Archive for category Trading

Equity Markets Moving Again – Sept 21 2001

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Markets were in a standstill from August 8th.  Today, the Fed made its delayed announcements.  There was likely large expectations from the public.  The message has been delivered and the public is now to decide.

Here is the price action.  Certainly down with full force.

This implies we are entering the strongest Wave down.

September 12 2011 – Update

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Prices are in a corrective ABC up pattern making a new down within a channel range (1218 to 1120).  A SHORT signal was issued at 1190 on 9/8 and left over the week end.

Prices are corrective within a visible channel.  Support is at 1130.

On the other hand, the US Dollar has made a new up move starting 8/29.  After a sideways correction, on 9/27, it resumed in a strong up move.

The US Dollar is at an all time low.  The next chart is the Monthly US Dollar index.

Equity Market Update – Sept 2 2011

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At the end of the day before (sept 1) and after the SHORT signal was received, this was the picture:

Our first target was the 200EMA (white).  All STO timeframes were already in overbought conditions up to the daily.

This was the effect of the day.  Clearly prices reached the 200EMA and after the bell opening, prices rallied for a few points and broke EMA.

Prices have now reached 50% retracement from the low of August 22 and 38% from the prior reversal low of Aug 8 (the last impulsive drop).

The 2nd rally from Aug 22 to Aug 31 (when we got the SHORT signal) is not an impuslive wave since prices have breached the Aug 17 prior top.  Meaning this 2nd rally is certainty a corrective rally and if so it gives an idea of the magnitude of the wave we are dealing with.  So is Aug 8 to Aug 17 rally becomes suspect and likely to be a large ABC wave.

Given that the weekly STO action is still oscillating below 30, and considering that the Monthly STO is in a clear decline move (at 62), the move is certainty to the down side but volatility will still be present.  However, since the public is now educated about the downside risk, it may be likely an up rally will meet with less participants.

We do not analyze the market on the News but the News tells of public sentiment.  All analysis is solely based on Technical Analysis and fundamental economics (which is rare) of supply and demand.

On the News side, Greece has given some hints that it’s goverment expenses far exceed its revenues (taxes from the public) and has entered a unsustainable situation where austerity measures further slows the economy creating even less revenues.  On top of that, the interest now being paid by Greece for the high risk Bond (2 yr Bond) investors is willing to take was 26.5% (July 2011) and today is 47%.  Greece is the 27th largest economy in GDP in the world.  The public sector contributes to 40% of its GDP.  It’s economic situation and new budget is assuming that the GDP growth will turn positive in 2012.  (it has been negative since 2000 with nearly 80 Billion Euros in deficit thru 2010 and another projected 9.5 Billion euros for 2011).

The News of the fundamentals of the Global economy follows:

Global Economics (www.tradingeconomics.com)

U.S. Employment Stagnated in August
Published: 9/2/2011 1:38:13 PM By: TradingEconomics.com, US Bureau of Labor Statistics
U.S. nonfarm payroll employment was unchanged (0) in August, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported on September 2. Employment in most major industries changed little over the month. Health care continued to add jobs, and a decline in information employment reflected a strike. Government employment continued to trend down.

Swiss GDP Growth Slows to 0.4% In Q2
Published: 9/1/2011 11:38:54 AM By: TradingEconomics.com, SECO
Swiss gross domestic product grew 0.4% quarter-on-quarter in the second quarter following a revised 0.6 % rise in the first three months of 2011, data from the State Secretariat for Economic Affairs, showed on September 1.

Canadian Economy Growth Slows In Q2
Published: 8/31/2011 2:38:08 PM By: TradingEconomics.com, Statistics Canada
Canada’s real gross domestic product (GDP) declined 0.1% in the second quarter, following a 0.9% increase the previous quarter. The decline in the second quarter was largely a result of a 2.1% drop in exports. Final domestic demand rose 0.7%. On a monthly basis, real GDP by industry increased 0.2% in June.

Euro Area Unemployment Rate at 10.0% in July
Published: 8/31/2011 11:20:11 AM By: TradingEconomics.com, Eurostat
The euro area (EA17) seasonally-adjusted unemployment rate was 10.0% in July 2011, unchanged compared with June. It was 10.2% in July 2010.

India’s Economy Grows 7.7% in Q2
Published: 8/30/2011 11:37:59 AM By: BBC
India’s economy grew 7.7% in the three months from April to June, compared with the same period of 2010.

Japan’s Unemployment Rate Rises to 4.7% in July
Published: 8/30/2011 11:35:31 AM By: TradingEconomics.com, Statistics Japan
Japan’s unemployment rate stood at a worse-than-expected 4.7 percent in July, up 0.1 percentage point from the previous month, excluding figures from the disaster-hit northeast of the country, the government reported on August 30.

U.S. GDP Revised Down to 1% in Q2
Published: 8/26/2011 1:36:52 PM By: TradingEconomics.com, US Bureau of Economic Analysis
U.S. real gross domestic product increased at an annual rate of 1.0 percent in the second quarter of 2011, (that is, from the first quarter to the second quarter), according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.4 percent.

Japan Inflation Rate up 0.2% in July
Published: 8/26/2011 1:26:27 PM By: TradingEconomics.com, Statistics Japan
The consumer price index for Japan in July 2011 was 99.7(2010=100), the same level as previous month, and up 0.2% over the year.

New Zealand Trade Surplus Shrinks in July
Published: 8/24/2011 1:33:31 PM By: TradingEconomics.com, Statistics New Zealand
New Zealand trade balance for the July 2011 was a surplus of $129 million, down from $197 million in June of 2011.

Swiss Trade Surplus Widens In July
Published: 8/24/2011 12:35:14 PM By: TradingEconomics.com, the Federal Customs Administration
Switzerland’s trade surplus widened in July despite a drop in exports, data from the Federal Customs Administration showed on August 23.

September 2011 Dairy

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9/25 – exit 1139

9/25 – LONG 1121 60 min oversold, 360 oversold.

9/25 – SHORT 1130 60 min overbought. Corrective pattern.  Impulse violation.

9/23 – LONG at 1118 60 min oversold.

9/18 – SHORT at 1198.  360 and 60 Min simultaneous overbought.

9/14 – A trading range has been established on a up moving corrective channel.  Ranges are 1120 to 1218.  Short at 1168.  (this is not meant to be a enter short but as a target.

9/13 – SHORT 1152. Parabolic move MACD neg divergence 60 min.  We are favoring SHORT to long due to weekly and monthly bear influences.  Turning to be very volatiles for LONG’s.

9/13 – LONG 1142 on 60 min wave 3 beginning.

9/8 – SHORT at 1190, 60 min breakdown from 360 min overbought condition.

9/6 – LONG at 1150 on 60 min double bottom oversold condition.

9/1 –  SHORT at 1221 on STO ovebought and MACD neg divergence on 60 mins.

Equity Market Update Setp 1 2011

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A signal to go SHORT has been received at 1221.

Equity Update August 24 2011

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Finally out of a trading range.  Prices have established a strong support at 1120 as described earlier.  A corrective rally is in its way.  LONG position have been entered at 1153 with stop loss at 1145.

2 trades on the SHORT side were entered at 1130 and 1140 yesterday with a stop loss and a meager profit on the other.  We are switching over to the LONG side cautiously.

Equity Update Aug 18 2011

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Prices reached our 1140 target and surpassed bottom of channel stopping at 1128.  Prices are significantly Oversold however there is still considerable downside potential for the medium term.  In the meanwhile a correction in time of prices is expected.  Since last down move was in price, it is possible this time correction will be in time and a combination of it (a triangular consolidation).  If such is the case, trading will be difficult.

A minimal LONG will be entered in the near term following the 60 minutes.

Equity Update August 17 (cont…)

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Prices went as far up as 1206.75 and reversed breaking the 60 minutes trend as expected.  Now prices have fulfilled the retracement from the original move down from 1348 to 1078 (1200 is 38%+) of the retracement.  A renewed down move is expected to continue.

The first test will be the channel of the 60 minutes at around 1145.

We will be pyramiding for maximum gain.

Equity Update Aug 17

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The SHORT signal on the 60 min was right on from the open bell at 1206 following a small short lived rally.

Exited partially at 1194 which was the 200MA of the short term chart (seen below).  Exited last position at 1185.

Followed with a small LONG position exiting at 1190.  Prices did go to the 200MA.

We expect further weakness leading to the 60 min down channel, estimated at 1140.

Equity Update Aug 16

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We are in a shor term SHORT sell signal with limit to the lower part of the channel.

SUMMARY: Prices bounced from significant oversold condition at 1078 retracing now to 1200 (slightly above 38% retracement).  An upper channel shows the price action below.  Starting from the right side on Aug 9, a clear breakout of the STO downtrend (shown in the blue section of STO) gave a early change in trend signal to the BUY side.

This next chart shows a later confirmation of August 11 of the Uptrend bounce.  In this case STO gave earliest change signal at the bare bottom at 1090 which is 2 days earlier.

Prices on August 16 are now are at the top of the channel after reachng 1200 testing twice.  There is sufficient medium term (MT) momentum on the Daily STO to carry upwards however the MT has been officially broken when prices measured from the Low of July 9, 2010 to May 6 at 1368.

The up channel move is not a clear impulse wave and thus by definition a corrective wave.  At the moment prices have created a negative divergence of the MACD with a formation of a double top at the 60 minutes chart.  It is expected prices will come toward the lower part of the channel.  (channel price low is at 1140).  Once prices drop below 1180, it is expected to confirm and intensify the drop.  STO in higher timeframes are mid zone including Daily STO (41).

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