28 June 2016

EUR/USD : Better Short Than Cable

  • Attached EUR/USD long term (monthly) chart. Very bearish formation, mega top formed, neckline (1.2120) broken, currently in a triangle consolidation holding pattern, awaiting developments to drive an eventual downside break towards the historical all time lows. Yuuuge trade in the making.
  • Chart is telling me that Brexit spillover effects (into EU) will be bigger than Brexit itself. Selling cable itself is not necessarily the best Brexit trade in the longer term. Shorting EUR/USD will be the better trade eventually.
  • Triangle boundaries for this month are at appx 1.16 and 1.06. Would appear to be quite a few more months before a triangle breakout trade occurs. Must monitor this.
  • EUR/GBP chart does not suggest the above conclusion .. yet. 

Gold : Chart Update

  • Long GLD ETF at 1097 equivalent, took some profit at 1308.
  • Longer term, expect gold to trade much higher by sheer force of fundamentals. But immediately, expect strong resistance at the downtrend line around 1360-1370 [high on Brexit results day was 1358]. Market must be very long by now as every analyst and his dog seem to be saying to buy.
  • This is one for patient periodic accumulation on large dips.

Brexit 2.0 : Iceland National Football Team

GEZ7 : Chart Update - So Far So Good

  • Pleased to report that position/risk sizing was spot on, thus enabling me to survive the pre-/post- Brexit huge range [98.90 - 99.27] day on 24Jun16 with long position intact.
  • Managed to take profit on half of position at 99.24, and re-established at 99.13. So, still long 100% deep in the money.
  • Triangle strategy is going well. Target 99.47, which is below current 3-mth Libor [0.6271 fix yesterday] ie triangle is seeing a Fed rate cut ahead ie much more drastic Brexit fallout to come.

11 June 2016

GEZ7 : Upside Triangle Breakout

  • Closed the week at 98.99. Fresh upside break.
  • Breakout point = 98.92.
  • Triangle points = 98.61 and 99.16 ie objective 55 tics.
  • Upside objective = 99.47. That's massive.
  • Daily chart (not shown) at upper end of rectangular consolidation so this may not perform immediately. Unless we get unexpectedly bad news to drive a strong leg up. Must be patient.
  • 75% loaded up on long ED risk.

04 June 2016

GEZ7 : Pre- Triangle Breakout

  • Been dabbling with this quietly on the side for the past few months. 
  • Pre-trade : managed to buy 1 risk unit at 98.705 last week, purely bottom picking on flimsy gut feel.
  • Missed trade : Thereafter, was paying 98.72 after market had run up for a bit. Emotionally ruing my lack of conviction and aggression in chasing (73 low). Objectively, it was the correct decision (no strong grounds to increase risk).
  • Real trade : Triangle continuation pattern apparent on chart now. Upside break point at 98.94. Mentally file aside the pre-trade with deep in the money stop. The real trade begins on break of 98.94 with 2 risk units. Shoot for 99.27 previous high as initial target.

08 May 2016

Bocelli/Ranieri : Nessun Dorma

Truly magical moments in sporting history.

01 May 2016

Gold : Consolidation Over

  • Since the 1285 high made on 11Mar, gold has been consolidating earlier sharp gains from the 1046 low.
  • Finally broken the 1285 high last Friday (1296 high, close 1293). Onwards and upwards from here.
  • Significant previous highs are 1307, 1345, 1392 and 1434. Expect at least a couple of these, if not all, to be taken out in the following weeks. Certainly we can call an end of the downtrend now. Hang on to those longs.
  • Partially makes up for missing the USD/JPY.

28 April 2016

Claudio Ranieri : My Hero

Claudio - I hope you do it. Thank you for the inspiration.

29 March 2016

USD/JPY : Getting Close

  • Trading around 113.70 currently.
  • Watchful mode here, attractive shorting opportunity akan datang. It will come, be patient.
  • Need to revise the parameters from the previous post. Think we can get levels closer to 116 to sell.

17 March 2016

USD/JPY : Confirmed Trend Reversal

  • Long term USD/JPY chart looks awful. SHS top at 125.86, NL 116.13, downside objective 106.40. Uptrend reversal confirmed.
  • Late making this post. Should have called this after Feb's closing at 112.68. Nevertheless, will keep a close eye on this and initiate fresh short on any rally towards the old neckline at 116.13. The market will usually always give you a 2nd chance on patterns such as this. Eg of possible scenario = frenzy on buildup towards next Fed hike.
  • Good risk/reward if can get set say, above 114, stop above 116, target 106.40. Patience and discipline required. If the market doesn't give me a good entry point and I miss the move, then so be it.
  • I think the Yellen Fed has cocked this up big time by starting the hike cycle too late.

04 March 2016

Gold : Daily Triangle Breakout

  • Right on cue, broke out after the requisite amount of time spent forming the triangle. Had feared that it might all fizzle out and limp towards the triangle apex but no, this one has not disappointed. Very pleasant indeed.
  • Am going to take some profits as we approach 1320. Short term tactical play only. 
  • (Anyone think move has anything to do with a potential Donald Trump presidency?)

26 February 2016

Gold : Short Term Plan

  • Daily chart shows a consolidating triangle.
  • Upside break of triangle (probably requires a close above 1250) should target somewhere around 1320.
  • Whilst long term target remains 1377-1479, it might make sense to book some profits if the shorter term triangle target of 1320 is reached (especially given that our average long-in price is 1097, would have been quite a decent run by then).

06 February 2016

Gold : Upside Targets

  • Assume 1046 low is the  low in place.
  • Fibonacci retracement levels from 1912 high of 2011 are : [38%=1377] [50%=1479] and [62%=1581].
  •  My gut feel is 1377-1479 is achievable sometime within the next 2 years.
  • Shorter term, we are probable going to break strongly above 1192 first before any meaningful attempts to shake weak bulls come into play.

Gold : Upside Break

  • Good strong weekly close at 1173. Details behind Jan NFP numbers (strong hourly earnings, UR below 5%) have led FX and Rates markets to price some Fed hikes back in, and yet gold was able to break higher. Good sign.
  • Updated weekly and daily charts on the right. Next resistance 1192.
  • See next post for bigger picture and upside possibilities.