Pattern Trader - December Trade Analysis, Trade Set-ups and Profit (Loss)

Transcription

1 Pattern Trader - December Trade Analysis, Trade Set-ups and Profit (Loss) Currency Pair: GBPJPY Entry Order: SELL Stop loss: Take profit: Analysis: Since forming a giant Double-Top (bear) price pattern in Jun - Aug timeframe, GBPJPY has been traversing sideways been and With the recent formation of a Head-and-Shoulders top (bear) price pattern, and, penetration below today's reversal bar could be the catalyst for lower prices.

2 Currency Pair: EURGBP Entry Order: BUY Stop loss: Take profit: Analysis: This pair is in a clearly defined down-trend. However, in recent trading sessions EURGBP appears to have found support at current levels - which also coincides with a recent double-bottom price level that prices shot out from in Jul-Aug. Today's key reversal suggests that we could get a decent pop from here. I'm not looking for much but if my target price objective is hit, it would represent a nice 2:1 risk/reward on this trade.

3 Instrument: US500 (S&P500) Entry Order: SELL Stop loss: Take profit: Analysis: Today's massive Key Reversal, at or near, a major resistance level could be probable cause for major concern for stock investors. The key price reversal is also at near-term high's forming what could be a Double-Top (bear) price pattern. I have a feeling that today's ominous technical break-down could be the start of a massive sell-off in this asset class. Look for prices to retrace and fill a price gap at the price level. I think you can get aggressive on this trade. (US500 Lot Size Calculation: Due to the pip calculations for US500, I recommend a lot size of 5x of what you would allocate to an FX pair. For my accounting I am going with 5x normal size. So if I am successful on this trade, it would equate to a 145 pip profit (29 pips x 5)

4 Pair: XAUUSD (Spot Gold) Entry Order: BUY Stop loss: Take profit: Analysis: This market is in a clear down-trend. However, this market looks very oversold. Penetration above the high of today's large key reversal - at the low of a "Falling Wedge" price pattern - could be a catalyst for this market to pop to the upside. (Confirmation would not be until a break above the upper trend-line, but I think its worth getting in at the recommended entry). "Falling Wedge" definition - price follows two down-sloping and converging trendlines.

5 Currency Pair: AUDNZD Entry Order: SELL Stop loss: Take profit: Analysis: Recently AUDNZD broke lower out of a Rectangle Top (bear) pattern. In the past few weeks this pair has retraced back to the break-out area. Today's key reversal at the same price as a near-term peak has formed what could be a Double-top, and a catalyst for lower prices from here.

6 Currency Pair: CHFJPY Entry Order: BUY Stop loss: Take profit: Analysis: Last week, CHFJPY made a 180 degree u-turn from a profound down-trend. While this is an early call, it now looks like this pair could be forming a Reverse Wedge Triangle, aka a Right-Angled and Descending Broadening Formation. Final confirmation of this pattern will be a break above the price level. Reverse Wedge Triangle - DEFINITION -A megaphone tilted down with the top horizontal. The top trendline is horizontal, the bottom one slopes downward.

7 Currency Pair: GBPJPY Entry Order: BUY Stop loss: Take profit: Analysis: After putting in a Double-Bottom (bull) price pattern in Sep-Oct, this pair has been traversing sideways. Recently. GBPJPY has formed a tight reverse symmetrical triangle. I believe if we penetrate above Friday's high price, which also coincides with a break-out from this triangle pattern, we could be headed (much) higher...in a hurry.

8 Currency Pair: GBPJPY Entry Order: SELL Stop loss: Take profit: Analysis: Click this link for : GBPJPY Video Analysis Currency Pair: GBPUSD Entry Order: SELL Stop loss: Take profit: Analysis: Recently this pair broke out (lower) from a Double-Top and Descending wedge triangle (bear) price pattern(s). However, following Draghi's dovish comments last week this pair shot up in what (to me) looks like a bogus short-covering rally. I think if we penetrate below the low of the recent inside-day bars, we will be looking at the price level shortly

9 Pair: XAUUSD (Spot Gold) Entry Order: BUY Stop loss: Take profit: Analysis: Following a protracted bear market XAUUSD formed a prominent Key Reversal last Thursday. In the last few sessions we have seen a consolidation of last week's reversal. Presently, it appears we could be tracing out a Reverse Wedge Triangle. Final confirmation of the RWT will be a break above the price level. However, I firmly believe, if we penetrate above the high of today's inside-bar high price, this pair could shoot higher (quickly).

10 Currency Pair: AUDUSD Entry Order: BUY Stop loss: Take profit: Analysis: This pair formed a Double-Bottom price pattern in Sep-Oct timeframe at the price level. Since that time AUDUSD has been vacillating in the and range. I believe today's key reversal will be the catalyst for further price movement to the upside. I REALLY like the risk:reward and would advise a higher tolerance on this trade. Instrument: NASDAQ100 (USTEC) Entry Order: SELL Stop loss: Take profit: Analysis: There are a number of headwinds facing this asset class: 1) rising interest rates, 2) flattening yield-curve & 3) junk bond credit spreads are imploding - suggesting an impending credit crisis. While it is an early call, this market appears to be tracing out a Double-Top (bear) price pattern. Final confirmation of this pattern will be a breach under the neckline at about the price level. This could this be an important "inflection" point and the start of a bear market in this asset class. A few weeks ago (Nov 1), I noticed a troubling technical divergence among the worldwide global stock indices, and in-hindsight, could have been the indicator of a (major) change in direction in stocks going

11 forward. Currency Pair: GBPUSD Entry Order: BUY Stop loss: Take profit: Analysis: Following last week's dovish ECB policy announcement, GBPUSD reversed its slowdrip downward slide. Recent price action (Double-Bottom and a "rising" neckline) suggests there could be more follow-through momentum to the upside.

12 Pair: XAUUSD (Spot Gold) Entry Order: SELL Stop loss: Take profit: Analysis: Following last week's key reversal at a multi-year low, I had some hope for a more sustained rally in Gold. But, alas, following the brief burst higher, recent price action (Key reversal and inside-day bar), suggests this market is ready to turn in its primary trend direction (down). It will probably choppy and volatile under the recent lows, so take profits quickly. Currency Pair: NZDUSD Entry Order: SELL

13 Stop loss: Take profit: Analysis: NZDUSD is in a long-term downtrend. Following a run-up from the Oct lows of to current levels, it feels like the brief up-move has been exhausted (see Double-Top (bear) price pattern), and this pair appears poised to resume in its primary direction (lower). I feel the US dollar will move higher following next Wednesdays FOMC interest rate meeting, and the recent rise in NZDUSD seems poised to be one of the first culprit's of a dollar rise. I explain my analysis on the prospective dollar move leading up to the FOMC meeting in this week's video report (see link above). I like the risk:reward on this trade. Currency Pair: CHFJPY Entry Order: SELL Stop loss: Take profit: Analysis: Following a break-out from a Double-Top (bear) price pattern in Jun-July, CHFJPY has been in a well defined down-trend. A few weeks ago, in reaction to some ECB/FED statements, this pair shot upwards. However, after its initial ascension from its lows in early December, this pair has not been able to

14 make any further progress, and feels like it is poised to roll over in its primary (down) direction. I think a break under Fridays inside-day bar could be a catalyst for lower prices. Currency Pair: JPN225 (Nikkei Dow Jones) Entry Order: SELL Stop loss: Take profit: Overview: In recent weeks, I have observed a number of ominous fundamental and technical indicators that are flashing severe warning signs of an upcoming major bear market in the worldwide stock markets. About a month ago, I noticed a substantial divergence occurring in the US stock indices - wherein the NAS100 went to new highs earlier this month, but the US500 (S&P500) and the US30 (Dow Jones), were well-off their highs made last July. Click this link to download my video on stock market divergence: SPECIAL STOCK MARKET REPORT Analysis: Even weaker than the US stock indices, is the JPN225 (see definition of JPN225 below).

15 As we can observe from the chart analysis above, the JPN 225 is currently trading well below its price levels it set in the July - Sep time-frame. In recent weeks the JPN225 has formed a well-established Head-and-Shoulders (bear) price pattern. On Friday, in reaction to the further collapse in the oil market - indicating weakness in the global economies and demand - the JPN225 market also collapsed. Friday's trading session "outside" (took out the high - then the low - of the previous day's session) Key reversal, and market closing price, puts the JPN225 index at an important inflection point (neckline). Given the severity of Fridays decline we may need a few more days consolidation of the recent lows. However, I believe penetration below this bearish pattern's neckline will open the door to (significantly) lower prices. Currency Pair: EURJPY Entry Order: BUY Stop loss: Take profit: Analysis: Following last week's sharp run-up, EURJPY has settled back to form what appears to be an emerging Flag price pattern.

16 Today's key reversal in the direction of the current momentum in this pair suggests there is (much) more room on the upside. Currency Pair: USDCHF Entry Order: BUY Stop loss: Take profit: Analysis: Following a sharp run-up, USDCHF has fallen back to just below the old resistance line. Today's key reversal suggests prices could be ready to resume higher, and the old resistance line will act as the new support line. SPECIAL FED TRADE ALERT (USDCHF) Last night I forwarded you a video on the USDCHF trade set-up ahead of the FOMC statement in about an hour. Click this link to download this Special Report video: 4:1 SPECIAL Trade Alert This is how I am entering my USDCHF trade entries: Buy (limit) , If my USDCHF limit order is NOT triggered, I will enter a long (Buy) position above

17 minutes after the FOMC announcement (I don't want to be sucked in by a "head-fake" right after the announcement). This is going to be tricky. Staying on the sidelines is also not a bad trade. Currency Pair: AUDUSD Entry Order: BUY Stop loss: Take profit: Analysis: AUDUSD formed a Double-bottom (bull) price pattern back in the Sep-Oct timeframe at the price level. The Double-bottom price pattern in this pair is a signal of higher prices to come over time. Accordingly, I believe, if we penetrate above today's inside-day and NR4 (narrowest range in past four trading sessions) bar, we should see prices go (much) higher from here. I REALLY like the risk:reward on this trade.

18 Pair: XAUUSD (Spot Gold) Entry Order: BUY Stop loss: Take profit: Analysis: Following a protracted bear market XAUUSD formed a prominent Key Reversal last Thursday. In the last few sessions we have seen a consolidation of the reversal. Presently, it appears we could be tracing out a Reverse Wedge Triangle. Final confirmation of the RWT will be a break above the price level. I firmly believe, that if we penetrate above the high of today's inside-bar high price, this pair could shoot higher (quickly).

19 Currency Pair: AUDUSD Entry Order: BUY Stop loss: Take profit: Analysis: This pair formed a Double-Bottom price pattern in Sep-Oct timeframe at the price level. Since that time AUDUSD has been vacillating in the and range. I believe today's key reversal will be the catalyst for further price movement to the upside. I REALLY like the risk:reward and would advise a higher tolerance on this trade. Instrument: NASDAQ100 (USTEC) Entry Order: SELL Stop loss: Take profit: Analysis: This asset class could. There are a number of headwinds facing this asset class: 1) rising interest rates, 2) flattening yield-curve & 3) junk bond credit spreads are imploding - suggesting an impending credit crisis. While it is an early call, this market appears to be tracing out a Double-Top. Final confirmation of this pattern will be a breach under the neckline at about the price level. Could this be an important "inflection" point and the start of a bear market in this asset class? A few weeks ago I noticed a troubling technical divergence among the worldwide global stock indices, and what in-hindsight, was the indicator of a (major) change in direction for stocks going forward. Click here to download: Special Stock Market Video Analysis

20 Friday's key reversal is at or near an important resistance level. Pair: XAUUSD (Spot Gold) Entry Order: SELL Stop loss: Take profit: Analysis: Following last week's key reversal at a multi-year low, I had some hope for a more sustained rally. But, alas, following the brief burst higher recent price action (Key reversal and inside-day bar), suggests this market is ready to turn in its primary trend direction (down). It will probably choppy and volatile under the recent lows, so take profits quickly.

21 Currency Pair: GBPUSD Entry Order: BUY Stop loss: Take profit: Analysis: Following last week's dovish ECB policy announcement, GBPUSD reversed its slow-drip downward slide. Recent price action (Double-Bottom and a "rising" neckline) suggests there could be more followthrough momentum to the upside.

22 Currency Pair: NZDUSD Entry Order: SELL Stop loss: Take profit: Analysis: NZDUSD is in a long-term downtrend. Following a run-up from the Oct lows of to current levels, it feels like the brief up-move has been exhausted (see Double-Top (bear) price pattern). and this pair appears poised to resume its primary direction (lower). I feel the US dollar will move higher following next Wednesdays FOMC interest rate meeting, and NZDUSD seems poised to be one of the first culprit's of a dollar rise. I explain my analysis on the prospective dollar move leading up to the FOMC meeting in this week's video report (see link above). I like the risk:reward on this trade. Currency Pair: CHFJPY Entry Order: SELL Stop loss: Take profit: Analysis: Following a break-out from a Double-Top (bear) price pattern in Jun-July, CHFJPY has been in a well defined down-trend.

23 A few weeks ago, in reaction to some ECB/FED statements, this pair shot upwards. However, after its initial ascension from its lows in early December, this pair has not been able to make any further progress and feels like it is poised to roll lower in its primary (down) direction. I think a break under Fridays inside-day bar could be a catalyst for lower prices. Currency Pair: JPN225 (Nikkei Dow Jones) Entry Order: SELL Stop loss: Take profit: Overview: In recent weeks, I have observed a number of ominous fundamental and technical indicators that are flashing severe warning signs in the worldwide stock markets. About a month ago I noticed a substantial divergence occurring in the US stock indices - wherein the NAS100 went to new highs earlier this month, but the US500 (S&P500) and the US30 (Dow Jones) were well-off their highs made last July. Click this link to download my video on stock market divergence: Analysis: Even weaker than the US stock indices, is the JPN225 (see definition of JPN225 below). As we can observe from the chart analysis above, the JPN 225 is currently trading well below its price levels it set in the July - Sep timeframe. In recent weeks the JPN has formed a well-established Head-and-Shoulders (bear) price pattern. On Friday in reaction to the further collapse in the oil market - indicating further weakness in global economies and demand - the JPN225 market also collapsed.

24 Friday's "outside" (took out the high - then the low - of the previous day's session) Key reversal and market closing price also puts the JPN225 index at an important inflection point (neckline). I believe penetration below this bearish pattern's neckline will open the door to (significantly) lower prices. For those of you who have not traded the JPN225, I have included a margin and lot size calculator below for all the major global stock indices. JPN225-DEFINED: JPN225 is Short for Japan's Nikkei 225 Stock Average, the leading and most-respected index of Japanese stocks. It is a price-weighted index comprised of Japan's top 225 blue-chip companies on the Tokyo Stock Exchange. The Nikkei is equivalent to the Dow Jones Industrial Average Index in the U.S. Currency Pair: USDCHF Entry Order: BUY Stop loss: Take profit: Analysis: Following a sharp run-up, USDCHF has fallen just below the old resistance line. Today's key reversal suggests prices could be headed upwards, and that the old resistance line will act as the new support line.

25 Currency Pair: EURJPY Entry Order: BUY Stop loss: Take profit: Analysis: Following last week's sharp run-up, EURJPY has settled back to form what appears to be an emerging Flag price pattern. Today's key reversal in the direction of the current momentum in this pair suggests there is (much) more room on the upside.

26 Currency Pair: EURGBP Entry Order: BUY Stop loss: Take profit: Analysis: EURGBP is tracing out an interesting Daily and Weekly Double-bottom (bull) price pattern. (Confirmation of the Weekly Double-bottom will be a breach of the neckline). I believe, penetration above Friday's inside-day bar, will open up a move to higher prices in the nearterm.

27 Currency Pair: GBPAUD Entry Order: SELL Stop loss: Take profit: Analysis: GBPAUD has traced out a discernible Head-and-Shoulders (bear) price pattern. Friday's insideday bar closed below the neckline. Should we see prices trade below Fridays low price could be a catalyst for (much) lower prices.

28 Currency Pair: AUDUSD Entry Order: BUY Stop loss: Take profit: Analysis: AUDUSD formed a Double-bottom (bull) price pattern back in the Sep-Oct timeframe at the price level. I believe the Double-bottom price pattern is a signal of higher prices in this pair over time. Accordingly, I believe, if we penetrate above today's inside-day and NR4 (narrowest range in past four trading sessions) bar, we should see prices go (much) higher from here. I REALLY like the risk:reward on this trade.

29 Pattern Trader - DEC Trade-by-Trade P/L Open Date Close Date Symbol Action SL TP Open Price Close Price Pips 30-Nov 1-Dec AUDUSD Buy Dec 2-Dec EURGBP Buy Dec 3-Dec GBPJPY Sell Dec 4-Dec US500 Sell Dec 4-Dec XAUSD Buy Dec 6-Dec AUDNZD Sell Dec 7-Dec GBPJPY Buy Dec 8-Dec GBPJPY Sell Dec 8-Dec GBPUSD Sell Dec 9-Dec XAUUSD Buy Dec 9-Dec NZDUSD Buy Dec 11-Dec AUDUSD Buy Dec 13-Dec GBPUSD Buy Dec 14-Dec NZDUSD Sell Dec 14-Dec CHFJPY Sell Dec 14-Dec JPN225 Sell Dec 15-Dec EURJPY Buy Dec 15-Dec USDCHF Buy Dec 17-Dec USDCHF Buy Dec 22-Dec EURGBP Buy Dec 22-Dec GBPAUD Sell Dec 22-Dec AUDUSD Buy DEC: Total P/L (pips) 479