Mercury

You don't trust anyone do ya? Serious thought I agree with you if we are talking about MSM opinion but when they are just reporting the facts then ok.

More bad retail news, it just keeps mounting up... Additional bad news for jobs and housing market embedded within this, US housing having topped out and started a decline phase. The notion that it is all down to a shift online is too simplistic I think and in any case, even if this was the cause, there will still be a recessionary knock on effect on jobs and tax take. No such thing as a free lunch, even thought the internet companies are trying to belie that but governments are waking up to this threat now, cue cut in online giants meager profits. https://www.bbc.co.uk/news/business-49654281

Possible turning point activated on Brent Crude at the Fib 38%. If this is a wave 4 (green) then the 38% is a good point for a turn. On the 1H chart there is NMD at the turning point and an A-B-C EWT count. Now have a small scale 1-2 that turned at the Fib 62%, again a classic point. Seeking a break to a lower low to garner further support, although we can never rule out a retrace at that point alas. Still a fast break into a wave 3 is what will really clinch it.

There is some chatter about buying the dips on Gold/Silver right now. It may turn out right, Silver has not yet broken through its daily chart supporting channel, although Gold may have. Even if it is not a buy the dip to higher highs it is likely to be a short term rally prior to further drops. The technicals on Gold (1H chart) look like this to me: The bearish move drop was in a 1-5 pattern (suggesting a change in bigger picture trend if we subsequently see an A-B-C retrace) There is PMD at the potential turning point last night There is a resistance trend line as part of a bearish channel that has been broken and has 1 failed retest so far Based on EWT I would be anticipating either an A-B or 1-2 retrace after a strong bearish move, especially on Silver, but after that a continuation of the larger time frame bearish retrace. So this is my lead and I am preparing to get Short again on a retrace turn bearish. I am also watching for a period of consolidation the breakout of which would be the tradeable event.

More pretentious perhaps? I mean traders like to think of themselves as trading rather than gambling. Then again investing is gambling too so... SB is just a vehicle. Investors have stop loss strategies too. The only difference is that leverage carries more risk obviously. Your thread asking whether SB is for mugs (or whatever the title is) hasn't really concluded but I think the question is wrong as mostly the thread seems to be about day trading. It isn't SB or CFDs or IG or whatever that is causing the problem...

Again fair enough but it is not ridiculous to be mindful that trends come to an end. Not all TA is geared towards trend following. Some is geared towards spotting trend changes. This is is the fundamental point about TA, you need to use the right kind for the circumstances. So if you are solely a trend follower you accept that you may get stopped out on a reversal and you may lose on any trades with a large draw down at the point of entry. If you are a swing trader you accept that you may get the turn wrong a few times before you get it right. If you do both you deploy different signals depending on whether you are in swing mode or trend following mode. I can only speak for myself but I only trend follow the EWT wave 3s. In the case of USD I do not think we are in the wave 3 sweat spot for trend following yet. I think the same thing for Gold/Silver. So I remain in swing trading mode until my analysis gives me wave 3 turn signals. This is about having a method you believe in but practicing it in a practical manner given the circumstances present by the price action of the markets and carious other signals you may have built into your method. So in fact in the case o EURUSD, I agree with your trend assessment BUT I think there will be a retrace rally before the next big leg of the trend occurs. I see the same thing on USD DX. I have backed this with fundamentals analysis whereby I do not see a major wave 3 (or C) rally on USD until all hell breaks loose on other markets. We aren't there yet. Really, for me, I don't see any other way to trade long term positions that marrying fundamentals and technicals. It is different for day trading scalpers, they have to figure out the prevailing trend on a particular day and trade between the S/R levels and avoid he whipsaw of sideways days. Typically they close out positions at the end of each day and do it all again the next day. Few carry positions into the weekend. It is a totally different kind of trading from what I do but they will also have their method. Question, if you do not have a method that involves TA of some sort then how do you decide to enter a trade; how do you decide on your exit points; how do you decide on stop levels etc etc? Investing and trading are related but different, although over the years I have come to the conclusion that technical analysis is useful for investing also, especially in helping with buy low sell high assessments. There are very many serious traders, money managers really, who use technical analysis. These guys manage billions. I would call them serious.

OK so that's a trend following strategy you are using, fair enough, but why 10340 was more my question and what happens at 10340? In terms of evidence for a rally, as you brought that up, (and not sure what you define as a "leap" higher) there is plenty about. First of all is the knowledge that markets don't move in one direction and that trends get broken. Look at any trend in the past and just before it hits a turning point and then reverses it looks exactly like what you posted. The trend is your friend until the bend in the end. In terms of specific signals: EURUSD hit a supporting weekly trend line with PMD and bounced up off it with a pin bar price action candle GBPUSD hit a weekly supporting trend line and an daily lower channel line and did leap higher, with a pin bar price action candle also, and then broke out through the upper channel line, where it now resides waiting for the next move AUDUSD completed a V-Bottom (EWT1-2) and then also leaped away higher, breaking back through the resistance level formed by the V pattern USDCAD completed a wave B rally and the dropped sharply. USD DX spiked off a weekly Triangle resistance line and a monthly down sloping resistance trend line and dropped sharply away How many more signals does a trader need to be at least aware that USD may be entering a bearish phase?

The FTSE 100 did indeed break out of its channel and then put in a decent retrace rally, that looks like a small scale A-B move to me. I now expect this market to complete a wave C (brown) down to a larger wave B (green) and after that we should see a strong rally to complete the overall 1-2 retrace. The Dax is behind and could be just about to break its equivalent channel. As with the FTSE there is NMD at the recent top and a clean 1-5 EWT count on the move up to that top. US large caps have all put in a top and an small 1-2 retrace rally against this. Crucial here will be a lower low than the recent short term bottom and if Dax and FTSE do drop then similar is likewise on US markets prior to opening at least. Price action on these indices will be instructive as to whether we have already seen the top of the Bull or will get another ATH. The strength of the move up so far suggests the latter at this point but the depth of any bearish move could negate that. Nikkei is also running an A-B-C pattern, more like the Dax and FTSE. Net I see this as a short term swing only and expect further upside rallies once this bearish phase is done but the next rally phase could be the final one.

based on?

How did you get on with this @Mthivele? Looks to me like it was indeed a V bottom. Now a small 1-2 retrace is out of the way the next question is where the wave 3 will reach. This looks to be based on AUD strength vs USD right now rather than anything to do with the Yen, which is in consolidation.

To complete the Triad picture, EURGBP seems to be setting up to hammer down in a wave 3, despite the prevailing MSM mood that GBP is going to reach parity with the Euro because of Brexit (sigh!). I want to see a break of the next support zone (circa 8850) and then I think the end of the initial wave 1 off the Pink 2 top might occur around the 8500 support level or below this. My assessment is for a long term Bear market against the Euro starting now.

EURUSD may have joined GBP in completing a small retrace and turned into a strong wave 3 but I can't rule out another leg down to the Fib 50% on this one and as I expect EURGBP to drop hard this could be a case of GBP rally while EUR lingers or retraces further. If EUR does rally from here then GBP must rally harder, which is what I have been advocating would happen on a retrace rally against USD with these two pairs so still EURGBP would fall. Longs here with a close stop below the recent low to guard against the extra leg down would seem to be the way forward.

Channel breakout looks to be confirmed with a short term retrace back to the breakout zone (horizontal support) and fast rally away. This on some UK economic data positivity but it was happening anyway. I see the small retrace as a 1-2 and now we should see a fast and long move to a wave 3 (probably consolidation around halfway) prior to completing a wave A (first part of the overall retrace move). If you have missed it look at EURUSD, which is lagging at present but will most likely follow GBP in due course. Other pairs AUD, CAD are also running hard, although in these cases I would be anticipating a retrace, which could offer a but the dip opportunity.

Only 2 charts of interest at the end of last week, which in my view show a clear (as much as anything can be clear on a price chart) turn into a retrace move. the strength of the reversals gives some credibility to the large scale A-B-C scenario that some few contrarians have been touting. This would totally fly in the face of the current zeitgeist for a major long term rally. But that is for the future. For now it seems that we can expect the retrace scenario rather than the consolidation scenario. That doesn't mean that is is down, down, down. Retrace moves can be difficult affairs to navigate so for me the choice is swing trade with care or wait for this to play out, assuming the long term Bull scenario is the right one. If a longer term Bear move plays out then getting Short in this early phase is crucial. One things does appear to be the case, we are seeing a profit taking sell off, which at a minimum should last a month or so until something new stimulates the market to decide its long term direction.

The end of the week brought what looks like a wave 1 turn, right at the last chance for the channel top and down sloping resistance trend line to act. A break of the lower channel line is needed to confirm this but we have seen a break of GBPUSD channel line and strong moves from USDCAD and AUDUSD (not in the basket). USDJPY is still in the grip of stocks so not yet responding to USD moves, although this pair has been overall more bearish the USD than others. EURUSD is the key driver here but it has been more reluctant to motor. My expectation for a short term relief rally in USD favour remains. Once this is done through I think we will see EUR really get going. My long term expectation is for a large scale A-B-C retrace on USD.

FX looks to have turned a corner and finally moved into that retrace rally, subject to a small retrace first, and precious metals looks to also have begun a retrace bearish move, perhaps to prime the pump for a much bigger rally to some but Oil has been dittering about a bit of late. Stocks have yet to reveal whether the perma bears are right this time or the perma bulls will get their way in the perpetual bull bias (or not yet story) being peddled. Overall I am interested in trading FX pairs against the USD and precious metals Short for the medium term (1-2 months) and staying out of stocks until thinks clarify as the whipsaw is too difficult to negotiate for non day traders. But what is going on with Oil? I have been thinking of the current move as a consolidation pending the next leg lower but there is another scenario that is consistent with my medium to long term view that Oil will go significantly lower. The fundamentals I have explained before but basically people with far greater market knowledge about Oil than I have made clear arguments for declining demand while supply is, unbeknownst to the general population it seems, increasing with reserves also much larger than previously though. I don't believe Oil will fall out of use or anything there are plenty of uses beyond power generation and vehicular fuel and anyway it will take many years yet for Oil to go the way of coal. So in the next few years it seems that falling demand will play a part but over supply is the key factor and OPEC are powerless to address this now with the advent of fracking. In the absence of a cartel control environment a more supply and demand competitor market is emerging, which is depressing prices. Recession would put further pressure on price as demand falls off further due to lower economic output. So much for the Fundamentals, if I look at the technicals then I have an adjusted set of parallel channels on the monthly/weekly chart, the lower of which has not yet been broken and in fact is offering support to price at present. I want to see a break of this supporting channel line and a failed test of the 5000 horizontal support zone to get really interested in my strong bearish scenarios. On the daily I now see that the current rally conformed better to a 3-4 retrace rally with the larger, prior, retrace being a flag formation. This would suggest a further rally phase to come to the Fib 38% or 50% levels off Pink 2 (4H chart) before a final drop to complete the wave 1 (blue), after which a wave 2 (blue) would be expected, maybe to a retest of the monthly channel line. The thing is though, if we do see this pattern play out then the market is likely to be a a final wave 5 (Purple) all the way to retest 1998 lows rather than an A-B-C. So the price action in the short to medium term will be very important to unpicking the scenarios. My feeling is there is a lot to play out and it will take some time for the final road map to reveal itself. Patience is the key for this. In the meantime if we do see that rally to the Fib 50% and a turn there then I would be minded to go Short on the basis that even a failed test of the 5000 level would be a decent trade and the chance of a much further drop is reasonably high. The first thing I want to achieve here is to figure out what the current move is and then that will help me make any trading decision. For now I will stay out and watch the price action.

When bad news is good news and good news is also good news you know there is "something rotten in the state of Denmark" Add to that the only significant mover on the US NFP data release being Gold and Silver and it is a head scratcher, if you follow news that is. I myself prefer to follow technicals and as such the rally is likely to be a retrace one after a 1-5 down. The turn occurred on PMD at a point of horizontal support. I now anticipate an A-B-C type retrace that will likely retest the channel breakout zone or the channel line itself. Probably this retrace will carry further back on Silver. After than the wave A bearish move would return with a wave 3. Rather than think of it as a missed opportunity, where any of my positions were stopped out, I look on it as an opportunity to get short with more certainty that the next move will be long and strong down. Might start end of play to day might start next week sometime, let's see.

Break through a ST support level and back below my monthly chart line (not particularly relevant at this point of course). If this carries on and is confirmed then the pin bar was a reversal and we should see a test of the next support level around $56. If that fails to hold then bring on $50.

Ok well today's move on Silver seals it as a retrace (or worse maybe if the Bear scenario is in play but I am ignoring that for now). The daily chart shows a follow on bearish candle as price rushes down to the lower channel line. What happens at this juncture will be telling. Gold is lagging, which is not atypical, but all things being equal, if both markets are in the same type of retrace move, Silver may have much further to go in this first phase to hit a wave A and allow Gold the time to catch up. If this hold and Silver breaks the lower channel with force then I think we are well into a very strong wave A that could carry to the Fib 50%. After than a strong B is likely before the eventual wave C conclusion beyond the 50%. This is conjecture right now but the strength of the bearish move must be building covering pressure on those who have loaded up on the big rally, hence the fast reversal on Silver and probably we will see something similar on Gold in due course.

So looks like my original thought that the current move is a 1-2 retrace was correct. The market has pushed up to make a higher high short term to get into the wave 2 territory and give us an A-B-C form so far. I had a tentative resistance trend line (grey) on which the price hit and rebounded back down in a pin bar fashion. This coincided with a zone of horizontal resistance, which in fairness is probably the more likely factor here. Key question now is whether or not this was indeed a reversal end to the wave 2 or could we get another test of the blue channel line around the Fib 38% (underside). One thing seems relevant to me, that monthly channel line, a parallel channel to the original rally channel, is being hugged on the shorter time frame charts. Overall my long term set up still suggests further downside before any rally and I feel a test of the $50 level is coming. A break of this level puts us firmly into a large scale A-B-C at a minimum but a further test around the $40 level could decide whether or not this is the right set up or will we see a much longer bearish phase back towards the 1998 lows. Unthinkable? The people who really know this market say there is too much supply. Supply and demand is the key dynamic for long term direction on commodities. Fracking seems to have changed the game far more fundamentally than originally thought. Reserves previously thought all but exhausted now appear to be huge, much larger than the previous reservoirs. The fundamentals for Oil do seem to be pointing to over supply and a shift to alternative energy sources long term. If true that means increased supply and reduced demand. All in the future that, the first questions still stands, have we seen a turn bearish or will there be another leg up; how common is that one..!

"If you can head, while all around are losing there..." Not to minimise the frustration at all, it was a difficult moment but it happens, accept it and move on is my philosophy. If you had stops in place that were satisfactory then no problem, IG will always honour that. With the system down there was nothing to do but take a break and clear the head. Regarding you suggestion on Gold I agree @tehka, a consolidation phase is a credible scenario for me also. Swing traders, like me, will tend to assume a retrace at this point for the following reasons: Typically such strong rallies get a strong retrace, unless this is the meat of a wave 3, which is possible but not, in my opinion, likely yet. The Top for Gold occurred at strong NMD, which is a signal of a retrace rather than a consolidation, less so for Silver but Silver acts in a different way to Gold in this regard, owing to the fact it is a smaller market overall I think The move down was sudden and sharp, again more synonymous with a retrace than a consolidation It is typical for a H&S neckline breakout to be retested, this would clearly only happen on a retrace From a Fundamentals perspective I only see Gold/Silver going on a major tear when the proverbial really hits the fan, which hasn't yet happened. My assessment is that the concern about the macro economic and political events has given fuel to precious metals, the fear factor if you will, but there will have to be actual triggering events rather than supposition for this to go on that tear, so now we have the opposite fear of not cashing good positions or worse getting caught with a good profit turning into a loss (who hasn't experienced that one..?) Professionals need to cash to make money for their clients so profit taking is a factor I cannot rule out a consolidation, yet, but have set out my stall to trade the swing here. If it doesn't work out then I get stopped out for no loss and I can trade any consolidation breakout. If the market continues to drop in line with my road map then some additional positions are possible but chiefly I will be looking for the end of the retrace to get Long when the big one comes. As I write stocks are rallying again and USD is in bullish retrace, not typically good for Gold, however I think you have to take these markets on their own merit rather than assume they are driven by other markets. Gold and Silver have had a good run but the market moves in waves and we are due a bearish retrace in my opinion. Let's see...

Well I for one would not describe you, or anyone, as an idiot for not knowing where a market will turn @dmedin. The best I can do is set out my road maps and follow the price action for clues and trading triggers as it progresses. I guess this is why they call it price discovery. The reason why I use a road map, based on technical analysis rather than fundamentals (which I do use for the big picture assessment), is to give me a frame of reference against which to assess that price action. I found in the past that if I do not have this then I get sucked into individual candle moves out of any context (emotional trading) or get sucked into short termism (day trading, which doesn't work for me). So to the question in hand, assuming we do have a confirmed bearish turn, which is looking likely now, the chief reasons for me selecting 1350 as my target are as follows: It is on the Fib 50%, a very common retrace level generally, and especially on Gold in my experience. It would result in a retest of the neckline of a long term Head & Shoulders formation. It is quite common for a breakout of such a neckline to receive at least 1 retest that on a failure would spark a massive rally (note it doesn't HAVE to get a retest and certainly the strength of the rally might suggest it will not get retested but a 50% retrace is common so...). It is also coincidental with a zone of long term horizontal support. This zone runs from about 1380 (so 1380 is a credible turning point too)to about 1340. Anything lower and we are I would flip to the Fib 62% zone and soon thereafter might be looking at longer term bearish scenarios. You also have to watch Silver for correlations. Typically I would be looking for solid turning zones on both. If we hit 1380 on Gold and Silver is not also at a solid turning point then I would have low confidence in 1380, although it will very likely throw up short term support, which could draw some traders into early Longs. Silver has a price gap that must be closed, unless it is a breakaway gap and I don't think so. This gap lies at the Fib 38% level. So we could actually see a turn here that would also result in an earlier turn on Gold. However the equivalent Silver LT support zone lies around the Fib 62% level and this makes sense as Silver typically amplifies Golds moves. In addition to all this, to have a credible retrace, we need to see an A-B-C wave form. If we hit the Fib 38s without this form I would be seeing it as a wave A. This means the Wave C would be lower and therefore the Fib 50% would be in play. So there are several potential road maps and A-B-Cs come in many forms so it is impossible to say where this will turn. As said my approach is to map out the various possibilities and follow price action for clues. Time and patience are the key here but it is noteworthy that you don't have to catch the turn itself, just identify when the trend changes back to bullish. If/when it does the next wave 3 will be massive. Note also that there are long term bearish scenarios being touted out there so nothing is certain in trading, as in life I guess. It is all about probability and money management. For me, respectful discussion help to assess these probabilities, especially with people who use different methods. Alas we don't seem to get enough of that on this and other forums where people seem to want to win an argument... So feel free to chip in, frankly your guess is as good as mine, or anyone else's.

Similar set up on Silver, no surprise there. We had a small overshoot on the upper daily channel line and sharp turn back today, very bearish candle so far (day is not yet over of course). Decent 1-5 EWT count but no NMD this time, not unusual with sharp rallies in Silver as it happens. There is NMD on the 1H chart though and now price is approach a short term lower channel line with the daily channel line still some way below. I would be looking for a retrace of similar proportions to Gold at this point with an initial target of the Fib 50% coinciding with the parallel channel lower line, subject to price action as Silver can run harder than Gold.

Possible turn in Gold and Silver in the making. Gold has hit a lower channel line off NMD at the turn. Looks like a clean wave 1 or a larger rally to come but, if the break is confirmed, we should see that retrace I have been talking about. For swing traders this is about Shorting the move, but watch out for the wave B. For trend followers you might want to check your stops and prepare to buy the eventual dip. There was a Pennant that marked almost exactly the half way point on this wave and gave be a great hint at the potential top where we got it (if confirmed). I am targeting a large retrace, maybe back to the original neckline breakout at circa (1350). However we may only see a consolidation phase, in which case buying the breakout Long on that would be the play.

Not a big fan of MSM shows but there are a few interesting point within this clip including: Watch the Russell as a leading indicator for large caps, which is something I do S&P500 gets cut in half in a recession Once we see that we are actually in a recession it is too late (contra argument to the don't panic boys who say things like an yield curve inversion MAY be a year and a half ahead of an actual recession) Oh and BTW, maybe the recession will happen sooner, especially if the current bull is asset price driven, which it is... If markets start to fall the wealth effect will be negative There are some "it all be alright folks" comments too so not at all one sides.