bearish bias - well documented and oft criticised, sometimes with malice If someone posts on this site they offer you their opinion and views for free. They may have errors in their thinking and even in their technical expertise/experience. We would all be better off if we stuck to what we really know. However you will also notice that there are some on the forum who seem to pounce on these errors with glee, which to me is a poor response to someone offering their thoughts freely. Why not simply respectfully point out the error, I'm sure the poster would appreciate that more than being castigated. I believe this is why we have so few active posters on the forum (BTW, I am probably guilty of this in the past but seek to avoid it now) The better way to measure success in a forum discussion is via points gained or loss. This equalises the relative size of the account. The better trader is the one who makes the most points at the end of a period, period! Clearly one needs a sufficiently sizable account to trade for a living BUT trading for a living is not like a salary-mans job. You cannot expect a regular daily/weekly/monthly income. It will be very lumpy. Most of the truly successful traders will tell you that thy make most of their gains from fewer than 5% of their trades. Make of that what you will, it was given freely and in good faith...

Called the wave 1 wrong, clearly, and the market did not break through the near term support area so back up it went. Looks like the wave 1 was posted yesterday. I would now be expecting an A-B-C to the wave 2. The first rally yesterday carried quite far but this market has a tendency to these wild swings (see shaded area on the daily for recent prior example). The current top out could be the wave 2 but more likely we will see similar wild swings and a test of the Fib 62% at least. Still a Short here would not be a bad trade if stops are held above the Fib 62% (or moved to the recent high for a small loss if the market drops fast today). Either way, once the retrace is done and we get a break of the short term support there are several 1000s of points to be had. Is it worth it? Depends on your assessment of risk/reward and capital employed here vs other alternatives. For me I see a better chance of getting maybe 2000+ points here with a chance of double that for a relatively small 200 point risk than I see on, say, stocks. Might get 2000 points on Oil in the near future (see my Oil thread post recently) but is Oil less risky than coffee? Gold/Silver Shorts are my preferred trade from a risk/reward and capital employed point of view. If USD turns soon it could be the best of all but that requires a trend change, whereas Coffee is already in a down trend of many months (years actually). In the eye of the beholder I guess... For the record I am Short Coffee from the previous turn and channel breakout and did take a speculative Short on the open today. I am Short Gold/Silver from the turn yesterday and Long Nikkei and Dax (see my post on DSchenk's daily FTSE trade thread). Coffee is a new market for me and I am finding it quite interesting but really I am tracking it for a long term bull market initiation, as described in my opening post. Is that worth it? Maybe 30000 points over 3 or so years?

Just to round it off @DSchenk, as I am no longer day trading stocks with the change in direction, over night and this morning I believe we got confirmation price action that the bullish trend has resumed across the patch. As mentioned yesterday I closed down all my shorts for profit and went Short Gold/Silver instead. Last night I decided to go Long the Nikkei to collect the massive divi on the basis that the ensuing gap would be closed (see chart below). I also went Long again at the bottom of the gap this morning and went long the Dax at the open but I have not gone in on the FTSE as I preferred the risk reward of the 2 I did go into. I intend to hold these longs for a while to see where we top out, more on this in another thread later. Good luck with the day trading, I think the prevailing trend will be long for a while now until we see the next turn (possible in late October...)

I don't think we can omit the gap move @cryptotrader. To me the event was just a trigger for the Bulls to do what they wanted to do. The momentum was turning up anyway (see daily chart for divergence below). I am expecting to see the gap closed, because they usually are closed quickly or not at all, and after that my alternative scenario, as referenced on the day of the gap up, is for an A-B-C rally (wave C to come, which should be fast and furious) to complete a larger retrace. At this point my road map would suggest we see a large bearish move but that's a long way off yet so let's reserve judgement for price action to come. On my charts (weekly first) you can see the large A-B-C (1-2 pink) retrace back towards the initial channel lower line for a retest. Several commentators have pointed out that we typically can't get a recession without Oil prices being high, well maybe this will do it; relatively speaking it will be a sizable percentage jump in prices but stocks will remain high, as are reserves, from fracking, so eventually supply/demand will reassert its dominance over speculators. Oscillators are over sold on the weekly as well. I have a good set of parallel channels with good touches on the top two lines. The bottom line is drawn equidistant and provided support for price at two test points before the rally and gap away. On the daily chart you can see that the wave B (blue) turn occurred on the lower parallel channel trend line and coincided with that PMD I referred to above. This means that the bearish move was losing strength before the Saudi event. Then we got the big gap, which looks to be set for a quick close as per usual. The move up to the wave A (blue) was a 1-5. The move down to wave B (blue) was an A-B-C. I therefore expect the wave C rally to come to be a fast and furious 1-5. We may get another test of the lower channel line for good measure before the rally starts. I haven't marked it on the chart but a retest of the lower channel line would be around about the Fib 78% retrace level... I would also like to see RSI touch over sold but it doesn't have to so long as Stochastic does/is. I figure later Friday or early next week to resolve this one.

Whatever is happening with respect to USD generally, and it looks like we may see a slightly lower low on EURUSD at present, the retrace bearish move I was looking for on GBPUSD seems to be in play. Key question will be whether it turns in a wave 2 or carries on down. Shouldn't take too long for this to resolve one way or the other and in all likelihood we would need to see USD fall and EURUSD rally hard for this pair to stop and turn. Having been stronger for a while I feel GBP may be on the verge of a phase of being weaker than EUR, enough to get the MSM talking about parity and Brexit impacts again...

Could Dr Copper be lighting the way for stocks? Traditionally this commodity was said to act as a leading indicator for stocks in particular and the economy in general. Since the 2011 commodities highs though there has been a disconnect. One thought is that commodities will get a hell of a lift from a period of hyper inflation brought on by all the QE and low rates as financials, which have been over-inflated already, crash . Another is that a deflationary recession will send commodities crashing like everything else BUT if you look at many commodity price charts you will find them back to significant lows. I am expecting HG Copper to retest its long term supporting trend line before the resolution to this becomes clear. My bias has moved from the deflation scenario to the hyper inflation one, as this makes most sense across all the asset classes and in the economy in general, although on main street, if we do see hyper inflation of consumer prices, I would expect it to be short lived as this will only fuel the recession, which as many economists have been saying is being propped up by the consumer. That's all longer term though, what I am seeing now is a potential rally in copper in a wave B (blue) that could conclude around the Fib 62% (early days target, pending later price action confirmation), which would also be a Wave C / Wave A equivalence. Such a turn of events could then help pin point the end of the Bull in stocks.

To complete the interlude, I have closed out all my Shorts on indices and shorted Gold/Silver instead, which hit my sell criteria. I now see my scenario on stocks, another leg up, as having started earlier than I had previously anticipated. This change is on signals from my methodology for a reversal/swing on stocks and puts in play a higher high on Dax and FTSE (although not a new ATH). Decent profits on all Shorts, apart from the FTSE, which played out at break even and live to fight another day. Buy the dips still dominant but for how much longer?

One thing that bothered me about my stocks down, USD down prognosis was how Gold/Silver could also go down. Well stocks (US large caps) seem to be turning up today and for now so does the USD and Gold/Silver look to have turned exactly where I had projected. Given this I have cashed all my stock shorts and gone Short Gold/Silver instead and am waiting on the sidelines on USD, which could also turn back down now. One thing to note is that I always trust my system and do not second guess it as that is emotional (thinking fast) territory. If it is wrong so be it, safety and profit taking first!

@DSchenk, yes the panto season started early this year. I thought the AG did very well and seems much more Prime Ministerial material than anyone since possible Thatcher, who, whether you like her or not, good PM material. Frankly I think the opposition played right into the Governments hands. General election odds must have shortened. Stopped out for no loss on FTSE100, still in the Dax day trades. Still in longer term US large cap Shorts too. Switch focus to US on US open so will not reenter the FTSE today.

While we are waiting for the US open I though I would update on Coffee. I am Short this market for the Short/medium term but seeking a long term bull market beginning. The market turned nicely between the Fib 50-62% and broke out of an ending channel to the downside, offering me some good very short term Shorts. I have retained those above the channel. I cashed below because I was expecting a retrace/relief rally, which we got over the past few days. I had expected this to run tot he Fib 50% but it fell short and has now broken the previous low. Looking at both the Daily and 1H charts I see this bearish phase continuing now to test the long term lower channel lines and possible to break into the market bottom zone below 8000.

@DSchenkWatching the soap opera that is the British Parliament live today so can't answer in too much detail [BTW, it is a genius strategy by the Government who are wiping the floor with the opposition where one would have expected the reverse today!]. Answers as follows: Longer term approach yes but I adjust according to the market circumstances so generally long term swing trading but will day trade fast moves short when they present themselves, as today. As and Bs and 1s and 2s are labeling used in Elliot Wave Theory. Normally I analyse on Monthly/Quarterly/Weekly then Daily then 1H. I typically trade off the 1H within the longer time frame set ups but often do a check on the 15/5mins charts to ensure there is no imminent reversal in play. For day trading a fast move I will use 5mins for swings and stops - this I do very rarely. Hope that is useful. Back to the parliamentary drama.

Seeing as you asked, I did trade the FTSE100 (and the Dax) this morning to follow up my longer term Shorts on the US large caps breakout yesterday (and the previous day) [see my "Are we there yet?" thread in interested in the background to this]. I am up a combined 80 points the FTSE100 and counting on 2 positions. On the Dax I am up almost 100 points off the pennant breakout. These are all short term positions, my US positions are more strategic. I am stop protected at break even and letting this run as I think there is a better than even chance this move has more mileage yet. Critical decision point is perhaps another 150 points lower (FTSE).

It would be easy to think that Thomas Cook was the only company problem out there. Having met some of the management a few years ago it is my opinion that the failure was as much one of management (massive egos) as of environment, although the latter played a big part no doubt. The notion that it had anything to do with Brexit is laughable. But there are other things happening that just adds to the general sense of an economy in decline: https://www.bbc.co.uk/news/business-49822845 https://www.bbc.co.uk/news/uk-northern-ireland-49818156 Uber bulls will attempt to talk this away but over the pad year or more the news has been a constant wave of these things with very little good news. Corporates have been cost cutting and leveraging to buy back shared for 5 or 6 years now, which is one reason wages have not kept pace. The very definition on untenable that is the basis for the GM strike action. Employment is strong but that is always the high water mark before a cyclical downturn and the jobs this time are not very secure gig economy based; they can evaporate overnight. The only "good news" stories we seem to see are all about another App based business going to IPO with losses rather than profits as a rack record. And when you think about it they aren't even truly disruptive! Uber is just a taxi service with less well trained drivers than, say, London black cabs (which have their issues it is true, nothing a good recession couldn't fix). WeWork is basically, in my humble opinion, a Ponzi scheme, or at best ill structured, and it's not like there aren't loads of actual property companies in the office space already; you know, companies that actually own the assets they are leveraging... These IPOs smack of another dotcom bubble, this is exactly what was happening in 1999. The only issue is we also have exactly what was happening in 1987 too. Glup!

Don't know if you can access this without a registration for Hedgeye (it is free to register and then you get the emails direct) but it is a simple message: slowing earnings = bad for stocks. We have slowing earnings in the US large caps and the expectation is for this to continue. At some point we reach the tipping point, some people think it will be this Autumn. It is a fact that most major down turns on stocks occur in the Autumn months (both the initial turns and the subsequent crashes, which can take a further year or so from the initial turn. Interesting take on the GM strike. https://app.hedgeye.com/insights/77838 See also this local article that summarised the strikers position. Notice this is politicised in an election year. It is about the gap between rich and poor. It is about the unresolved blame for the credit crunch and the subsequent bail out of Wall St, which is why Trump got elected in the first place but the Democrats are the ones all over this in a bid to take back their traditional base. https://eu.freep.com/story/opinion/2019/09/24/uaw-strike-workers-gm-dingell-debbie/2432795001/ If you are looking for a Black Swan look no further... Oh and the Trump impeachment debacle or course. Makes China trade talks a sideshow...

The Yen joins the anti USD party with a failed retest of the channel breakout zone. break of near term support will be key. Will the Nikkei follow?

Interesting historic relationship between a Repo crisis and a major markets event...

DX looking bearish.