~~~~~~~~~~CANDY MATHESON: Blog Creator// Market Analyst // Certified Professional Life Coach~~~~~~~~~~~ ~~~~~~~~~~~~~PHONE: (807) 286-0563 (Thunder Bay, Ontario, CANADA) Mon-Sat--9am-5pm ET~~~~~~~~~~~~
With all the talk about the Euro this weekend, I thought I'd post a couple of charts on the EUR/USD. The first chart below is a Monthly timeframe. Price has not made a new monthly swing high since July 2008. Furthermore, the last swing to the upside that was made in November 2009 (1.5143) has not been broken yet, while a new swing low was subsequently made, instead. The trend is unclear on the monthly timeframe and price action could, in fact, be described as forming a potential broadeningtriangle (blue lines). The rising 50sma (red) is holding as near-term support since March of this year.
Price on the Daily chart below closed just below the rising 50sma on Friday. Price action has been forming a small downward sloping H&S since April of this year.
From a Daily and Monthly timeframe, it is unclear whether the trend is currently up or down.
On the firstWeekly chart below, I've added a regression channel. Price closed on Friday at the +1 deviation point of a downtrending channel (dotted pink line) and is holding above the rising 200sma (pink). On the second Weekly chart below, I've added the Monthly TPO Profiles...the POC is shown as red horizontal lines.
In essence, it could be said that on a Weekly basis, the EUR/USD has been (and still is) in downtrend since July 2008. Significant resistance is immediately overhead and it will be interesting to see whether buying will step in above Friday's closing price or not.
In Thursday night's after-hours action, the TF nearly hit the Blue Triangle Apex on my 4-hour chart below in a continued rally from its low of 800.50 set on Tuesday this week. The Apex level is at 835.80...price has also been swirling around this level since March 30 (it was a former Fibonacci confluence zone) and seems to be acting as a magnet. The 200sma (pink) and a 50% retracement level from the 872.00 high to the 800.50 low are also in the immediate vicinity of this level. The Apex level of 835.80 seems to be the "battle zone" between the bulls and bears...further confirmation is required to determine who will win.
Furthermore, the YM, ES, NQ & TF broke above their necklines of an IH&S formation on their 4-hour charts as shown on the chartgrid below. We'll see whether price can hold above the necklines or not.
Traders were able to eventually push price up sufficiently on the NKD to fill its gap that occurred right after the earthquake in mid-March. However, the buying stopped immediately after the gap fill and price failed to hold above 10000. Since last Thursday, a bearish Three-Black-Crows candle pattern has formed as shown on the Daily chart below. After a modest rally, price has now fallen back and is holding beneath the 50sma (red). A break with conviction below near-term support levels of 9420 & 9320 could prove to be problematic for this index.
The NQ has broken below its uptrending line that was part of the pink diamond formation on the Daily chart. After completing a Three-Black Crows candle pattern today, price is falling below the diamond apex at around 2285 as I write this in the after-hours trading session as shown on the chart below. The next support level is around 2250.
Further to my post (below) this morning, I would note that downside momentum continues to build on YM, ES, NQ & TF and price is holding beneath their respective 50sma's (red), although the RSI's are beginning to heat up a bit as shown on this Daily chartgrid:
I would also note that the TF has broken and closed below a Head & Shoulders neckline yesterday and today on the Daily chart. An eventual downside potential target lies at 754.80 as shown on the chart below.
Although I'm officially on holidays, I happened to peek at the markets this morning and have noted the lack of interest/strength on the buying side of YM, ES, NQ & TF so far this week. In my post on May 15 (Fibs & Fibs) I outlined potential Fibonacci confluence zones to the upside and the downside for the TF. As a reminder I'm mentioning the downside confluence target again of 800ish. That level would complete a downside Wave 3 pattern and possibly provide interim support for a Wave 4 rally...however, should a Wave 5 pattern subsequently ensue, then the next support level of 760ish could be in the cards. The 4-hour chart below shows these levels.
I'm on vacation now and will be back shortly after June 21. Before I sign off until then, I want to thank, firstly, my late hubby/trading partner for getting me "hooked on trading" and, secondly, my trading mentors/friends (you know who you all are) for taking me under your wing! I'm very grateful for your kind support, fun and wisdom that you've so generously shared with me over the months and years. I may have lost my soul-mate, but I've gained many friends in the process...I find this to be totally amazing, and it is a priceless gift to me! I wish you all safe trading and hope you make many happy memories along the way.
P.S. Here's how the YM, ES, NQ & TF closed on April-May's OPEX Friday. Each candle on the chartgrid below represents a one-month OPEX period. The following Pivot Points calculated from this last OPEX candle are now in effect for the May-June OPEX period:
YM = 12458
ES = 1330.75
NQ = 2341
TF = 836.90 (The TF is the only one that didn't close above its PP for the April-May OPEX period)
The chartgrid below shows Daily charts of YM, ES, NQ & TF with Volume Profiles shown for each OPEX period. The April-May OPEX Volume Profile POC figures are (red horizontal line):
YM = 12593
ES = 1332
NQ = 2367
TF = 843
The above PP & POC levels may play a pivotal role in determining a direction in trend for this next OPEX period.
In my post on May 8, 2011 ("A Diamond in the rough?"), I spoke of a possible diamond formation on the NQ Daily chart. The diamond was shown in pink on my chart, as well as arrows which delineated where possible support levels may lie. I'll give a brief update as to where the NQ is trading now relative to that formation. As can be seen on the Daily chart below, the price broke above the diamond and has held above the pink uptrending line that is an extension of that pattern, as well above as the apex which is around 2287ish. So far, the 50sma (red) has held as support as price has not yet closed below that level (currently at 2333). All support levels beneath today's closing price are still in effect, and today, the NQ closed above its last swing low set on May 5.
The next chart is a Daily chart of the YM. It is currently backtesting a rising trendline and is also holding above its rising 50sma. Additionally, it has closed above its prior swing low set on May 5.
The next chart is a Daily chart of the ES. It is currently backtesting a rising trendline and is also holding above its rising 50sma. Additionally, it has closed above its prior swing low set on May 5.
The next chart is a Daily chart of the TF. It is currently backtesting a rising trendline and is also holding above its rising 50sma. Additionally, it has also closed above its prior swing low set on May 5.
Below is a 60 min chart grid of YM, ES, NQ & TF. Price is trading at or below the uptrending regression channel "mean" on YM, ES & NQ. Price is trading above the downtrending regression channel "mean" on TF.
It remains to be seenas to whether all four e-minis will re-establish a Daily uptrend, or whether they will continue to chop within their respective channels. For now, the 50sma is holding as near-term support.
Todaythe TF closed back inside the BLUE triangle that had been forming since the beginning of the May Opt. Exp. period (as well as since the beginning of April...the 2nd Quarter) & just below the apex @ 835.80 and the 50sma (see 4-hour chart below). If price breaks & holds above the triangle downtrend line at some point, watch for the 50sma (red) to cross back above the 200sma (pink) and for price to hold above the 50sma on any further advance, as well as a re-establishment of a new uptrend. Otherwise, there could be more sideways movement (generally speaking) in the longer term between 872.00 and 813.10 as shown on the second chart (1-hour) below.
Just a general comment re:YM, ES, NQ & TF...for now the 50sma on their Daily charts is a tough level for bears to capture and hold price beneath. Even the NKD closed above its downtrending 50sma today.
The April-June 2nd Quarter Pivot Point for the TF is 817.50...this level was tested repeatedly overnight and today. This level may prove to be pivotal in either a reversal or a continuation of recent weakness. This level held when tested several times in mid-April...today's low pierced below the lowest low that was set during that time period and has now created a lower low on the Daily timeframe...however, today's candle closed at 821.30 (and above the 2nd Quarter PP). It will be interesting to see whether the TF can hold above this PP and then make it back above the Daily 50sma (currently at 828.20). I'll be watching price relative to volumes and momentum on an intraday basis in relation to these two levels as well as to today's close.
Due to other commitments, there will not be a post from me for a couple of days. My comments in the last two posts below still apply for now. Basically in this type of "distribution" environment pertaining to YM, ES, NQ, TF & NKD, I'd be looking for a variety of triangle formations within which to daytrade in either direction...e.g. typical triangles, broadening triangles with ABC corrections to 127.2-161.8% external Fibonacci/Fibonacci extension confluence levels, and diamonds...plus possible sideways channels....until a trending market emerges on their Daily charts. I would note that the ES, NQ, TF & NKD have all broken their last swing low on their Daily charts and would need to re-establish an uptrend on that timeframe if they were to resume an advance...the YM is threatening to break its prior swing low as I write this post.
After putting my post below to bed for a couple of days, I decided to have a closer look at potential upside and downside targets for TF (simply because that is what I daytrade).
That post mentioned high-basing on the Daily chart and a sideways-trending channel on the 4-hour chart with respect to YM, ES, NQ & TF. Should the TF break out of this sideways channel either to the downside or to the upside, Fibonacci confluence levels (in both directions) are shown on the following two 4-hourly charts.
The downside confluence level of 800ish lines up with the POC of the Volume Profile for the month of February and just above the 786.00 POC of the Volume Profile for the past 180 days.
The upside confluence level lies around 900ish. Last month's Volume Profile POC is sitting around 850ish and recent intraday action has failed to hold above this level so far. However, March's Volume Profile POC is sitting around 825 and has held as support so far. This would suggest that short-term resistance is at 850ish and support is at 825ish.
Purely from a statistical point of view, since price closed at 832.50 last Friday, a target of 900 would yield the most profit from that point vs one of 800. I'll see which target is preferred over the days to come. As a daytrader, I'll be watching to see how volumes and daily/hourly volume profiles build on lower timeframes and how price and momentum react around those levels for further clues.
I think I'll just set my trading platform on auto-pilot for the next couple of months...buy one day...sell the next...repeat...repeat...repeat.
While the YM, ES, NQ & TF basically high-based on their Daily charts, the NKD didn't finish the week quite so well-off...I'll be continuing to see what effects any further downside movement on NKD may have on the e-minis.
Each candle on the next chart grid of YM, ES, NQ & TF represents a one-month Options ExpiryPeriod...the current candle will expire next Friday (May 20) and represents the April-May period. These candles also show these e-minis high-basing just below their respective highs established since January of this year and above their respective March-April Opt. Exp. Pivot Point...which, so far, could be interpreted as a bullish April-May Opt. Exp. period.
For data buffs, the Opt. Exp. Pivot Points which are in effect for the current period are as follows (calculated from the prior candle's H/L/C--the March-April period): YM = 12171 ES = 1310 NQ = 2295.50 TF = 827.90 (N.B. Friday's closing price on this e-mini is the weakest compared with the other 3 e-minis and is closest to its Pivot Point level...very close at only 4.60 points above...furthermore, Friday's closing price is presently below the closing price of the last period...the bullish lustre on this e-mini is beginning to tarnish, and some of the lustre has been lost on the other 3 e-minis, as well)
The 60 min chart grid below of YM, ES, NQ & TF reveals that continued action occurred within a basically sideways-trending channel for a good part of the April-May Opt. Exp. period and did not break out today. In my last post below, I made reference to this zone. I have to say that I have the same conclusions for tonight's review that I had in that post. Furthermore, on a Daily basis, they are technically still in uptrend...however, it is becoming increasingly messy and questionable. I'll see what next week (Options Expiry Week) brings.
NB: Because Blogger was down last night and this morning before the market open I couldn't post this, but I did write it last night...here it is now, FWIW.
I would refer to the 60 min chart grid below of YM, ES, NQ & TF. If any more retracing occurs in between the horizontal levels shown on these charts, these markets will be so "juiced" that they're liable to either spill out and run in all directions all at once, or just lie there in a dribbling, messy heap!
That being said, I'll be looking for one of the following scenarios to play out over the next while:
a concerted move (with conviction) for a breakout in one direction or the other to clear and move away from the outer-most levels and continue in that direction
a slow-moving, dribbling, messy contraction to form in between these outer levels
a slow/fast-moving, dribbling, messy expansion to form in between these outer levels, while sometimes piercing through them
For a clearer picture of whether the bulls and bears are "kept in the blender and on what speed and setting," I'll have to drill down to lower timeframes and try and make sense of things as they play out on a daytrading basis...and hope that the juice doesn't run dry in the meantime (e.g. volumes and volatility drying up).
The chart grid below shows 30 min (market hours only) charts of YM, ES, NQ & TF. As can be seen, a small opening gap down has been left unfilled on today's action on all except NQ which lagged the initial decline.
The chart grid below shows 60 min (24 hour) charts of these 4 e-minis. Overlayed on the charts is a regression channel. As can be seen, a fair amount of consolidation has taken place just above and below the channel "mean" (broken pink line) and within the horizontal white lines. It remains to be seen as to which direction the markets will finally commit...either above or below these compressed zones.
As long as these markets stay locked within these levels, it is my opinion that neither the bulls nor the bears are in control and they will continue essentially in a sideways movement until a breakout and possible retest occurs (i.e. above 12780 or below 12525 on YM, above 1360 or below 1328.50 on ES, above 2415 or below 2363 on NQ, and above 855 or below 823 on TF). As a daytrader, I'll have to find "levels within these levels" to assess during market hours until a solid breakout occurs.
Based on recent action of the intraday tape on TF, as well as YM, ES & NQ, I would venture to say that should these markets continue to rally and break above their last respective swing highs on the Daily charts, and should they fall back to retest this latest push upwards since last Thursday, then unless ALL of the levels (horizontal while lines) shown on the 30 min chart grid below are not breached, then a bona fide continued rally on a Daily timeframe is possible. However, if they are breached, it is my view that investors' money is best held in cash for awhile. In any event, I believe that ALL of theselevels (and possibly even lower to Thursday's low) should be retested regardless of what happens. I would also add that the last Daily swing low on Gold, Silver, Copper and Oil should be retested thoroughly before any further serious "buying and holding" is done, particularly if hedging is the purpose against a potential turn in the Daily uptrend of the equities market.
I appreciate that my observations are limited to my experience in the markets to date; however, this is the best conclusion that I have to present at the moment. I will continue to monitor and daytrade the TF based on what I see and update my conclusions accordingly.
The chart grid below of YM, ES, NQ & TF shows a Daily timeframe with several white horizontal price levels and a Fibonacci Arc. Whether the nearest levels hold as support (as in the case of YM) or resistance (for ES, NQ & TF) remains to be seen and could play a pivotal role in the next few days. All 4 have put in a higher swing low after today's close on this timeframe, and, having put in a higher swing high last Monday, they are, technically, still in daily uptrend. I would conclude, therefore, that near-term daily support is last Thursday's pivot low and major near-term resistance is last Monday's pivot high...however, in the case of ES, NQ & TF, they first need to break and hold above their minor resistance levels of 1343, 2403, and 858.10, respectively. If the pivot low is breached, then the daily uptrend would need to be re-established.
The chart grid below shows a closer look at intraday support and resistance levels as defined on a regression channel which is overlayed on a 60 min timeframe beginning from the swing low made prior to last Thursday's and is still moving upward. The broken pink line is the "mean", with standard deviations of + & -1 and + & -2 shown. Also shown is a Fibonacci Retracement. It can be seen from these 2 studies that, on this 60 min timeframe from April 18/11, the NQ is the strongest in terms of where it currently lies on its Fib retracement and regression levels, with the YM, ES then TF following. However, the NQ has been the least volatile in terms of price movement during this period. We'll have to see if price can move away from the present compressed levels on all the e-minis (and the NQ, in particular) and continue upward, or whether a change in the daily trend is forming.
What do I make of all the charts that I've posted below over this weekend? Well, I'll be watching all of them to see how each performs in terms of relative strength and weakness against one another. Perhaps some clues will be revealed from these for the markets, in general, for the days and weeks to come.
As an aside and from time to time, I'll also look in on relative strength/weakness in price movement, performance and volatility between GS & C, as well as to XLF & BKX (and a comparison of these to the markets, in general) over the next while...particularly in view of C's 10-for-1 reverse stock split which took effect at market close on Friday.
Below is a Weekly chart grid of Gold/Silver/Copper/Oil with regression channels plotted on each line-chart. I like to sometimes look at line charts in order to simplify things and see how closes are performing relative to patterns and support/resistance levels. The broken pink line is the "mean" of the channel, which has been in effect for the past couple of years now. Of course, the one that stands out in terms of volatility, is Silver, while Copper is showing relative weakness compared to the other 3 in terms of where it is within its channel.
The next chart grid of these 4 commodities is a 180-day 4-hourly grid. Displayed on each line-chart is a regression channel and Fibonacci fan line for the 180-day period.
Because the entire timeline is not shown on the grid format, please refer to each chart below for a clearer view:
From these 4 180-day charts, we can see that Gold, Silver and Oil have reached one type of regression channel support...Copper has not. On Friday of this past week, Gold closed near its 23.6% Fib fan line...Silver near its 50%...Copper near its 61.8%...and Oil near its 38.2%. In the past 180 days, Copper is the weakest, then Silver, then Oil, then Gold at the moment.
Perhaps this means that Gold and Oil are the most desirable of the 4, value-wise. In any event, I'll be watching all 4 to measure their performance against each other in the coming days/weeks.
On Monday of this past week, NKD managed to fill its post-earthquake gap on the Daily chart but failed to close above it (see chart below). Several levels are of interest to me on this chart...10005, 9750, 9420 and 9320, as well as a couple of trendlines.
Last week, USD/JPY managed to close above the 80.00 level...a level agreed upon by Japan and the US after the earthquake (see chart below).