Tag: $UUP

Trade / Investment of the Year?

you wait, patiently, for opportunities to appear which “change the game.”

as many of you have been following me know, the swing patterns that we watch take some time to develop … in this case a thesis is made for the “trade of the year” to be SHORT EURO vs USD.

what do we have working?

here you go …

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note, the MATH stopped the decline of the EURO and we are carving out – almost exactly – the same pattern that appeared at the all time low of the EURO after it was introduced.  if you take the time to measure the moves …(I have) you’ll find the swings are almost exact.  the LAST TIME the EURO did this it EXPLODED in a multi-year advance that crushed the dollar. is that going to happen again …?

have no idea … but the “rule” from the great land of the CMT is that the consolidated triangle breaks in the direction of the trend going into it …so, in this case, the EURO “should” breakdown against the USD. As shown from the lows in early 2000 .. it certainly didn’t do that.  but here’s the daily … and remember the triangle has 5 legs labeled a,b,c,d,e ..

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here’s the dollar index pattern:

note we have an AB-CD present, a .618/.786 overlap and a 1.612 extension present.  THIS COULD BE THE SUPPORT TO CATAPULT THE DOLLAR HIGHER …just a pattern.

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it’s just a pattern but the probability that we are in the final ‘e’ leg of the 1.5+ year consolidation of the EURO is high … this is POTENTIALLY a monster move coming ….

let me know if you have any questions …

B

PS – here’s the geometry of the consolidation .. one line oriented w/ price and time and 90 degree angles created this trend line.  (I am writing this before I draw it – cheers)

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IF you take the time to study this – and why not if you subscribe to my blog you’ll find that MOST if not ALL the major pivots occurred around the construction of this simple square.

Here’s a great picture from Mr. Joe Dubs:

VItruvian-Man-Square-Circle-Green

here’s the monthly square:

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again, only one line created these trend lines and it was the low to high and then 90 degree angles. folks, take the time, defy human nature and prove it to yourself …look at the geometry present.

the other thing you can do, if you REALLY want to dig deep is to use the box height and widths to create the time cycles present in the EURO or any security. but I’m tired, it’s late …just think A^2+_B^2=C^2.  perhaps there was something to Pythagoras and the Music of The Spheres …or not.

Bart

US Dollar Index – one more wave down then up? some nice targets below …

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US Dollar Index – beginning of the next move up? – update

05/21/2016

05/21/16 – note , same move up in PRICE and TIME.  Believe we should find some resistance here and the pullback should be BOUGHT for the USD index.

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Addicting Adrenaline Fueled Adult Cowboys and Indians….the FED Rate Decision (rules of pattern recognition #3)

Note, Darth Vader and the Dark Side connotation with the mouse image below ….

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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)

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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?

average-daily-trading-volume-2

(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)

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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

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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

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the Dollar Index as of March 13, 2016

here’s the near perfect pattern that began this monster advance in the dollar:

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additionally here is a very long term chart of the USD Index:

US_Dollar_Index_from_Stooq_dot_com

I put my own levels on it below …

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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 …

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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.

Dollar Index .. on it’s way

you know what, we might be surprised at how big this coming run is going to be for the dollar … make no doubt, the next rise has begun.

if your already in, stay in. if your not, believe we’ll find some short term resistance in/around here for a pull back to 96.50 or so to get a ticket on this train.

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Using ratio analysis to look for inflection points …

I like ratio analysis .. it shows rotation, strength vs weakness and a bunch of stuff.

Greece and Eurozone have been all the rage and, well, rightly so – I guess.

But I’m trying to tune all that out and just draw some pictures.

Here’s the deal .. when the DAX underperforms the NYA (the candles go down) then the EURO bottoms and goes UP against the dollar (red line)

So, we just finished a SELL PATTERN of RELATIVE STRENGTH of the DAX vs NYA. So, the DAX should underperform and, if 2015 is any guide, then the EURO should bottom and start up for a tradeable long.

candles is the relative strength of the DAX vs NYA. the line is the EURO vs USD. NOTE the inverse relationship ...
candles is the relative strength of the DAX vs NYA. the line is the EURO vs USD. NOTE the inverse relationship …

US Dollar Index

Folks, this one has been tough and has exceeded any of my previous projections for a pull back.  Is it parabolic?  Maybe? Kind of? But it is very overbought – ok I’m going to say it – EXTREMELY OVERBOUGHT and NEVER in the history of the index has there been this level of BULLISH SENTIMENT.  You can’t go wrong BUYING DOLLARS.  So, for me that means to watch out …

Here’s my latest attempt at finding a pattern to stop this in it’s tracks … I have NOT gone long the EURO but have gone w/ my gut each time a level has held for a bit but the thrust and “feel” and YES “feel” has a lot to do w/ it just haven’t been there …

So, we’ll keep trying but I STILL BELIEVE that being LONG DOLLARS is the wrong side of this trade for now … a nice multimonth pullback and it will take off again. But for now – well – I’ll stand aside ..

PARABOLIC MOVES ALWAYS END IN A VERY SWIFT AND DEVASTATING MOVE OPPOSITE HOW IT GOT THERE …

Make it a great weekend and happy PI day!

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EURO and 138 …

usually try to stay away from blindly buying or selling the .618 retracement … that number is the usual first introduction of people using leading indicators and sometimes it works and sometimes it doesn’t and people eventually say “hogwash” and run away from these techniques — GOOD!  however, when we have projections or overlapping patterns then I get interested in this level.  here’s the .618 retracement overlapping patterns:

overlapping patterns into .618
overlapping patterns into .618

 

Daily EURO look
Daily EURO look

here’s where the 138 gets interesting ….

1) the Euro vs USD, believe it or not, has been down 138 days.  and, having seen my past posts on the 66.6 months for the S&P and 1920 days since the low and the concept that PRICE equals time then if we do a calendar day count from the last high on the EURO on May 09, 2014 we get 138 days.  How do we convert that to PRICE in the FX ?  Well, we really don’t care about decimal points in the world of vibrations .. we care about the NUMBERS so convert like this:

  • HIGH was 1.3989 or 1.4000 (work w/ me people)
  • 1.4000 = 4000
  • 138 days = 1380 (also pretty close to 1382 or 1.382)
  • 4000-1380 = 2620
  • 2620 = 1.2620
  • 4000 square root = 63.25
  • (63.25-12)^2 = 1.2626

so, not trying to be a hero here BUT back when the dollar was at 79 I was recommending the BUY … but now, everyone and there brother is lighting up the twitter universe, CNBC, Yahoo Finance, Marketwatch and blah blah around the DOLLAR DOLLAR and the bearish sentiment for the EURO is massive … a perfect time for the EURO to bounce ….

Carving out a bottom folks … and, while I remain extremely bullish on the dollar am expecting the classic 3 wave corrective movement so … am going to let the .618 or .707 (square root of 2 – 1.4142, 1/1.4142 = .707) level prove it and then look for an OPPORUTNITY to BUY the pullback that SHOULD be a classic 3 waves …

EURO and the number 138
EURO and the number 138