Sorrows of young Trader

A little bit of clarity?

mdm — Wed, 01 Feb 2012 00:43:59 +0000

Everything went up together, and everything should go down together as happened in 2007-08 when liquidation hit every asset class. Waiting for the first sign after a stretched January, today gave strong hints that some top could be in. You could see post for details, but one of the strongest move should be in Crude Oil that has no more time to delay it as it did in last several days. Strong reverse in euro should be the first sign, because the next shock to the system should come from Europe (Greek swap deal is announced as “close” or “almost done” every day since two weeks.. It will never come out or it won’t be enough to avoid Greek default, that probably will happen in March) . What i need soon to be sure the trend has changed is a strong trend day down.

As i said, January wasn’t a good month, full of uncertainty and stretched rises: those were days when EW brings some confusion in. I know it happens near extremes – top or bottoms – and when the trend change, EW will come back clearer and useful as ever was for me. Waiting patiently!

ES Jan 31st

mdm — Wed, 01 Feb 2012 00:31:59 +0000

Today’s action wasn’t clarifying. I’ll stick with the “top is in” count, but unfortunately i still cannot rule out this is another one correction. However, it should have more downside to complete it, and while the difference between a wave C (if it want to finish a correction) and a wave 3 is sometimes subtle, we are waiting for the start of a bigger wave 3.. so i’m sure we cannot confuse them. This is the actual count: today’s high was exactly at the 61,8% retracement of the drop from the high, and 61,8% is typical for wave 2′s so i favor the immediate downside case.

Metals Jan 31st

mdm — Wed, 01 Feb 2012 00:24:19 +0000

It’s too early to declare a top is in, but Gold showed a perfect opportunity today. From the last clear ABC low, it completed five waves up signaling at least a correction was coming. Immediately, five waves from the peak signaled the view was right, but the session closed with a bounce. Now i expect at least other five small waves under today’s low: if ths decline morphs in a bigger impulsive move, then is it possible to consider the intermediate bearish count (second chart).

For the intermediate term, it is always live the bullish count, but even in this case today’s high could be a small wave 1 leading to a sharp retrace to 1610-40. We’ll see while it develops.

Silver is still a guess: if Gold is going to correct, then the higher speculative metal should. Is it possible to count a complete structure in it too, but i sincerely wouldn’t bet the farm on it. However, the higher high and the close under yesterday’s low raise the probability for the bearish case at least in short term

EurUsd Jan 31st

mdm — Wed, 01 Feb 2012 00:04:29 +0000

Two days of strong reverse make me think that the Euro run could be arrived to an end. The wave structure too could show a complete ABC correction, but we need five clear waves down to declare a top. If an impulsive move is in the making, it is in a small wave 3 and will probably have follow through tomorrow, targeting 1,29, the start of the ending diagonal drawn from jan 25 low.

Crude Oil update

mdm — Tue, 31 Jan 2012 17:59:47 +0000

Obviously it preferred the other way!

My alternate yesterday was: The dashed lines are in case last two days’ action is a sort of leading diagonal: in that case, expect a sharp spike before heading down and the condition was until it stays under 101,4

Well, looks like it did it this way. Breaking leading diagonals, exactly as ending diagonals, cause a sharp move against the diagonal direction. In case of ending diagonals, the move retraces at least to the start of the diagoanal; in Leading ones, it stays under the start. So it had to stay under 101,4, and it did before heading to new lows.

Now, after many days of deception, and a series of waves 1-2, it is time to fully commit if my count is right. Expecting a fast move to the neckline (around 97,4) and a break for heading under 92$

Warming up?

mdm — Mon, 30 Jan 2012 22:23:41 +0000

Structure of this morning action doesn’t still look impulsive. While the Eur drop looks stronger and could turn out to be a reverse (lower high and lower low), there is no clear ending/reversing impulsive structure in metals.

Then, ES. As i repetely said, the structure to the top looks conplete. One could make a case where a final w4/w5 are still missing to complete the big final C, but i assume it as completed because the Dow went too close to the May high so that should be a double top and i think it is not worth betting for another high in SPX while the Dow stays under the previous high.

However even in ES the drop has to assume a clear impulsive structure, so i am expecting a big follow through tomorrow to confirm it

Oil is still driving me crazy. I won’t change count until it stays under 101,4 (and continues to put lower highs and lower lows), but i need a confirmation under the proposed neckline at 97,4. At this point i admit i was expecting a faster breakdown, but maybe it needs some more time. The dashed lines are in case last two days’ action is a sort of leading diagonal: in that case, expect a sharp spike before heading down

Weekend

mdm — Sun, 29 Jan 2012 17:13:43 +0000

Unfortunately, nothing new in respect of Thursday posts. Euro and Metals didn’t confirm any turn, so for now one should stick with the uptrend.

ES failed once again to breal under 1306 (1304-6 is a key level for the cash index) but the bounces since the top looks corrective so it could break soon.

The same for Crude Oil: i thought friday was the right day to breakdown, but i needed another range bound session. For now, it put a lower low and lower high in respect of thursday, so i think the last high (100,6) should hold.

Charts tomorrow when i think i’ll more guess; have a nice week

Turbulence ahead

mdm — Fri, 27 Jan 2012 00:49:56 +0000

EDIT: Just to clarify, if i wasn’t already in i would strongly short ES and Crude Oil with stops at today highs. They shouldn’t be violated in intermediate term, and offer a huge risk/reward ratio.

As written in ES post, i have recently said too many times the we were at the top. So, tonight low profile! But this afternoon i saw complete structures in almost every asset, and i have just to wait for confirmation. Times ahead should be ugly, and as soon as tomorrow you could probably see a strong move, especially in ES and Oil. We’ll see, this weekend posts could be really interesting.

In the meanwhile..

PS: i entered the “compression” trade on Natural Gas that i showed yesterday. I’ll update

Oil Jan 26th

mdm — Fri, 27 Jan 2012 00:32:25 +0000

No more time: under this count – that is overall working since many days – today’s high have to hold and it should start (maybe as soon as tomorrow) a HUGE decline.

Chart is well detailed

ES Jan 26th

mdm — Fri, 27 Jan 2012 00:25:22 +0000

I have called a top too many times in the last few days, so i don’t want to repeat. But..

Well, if tomorrow it goes under 1305, expect fireworks