Mercury

Very interesting indeed @Caseynotes. I was at a talk on Gold a few years back when a fund manager, who was pro gold, suggested that the following 3 things needed to be the case for a Bull run in gold: Interest rate back drop unsettling - tick Gold rising in all major currencies - is in USD but not sure about others... Beating the Stock market (SP500) - maybe about to be tick?

Looks like the breakout of the extended consolidation Triangle is down then. Is this the end for Cryptos, at least in the current guise? Is it a precursor of a cascade across most assets classes with Stocks also under pressure?

Mentioned Silver just now in the context of USD. Precious metals seem to be following USD at present and regardless of that the technicals are suggesting a retrace prior to a more significant rally. Same but smaller on Gold I think. If we do get this retrace and a bounce at a good support zone and then a fresh higher high this could be a nice Long trade. A retest of the breakout zone would offer a close stop (low loss potential) Long IF the nature of the price action is consistent with a retrace and not a plunge lower. Ideally you want to see the bounce first but it could run fast. May take a while for this to mature, patience is required.

After initial bullishness the Europeans have turned bearish in the run up to the US open. Perhaps they are tired of being slapped back down by the Yanks? I wonder whether they will have it wrong again? After a long period where European markets have been more Bearish than the US markets (not putting in higher highs as the US large caps did) the do seem to be agitating for a rally now but seem jittery. Will the pile in if the US large caps rally or stay depressed and divergent from the US?

So is that long term or short term bullish @cryptotrader? How do you think you will play it?

Silver makes a fresh low beating the 10 Sept low and then immediately rallies out through a short term ending diagonal channel. I would expect a small 1-2 retest of the channel prior to any major rally but aligned to the strong Gold breakout from support consolidation the odds are good for a strong rally in Silver.

Gold breakout into a rally from Daily channel breakout retest & support zone. If this is sustained then it supports a stocks Bear.

Retrace rally looking more likely with an hourly candle close inside the Daily channel. However I would like to see a small bearish retest of the lower channel line and rally away OR a fresh lower low and rally back inside the channel to be more comfortable. Ultimately for me I will not be comfortable until I see a breakout of the upper channel line, at which point I will be watching the price action on the retrace for a turn point back into the claws of the Bear. I am preferring counter trend rally Longs on EURUSD to Oil at present.

Adding a bit of weight to a potential Oil rally scenario is the possible bearish move beginning to muster on USDCAD (see separate thread).

Again agree @Caseynotes, it is interesting that the direction of this thread was teed up by @PandaFace asking about a potential Long set up and then @TrendFollower pushing a Short idea. Hopefully PF took a pass, I think he said he did, if so score 1 for the value of the Forum when discussing actual trading ideas (we need to do more of this! Don't be shy, just ask the question. Doesn't matter if we use different techniques, in fact that is a plus!). And in essence both PF an TF can be right, it's just a question of timing. As for me, as shared already, I am planning for a strong retrace, which PF may care to trade Long. Such a Retrace may allow TF to get in Short at a better price if he wants to take the next wave down. Regardless of whether this is a major trend change (resumption of the LT Bear trend) or a retrace prior to a major rally the next wave down will be much bigger than the one we have just had. Previously I outlined 2 rally scenarios and could not decide if the past 2 & 3/4 year rally had topped out. Given the strength of this bearish move (and other technicals) I am now confident (90%ish) that we have seen the top and only one 1 scenario remains for me, that retrace and then push lower. But let's not get to far ahead, we need to see the current move bottom out and a confirmed turn first.

Agreed @Caseynotes, you gotta have confirmation or it is very high risk. I don't mind taking a punt on a turning point with close stops where that makes sense but when it is counter trend, as this is likely to be, and with such a strong move, we cannot know where the retrace will start until price action reveals it. In the case of Oil I can easily see another leg down short term, although I suspect the big drop is over. I have noticed over the years that a first move of a trend change, especially a Bear move, often ends with a powerful push that exhausts the move, which then promptly reverses until it finds a strong momentum to sell again. I think this is what we will see here. IF we do I think shorting the retrace is a great move, and Fibs and Levels can really help identify where that optimal retrace peak will be (subject to price action confirmation as always).

Finally a training video that makes sense, probably because it is from a real pro trader... Nice one @elle Way too much technical stuff for my taste, would never try to replicate that but I love to see others matching my set ups with different approaches. His balance points don't quite work for Brent but there are others that do. Like the guy on the video I would not be catching the falling knife, unlike him I do not day trade so will not be looking for the Long on this one, thought I believe there could be as much as a 62% retracement on offer. I would prefer to only play the Short side of Oil as I believe this to be the big picture trend. Right now we are getting a bounce and maybe a return within the daily down channel, which, if it sticks and rallies, would mean yesterday was a false breakout and overshoot. Let's see...

I would suggest that, like yourself @TrendFollower, others were focused on different markets. For me Oil is a difficult market with a few very big players who can influence direction with their trading. I'm not saying they are doing anything nefarious but merely that when they change direction en mass you get very fast moves. I can only speak for myself but I think there is much better potential in shorting stock indices (far further to fall in points terms) and going Long on safe haven markets such as USD, Gold and Silver. This is my strategy and the main reason I am not interested in Oil. You have to focus otherwise you end up spread too thin, miss out on good opportunities and just plain misread the markets price action. Regarding downside for Oil, I think will go far further than $50 because I think the long term trend is still down not up. If I am right Fibonacci retrace will give you an incorrect reading. Time will tell the tale as always.

Breakout rally was curtained and the pair put in a new lower low (marginal but still lower). Now testing the LT Triangle lower line and the Monthly chart FIb 23%. I would not trade a Short here until I got a confirmed break on the Weekly chart. An unclosed price gap remains above and both GBP an EUR have been rallying of later. Remains to be seen but my set ups still show EUR as having more distance to rally. I will continue to watch EURGBP for clues for the primary pairs and for a potential Short campaign.

Silver is at an interesting juncture that will surely tell the tale of precious metals, "as goes Silver, so goes Gold". As suggested previously, Silver seems to be in a trading range consolidation phase. The point here is not to trade within the range (strictly for day traders that and very precarious on a market like Silver). The point is to trade the consolidation breakout, always being mindful of false breakouts. To recap, my Fundamentals assessment is that precious metals are due a rally after a significant bearish retracement off the commodities high of 2011 (Gold made it to the Fib 50% - significant for Gold but Silver put in a touch on the Fib 78%). Both of these retraces were halted around the LT support trend-line and rallied away into a EW1-2 and then a smaller 1-2 in the case of Gold. Stocks are under pressure, flight to safety will be to the traditional places: USD, Gold, Silver (possible Yen but not so much I think). Silver has now retraced to potential double bottom with the last major bottom (my purple 2 - Daily chart @ 1,390 ). A break below this would call a rally into question. A break below the 2015 low at 1365 would be bearish. Because my big picture Fundamentals and analytics are bullish my bias is that Silver will not break low. Stocks are turning and may have topped out. USD is rallying, although I can see a short term drop on USD, which would also help push precious metals into a rally (at least short term). On the hourly chart I have a potential ending Triangle formation into the wave 2 retrace turning zone the second part of the potential double bottom). The move down confirms to an A-B-C retrace pattern. There is a small gap on last nights close and reopen, which likely needs to be closed before a rally. Key point to consider a Long would be the breakout from the Triangle. I have PMD on last nights close but am wary of a breach of the previous low 1390 as this would give pause for reassessment. I have stops just below the previous lows.

AUDUSD looks to have completed the projected retrace move back to the breakout zone. Always a chance that there will be another retest before it rallies away. I am not trading this pair but it looks to be slightly ahead of the others so useful for correlation.

GBPUSD could be breaking out of a down channel after a retest of the original breakout point (as projected by my road map). AUDUSD looks to have already done so over night and possibly EURUSD is moving to join. Can't rule out another leg down just yet so stops below the 12,800 mark if you want to give it some room.

Well @TrendFollower it is not all that hard, once I have a market fully analyses it is just a matter of keeping it up to date with emerging price action (including reassessments when indicated). Regarding success rate, the analysis is about improving the chances of being right on a call and therefore on trading but the latter is more a matter of trading discipline than analysis. I find that I tend to lose when I do not stick to my rules/systems, and in particular when I get attracted to short term price action. What I can tell you is that when I purposely look to trade counter trend (as with the EURUSD recently) I am very tight on stops in case I am wrong/too early etc. In that example it proved to be the case but I only lost about 60 points in that whole action, which I am more than happy with, considering the potential gains on offer. Naturally the trick to it is executing well not just being right on the analysis. However I start with the analysis. I have to be right there or I cannot be right in my actual trading and that includes being right long term and with timing. My philosophy here is "if at first you don't succeed, try, try , try again." Speaking about oil, my big picture assessment is the same as yours (i.e. Short). I didn't trade short because I am not focused on Oil right now NOT because I am bullish or negative a Short. It is hard to call the tops of the market after all. One method my analytical method provides for is a trend change conformation with a significant retrace of the first wave off the turn. That is one of my 2 scenarios. My trading systems is built to seek these confirmations to trigger a trading set up. In this was I seek to maxmise the chances of success, while minimising loss exposure. But I cannot yet rule out another higher high, can you? Therefore I prefer to wait for more price action to help me make this assessment. I do not support a Long, except perhaps a very short term counter trend set up, which I myself would not take. So that is where I am and why, I too have been open about that... Also I have been open about the fact that I have not traded this market and why. You have been asking if anyone has Shorted Oil, have you? If so where did you decide it was worth Shorting?

So this market did indeed make a break for a rally through both the Triangle and Channel set ups but has been stopped at short term resistance and is likely to make a retest of the breakout zones before a stronger rally. With the Euro presenting weakness one cannot rule out a break through the lower long term support line (Weekly chart Triangle set up) and I am biased towards that but perhaps not just yet (time and price action will tell). For now, on the 1 hour chart, I see a retrace and retest of support. I also see that near term price gap has not yet been closed. Therefore my leaning is towards another rally through the near term resistance. If this happens then either GBP will be dropping faster than EUR or EUR & GBP will turn and rally but EUR faster and harder. As I currently see GBP (and AUD) rallies as more likely I conclude that EUR will rally hard, but need to watch GBP and AUD for correlation turning points and also this cross pair (EURGBP) for similar correlations and of course EUR price action. Trading strategy: My problem with trading EURGBP Long is that it doesn't fit my long term prognosis (therefore would be counter trend trading, which is inherently more risky) and also would be trading within a consolidation zone, which is fraught with difficulty and whiplash moves as Bulls and Bears slug it out. Therefore on EURGBP I will continue to watch for an indication that the long term Bear I am projecting is occurring to get Short and for correlation confirmation for EURUSD and GBPUSD.

While price remains within the Daily chart down channel I can find no trading set up (unless you are already short from the turn, then I would stick with that for now). I like to deploy a two part bet strategy in situations with such uncertainty as on Oil (and Stocks as it happens) just now. That is to say I would take profits on half my Short position at either a strong rally away from a predesignated support rally point OR, more particularly, on a breakout of the upper channel line (always watching out for the annoying false breakouts. I remain with my 2 rally scenario assessment so Longs only on channel breakout but if one were keen to take a speculative I would suggest that the recent price gap on the 1 hour chart should be closed before any strong rally. This would be consistent with my EWT count (current mini rally being a 3-4) and I would therefore expect a final leg lower to the bottom of the channel before a rally phase of any interest. If no such move occurs then the breakout through the upper channel remains on. Personally I prefer to wait this one out and see where the rally takes us and trade with the new trend Short, if and when that is confirmed.

It's even simpler than that surely? Price moves back to resistance after a drop and gets turned back down, go Short! If you are into Elliot Wave Theory, you additionally see a 1-5 down and A-B-C up to that resistance. If you are into Fibonacci retrace you may have taken a speculative Short at the Fib 76% even but if you didn't the above 1-2 retrace set up is the place to go Short. Anyway regardless of all that, if and when price breaks past recent lows and support levels there is likely to be an acceleration in the Bearish move. I will be studying the price action of any Bearish move and how the market reacts to key support to get any clues as to which of my scenarios is more likely OR whether the Bear just hammers on down...

I see something different @Caseynotes. The small retrace is expected after a major turn (if it is). Price action got stopped at small overhead resistance (fib 50%). A fall off from here is consistent with my assessment of a bearish phase. Also USD remains strong, not sure that will last but let's see.

AUDUSD turned at the first Resistance point and fairly firmly, which suggested to me that was the Wave A termination. I'm now looking to see if a potential Wave B will turn at the Fib 50% level, that coincides with the channel breakout point, or perhaps retest the actual channel line. A break through back into the channel will need a reassessment but for now this market is proceeding as expected and aligned to GBPUSD, although not EURUSD it seems.

The Gold/Silver retrace has been steady, after a Fib 76% rally turn, but has gathered pace on both towards the end of the week and both are now approaching important support zones. Gold in particular is heading for a retest of the 1,200 support zone, which is quite obvious on the Daily chart and coincident with the breakout of the previous daily chart bearish trend channel breakout. On the 4 hourly (and hourly) chart this zone can be seen zoomed in. It also coincides with the apex of the 4 hourly Triangle and the Fib 50% of the whole rally up from the 16 Aug pin bar turn. So the 1200 area is the lead candidate for this current bearish move to terminate but there is also a chance that the market moved down to retest the LT support trend-line, which is also at the Fib 62% (1190). There are 2 other turn zones below but I will look at that after I see how the first two do. Additionally Silver is at an important support zone so for Gold to drop to the lower zones Silver would probably have to break the 11 Sept low and if that happens all bets are off...

This pair did indeed begin a bearish move with a breakout of the ascending Triangle. At present this still looks to me like it is going to rally further in due course but for now I have too many scenarios for how this current bearish move will play out so I cashed my Short early and will await events. In practical terms I am more inclined to trade EUR as it is so low that stops can be very close. It is possible we will see a short term rally followed by another drop before a proper turn back rally takes hold. Watching for correlations with AUDUSD might prove useful as that market is showing an ABC type retrace rally, which ought to descend further before the final rally phase. EURUSD could do something quite different.