Thursday, 24 March 2011

EUR- top is in?

I put out a post recently suggesting a great double bottom setup in the USD Index and double top in the EUR: This is now playing out.

The DXY spot chart gave me a confirmed Daily long signal last night. Tonight when the ICE futures open, I will looking to get long. Unfortunately, EUR sold off just short of my ideal level and has fallen almost 200pips. There is some potential support coming in here as per the chart below. The trend is now down on the 60mins EUR chart and momentum is making new lows. There is a confirmed bearish candle reversal pattern on the Daily. Thus, I think the best setup in EUR is to look to short the first rally into the moving averages/resistance on the 60mins.

DXY Daily:

EURUSD 60mins:


Good Luck

Asian End of Day Summay

Sorry for no post this morning- I was off the desk for work and play reasons :) There has been a great swell in Sydney for the past few days so I had to finally get some waves. Funnily enough, Kelly Slater surfed my local break on the one day I decided to get out of town: Shame I missed it.

To the markets, the ASX200/SPI hit the open gap today at 4720 and closed positively. I posted a short term possible support play yesterday at 4655 and a triangle breakout trade late in the day which both played out well. Unfortunately, I didn't carry this position overnight as it had not moved strongly my way. C'est la vie.

The Daily chart has bounced strongly from the 61.8 fib fan and retracement level that I showed a week back. Note how those hammers were a lead indicator for this recent move.

ASX200 Daily:

The 15min chart closed the open gap today

ASX 15mins:

I am following 2 scenarios here currently. The recent action has formed a big basing pattern (possible cup or inverse Head and Shoulders). Thus if we see more consolidation around this level in the next day or so, I will be buying above 4700/20 for a possible breakout trade. We may need more time before a strong breakout can ensue given how far we have rallied already. However, I don't want to over think myself too much as this is a strong trend. Secondly, should this 4700/4720 prove a more formidable resistance level, or if we get some real overnight weakness, I will be looking to buy a deeper retrace again at 4655 and then 4600. I actually think this is a more likely scenario given some of the setups I am seeing overseas but until we see weakness, no need to second guess.

MSCI Singapore continues to trend higher after a clear failed breakdown and double bottom pattern. I thought we would struggle at the open gap but the price action was strong once again today. The targets are higher still for this index and I will continue to focus on buy setups.

MSCI Singapore March 60mins:

I was somewhat early with my Taiwan short but am happy to hold here for now. Today we hit the 3050 breakdown level on the MSCI Taiwan Futures level which is also a perfect A=C. The price action has been lethargic to me of late and I am seeing clear bearish divergences. This is a great risk/reward short and I would be happy to throw it away tomorrow if there is no weakness.

Taiwan Daily has hit a downward sloping trendline and has rallied right back into the moving averages:

Taiwan Cash Daily:

MSCI Taiwan March 15mins:

I showed an interesting setup yesterday in the Nikkei. I don't actually trade this but I am sure it will have ramifications for other Asian indices if this scenario plays out. For now, we still possibly have higher targets and a clear short level below the recent open gap.

Nikkei June 60mins:

In conclusion, the ASX has rallied strongly right into the first formidable resistance area. We may need more time before a strong breakout can ensue. Look to buy a deeper retrace and scalp short if possible to these levels. Hang Seng continues to rally above the support level mentioned. Taiwan looks to be the best short setup at this level. I have some interesting comments on currencies and the S&P 500, and will be posting this later. Stay tuned.

If you are enjoying some of this commentary, I would really value all comments and questions. I really want this to be an open site and I encourage all feedback and opinions.