AUD/USD short

This is going to be edited with charts and notes later today.

Short AUD/USD at $1.0828 or a break below $1.0765

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GBP/USD short – Second attempt

The Pound Dollar got me on that first try. If I hadn’t been encumbered with giving advanced notice the trade would have been closed for a very manageable 39pip loss when if first appeared to be doomed to failure. It looks like the 5th extended so the next stop is $1.6856 level. This also matches with an C=A level so, it should be good for at least a pullback. This should allow for a break-even stop, if not better.

I’m going to try this one again. A Sell at $1.6846 is going to be entered once the market opens on Sunday. No stop and no limit just yet. If no stops are too scary then entering one at $1.6965 should be good.

chart

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GBP/USD Short Trade- Update

This trade is going to bust. The decline is corrective and the slaughter of the US Dollar continues. It’s time to cut it short or lower the stop to at least minimize the losses that are about to come this way.

To give it a chance, and give time for realistic exits, lowering the stop to $1.6540. This will give a 100pip loss if it hits. If I weren’t encumbered, a market close would be placed right now at $1.6479 for a reasonable 39pip loss.

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GBP/USD Short Trade

The British Pound has been in a good rally, or has it? Stepping out to a larger view one would see that a dramatic fall has occurred from the ~$2.1110 level. For the last two years the GPB/USD pair has been consolidating in a contracting triangle. Price is now reaching the upper trend line of that triangle and is in a prime spot to take a short. Since the price is so close to the line a reasonable stop can be set over the line. To the downside, the lower line of the triangle is the first objective and currently sits about $1.4925, so there is ample reward. Further out, if this plays out as intended, price will drop through the bottom of the triangle for a distance equal to the width. Wouldn’t that be nice!

Two charts to view, a daily showing the rise off of the lower line and a 4-hour chart showing these last legs upwards. The first is the daily view. This chart shows the multi-year triangle in progress, along with my view of the waves off of the lower line. As noted on the chart, there is very little strength to this move up, which shows as a lackluster RSI reading. So far, RSI has yet to even break out of the “Bear Zone” of the range. This could, of course, change with a break-out and rally out the top of the triangle.

 
chart

Next up is the 4-hour chart. This one shows the target value, entry point and dead-wrong stop level. The full target level would normally be 100%, or 5=1. That level has already been passed so, 1.618*1 is the next level at $1.6492. That point also coincides with the upper trend line so it is a logical point. Just to be sure to not miss the entry, the level is being pushed down to the 1.382*1 point, or $1.6440. That makes for a potential draw of at least 50pips. 205pips if it blows out and hits the stop at $1.6645. Targets are currently unset but, the bottom line is the first objective. If it moves our way targets will be set at a later date.

 
chart

Well there it is, the next trade in line. Two more are in the works, AUD/USD and EUR/USD. USD/JPY is still in the setup phase that was written about a separate post and EUR/AUD may be getting close to a trade point. The GBP/USD trade may fill overnight. Will find out tomorrow.

The only thing not mentioned was the fact that this pair could blow out the top. All the way back to the $2.1110 level. One quirk about fx pairs is that is seems if a trend is violently interrupted, price will consolidate then violently move back to the origin of the break. Just something to keep in mind

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Aye Carumba!

Well, I can’t put my finger on it exactly but, something just doesn’t add up. I’m beginning to suspect a run to a new high and then the fall. Everything is shaping up nicely except…. GBP/USD looks to have one more leg up to about $1.6450 before declining; AUD/USD looks to have a push up in the makings as it is currently in a three wave decline; S&P500 has a three wave decline that says corrective all over it, and still has that 1384/96 target to hit (after hitting 1277 first); and most importantly, little Miss Dixie (/DX, U.S Dollar) has broken above an important trend line but is just sitting there doing nothing.

Given these nagging little shards I think it’s time to set some stops. Just in case the decline is for real perhaps a trailing stop is in order? Setting a TP (Take Profit) at $1.3992 (1.3976 is the actual target, it’s the 50% point of the last advance) and a 50pip trailing stop to start at $1.4251 (price is $1.4221 as I type this).

I hope the TP gets hit and it zooms up! If that happens, a new position will be figured out soon.

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Update on EUR/USD short…..part deux

It has been about a week in this trade and it seems to have set up for another move. Now is the time to set some stops in case it blows out the top. The emergency safe stop of $1.4583 can be lowered down a tad to just over the recent peak. $1.4525 should provide an adequate cushion.

Price action has been dancing all around the entry point, a little below then rally hard off of it. The entry level seems to be pretty good support so far. The question is; is price staying up because of options expiration week, or is it being held down because of it? Of course there is still another option, and that is simply that no correlation exists.

A break below $1.4380 should confirm the top is in and set in motion a large degree decline, which will have positions added along the way. On the other hand, a break above $1.4530 will confirm a rally to at least $1.4650, or even a whopping $1.4900.

Even if it blows over the top no long position is likely to be initiated as I believe the EUR/USD is to close to a top. This matches with my view that the USD (/dx) is near a rallying point. What’s the saying? “The market can be irrational far longer than you can remain solvent”. Oh so true. Not to be dire, just being realistic, but have to be prepared to cut it loose and move on in case my view is wrong.

ps. Added 12:30pm
One potential that was mentioned to me that I had not noticed is a Diamond Top. Quite possible.
EUR/USD chart

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EUR/USD short…..part deux

It didn’t take long for price to reach the 100% mark. As stated, a new short position was taken with a standing limit order of $1.4383. At present there is no stop placed, however, a fail safe stop could be placed 200pips over head. Since this is meant to be a longer term position it will get some breathing room for a few days before I set a stop level. If something changes in my orders, I’ll post it ahead of time.

The chart below is the same one as before but, I cleaned the labeling so it may appear to have changed. Even though some labels are different, the outcome and points remain the same.

USD/JPY, GBP/USD, AUD/USD and CAD/USD all have just about reached what I see as turning points. The only problem is that the S&P500 isn’t anywhere near what I had pegged as a good top(1390±6). With one small 5 waves up it could end with a truncated fifth and all would be well. Latest S&P500 4-hour chart here.

EUR/USD chart

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Oh Hindsight for Foresight

It is now obvious that the 120pips should have been taken when it was given. The second entry was stopped out at +5pips while the first is rolling a loss.

The current action is pointing at the 100% mark. If that is to be, the first position will stop out for a loss on the way to the projection point. A new entry is set for $1.4383 with the full target marking at $1.4393, so a 10pip cushion. If price should fail to reach that point and instead breakdown, an entry on a break of $1.4040 is the mark. The downside target has not been changed.

What has changed for the betterment is that now an oscillator divergence will likely enter the picture, which makes for a much cleaner turning point. This also fits much better with the view on the S&P500 turning point of 1390±6 points.

Time to sit back and see what cooks in the pot. Soup or slop? Won’t be long till we find out.

Click to enlarge:
EUR/USD chart

Previous chart set up
Previous entry and trajectory estimate

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S&P500 topping action?

S&P500 4-hour chart. On this chart price looks to clearly be rising from a corrective pattern — I believe a fourth wave a-b-c. If that is indeed the case, this is the last push upwards. “i” and “ii” of a final fifth appear to be complete and “iii” is currently underway and extending. (i) and (ii) of “iii” are complete and (iii) of “iii” is currently in progress.

There are two other options as I see it:
1- A truncated fifth is in progress which will soon end. If that is the case a drop below 1240 is really the only verification. A truncated fifth is the last of my options and I give that a very low probability.
2- Price is carving out I of V. If this is the case, a small rise to about 1322, or at a maximum 1336,  to complete I then a decline for II. The decline should NOT go below 1240 and should target closer to 1290/1300. Once there, waves III, IV and V will complete the upward move. A target area can be set once III and IV have completed.

The only way to tell the difference between options 1 & 2 will be if the decline breaks 1240 area. In any event, whichever course the market may take, all roads seem to be pointing to a top. The next question begs, “What kind of top”? Whether it is a major top or will just lead to a minor correction is yet to be seen. Once price begins its decent a better assessment can be made. I suspect a major top. Time will tell.

EUR/USD chart

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EUR/USD Short Trade from 3/19

The EUR/USD short has started to turn positive so it’s time to adjust the stops. The first entry at $1.4099 still has the original stop point of $1.4280 but, the second entry at $1.4175 should be moved to +5, or $1.4170. Of course, another option is to close both trades now and book 120pips (price is $1.4075 as I type this) of profit and look to re-enter on a down break of the rising trend line. I’m holding steady on this one.

As can be seen on the updated chart, price has fallen back to the lower trend line and is creeping along the rise. It is very possible to see one more push to top the recent high but, I believe that is a low probability. Instead, I expect the price to fall below the line and pick up some downside momentum once it breaks free. Whether or not it returns for a KOD is yet to be seen, and in fact, it’s a little premature to speculate on that move until it actually breaks down.

Until price breaks down, or blows upward, there is nothing else to do but wait. Book ’em, or let it ride? Going for the big pips means let it ride!

Click to enlarge:
EUR/USD chart

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