"For many these October levels might seem support, especially if there is a 2-3 day counter-trend move in the markets next week, but probability patterns often suggest that the price normally follows the model, so the expectation is that November lows are the target before any major rally or support is verified…
I do expect a 2-3 day rally upwards next week, but firstly I would like to see a test of the November and Weekly lows next week before a major counter-trend move upwards towards the weekly 50% levels.
The trend will probably continue down on Monday or hopefully it will so that these lows verifies support, before there is a 2-3 up move back towards the recent break.
Therefore the Weekly 50% levels next week are resistance zones for a continuation move down after any 2-3 day counter-trend UP move. (previous Weekly Report (11th November)"
Index Weekly Report continues...
This week along with the lower weekly open, like many lower weekly opens, tried to push upwards before hitting resistance and drifting back down.
However with this week ending, the higher weekly open next week can therefore continue down into another 5-day pattern towards those November lows as shown the Weekly charts:- A higher weekly close followed by a lower weekly close as it heads down into November lows before major support is found in both these markets for this current month...
Index Weekly report continues...
"Friday’s trading is either going to set-up another wave down or if it closes around the middle of the 5-day range, then next week the 5-day 50% level can be a risk level to trade a 3-day UP move from next week..(Friday Report)"
Index Weekly report continues...
The overall technical pattern is bearish, and this is also confirmed with price trading below the 3-day cycle and Weekly 50% level.
I was looking for a Sell down to continue on Friday. There were a couple of confirming set-ups playing out over the past 2 days, and a high probability set-up that the 3rd day would continue down, this was even confirmed on my part with my systems.
But what had happen was that early rotation upward and close above the trailing resistance line change the intra-day cycle.
There was an early push down, but it simply tested the cycle lows and moved back above Friday’s Risk levels..
For those traders in Shorts on Thursday after the first ‘exit’ once back above the Risk level all traders should be in neutral positions.
The Weekly 50% level is the trend guide for next week, whilst price is above that level the expectation is that the market is heading upwards.
But whilst that set-up didn’t eventuate on Friday, below Friday’s lows next week, and below Weekly 50% level, the trend is down, and a similar pattern as GBP this week.
For Monday I don't have a set-up as yet, otherthan respecting the current trend defined by the Weekly 50% level..
Read GBP below....
Daytraders: when trading break outs from trailing resistance lines always try and take you first lot out around the .90 pip range from the previous swing low.
It depends on how many lots you are trading but the 2nd lot will be based on the next 90 pip move upwards, as shown above.
Stops can be entry levels at breakeven after first exit, or move stop to a dollar breakeven level so that the $dollar loss is neutral.
Because after any change of cycle, price can come back down and re-test the cycle lows before continuing with the trend
There was no set-up on Friday, it was see how it plays out and where the day closes to confirm next week's trading....
Friday:-what it did do with the push upwards early in the day and reverse back down, is change the intra-day cycle around to a BUY forwarning that the Monday price action 'probability' is UP....
As I mentioned in the morning post... the 5-day 50% level next week is going to be guide on any 3-day rally next week....
There will be a full US Weekly report completed over the weekend for both DOW and ES
Trend defined by Weekly 50% level and 3-day cycles.
Ideally I would like for both markets to come off much more, and head down towards the November lows (Weekly charts-Weekend Report).
A Weekly trend that follows market dynamics should hopefully head down towards the lower green channels on Friday.
There will be a full Weekend report on Friday’s trading, because Friday’s trading is either going to set-up another wave down or if it closes around the middle of the 5-day range, then next week the 5-day 50% level can be a risk level to trade a 3-day UP move from next week..
US report continues Below…
There were 2 set-ups this week, a rotation back towards the Weekly 50% levels from Tuesday, and then a continuation down on Wednesday and Thursday.
There are no set-ups on Friday…
Swing traders still holding shorts, Use the 5-day 50% level as a trend guide on the way down and hopefully exit levels are taken out on Friday to be neutral positions…
Entry @ 6496 partial exit 6506 R22 up from swing lows.
Stop moved to dollar breakeven @ 5487, looking for R44 UP swing into 6528 (exit 6526)
Gap filled on upside @ 6538, and coming down into an R87 and R44 lows @ 6494...
Didn't rise high enough to short the market around R44 spiral tops
Around the lows there is still a possibility of a swing back towards the highs late in the day... but don't try and trade longs below R44 Risk levels as this price action is following the overall Weekly trend down on Friday....
Any longs around these lows are high risk trades for Friday.....as the morning report suggested:- price following the rotation down towards 5-day dynamics
Partial exits on low this morning and there has been a slight push upwards.
As I mentioned in the GBP post today:- "Most derivatives are non-linear, so traders can expect some form of rotation upwards in the opposite direction of the previous day's close."
Therefore that can happen on Friday and move up into a higher Weekly close.
The trailing resistance line has dropped down, so whilst price is still below this level, then traders can remain in shorts.
Above this level, and shorting is open to risk….
Below this level and longs are open to risk…
Partial exit @ 6528, with the expectation that the R44 will complete the move up into the 5-day 50% level @ 6545.
The Risk above 6545 can head up into the close, but like all bearish patterns in Day trading, around the R44 highs the Risk of longs increases.
If stopped out at entry @ 6518. I won't trade again today
The only short-term UP move that would interest me would be a test of the November 50% levels and then trade the break of the trailing resistance line, otherwise stay out and respect the trend….Yesterday's Report
Following my report price moved up into the Trailing resistance line and sold off down into the November 50% levels.
These levels are major support zones, so any trader looking for a swing back up would ideally confirm the break of the Trailing resistance line, looking for a minimum 3-day UP move
Most derivatives are non-linear, so traders can expect some form of rotation upwards in the opposite direction of the previous day's close
Personally, I prefer to trade any swings upwards from the following trading week starting from Monday, because a Weekly close above this level verifies major support.
A break below this level on Friday and GBP is heading down much further..
SPI moved down on open but just didn't reach my entry level @ 5496...
This morning the market is moving in 22 point waves, and this price action is what I wanted to happen, with traders exiting the R22 high and moving open positions to stops below 5946 and heading upwards into R44 highs and take the day off...
Day traders trading 2 lots look for 18-22 point moves as first exit zone and then look for 40-44 completion on the 2nd lot.Morning report
2nd lot exit zone could have been the 2nd R22 range @6533, as it comes close to closing the Gap....
No trades at this stage of the day....
A 2-day pattern up-move, and then failure (next day down) has the potential to collapse into Friday’s lows. There is also a forewarning pattern on ‘Dilernia Drops’ that is alerting traders the potential down move.(Yesterday's report)
Looking for a major sell-off on Euro.
Price action coming down on the 3rd day, and verifed with the break of the trailing intra-day support on Thursday
2 lot traders can parital exit 1 lot here and move stops to above trailing resistance line which matches the 3-day highs.
2nd lot can exit at 1.45290
3rd lot traders can exit on target @ 1.4390
A break of the Weekly 50% level is want I want to see, if this breaks first target is the previous weekly 50% level, but the expectation that the currency will follow a similar pattern as GBP/USD and head lower next week..
If Friday takes out 3-day highs @ 1.46720 (no shorting above it)
Day trading:- The potential for further weakness is there, but as you know my work I don't short the SPI unless it's a higher open or a from a higher R44 spiral point/Pivot
Depends on the open, but the expectation for the gap fill @ 6539 today to play out, however it's not opening near (sycom close) any risk levels to use to minimize risk on the upside if trading longs on open, the best Risk zone would be to use the R87 low @ 6496 to trade any up move back towards the gap fill and 44 points upwards...
The 5-day 50% level is 6546 and also the lower pivot, a higher open and push down and expectation that the R87 will complete on the down side @ 6496
Risk:- Don't trade shorts above 6546
Don't trade longs below 6496
Day traders trading 2 lots look for 18-22 point moves as first exit zone and then look for 40-44 completion on the 2nd lot.
3rd lots can be held with breakeven stops and once again hold overnight...
Push down on US markets on Thursday following the overall down trend defined by the Weekly 50% and 3-day cycle.
I would have liked more weakness into the down targets today, but hopefully that can occur overnight or Tomorrow for those still holding short positions.
Trend guide on Friday will be the 50% level....full US report later...
Currently both markets are slipping early on Thursday but 5-day 50% levels still supporting the market with downside targets shown if Thursday follows a 'sell' pattern...
Trailing resistance lines are risk levels today limit 'short' trading above both those levels...
Tuesday:- Expected start of a 2-day UP move into the Weekly 50% levels
Wednesday: Expectation of the 3-day and Weekly 50% level to be resistance, which was verified on Wednesday selling down from the Upper Risk levels.
Thursday: If this follows the overall DOWN trend then the potential of a move back down into the Weekly lows is a possibility, and further weakness next week….
US report continues below...
If both markets are going to head lower then it needs to confirm the break of the 50% levels on Thursday. Because at this stage the market can swing back up towards the highs once again..
For Swing traders still short, simply sit in the trade and hopefully it will head down into the blue channel lows and exit positions:- Stops above yesterday’s highs
Day traders:- I don’t have any clear cut entry to trade today, as markets are currently supported, but don’t look for longs below those 50% levels on Thursday…
Break back under 6627 has pushed the market down into another r44 low, where this time the exit zone can be partial exit @ 6606 and held with the expectation that the lower Gap will fill or at least to the 5-day 50% level. (or into the close of today)
Even though the expectation that these 44 point swing lows have attracted buyers pushing the market upwards, the failure at the 3-day highs and Weekly 50% level has the potential to push the market lower into the close....
Partial exits and run breakeven stops from entry or just above 6627...
Next exit zone is 6578 5-day 50% level and take day off for 2nd lots, with the potential of further weakness if US markets Sell-off tonight.
Weekly 50% level supported price on Monday, with the view of a rotation back towards the break on Tuesday.
There were no set-ups on Wednesday as it was viewed as a ‘stalling day’, part of the 2-day reversal, however it failed to close above the 3-day high.
Two probability patterns now: - support off the Weekly 50% level, and there is a potential of a higher close on Friday. This is confirmed whilst price is trading above intra-day trailing support.
A 2-day pattern up-move, and then failure (next day down) has the potential to collapse into Friday’s lows. There is also a forewarning pattern on ‘Dilernia Drops’ that is alerting traders the potential down move.
If Price breaks the Weekly 50% level on any push lower this week, then it’s down into Weekly close on Friday, and don’t stand in it’ way until next week..
Tuesday there was an expectation of a reversal back upwards to verify resistance around the break of the 3-day lows. Traders who were long had exit zones at 2.0810
The expectation was then for GBP to continue down into the November 50% level, however I was looking for Wednesday to ‘stall’ before trading the break of the trailing support zones down..
Even though intra-day cycles are long around these lows today, the Weekly timeframe pattern suggests further weakness into Friday.
The only short-term UP move that would interest me would be a test of the November 50% levels and then trade the break of the trailing resistance line, otherwise stay out and respect the trend….
2 lousy points shy of 6586 around the lows to confirm the UP move today (low 6588)This would have completed a nice 'money pattern' today.
This move coming into the R44 highs is what I wanted to happen from 6586 (spiral point)
Around these highs the market RISK increases for long positions, but as I mentioned this morning, a 44 point up move could continue higher into the close..
The rest of the day is an each way bet. Major resistance around the highs based on the 3-day cycle and Weekly 50% level, but whilst it's trading above 6627 there is a possibility of a higher close.
A higher close above the 3-day highs will swing it into a BUY cycle, but after any change of cycle there is an expectation that there could be a 2-day rotation back down to re-test the 3-day lows from Tomorrow
If market reverses down later today, no Longs are traded around the lows, due to expectation of 'gap' fill and the potential down move in US markets...(US report later).
No view for the rest of today, wait until it plays out....
Still waiting for the first 44 to complete from yesterday, normally price will come down into an R44 low, as it pushes down from yesterdays pivots and into @ 6586.. Early short play....
However price has opened higher and is actually pushing upwards from yesterdays lower Spiral point @ 6594..at this stage..
Around the R44 highs, the Risk is actually increasing...
Any rotation down from these R44 highs, and no longs are taken, as expectation that lower gaps will fill....(higher spiral point)
Once again upper risk level is 6627 from yesterday..
I preferred the down move into 6586 to be trading longs today, then risk can be better managed.....
Yesterday was gap trading on the downside from the higher pivot @ 6627, and it took nearly all day to complete the R44 range, which was 2nd lot exit zones.
Whenever the market opens around the center of the 5-day range its' probably the hardest and most choppiest time for any day trader, but hopefully the risk can be minimized today..
One thing we notice about Tuesday and Wednesday is that on both days the R44 lows are attracting buyers into the market. Even though price is still trading below the 3-day lows and Weekly 50% level (bearish), there is buying strength coming into the market, as pointed out yesterday.
Depends on the open, but the R44 will complete @ this level, if there is going to be any buyers coming into the market, then the expectation is that any up move is going to be a minmium 44 points and I won't look to be shorting above this level, as any move could just continue higher into the close.
Below 6586, and expectation that price is moving down closing the 'gap'. @ 6562.
But I won't be looking for longs below 6586 today. The Trend is down and could go down much further because of the overall trend, but at the same time it could be simply a choppy day waiting for direction in US markets tonight.
Traders in Short positions should look to partial exit positions around trailing support and move open positions stops above today's highs....
This late push down into the close, helps set-up Thursday's pattern
Full report later......
Upper resistance levels on US markets played out, but I would have prefered a bit more weakness in both markets, at least testing or breaking trailing support.
However, this was the second day of a 2-day rally, so if both Markets are going to move back down, then Thursday is the most probable day...
"Expectation that the market won’t reverse or attempt to reverse down until the 3rd day (Thursday)...I don’t expect much weakness in US markets on Wednesday, but hopefully any continuation down is back towards the lower ‘blue’ channel on Thursday."Pre-open Report
Risk to be shorting above Risk levels on Wednesday
The support was verified on Monday, however the rally completed in 1 day back towards the Weekly 50% levels. The same Weekend report suggests that these same Weekly 50% levels are resistance zones, and at this stage that’s my view.
Yesterday was the first day rally, any rally that swings back towards these levels normally plays out on a 2nd day. Therefore the 2nd day needs to consolidate below or close below these levels to verify the overall down trend…
US report continues below…
Risk on both markets....
Limit trading shorts above those levels because above those levels and expectation that the market won’t reverse or attempt to reverse down until the 3rd day (Thursday)
Trading shorts:- partial exits at support zones @ the 5-day 50% levels, move 2nd lots to breakeven. I don’t expect much weakness in US markets on Wednesday, but hopefully any continuation down is back towards the lower ‘blue’ channel on Thursday.
Last week we were using the 5-day 50% levels as ‘Sell’ zones and trend identification as the Weekly trend moved down. This week the 5-day 50% level are swing points and exit zones, or in this case partial exit zones...
EURO is well support compared to the GBP (report below). The Euro remains above the weekly 50% level, and yesterdays break of the trailing resistance line has sent the Euro back towards the previous break of the 3-day lows.
It's probably 1 day too early to be shorting again, because resistance needs to be verifed, if that's the case on Wednesday then on Thursday traders can use the trailing support line as a confirming breakout trade.
No Set-ups for Wednesday....
GBP/USD report below..
Swing traders can exit shorts on the lows of today, as systems have gone long.I do expect a rotation back upwards to re-test upper resistance zones around the Weekly 50% level...That needs to be verified with the break of intra-day trailing resistance line (yesterday’s report)
Wednesday it’s too early to say what the market will do. A 2 –day reversal, which today is part of the 2nd day has a random length, therefore it might be 1 more day to get a better idea on the next probability trade.
Those traders who are still long, partial exit on today’s highs and run breakeven stops from entry, with next exit zone around 2.080.
Even though the trend is down, better shorts might be on Thursday….
Morning report:- "anyone trading shorts this should be partial exit zones or trade 22 point ranges partial exits on the way down....8:30am"
If traders are using this strategy today, then stops are placed equivalent on the upside so that any losses are breakeven Dollar amount.
At this stage of the trading day, it is repeating the process for a 2nd time into 6607
Even though I would like the market to complete the move down 44 points and into 6586-80 whilst it's trading below 6627, it’s about money management today…...
Pivot highs @ 6627.... early push down but 6613 and the previous 5-day 50% levels has supported the market pushing price upwards towards the 3-day highs and Weekly 50% levels..
44 points up aligns with the Weekly 50% level @ 6656-7
There is still the expectation that the gaps or some rotation down will occur, (3-day resistance) but whilst price is above 6627 the daily trend is up.....
Any downside moves the 5-day 50% level @ 6580 is the rotation zone if price moves back below todays morning lows....
Day-traders this is a target and exit zone and take the day off.....
Others can hold with the expectation that the Gap @ 6562 will close......
Can't trade longs around these upper levels today without at least a 44 point reversal down...
US markets have completed the Swing into the Weekly 50% level. These levels were viewed as swing targets from the lower weekly open this week, and also resistance this week (full US report later).
SPI back to the 3-day highs after the US rally on Tuesday.
My view yesterday was that today would provide better shorts in the market than yesterday, but these shorts at this stage are only view based on 44 point moves, and/or into the gap of 6562.
Higher Daily open and expectation that it will try and close the gap on the downside. That will depend on where the market opens.
This will place the Market around the 5-day 50% levels, which often consolidates the price action, therefore at this stage I'm not expecting much more than 44-points or into the gap...
Day traders:- The lower Pivots @ 6577 match the 5-day 50% level, so anyone trading shorts this should be partial exit zones or trade 22 point ranges partial exits on the way down....
Above 6627 and price is heading upwards into the 3-day cycle which could close above it, as part of the 2-day swing.
But to trade any UP move price would need to come down 44 points so that traders can at least have a lower Spiral point to minimize Risk of trading longs...as was the case with both lower Spiral points on the R44 yesterday. (open 6453 and 6504 2nd swing point)
Exit zone for traders @ the 5-day 50% levels.
Expectation that this up move is part of the 2-3 day swing from Monday's lows, and rotation is towards the weekly 50% level before it hits resistance once again..
Full US report later
Aussie and Euro traders trading longs during night session on US markets from cycle lows should partial exit around these highs, and move open position to break even stops from entry and hold for a move towards the 5-day 50% levels in both markets...
In the Weekly report I also mentioned that there is a probability 2-day upswing in the market back towards the Weekly 50% levels, after a push down on Monday into the Weekly lows.
Monday hasn’t come down far enough, but what it has done is swing the intra-day cycles around after consolidating between the 5-day lows of Friday and Monday.
Therefore if the DOW and ES are going to swing upwards on Tuesday price needs to remain above the intra-day cycle lows and head back towards the 5-day 50% levels, just like what’s occurred in the SPI today....
Don’t trade longs below 12974 on the DOW, and ES 1437. (cycle lows)
There will be short-term counter-trend moves against the overall DOWN Trend, and I do expect US markets to continue lower in November as shown in the weekly report……
Counter-trend UP move in a down trending market and has completed the rotation back into the 5-day 50% level @ 6544
This isn't a 'shorting' zone today! It's rising upwards from a lower Daily open. The best shorts occur from higher daily opens.
This week there is an expectation of a 2-day UP move back towards the 3-day highs and Weekly 50% levels in most global markets.
5544 can be a resistance zone today, but I view today as part of a daily rotation upwards, and if there are going to be shorts in the market, then tomorrow will provide better opportunties..
Today is the first stage, and if US markets head upwards on Tuesday then the SPI will open much higher tomorrow..
Expectation of the market heading down as it follows the break of the 3-week lows and rotation into the November 50% levels....(read Weekly report)
Whenever there is a lower open traders will try and fade the gap on the Upside, as was with the case yesterday. But traders need to acknowledge the overall trend of the market and Weekly timeframes.
Yesterday was hard to go long on open because price wasn't anywhere near a lower pivot 'risk' levels. Today day-traders have lower Risk levels to trade and manage the intra-day trends....
There will be short-term counter-trend UP moves against the overall down trend...
Report continues below...