Addicting Adrenaline Fueled Adult Cowboys and Indians….the FED Rate Decision (rules of pattern recognition #3)
Posted on March 16, 2016 Leave a Comment
Note, Darth Vader and the Dark Side connotation with the mouse image below ….
My biggest LOSSES were back in the day trying to trade the FED Decision in the spot currency markets. There I said it.
What I came to realize, for me – maybe not for you – is its addicting, adrenaline filled adult version of Cowboys an Indians. I can’t even begin to estimate the number of people frantically clicking their mouses for BIDS and ASKS and seeing the easy money then evaporate into the losses but then turn into winnesr and then losers and then, ultimately, closing the position at the market and saying – “great I made money” or “I am so thankful I am out of the market.” Come on, admit it, if your a trader you’ve more than likely jumped into the cage with the gorilla’s juggling dynamite. (OBTW, the dynamite is lit – which means, it will BLOW UP)
Go ahead, click that mouse at 2 EST and you might as well be throwing money up into the center of a tornado with an insane idea that you know where the money will land. (hint: you don’t)
How big is the Spot FX currency market?
(note, at any given time the “retail” market is able to trade roughly 1.5-1.8 trillion)
so, what do you do? well you plan … you play “if-then” and look to enter the market long after the chaotic swings. Trust me, this takes discipline, letting 200+ pips move go in whatever way they are going to go and – sit on your hands.
#3 – as a discretionary trader and somewhat impulsive personality – I have a rule of life: DO NOT TRADE W/IN ONE HOUR of any major fundamental news announcement. NO MATTER HOW BIG THE MOVE.
I’m not trying to preach here – I’m reiterating my gameplan for today at/around 2 EST. Bottom line is there is no gameplan – I’m NOT going to trade a FED RATE announcement. I will watch the chaos like a sniper and prepare my next move … why?
Well, as you can see over the past couple posts the USD is at/approaching a crucial juncture. I honestly don’t know which way it will go but we have MAJOR patterns on the EURO, POUND, YEN, AUSSIE, KIWI that need to work themselves out. The EURO has been in a trading range for a YEAR. It’s also showing some similarities to the bottom that was formed in November 2000.
So, the charts below are going to be my gameplan for post-FOMC tonight around the Asian open.
CHEERS – Bart
EURO MONTHLY:
- deeply oversold – the most ever since 2000
- consolidation occurring like 2000. should resolve soon
- RSI butting up against resistance (polarity)
EURO WEEKLY:
- note the RSI has “recovered” but isn’t in the oversold region of the past rallies – it has “recovered” with no real move UP – it’s consolidating.
- note the contracting triangle
EURO DAILY: here’s my gameplan for the EURO in a nutshell
- the PATTERN shows a consolidating triangle. they occur in 5 waves a-b-c-d-e and the “wave” relationship should be .618 of the preceding wave. the “bc” wave has done that and we have a very nice pattern for “cd” in/around 1.0644-1.0720.
- would like to see that hold w/ a move up into “e” to complete the sequence.
- IF we break hard to the downside and the pattern is broken then “assume” that “e?” was the end of the consolidation and get short looking for a daily close below lower trend line as confirmation.
- IF we break strong to the upside then look for “breakout targets” and watch price action in/around these areas. If continually strong and a DAILY close ABOVE 1.171 then TRIANGLE THESIS IS WRONG. Adjust
go ahead and hate … CSCO appears ready to breakout and outperform
Posted on March 14, 2016 1 Comment
03/14/2016 – update
the move down to 16 did not materialize but do believe the Mirror Image Foldback is still working. Put this one on the radar screen as it appears to be getting ready to blow. An update chart below:
PUT THIS ONE ON THE RADAR SCREEN ….
now, look at these relative strength charts of CSCO vs FB/GOOGL/AAPL/AMZN
believe it or not … the glamour names certainly look to be under pressure from CSCO and it “should” start to outperform on a relative strength basis. With this type of underlying strength, watch for the breakout noted above.
Let me know if you have any questions.
B
a move down to 16 would be a NICE place to BUY for a potential foldback as shown …KABOOM (?)
buy your shirts now … Cotton getting ready to explode – 15 months later
Posted on March 14, 2016 Leave a Comment
03/14/2016 – my good friend JC (www.allstarcharts.com) just blogged about cotton and it jogged my memory that 15 months ago I blogged about a low coming in cotton. (I’m good at timing, right? LOL) But, time is the key component and the PRICE level just completed the same corrective move (-75%) that represented the largest corrective move – EVER.
just saying, Cotton could be rolling w/ like Mr Toads Wild Ride …here’s updated charts:
if your an ETF player, perhaps look at LONG BAL in/around these levels and stop out below 35?
Enjoy.
Bart
Wrong below 54.45 ….picture paints a thousand words. Two charts so here’s two thousand words.
Chinese Yuan update …
Posted on March 14, 2016 Leave a Comment
sure looks like USD new highs after this pullback is complete.
update to TLT and 30 year continuous futures …
Posted on March 14, 2016 Leave a Comment
03/1482016
02/27/16 – TLT, if correct, should be losing steam over the coming days/weeks. Initial target appears to be 109-111.
note, if this pattern fails, then 145 is a very strong target as shown below. also note, the cycle top times came in w/ pattern completion. right now, favor the short side into the 109-111 area but do want to show possibilities.
the current market conditions and the AUDJPY – update
Posted on March 13, 2016 Leave a Comment
03/13/2016 – UPDATE
I’ve received a bunch of requests trying to see if this is a new BEAR MARKET or a corrective move w/in the context of a BULL MARKET. so, in order to give it a shot I’m going to go to the AUDJPY. TILT …? Yes, the AUDJPY. Please see below and read about the strong correlation of the AUDJPY and the NYSE.
so, here’s the deal … the market corrects in a-b-c fashion. see the chart below – that’s the “alt” count shown. however, it also moves in 5 waves and that the count shown.
there are 3 rules – yes rules – which means don’t break them – for Elliott Wave. The one were are really following is WAVE 4 CAN NOT go past the end of WAVE 1. It’s that simple …
so, in the case of the AUDJPY, we need to stop right here and start back down to finish a 5 wave sequence. ELSE, the a-b-c correction is complete.
so here’s a thesis:
- IF the AUDJPY is to complete a 5 wave sequence down into targeted area THEN it needs to stop in/around here and NOT overlap the end of wave 1.
- this is BEARISH for equities
- IF the AUDJPY is complete w/ an a-b-c correction (the “alt” count shown) THEN it will blow thru the end of the wave labeled 1 and new highs to be seen.
- this is BULLISH for equities
obviously, I have NO IDEA which way this rolls … but I have some clear benchmarks to follow in the coming days and weeks.
does that help?
B
something to note …
- the HIGH in 2000 was the LOW in the AUDJPY and then a couple years later they synced-perfectly.
- as the NYSE was making new highs, the AUDJPY diverged (and completed the PERFECT PRICE pattern like 2007) and then the NYSE Index dropped …
- the most recent low (remember the XLP/NYA?) timed the NYSE low – perfectly.
so, pay attention to this one ….
B
10/21/2015 – I’ve been asked what I think of the market of late …I’ve answered I have no idea. I see some patterns that suggest YEN strength across multiple currency pairs – and no it isn’t the USD vs JPY. That’s ugly. EURJPY, GBPJPY and my favorite AUDJPY appear they are willing to crack to YEN strength …. they “should” all go which means USD vs JPY which means pressure on equities.
here’s an update to the AUDJPY pattern. Folks, everything about this is so precise and harmonic – it’s one of my favorites. why? simply, I have a greater than 50% chance that the form, proportion and harmony are correct. Sure “looks and feels” that we have completed a daily/weekly wave 4 – almost perfectly in PRICE and TIME and therefore if we break the “KEY KEY SUPPORT” as shown, chances are we are in the beginning stages of 1000+ pip move. If your a currency trader – be ready to rumble.
- NOTE THE CORRELATION BETWEEN THE AUDJPY AND NEW YORK STOCK EXCHANGE INDEX ($NYA)
Thanks for reading and let me know if you have any questions.
ROCK ON, OK?
BART
folks, this is not a “I told you so” blog or any of that because I have no idea what’s going to happen from one minute to the next in the market. just look for patterns and then “IF-THEN” the resulting move if the pattern works or doesn’t to manage risk … seriously.
but I did want to spend just a little bit of time on the PATTERN that appeared on the AUDJPY back in November 2014. Yes, almost a year ago.
first off – here’s the foot stomp – GO BACK AND LOOK AT LONG TERM CHARTS and, obtw, take all of the indicators and oscillators and all that other useless garbage off the chart and look for PATTERNS and MEASURED MOVES. Once you find them, then throw all the indicators you want onto the chart … it’s like using steak sauce on a perfectly grilled steak.
anyway – look at the PERFECT repeat of the pattern in 2007-2008 on the AUDJPY:
here’s the result:
Why is this important to the US Equity Market? Here’s a chart showing the $NYA overlaid on the AUDJPY. Note the close correlation that occurred in the early 2000’s. Since then it’s been highly correlated.
So, is the “correction” in the AUDJPY and the EQUITY markets over? Using Fundamentals (which I don’t) I can tell you I don’t have a clue. However, we do have a PATTERN that is crucial to the overall direction of the equity markets.
so here we go …
IF the AUDJPY can stay above the crucial 81.90 level THEN equity markets should rally.
IF AUDJPY loses this level (81.90) THEN equity markets will continue to slide lower.
NOTE: the yellow boxed area contains ALL of the current AUDJPY moves. It’s also a region of 4 years of resistance. Note, the red trend line coming from the Jul 2011 top into current market price. We spiked thru it but are still above it – watch that closely.
thanks for reading and let me know if you have any questions.
rock on, ok?
B
the Dollar Index as of March 13, 2016
Posted on March 13, 2016 Leave a Comment
here’s the near perfect pattern that began this monster advance in the dollar:
additionally here is a very long term chart of the USD Index:
I put my own levels on it below …
some things to note:
- even in the midst of this monster rally – we still haven’t hit a .382 retracement from the all time high
- the low was – almost exactly a .786 price projection
- note the RSI – we blew thru the old resistance and note how the “log” trendline that acted as resistance was most recently support.
- also, note the trend line connecting the highs on the RSI … believe we should/will find support in/around here and the Dollar should start a new move.
here’s where I think we are …
this one is tough … we have the ECB last week and now the FED upcoming. Believe we will see the move occur next week. It’s almost a year since the high was made in 15.
Bart's Charts 