Commodities, Financials and FOREX Special Situations for the week of January 19, Table of Contents

Transcription

1 Commodities, Financials and FOREX Special Situations for the week of January 19, 2015 Table of Contents COMMODITIES: GC Gold FINANCIALS: FXI IShares FTSE China Index Fund, AAPL (Apple Inc), EWA (Ishares MSCI Australia Index) CURRENCIES: Swiss Franc (G6S & EUR/CHF), EUR/DKK, GBP/EUR, USD/SGD, NZD/JPY, USD/MXN, AUD/USD, EUR/AUD, EUR/USD, EUR/NZD, Beans (ZM Soybean Meal ZS Soybeans) 1 of 18

2 COMMODITIES GC - Gold On Thursday and Friday Gold found aggressive buyers and bears were forced to close shorts. As a result the market closed the week $53 higher. We do not like much the interpretation of the formation between September 2014 and January 2015 an Inverse Head and Shoulder (due to the asymmetry of the shoulders and the sloping neckline, but could not ignore the fact that this market: 1) Is gaining upside momentum on volume. 2) Has NOT any bearish setup in play. 3) Rejected the prices below $1250 and is not auctioning within the $1250 $1350 range, were previously balanced between January 2014 and September of 18

3 FINANCIALS FXI - IShares FTSE China Index Fund If the market can move and trade above $43.5 this could be a decent long setup with a target at $ Note how intuitively makes more sense to analyse horizontal patterns (like the 3 year Rectangle shown with thick lines) rather than ones with sloping lines (like the 4 year Symmetrical Triangle shown with thin lines). Also from a trading standpoint, entry and stop orders can be placed more precisely when one refers to horizontal setups. 3 of 18

4 AAPL (Apple Inc) A decent short if APPL decisively closes below $ on volume. Below the target would be at $ of 18

5 EWA (Ishares MSCI Australia Index) Above is shown the weekly chart of EWA, the Ishare MSCI Australia Index. This is another example of a decent horizontal pattern (1 ½ year Rectangle sice 2013) within a larger pattern. Much easier (less risky) to trade the first, than the second one. We have an alert at $21.32 in case we decide to get sort to trade a move down to the measured target at $ of 18

6 CURRENCIES Swiss Franc (G6S & EUR/CHF) Not a trading setups here. Just a reminder that long tail events (black swans) exists. This past week many firms and traders and went under water because of this move. Even if rarely, events like this, the 9/11 attack or the 2012 flash crash happen. Once you have money in the markets (or even just in your FCM account...) your capital is at risk. If years from now you still want to be in the game you have to be prepared to deal (or survive) to several situations like this. 6 of 18

7 EUR/DKK What happened in Swiss this past week brought my attention to another pegged currency: the Danish Krone. The krone is pegged to the euro via the ERM II. This goes back to 1992 and the creation of the euro. At that time, Danish people did not want to become part of Europe and this led to Denmark retaining the krone. However, the political establishment in Denmark was essentially pro euro, hence they pegged their currency to the euro. Right now Denmark s economy is in much better shape than the Eurozone. This fact may mean that maintaining the peg is not worth the hassle of building up huge amounts of foreign reserve...if the peg is released expect a double digit move in the cross rate. 7 of 18

8 GBP/EUR During this past week the market had a decisive breakdown. We are currently placed for a move to and then of 18

9 USD/SGD USD/SGD is still trading within a multi month range channel to its measured move target (at ). 9 of 18

10 NZD/JPY With the benefit of the hindsight the setup we took in this market was a poor one. Firstly, because it is never a good idea to trade against a multi year bull market, especially if the price is moving in the upper part of a multi year channel. Secondly, the chart pattern that we got engaged with is too short in term of the time it took to form (our trading plan takes into consideration only pattern of 10+ week of duration). 10 of 18

11 USD/MXN Deteriorating action with a possible formation of a short term Head and Shoulder in the USD/MXN pair. A close below could extend the current correction down to below The long term target remains at of 18

12 AUD/USD Above is shown the monthly chart. In our view this pair is heading lower, but shorter term is setting up for a bounce: a small Inverse Head and Shoulder pattern could be forming at these levels and a launch a short rally up to around of 18

13 EUR/AUD Not an optimal Head and Shoulder setup, but still worth to watch, if not to trade with limited size. 13 of 18

14 EUR/USD EUR/USD closed the week at 11 year low. If it doesn t find some support at these levels the move down could escalate. We are currently short. 14 of 18

15 EUR/NZD So far, the multi week continuation head and shoulders formation is playing out very well. The launching setup was less than perfect, since the neckline was not horizontal, but the breakout is a textbook one. The measured move target of this chart is at We are short. 15 of 18

16 Beans (ZM - Soybean Meal - ZS - Soybeans) ZM Soybean Meal Both Soybean Meal and Soybeans (shown below) have triggered short term bearish setups that could bring to a retest of 2014 lows. 16 of 18

17 ZS Soybeans Longer term ZS chart is extremely bearish. But apart the small rectangle that we are showing in the next chart, there are no long term setups in this market to justify a long term bearish position. 17 of 18

18 The Prop Trading Futures Project // www. Robert Main Publisher of the: Commodities, Financials and FOREX Special Situations Report (FREE) Commodities, Financials and FOREX Trading Strategies Report & Intra-week Updates (PREMIUM) HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS & ACTUAL RESULTS ACHIEVED BY A PARTICULAR TRADING PROGRAM. ONE LIMITATION OF HYPOTHETICAL PERFORMANCE RESULTS IS THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK & NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS THAT CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM THAT CANNOT BE FULLY ACCOUNTED FOR IN PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. This report may include market analysis. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. I am not an investment advisor, and the content of the site is not an endorsement to buy or sell any securities Information is from sources believed reliable but accuracy cannot be guaranteed. No part of this publication may be re transmitted or reproduced w/out the editor s written consent. All analysis & trade strategies are based on entire trading session (not just pit session ) unless otherwise specified. Trading Strategy results are based on entry & exit at the recommended levels and do not account for slippage or commission costs. Readers using this information are solely responsible for their actions & invest at their own risk. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK. Copyright 2015 The Prop Trading Futures Project 18 of 18