Tag Archives: the trading room

Trading Room – 28th February, 2017

Today’s Trading Room looks at Copper, USD Index and DAX.

To learn what the Trading Room is about see first Trading Room analysis here.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

Copper

TECHNICAL ANALYSIS

Copper Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

This analysis is overall neutral, neither bullish nor bearish. ADX is now declining after reaching extreme. Divergence with price and RSI (red lines) is bearish. Either a larger consolidation or a trend change is a reasonable expectation at this time, but no trend change has yet been indicated.

Volume is so far inconclusive. Sometimes at the beginning of a bear move volume can be light as the market falls of its own weight. However, light and declining volume does not support the fall in price so far.

TREND LINE ANALYSIS

Copper Chart Weekly 2017
Click chart to enlarge.

The long term green line was perfectly touched just three weeks ago. This may provide strong resistance. The lilac line has now been breached (this is seen more clearly on the chart below). However, this lilac line is too steep for reasonable technical significance. That is the risk at this time with this analysis.

ELLIOTT WAVE ANALYSIS

Copper Chart Daily 2017
Click chart to enlarge.

The lilac line has been breached and price has now turned up to find resistance there. If the green line holds, then this lilac line should too.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

USD Index

TECHNICAL ANALYSIS

USD Index Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

This market so far is moving upwards as has been expected. I am publishing this chart again today because at this time it may be offering a good opportunity to join a trend in the relatively early stages.

ADX is below 15, so no trend is yet indicated. ATR is still declining. These two indicators together signal caution about a potential upwards trend.

RSI is neutral. MACD and Bollinger Bands are bullish.

I particularly want to draw attention to the long lower wicks of the last three daily candlesticks. These are bullish.

ELLIOTT WAVE ANALYSIS

USD Index Chart Daily 2017
Click chart to enlarge.

This chart is the same as the last published daily Elliott wave chart for USD Index with the exception of the short term support line which is slightly redrawn. Notice the long lower wicks on the last three daily candlesticks and how they all sit neatly on the trend line.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

DAX

TECHNICAL ANALYSIS

DAX Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Analysis of DAX is presented in response to a reader’s request and not because it offers a good opportunity at this time.

Some larger sideways consolidation or a deeper pullback here is a reasonable conclusion after ADX reached extreme and RSI exhibited double bearish divergence over a reasonable period of time. At this time, it looks like DAX is in a consolidation with an upwards bias. The risk here is a deeper pullback may develop.

VOLUME ANALYSIS

DAX Chart Daily 2017
Click chart to enlarge.

StockCharts do not offer volume data for international indices. This is FXCM volume data.

Watch On Balance Volume closely over coming days. If it breaks out of the current range, that may precede the next direction for price.

Strongest volume of recent days is for downwards days. This is bearish.

ELLIOTT WAVE ANALYSIS

QUARTERLY CHART

DAX Chart Quarterly 2017
Click chart to enlarge.

A Super Cycle fifth wave may be completing. Super Cycle (IV) may have been a large contracting triangle, or it may have been a more brief zigzag (alternate weekly chart below).

MONTHLY CHART

DAX Chart Monthly 2017
Click chart to enlarge.

The triangle fits, but it is not supported by MACD hovering about zero. This is not a requirement but does add confidence when it occurs.

WEEKLY CHART

DAX Chart Weekly 2017
Click chart to enlarge.

The weekly chart shows all of Super Cycle wave (V) to date. Primary wave 4 may not move into primary wave 1 price territory below 10,488.

DAILY CHART

DAX Chart Daily 2017
Click chart to enlarge.

A correction for intermediate wave (4) may not move into intermediate wave (1) price territory below 10,807. Intermediate wave (3) may be over. This is supported by classic technical analysis. A deeper pullback may occur here, maybe to the 0.236 Fibonacci ratio about 11,527. That would see intermediate wave (4) end within the price territory of the fourth wave of one lesser degree.

It is my conclusion at this time that DAX does not offer a good trading opportunity. The upwards trend looks stretched at this time, so a pullback may occur. If it does, then at its end it may offer an opportunity to join the upwards trend.

ALTERNATE MONTHLY CHART

DAX Chart Weekly 2017
Click chart to enlarge.

The conclusion for the short term may be the same even if the triangle is wrong. Cycle wave IV may have been a quicker zigzag. Cycle wave V may still be within the final fifth wave up. The daily chart would be the same for this idea.

DISCLAIMER

As always, it is essential that anyone using this analysis for trading advice manages risk carefully. Follow my two Golden Rules:

1. Always use a stop.

2. Never invest more than 1-5% of equity on any one trade.

Trading is about probabilities, not certainties. Failure to follow my two Golden Rules of trading indicates failure to manage risk.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 01:12 a.m. EST on 1st March, 2017.

Trading Room – 21st February, 2017

Today’s Trading Room looks at NGas, EURUSD, USDJPY and EURGBP.

To learn what the Trading Room is about see first Trading Room analysis here.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

NGas

TECHNICAL ANALYSIS

NGas Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Natural Gas continues lower as the last analysis expected. Today’s strong volume spike may be a selling climax. In the short term, it may be followed by a small consolidation before price may continue lower.

For the very short term, if price breaks above the steeply sloping rose trend line, then look out for a deeper correction. Expect price to fall to next support at 2.55 while price remains below that line.

This trend is not yet extreme and there is no divergence yet between price and RSI to indicate weakness.

ELLIOTT WAVE ANALYSIS

MAIN WAVE COUNT – WEEKLY CHART

NGas Chart Weekly 2017
Click chart to enlarge.

This wave count expects Natural Gas is in a new bear market to last one to several years.

MAIN WAVE COUNT – DAILY CHART

NGas Chart Daily 2017
Click chart to enlarge.

If a deeper correction does develop here after the selling climax, then it may be a primary degree fourth wave that may last a Fibonacci 13 or 21 days. First, the rose trend line on the TA chart above must be breached to indicate primary 3 is over. So far it is less than 1.618 the length of primary wave 1, so it is likely to continue further.

ALTERNATE WAVE COUNT – WEEKLY CHART

NGas Chart Weekly 2017
Click chart to enlarge.

Downwards movement from the last high may be primary wave B coming to an end as a very common expanded flat correction.

ALTERNATE WAVE COUNT – DAILY CHART

NGas Chart Daily 2017
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Minor wave 3 has only just broken below the lower edge of the base channel. This is how a third wave should behave. The selling climax of the 21st of February may be followed by a brief shallow correction before price continues lower to complete minor wave 3. Minor wave 4 may not move into minor wave 1 price territory.

Both Elliott wave counts expect Natural Gas to continue lower from here at least to make a new low below 2.549. That has not happened yet.

USDJPY

TECHNICAL ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

I have published this pair often in Trading Room. That is because I consider it to be a good opportunity at this time. The idea of Trading Room is to look for markets that are trending and find entry points to join the trend in order to have a wider range of opportunities to profit from.

This is my favourite trade set up: a breach of a trend line followed by a back test of support or resistance. USDJPY has done this with the blue trend line.

The risk with this set up is that the trend line is too steep and not often tested, so price may break back below it. The risk does not at this stage look to be high, but it must be acknowledged.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

This market is behaving as expected so far.

EURUSD

TECHNICAL ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Last analysis of this pair expected a bounce to unfold after the candlestick of the 15th of February showed a bullish long lower wick. This was followed by a strong upwards day, and now a strong downwards day.

This is not correctly a bearish reversal pattern; the red candlestick for the 17th of February does not engulf the green candlestick for the 16th of February. However, it is still a strong downwards day and is bearish. Price may now be finding some resistance at the Fibonacci 13 day moving average and the mid line of Bollinger Bands.

ELLIOTT WAVE ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

On Balance Volume remains bearish. A purple resistance line is added. The last test is another small bearish signal.

EURGBP

TECHNICAL ANALYSIS

EURGBP Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

This pair is presented in response to a member’s request. While the Elliott wave count is bearish, this classic analysis is not so much.

The last two upwards trends reached extreme. Since the high on the 16th of January downwards movement has brought ADX down from extreme. There is again room for a trend to develop.

This market currently looks range bound. Resistance is about 0.8650 and support is about 0.8450. The bottom line is a breakout would be required before any confidence may be had that this market is trending.

ELLIOTT WAVE ANALYSIS

MONTHLY CHART

EURGBP Chart Monthly 2017
Click chart to enlarge.

The large downwards wave labelled Super Cycle wave (II) will not fit as a five wave structure. It will only fit as a three. This may be the end of the bear market.

The upwards wave labelled cycle wave I looks like a very good five wave impulse. It should be expected to reasonably be followed by a three wave down movement for a second wave correction, which is most likely to end close to the 0.618 Fibonacci ratio.

DAILY CHART

EURGBP Chart Daily 2017
Click chart to enlarge.

C has not yet moved beyond the end of A to avoid a truncation. The target has a good probability.

While classic analysis is not very bearish, this Elliott wave count is.

Use the lilac line for resistance.

Volume analysis:

The strong volume for the last session of the 21st of February supports this wave count. The fall in price is supported by volume here as a third wave should be.

On Balance Volume is giving no signal, either bullish or bearish.

DISCLAIMER

As always, it is essential that anyone using this analysis for trading advice manages risk carefully. Follow my two Golden Rules:

1. Always use a stop.

2. Never invest more than 1-5% of equity on any one trade.

Trading is about probabilities, not certainties. Failure to follow my two Golden Rules of trading indicates failure to manage risk.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 12:10 a.m. EST on 22nd February, 2017.

The Trading Room – 15th February, 2017

Today’s Trading Room looks at Natural Gas and USDJPY.

To learn what the Trading Room is about see first Trading Room analysis here.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

Natural Gas – NGAS

TECHNICAL ANALYSIS

NGAS Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

In the mid term, there is a new downwards trend for Gas. Use the Magee trend line for resistance.

In the short term, price may bounce up here from the 200 day moving average. The slight decline in volume for the last two days, along with small range days, looks like bears are temporarily exhausted. Expect a bounce as fairly likely.

This chart looks very bearish.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

ELLIOTT WAVE ANALYSIS

WEEKLY CHART

NGAS Chart Weekly 2017
Click chart to enlarge.

The trend channel about cycle wave b has been breached now at the weekly and daily chart level. This may offer some confidence in a trend change.

DAILY CHART

NGAS Chart Daily 2017
Click chart to enlarge.

Cycle wave b may be complete. A cycle wave c down may be in the early stages. This wave should last one to several years if the wave count is correct. The lower edge of the channel about cycle wave b is now breached by two daily candlesticks.

Look for bounces to find resistance at the Magee trend line.

I do have an alternate wave count, but it too is bearish at this time. Publication of it would add nothing to the analysis. If any member wants it, then please email me and I’ll send it to you.

USDJPY

TECHNICAL ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price has moved upwards, as expected, since last publication of analysis of this pair. There is now a full daily candlestick above the blue line, which previously provided resistance and may now provide support.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

This market is behaving as expected so far. Elliott wave targets may be used as profit targets.

DISCLAIMER

As always, it is essential that anyone using this analysis for trading advice manages risk carefully. Follow my two Golden Rules:

1. Always use a stop.

2. Never invest more than 1-5% of equity on any one trade.

Trading is about probabilities, not certainties. Failure to follow my two Golden Rules of trading indicates failure to manage risk.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 12:35 a.m. EST.

The Trading Room – 13th February, 2017

Today’s Trading Room looks at USDJPY, USD Index, NZDUSD, EURUSD and US Oil (by popular demand).

To learn what the Trading Room is about see last Trading Room analysis here.

USDJPY

TECHNICAL ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

For the long term, assume the trend remains up until proven otherwise. The long term 200 day moving average still has a positive slope, and the short and mid term averages are still above it.

For the mid term, price has seen a relatively deep pullback. The question will be: Is this over and will the upwards trend resume?

Price is at support just above 111 (horizontal support and resistance lines are drawn after looking back 3 years). Resistance is just above 114 and next about 116.

There is some bullish divergence with RSI, but RSI did not reach oversold for this pullback.

The risk here is that the pullback may move lower and RSI may develop double divergence with price before price turns up.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

ELLIOTT WAVE ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

This wave count has excellent alternation and Fibonacci ratios. There are also some close Fibonacci durations for waves.

If intermediate wave (4) moves lower, it should find strong support at the lower edge of the best fit channel. Double zigzags are reasonably common structures. Triple zigzags (labelled W-X-Y-X-Z) are very rare. If intermediate (4) is correctly labelled as a double zigzag, then the probability that it is over here is very high.

VOLUME ANALYSIS

USDJPY Chart Daily 2017
Click chart to enlarge.

Volume increased during the middle portion of the pullback, and now at the last low volume declined as price fell; the market fell of its own weight. This points to a tired trend. Price certainly could move lower here, but the probability of a low in place has slightly increased.

On Balance Volume is at support. If it breaks below the yellow line, that would be a bearish signal.

USD INDEX

TECHNICAL ANALYSIS

USD Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price has moved upwards since last analysis of this market.

The long term trend should be assumed to remain upwards until proven otherwise. This downwards movement should be assumed to be a pullback within a larger upwards trend.

Looking back at price behaviour in the last upwards wave from the left of this chart: price starts out slowly with choppy movement, generally trending, and it is not until the middle of the movement that Bollinger Bands widen and ATR shows a good increase. Then the trend quickly became extreme, yet price continued upwards while ADX steadily declined from about 45. So trends for this market can remain very extreme for long periods of time.

The current situation looks similar to that back in September 2016: ATR is declining as price moves up, Bollinger Bands are contracting, ADX is low and below both directional lines, and RSI is neutral. In the current day, Stochastics is also returning from oversold and exhibits single bullish divergence at last lows.

It is looking like USD index may be in the very early stages of the next wave upwards.

Unfortunately, neither BarChart nor Stockcharts provide volume data for the USD Index, so no volume analysis can be done.

ELLIOTT WAVE ANALYSIS

USD Chart Daily 2017
Click chart to enlarge.

The structure of intermediate wave (3) and of primary wave 5 is incomplete. Price has found support and bounced up off the best fit channel. The short term yellow resistance line is breached. It is looking increasingly likely that USD index is beginning the next wave up.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

NZDUSD

TECHNICAL ANALYSIS

NZDUSD Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Since last analysis of this pair, which was very bearish, price has fallen and closed below the short term Fibonacci 13 day moving average. The long, red daily candlesticks look bearish, and the longer upper wicks on the first two are bearish.

RSI is now neutral and Stochastics is returning from overbought. There is room for this wave down to continue.

ADX was extreme. It has a long way down to go before it would again indicate a trend.

ELLIOTT WAVE ANALYSIS + VOLUME ANALYSIS

NZDUSD Chart Daily 2017
Click chart to enlarge.

The green support line has been fully breached.

The structure here is seen as a leading expanding diagonal. The fifth wave of minute wave v must be longer than minute wave iii to meet the rule regarding wave lengths for expanding diagonals. This gives the minimum target calculation.

A trend line is drawn about On Balance Volume, which has been tested at least three times before and is long held. It is now breached and OBV is coming up for a back test of resistance. If this line holds, it would be strengthened and more confidence would be had that price has turned.

The three red daily candlesticks in last week saw increasing volume. This supports downwards movement and adds confidence in a trend change here.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

EURUSD

TECHNICAL ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

Support and resistance lines are added this week. Look for support next at 1.055.

This pair is not as clearly bearish as NZDUSD, but it does look like they may be turning downwards together. Look out for Bollinger Bands to widen as volatility returns to this market.

Stochastics is returning from overbought after exhibiting divergence there. If it reaches oversold while price reaches support, then this market will be carefully analysed for any weakness in downwards movement.

ELLIOTT WAVE ANALYSIS + VOLUME ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

On Balance Volume remains bearish. A back test of resistance for both yellow trend lines has happened and OBV has turned down from both giving bearish signals.

The best fit channel has been breached. A one day throw back occurred right after the breach, but price may still curve up and around for a longer back test of resistance. That is the risk here to short positions.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

US Oil

TECHNICAL ANALYSIS

USOil Chart Daily 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

US Oil entered a consolidation back in December 2016. Since then price has been fluctuating with typically choppy movement from resistance to support and back again. Resistance is about 54.15 to 54.35 and support is about 52.15 to as low as 50.70. During this long consolidation, it is now two upwards days that have strongest volume suggesting an upwards breakout is more likely than downwards.

On Balance Volume has last week given a strong bullish signal.

Prepare for an upwards breakout. This may happen this week.

A classic analysis target would expect price to travel at least the distance of the widest part of the consolidation after a breakout. That would expect a movement of about 4.53.

ELLIOTT WAVE ANALYSIS

USOil Chart Daily 2017
Click chart to enlarge.

The Elliott wave analysis is overall very bearish for US Oil. This is an alternate wave count that is published here because it aligns with the classic technical analysis today.

This wave count expects essentially that any upwards breakout may be false and short lived.

Trading advice for members only: [Content protected for Elliott Wave Gold members only. To subscribe click here.]

DISCLAIMER

As always, it is essential that anyone using this analysis for trading advice manages risk carefully. Follow my two Golden Rules:

1. Always use a stop.

2. Never invest more than 1-5% of equity on any one trade.

Trading is about probabilities, not certainties. Failure to follow my two Golden Rules of trading indicates failure to manage risk.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 06:27 p.m. EST on 12th February, 2017.