Technical Analysis - EURO 6/30/11

EURO still looks like it is in a long term distribution pattern to me.

Intermediate term is still sideways.

Another week of mixed signals from the moving average envelopes and RSI.

DTS also giving mixed signals.  ADX/DMI showing non-trending behavior on both time frames.  

My top Elliott Wave count continues to be long term bearish on this market.  Could we get a new wave (2) high?  Sure, but I am still not shy about saying that I have zero desire to own the EURO right now.  

Current Stance

Long Term: Sell

Intermediate Term: Flat

Definitions: 
Flat = no position / not long or short the market. 
Sell / Short = positioning to attempt to profit on price declines
Buy / Long = positioning to attempt to profit on price advances
Hold = hold a long position
Hold Short = hold a short position

A Four-Chart Lesson in Spotting Trade Setups

By Elliott Wave International 

You can find low-risk, high-probability trading opportunities by trading with the trend. The trick is to find the end of market corrections, so you can position yourself for the next move in the direction of the trend. Enjoy this excerpt from Jeffrey Kennedy's How to Spot Trading Opportunities eBook. Read more.

Technical Analysis - Gold 6/29/11

Gold's long term uptrend is taking a little break, but remains intact at this point.

Gold futures remain sideways in the intermediate term.

Moving average envelopes paint a little bit of a mixed picture between the weekly bar (left) and daily bar (center).  Same story with RSI.

Dynamic Trailing Stop also paints a mixed trend picture for gold futures. 

ADX/DMI is flatting out a bit on the weekly chart, but is displaying trending behavior on the daily bar chart.  Of course, the daily ADX is still below both the +DMI and -DMI lines which, along with the recent sideways action, have crisscrossed a few times lately.  

Current Stance

Long Term: Hold (core position)

Intermediate Term: Flat

Definitions: 
Flat = no position / not long or short the market. 
Sell Short = positioned to attempt to make money on price declines
Buy / Long = positioned to make money on price advances
Hold = hold a long position
Hold Short = Hold a short position 

K.I.S.S.

Lately free time has been spent working on learning to program so I will have the ability and skills to automatically backtest and possibly even automatically trade system ideas that I have.  In the past, I have meticulously and manually tested such strategies on spread sheets.  Clearly, having the ability write some code and test automatically would be supperior and less time consuming.  

Anyway, progress is being made, but I still have a lot to learn.  Money and risk management via position sizing have been a major part of my strategy ideas, and these can be complicated to write code for.  Well, at least for me at this stage.  

I've been piecing together code for the short-term system I currently use on the e-minis.  I'm not done with all the intricacies yet (like variable position sizing), but decided to take a little break and write code for just a simple trend following system for use on daily charts today.  The basic system had three lines of code and showed long term positive equity curves for the most part.  Just like surfing, it just caught financial waves and rode them.  


It's amazing.  Only a few lines of code are required for a simple system trading a fixed number of contracts (I don't trade a fixed number, butt.....).  Within minutes I had a basic system coded and was able to test it across several markets separately.     


Although this is not a full system with proper risk management, it is a reminder to keep things as simple as possible.   

Technical Analysis - Swiss Franc 6/28/11

The Swiss Franc is making new highs.

It feels like I've been repeating myself on the updates of this chart for weeks: long term trend still up. 

Ditto for the intermediate term trend. 

Moving average envelopes looking pretty healthy, but RSI is showing some negative divergence on both the weekly and daily bar charts.  This divergence in price velocity could indicate some short or intermediate term weakness ahead.  

 Dynamic Trailing Stop is in uptrend mode on both time frames.  


ADX / DMI is in trending mode on both charts.  

The chart above is how many Swiss Francs (CHF) the USD will buy measured in a weekly bar.  Yup, it's been a good idea to hold Swiss Francs for a long time.  Nothing last forever, but this trend is still intact.  


At the time of this posting 1 USD = 0.83228 CHF.  


Current Stance 

Long Term: Hold

Intermediate Term: Hold

Definitions: 
Flat = no position / not long or short the market. 
Sell Short = positioning to attempt to profit on price declines
Buy / Long = positioning to attempt to profit on price advances
Hold = hold a long position
Hold Short = hold a short position
 

What Will Happen to the Stock Market When QE2 Ends?

Club EWI's free "Independent Investor eBook, 2011 Edition" offers you an unorthodox view of the Fed's quantitative easing program
By Elliott Wave International 

Club EWI's free "Independent Investor eBook, 2011 Edition" offers you an unorthodox view of quantitative easing and its "effects" on stocks and the economy... Read more.

Technical Analysis - Silver 6/27/11

Trends don't move in a straight line.  I still consider the one in silver to up over the long term.

Intermediate term is neutral for silver right now.

The weekly bar chart's moving average envelope is neutral and teasing with downtrend mode.  On the daily chart, the moving average envelope is in downtrend mode.  

RSI is neutral on the weekly bar chart, and is in downtrend mode on the daily bar chart. 

Dynamic Trailing Stop remains in downtrend mode for both time frames.

ADX/DMI shows non-trending behavior on the weekly chart, but has started to register trending action on the daily bar chart. 

My top Elliott Wave count for silver continues to consider current action to be part of a corrective 4th wave.

Current Stance

Long Term: Hold (core position)

Intermediate Term: Flat

Definitions: 
Flat = no position / not long or short the market. 
Sell Short = positioned to attempt to make money on price declines
Buy / Long = positioned to make money on price advances
Hold = hold a long position
Hold Short = Hold a short position 

Can the Fed and Economists Forecast the Future? See This Startling Chart

Elliott Wave Financial Forecast Editors Kendall and Hochberg on economists, the Fed and forecasting
By Elliott Wave International 

EWI's Pete Kendall recently spoke with radio host Gabriel Wisdom, and the two discussed a crucial but rarely-asked question about economists and the Federal Reserve. Pete's startling comments flatly contradict conventional wisdom. But what do the facts say? Read more.

Technical Analysis - S&P 500 6/24/11

S&P 500 long term trend seems to have entered a sideways trend.

Intermediate term trend is down in the S&P 500. 

Weekly and daily bar moving average envelopes are both in downtrend mode at the moment. 

RSI is also in downtrend range on both the weekly and daily bar chart.  If price on the weekly chart does not make a new swing low like RSI has done, we might be looking at a failure swing there. 

Dynamic Trailing Stop in in downtrend mode on the weekly chart, but has whipsawed in and back out of uptrend mode on the daily chart.  Remember a few weeks ago when we started seeing suggestions of a possible intermediate term sideways pattern?  

ADX / DMI looks like it is starting to register trending behavior on the weekly and daily charts.  In this case, it is a downtrend.  

My top Elliott Wave count still indicates a major top pending, possibly after a new pattern high (but I would not wait around for that).

VIX continues to wander around at complacent levels. 

Last week (and the week before), we said that the rally in the Put/Call suggested a short term low.  Since that post, we did see a short term rally in the S&P, and as a response, the Put/Call is now back into a more neutral range and prices are falling back off of that short term rally.  There does not seem to be a strong indication out of the Put/Call for this week's post.

Current Stance

Long Term: Flat

Intermediate term: Flat

Short term: I use a proprietary semi-automated system for short term trading on this index, and it is currently taking signals to the long side.  It is very possible for this system to change direction more frequently than posts to this blog.  

Definitions: 
Flat = no position / not long or short the market. 
Sell / Short = positioning to attempt to profit on price declines
Buy / Long = positioning to attempt to profit on price advances
Hold = hold a long position
Hold Short = hold a short position

Technical Analysis - EURO 6/23/11

Weekly bar chart of EURO futures still looks like a probable long term distribution pattern to me.  I would rather own the Swiss Franc.  

Intermediate term trend in the EURO remains sideways. 

Weekly and daily moving average envelopes, along with RSI, are giving mixed signals.  

Both weekly and daily Dynamic Trailing Stops are in downtrend mode.  

ADX / DMI registers non-trending behavior on both charts. 

Top Elliott Wave count still super bearish for now.

Current Stance

Long Term: Sell

Intermediate Term: Flat

Definitions: 
Flat = no position / not long or short the market. 
Sell / Short = positioning to attempt to profit on price declines
Buy / Long = positioning to attempt to profit on price advances
Hold = hold a long position
Hold Short = hold a short position

Mike Church Interviews Ron Paul

Ron Paul is a long time champion of free-markets. 

Technical Analysis - Gold 6/22/11

Gold's long term uptrend still in place.

 

Sideways intermediate term trend in gold futures.

Moving average envelopes: uptrend mode on weekly bar chart; neutral range on daily bar chart.

Dynamic Trailing Stop: uptrend mode on weekly bar chart; downtrend mode on daily bar chart.

ADX/DMI: trending behavior on weekly bar chart, and turning back up from non-trending behavior on daily bar chart. 

Current Stance

Long Term: Hold (core position)

Intermediate Term: Flat

Definitions: 
Flat = no position / not long or short the market. 
Sell Short = positioned to attempt to make money on price declines
Buy / Long = positioned to make money on price advances
Hold = hold a long position
Hold Short = Hold a short position

Technical Analysis - Swiss Franc 6/21/11

As currencies go, I like the Swiss Franc and have for some time.  In fact, although I an not married to it indefinitely, I personally believe global storage of CHF in physical form outside of the banking system is a good idea right now.  But that's another story.  This blog is primarily about long and intermediate term trading.

Long term uptrend still in place; check. 

 Intermediate term uptrend still in place; check.

The moving average envelope has moved into neutral range on the daily bar chart (center), but remains in uptrend mode.  

RSI is in uptrend range on both the weekly and daily bar charts.

Dynamic Trailing Stop is in uptrend mode on the weekly bar chart, and in downtrend mode on the daily bar chart.  Based on what we can see on the daily bar chart above, I am not letting the daily bar DTS stop me out of long positions in this market right now. 

ADX / DMI registers strong trending action on the weekly bar chart, and is currently in non-trending mode on the daily bar chart. 

At the time of this post 1 USD = 0.84114 CHF.

Current Stance 

Long Term: Hold

Intermediate Term: Hold

Definitions: 
Flat = no position / not long or short the market. 
Sell Short = positioning to attempt to profit on price declines
Buy / Long = positioning to attempt to profit on price advances
Hold = hold a long position
Hold Short = hold a short position

How to Set Protective Stops Using the Wave Principle

The 3 simple rules of Elliott wave analysis can help traders manage risk, ride market trends and spot price reversals
By Elliott Wave International 

EWI's Chief Commodities Analyst Jeffrey Kennedy values the Wave Principle not only as an analytical tool, but also as a real-time trading tool. In this excerpt from Jeffrey's Trader's Classroom Collection Vol. 2, he shows you how the Wave Principle's built-in rules can help you set your protective stops when trading. Read more.

Technical Analysis - Silver 6/20/11

A friend sent me an interesting link regarding the Dodd-Frank Act and how it might affect some OTC markets, including precious metals.  If anyone has any insight into this, please let me know.  

I changed the scale of the weekly silver chart we have been using to semi-log.  This scale better represents the price changes.  

While the long term trend in silver remains technically up, the intermediate term trend is neutral.

  
Moving average envelopes are neutral on the weekly chart and slightly downtrending on the daily bar chart.  


RSI is in neutral range on both the weekly and daily bar charts. 

The Dynamic Trailing Stop is in downtrend mode on both the weekly and daily bar charts.  

ADX / DMI looks weak on both charts.

My Elliott Wave count indicates silver to most likely be in a large 4th wave correction. 

Current Stance

Long Term: Hold (core position)

Intermediate Term: Flat

Definitions: 
Flat = no position / not long or short the market. 
Sell Short = positioned to attempt to make money on price declines
Buy / Long = positioned to make money on price advances
Hold = hold a long position
Hold Short = Hold a short position  

If you are thinking that the charts above represent a simplistic way of trading markets, you are right.  I like to keep it simple.  My trading does not utilize news stories or ideas about how external factors might affect price action.  Instead, I just follow price action and try to catch trends the same way a surfer would catch a wave.  The markets are way smarter than me, so I figure I'll just follow them.

Technical Analysis - S&P 500 6/17/11

The S&P 500 recently broke out of its previous long term uptrend lines. 

As the daily bar chart above shows, the S&P 500 index is currently in an intermediate term downtrend.

The weekly bar's moving average envelope is neutral, and the daily bar's is in downtrend mode. 

RSI on the weekly bar chart is in neutral range.  We are still watching to see if price follows RSI's lead and makes a new swing low.  

RSI on the daily bar chart is in downtrend range, but has recently been diverging positively.

The Dynamic Trailing Stop is in downtrend mode on the weekly and daily bar charts.  

ADX / DMI is non-trending on the weekly bar chart, but registering trending action on the daily bar chart.

According to my top Elliott Wave count, we could expect a major top to be in place after a possible slight new pattern high.

While the VIX has risen a little bit as a response to recent price declines, it remains a complacent levels.   Although this has long term bearish implications, the Put/Call ratio paints a different sentiment picture for the short term.

Last week it was mentioned that the fact that the Put/Call ratio was rallying so much might indicate a short term low.   This condition still exists, as the ratio has even rallied further.  

Current Stance

Long Term: Flat

Intermediate term: Hold Short (I am currently using daily DTS as my stop).

Short term: I use a proprietary semi-automated system for short term trading on this index, and it is currently taking signals to the short side.  It is very possible for this system to change direction more frequently than posts to this blog.  

Definitions: 
Flat = no position / not long or short the market. 
Sell / Short = positioning to attempt to profit on price declines
Buy / Long = positioning to attempt to profit on price advances
Hold = hold a long position
Hold Short = hold a short position