Mercury

Hindsight is 20/20 as you said before @dmedin So the question is, if you were going to trade the SP500 now, do you buy and hold? Buy and hold sounds like an investment strategy to me rather than a trading strategy, albeit that as a longer term trader I do hold positions for some time if we are in a strong run. As a swing trader, which is mostly what I am, the play was to buy after Christmas (which I did, after cashing my shorts on reversal signals) and cash out in early May (I actually cashed earlier than that, which was a mistake). Then buy again in June and cash out and go short in July, I did the latter not the former. If you bought the dip in June and held you would have been stopped out on the July reversal. I have posted recently elsewhere that I went Long on the strong pull back after the reversal rally in early August and have swung successfully a few times so far and am now Long again but this is all tactical for me as I believe the odds favour an end to the Bull sooner rather than later. Unless there is a confirmed breakout rally buy and hold will not work. Typically traders do not buy and hold anyway. So net, trading is not as simple as it seems in retrospect and other than when we get into long strong wave 3s or Cs (trend following territory), swing trading is a better strategy than buy and hold. It is also worth noting that the markets tend to spend more time in consolidation phases than strong trends, hence swing trading is more often than not the right approach. A trading strategy will have an exit as well as an entry part to it, even if this is something as simplistic as a trailing stop, which I never use myself. In order to make a profit you have to cash out. Buy and hold is not a trading strategy and for my money, at this part of the cycle, it is not even a credible investment strategy either. Various market greats, such as Buffett for example, all say 2 things (they say many things but they all agree on these 2 at least): Buy low/sell high (reverse for Shorts naturally) - you have to sell to make money (outwith dividends of course) Don't lose money - this is about money management and risk management Crack these 2 simple concepts and get control of your emotions and you can make it work. Fall into the trap of retrospective recriminations and false lessons learned and you will not succeed.

Small 1-2 done, followed by the expected rally away. Just need to see a break of the overhead resistance zone (previous Wave Aor1 green top) for the next phase to be confirmed, a wave 3 (possible wave C) off the wave Bor2 (Green) end and turn. If it is to be a wave C it could still offer up some whip saw price action so care with stops is needed for me. There is also a possibility of a strong wave 3 followed by a deep wave 4 that overlaps the wave 1 (blue) that is synonymous with an ending channel. So unless this is a resumption of the never-ending bull story I am expecting more whip saw and difficult trading environment. That said we may see a sharp move up to the ATH area and a slow consolidation dome top before a resolution without any further significant whip saw. For me it is all about getting the signals as to whether we will see an end to the Bull soon or a break through to another strong rally.

An interesting possibility occurred to me as I watched price action on Brent. Could the retrace be a larger one that will run up to the Fib 62% resistance zone off the blue wave 2 turn? There was PMD at the wave 1 (green) and again at the wave B (light blue). The waves currently fit a complex retrace with each wave having an A-B-C form. This is not synonymous with a motive (larger trend) direction or a trend change so at present I am leaning towards the larger retrace to about the $63 level rather than a longer motive rally. A turn below the wave A (light blue) and drop below the wave B (light blue) may negate this but that doesn't seem on at present.

US large caps seem to be following a complex (lots of whip saw price action) road map. Still inclusive as yet but a potential A-B-C retrace (brown 1-2) could be done at the Fib 50%, similar on other indices. Need a break of overhead resistance to confirm but it is looking promising for a bullish rally phase. If stocks do rally I wonder what will happen to precious metals... Will probably get a small 1-2 bearish retrace prior to any major rally, this could be a signal to watch out for.

USD took another small leg up to the Fib 76/78% zone (mirrored in EURUSD) and then turned around US markets open on NMD and overbought oscillators. Retrace is a descent A-B-C, lets see if this one confirm with a sharp drop away.

Can't quite see the time frame on the chart pic @Mthivele, might be worth trying to post a saved chart rather than a pic. As you suggesting a break down or up here? Are you suggesting s short term move or a longer term breakout? This isn't a market I look at and there is insufficient historic data for me to get a long term view here but from the daily chart it looks like we could be seeing a V bottom that, if it breaks above the top of the V, would be a good Long. This is consistent with AUDUSD, where I am anticipating a similar situation. That said, the Yen looks like it may stage a rally vs USD (down on USDJPY) and that is my long term prognosis BUT we could see a medium term rally in USDJPY if stocks rally. All in all not a clear picture to me but as I said I don't look at AUDJPY. Thanks for posting the idea though, let's see how it plays out.

This pair has just completed a wave 1 down (1-5 form with a nice pennant in the middle) and has turned up sharply on GBP jitters after a brief fakeout of the daily chart lower channel line. There was PMD at the turning point and now I would anticipate a retrace move to wave 2 (brown) in some form of A-B-C pattern. I am targeting the fib 62% resistance zone initially but may update as price action progresses.

2000 really...

Didn't feel you were @dmedin, just pointing out that these calls are often all there in the threads, just maybe requires a bit of work to get into the back threads.

If you have the patience and don't feel the need to be "in the market" constantly @dmedin then trading the breakout is the way to go in my book. This is why I focus on longer term swing trading, although I like to spot the trend change early and get set up earlier than the breakout to create a base from which to pyramid a breakout move. If this is the move I have been chasing all this time then I will be in good shape. As to whether this is a counter trend trading opportunity or not, my view is yes it is but it is a significant one, a major retrace potential. That said there is a view out there that EUR in particular is due a big move. I still think USD will go bearish for a while but will rally hard as a safe haven in due course. How to decide when this might be is what the recession watch stuff is all about. Quite apart from it being an obsession, as some have suggested, it is, to me, a sensible thing to keep a weather eye on. In fact I would say to ignore it and trust to the never ending bull is obsessive, but that's just me...

Not that I am an expert on Gold @dmedin, I am not, but I have been calling this rally since before the above post. This was when to go Long. Now there is a tricky choice between buy the dips and wait for a significant pull back (this is more than a dip). I am in the latter camp.

That is a reasonable strategy right now @dmedin but if it is right for stocks indices then generally it is also right for individual stocks... The uncertainty that abounds right now should at least warrant caution, in all assets frankly. Until things resolve more generally there are no one way bets.

GBP looks to be leading the way against USD. The daily channel resistance trend line was reached and rejected initially but now price is making a second attempt. A breakout here will be significant I feel if it is with some strength. Ideally would like to see EUR and possibly also JPY do something similar.

Time to reprise the USD outlook. The Fed (minor) rate cut and Jackson Hole is now behind us and serious market players seem to be holding fast to further Fed rate cuts this year (maybe soon) and/or other policy actions, which they believe will trigger a response from other CBs (although many seem to hold that this will happen regardless of what the Fed does). The general zeitgeist seems to have it that USD will rally as wider economic issues persist and deteriorate and/or the US economy and currency is the least worst. Also in a currency war situation the same people think the USD will be the go to currency but on the other hand the Fed has more room to play with. Some people are holding fast to the Donald factor in an inane view that his tweets are the key driving force in the market, good luck with that one, and/or that we will have a China/US trade deal soon, good luck with that one too... You can tie yourself in knots over all the whys and wherefores, which is why I don't worry too much about it. So long as price action is making sense to me in terms of the technical road maps, and in terms of the fundamentals, I don't much care what triggers a move, just need to watch out for volatility around key calendar dates. I guess the Fed and US NFP remain the key 2, as they have been for a long time now. Will bad news remain good for stocks? Don't care at this point. What I am seeking is confirmation that the USD has turned into a long awaited bearish phase. Let's look at the charts because the only thing we really have to work with here is price action and maybe other things like momentum and volume if you are so inclined, have the data and the skills to read it. For most of us it remains price action. On the weekly chart it is clear that USD (or at least the DX basket) has been moving up steadily but not in a definitive manner since early 2018 off a floor created at the beginning of 2008 (the credit crunch). There is strong NMD at the recent turn, which occurred at the top of the channel (or triangle) and in close proximity to a down sloping trend line, that may be a large scale Flag (i.e. a way station on the route to much higher highs). The junctions of such trend lines are often strong areas of Support/Resistance and so it appears to be in this case with a weekly pin bar and daily chart spinning top type ending candle. However price does need to break through the lower channel line to confirm a bearish move in the medium term. On the daily chart you can see that price dropped fast from the spinning top turn to put in a wave 1 (brown). On shorter time frames you can see that this bearish drop was in a classic 1-5 wave from. After that we saw an A-B-C retrace to wave 2 (brown) just short of the Fib 76% zone. On the 1H chart we can see this wave 2 (brown) in close up, the turn occurred with NMD then broke down through a short term channel before rallying hard to put in an effective short term double top (second one was slightly lower) and then dropped again through short term support. Price has since rallied to test and fail at that short term support (now resistance). So now it just remains to be seen whether price drops away from here or retests and resumes it bullish journey (or puts in some further consolidation indecision ahead of the next Fed and US NFP). For me the outlook looks bearish from here, just need the price action signals to confirm.

I think you are right @elle, just not now, later when USD really kicks off and it wont just test that area it will cut through like a knife through butter. Aligned to you recent Yen comment, I don't see Yen strength without USD weakness, unless, I guess, we get a bout of serious stocks bearishness. In that case though I would also expect USD strength. We will know soon I expect...

Agree @elle, that is what I am seeing too.

Gold and Silver looked to be running away with themselves in a bullish surge yesterday but as stocks picked up momentum the other way and the USD also did the same the precious metals suddenly got an attach of the jitters and couldn't manage a breakout. This seems important to me and if next week does reveal a stocks rally perhaps we have seen Gold/Silver top out for now with another failed assault on key resistance. Late price action was bearish on Friday. Remains to be seen and of course no once can rule out a breakout next week, which would be a Long trading event in my opinion but I am minded to expect a pull back from these levels and a significant retrace to prime the pump for a later surge and breakout. On Gold the obvious retrace end would be a failed test of the long term neckline (circa 1360), a recognised important level in the past by professional traders and money managers. So what I am looking for and trading next week is as follows: Continued USD bearishness, probably after a bit of a relief rally but I wouldn't expect much - I am long currency pairs against the USD Stock indices bullishness to complete a wave B and turn into a strong wave C but watch that whip saw price action medium term Gold and Silver to go bearish for a time Let's see, could be an exciting and profitable week/month if my USD turn has finally arrived. Have a great long weekend those of you who are on it.

So stocks did indeed drop, despite a great bullish effort to stage a fight back yesterday. A while ago I suggested I was looking for a lot of whip saw action as a telltale signature of a Bull ending phase. We are certainly getting that at present but there is a ways to go yet I think. If the move down yesterday is to be a Wave B it must turn soon and whether we see fresh ATHs on US large Caps or a retrace turn remains to be seen but the more of this whip saw price action we get the more I will be thinking about the latter rather than the former. And almost certainly this is true for non US large caps. So I see 2 lead scenarios, other that either a rocket to the moon or an express elevator to hell when we open up again next week, as follows: A rally up to a wave 3 and then strong bearish drop to wave 4 that goes lower than the wave 1 high (that would be the mid Aug high (1rA green). An ending channel in EWT can have an overlapping wave 1 wave 4, usually this is not valid but is is a signal of an ending phase. A continuation of a series of A-B-C moves that ends with a lower high top and turn - resulting in the mid July highs (later for SP 500 and Nasdaq) being the final top of the Bull So either way we are set for a lot more whip saw, in fact this is important to see if you are seeking evidence of the end of the Bull. The road map in my chart is simplified, showing the prevailing direction only and not all the twists and turns. It will be hard to trade is my guess and will take much longer than my chart is showing to resolve, maybe well into the Autumn. Personally I see better and safer trading opportunities elsewhere. I might take a cheeky Long to stay interested.

Didn't see you post until just now @dmedin, don't see the Yen as any more manipulated than any other government backed currency and don't get me started on crypto manipulations (think Ponzi!). As I mentioned somewhere else regarding manipulation, except for artificial pegging (e.g. Swiss Franc to Euro), I ignore reports of manipulation as this is endemic in all markets, financial and otherwise. This is about human nature; I use technical analysis to assess the impact of this human nature on price action and trade triggers according to my methodology. In recent times USDJPY seems to have been inversely correlated to stocks, which is not unusual if the Yen is acting as a safe haven, and with stocks taking a tumble it is not surprising to see associated Yen strength. However what would happen in a period where stocks rise while the USD falls? Would USDJPY fall or rise? It seems clear to me that USD has broken lower i a long awaited correction bear move. This needs to be confirmed with some lower lows but for now price action is heading this way. Based on the technicals and price action I see USDJPY as in a bearish phase. A break lower past recent lows would be needed to keep this scenario live and there is some longer term support to get through but once it does there is nothing much to stop this pair hitting 10000 and if this doesn't hold then the right had should scenario I outlined in the previous post would surely be on. I don't see this pair rising again until the USD bearish phase is done and there is a flood back into USD in a flight to safety that overwhelms markets. But that is some way off. It is most likely that this flood will not happen on the first stocks (and not just stocks) top put and drop but rather on the major drop which would come after a relief rally. Even if stocks do keel over this Autumn, as some are predicting, it may take 9 months to a year for the drop and relief rally to play out. That puts us in Autumn 2020, which is about when a recession may get officially called and hey presto, mega crash (wave 3).

Update to the above as follows: Looks like that retest I was looking for did occur and failed sending the market down to make a lower low so far yesterday. Hard to say this is a correlated move with everything that happened on Friday and on the weekly chart there is still plenty of support just below where price currently is so could easily get a bounce, maybe to retest the flag line but the classic road map here is for price to drop through to the next level. This would mean a test of the long term supporting trend line and this would be quite instructive in terms of which resolution to the over exuberant Bull we will get. 3 scenarios: Deflationary recession - copper drops through the support line and reverts back to mean/normal levels Inflationary - flight to "real value" - copper soars The central banks and politicians get their way and crazy policies become off the charts mental and copper soars like it did in the 2011 rally Honestly can the market really buy the never-ending story again? I don't so recession but which type? Copper might just be the tell.

Just updating this older thread for my post on the supercycle thread. Interesting analysis @cryptotrader but not quite sure what to make of it. The individual commodity patterns are not moving together, sometime Oil peaks around the aggregate top and sometimes it is something else. I am not convinced that all commodities move alike, I think agri and livestock has very different drivers to base metals and Oil. Also looks like they have lumped precious metals in with base metals, which is not correct in my opinion as PMs are a separate category (Silver is constantly argued on that, is it a precious metal or a poor industrial metal? The price charts say PM so that's that for me). I can't speak for agri and livestock, I only know that things like coffee and rubber are too cheap for farmers to earn sufficient income to keep them in the business. Others may wish to chip in on the discussion on agri etc, but to me Oil does appear to be bearish, although there is a case for a short bearish phase followed by a strong rally (See chart below). I have previously shared my bullish stance and analysis on PMs so won't reprice that again here. Copper is an interesting one. I am seeing a bearish phase in progress and it could breakout of of long term support into a massive deflationary bear move, which would align with a major deflationary recession. Alternatively, if the recession (which is in my view a certainty, just a question of when the markets crash in recognition of the fact we are already there) is mostly a financial one (i.e. Central bank policy and Fiat money printing driven) then we may get a flight to safe haven of "real things", in which case it will not just be precious metals that appear precious. This will be a hoarding mentality that could also drag other necessary commodities like agri up too. In the end I prefer to look at each market and decide on its intrinsic merits rather than trust to notions of commodities as having a group effect.

It has been very common @dmedin for people to look at director share dealings over the many years we have had listed stocks. All the major stockbroking platforms have recent director dealings detailed on the data sheets for listed stocks. Not sure I follow your point re being a big shark or not with respect to this, most company directors are not big share dealing players. Maybe after we get to a reset system the powers that be will finally figure out that tying professional management (as opposed to owner entrepreneurs) to share prices is a recipe for the accounting corruption have seen in the past, may be seeing right now in GE, and probably the disaster that is share buybacks yet to unfold. For sure the failure rate of major M&A to add any shareholder value (in fact the opposite is the norm) at the top of the market lies in this need to boost share prices for personal greed motivations. All we can do is be aware and profit from it if we can or stay away. One thing that I did spot in the article link was the following https://uk.finance.yahoo.com/news/hereby-order-trump-mocked-highly-183918544.html Now that is pure comedy gold! However on the more serious side, how do all dictatorships start... Imagine a a world where the US was run by a religions conservative megalomaniac? No wonder Margret Atwood decide to put out a sequel to her famous book so long after the original was published... Dark times perhaps #(insert whatever it's all drivel)

Yeah, same on the US large caps. Coming up on potential wave B turning points there and Gild/Silver are at key resistance so if there is to be a turn it could be last thing tonight of first thing Sunday.

Like I said before, it's all about the dollar, bout the dollar, bout the dollar. At present, assuming this is a sustained USD turn, who knows these days really, all key USD pairs are retracing hard. I expect that to continue for the rest of the Summer and into Autumn. Cue excessive central banker currency wars and related whip lash on stocks etc. FX would seem to be a safer directional bet now.

Look out for a twist in the story before any bull rally @tehka, there may be more whip saw price action to come on the US large Caps and European indices yet before any assault on fresh ATHs (or failure to make it). Personally, I would not go Long until I saw a clean break through overhead resistance and would not go Short until I saw a break of the long term supporting trend line (purple line in my charts). That said, If I saw a good technical retrace bearish move turn back up, say around the Fib 76/78% with other indices doing likewise I might be tempted to a close stop Long there (i.e. further down from where we currently are). Once again thanks for the post, it's nice to get some actual trade ideas coming through.