Life is full of surprises. It is a curve ball. In those respects we must all be thankful that we are in a profession which keeps you on your toes all the time fully aware of that nothing is like it seems. What seems to be going down is actually going up while what is going up is actually down. Take a careful look at last week trading. This is not the first time you will notice such moves nor will be it last your last. As a trader you may be living the high life of pips but a curve ball is always around the corner. A trader will be aware of this more than anyone else in the world. What the market gives it will make every effort to take it back.
We run probably one of the most difficult concepts on internet which is trading live and teaching at the same time. We even are making a desperate effort to make as much of our knowledge out their in the form of indicators. We dont cheat and we are extremely open about every trade something you will not find at any other place. Which is why C3X subs are among the most loyal.
Looking back at last week, there has been a tremendous high volume portfolio shift of the 10 y curves into equities and risk assets. This may not be a temporary portfolio adjustment but could be riding on something much bigger. Insiders act much before you even get to see the news. Some of the reasons for this shift will be visible over the course of the next few weeks. But we hardly concern ourselves with these little news and verbal diarrhea from these supposedly important people.
We are hard core technical traders for whom prices are the scriptures.
With that thought lets immerse ourselves in this week deliberations on what the week holds and probably what the long term picture looks like. With over 25 charts and analysis, this is a long post so have the patience and the mental energy to think and ponder over each chart.
The CRB index did play party with the risk on environment but still was an underperformer compared to equities. CRB still manages to close under the 200 DMA and above the 50 DMA. It has never closed above the 200 DMA since March 2012.
Wheat is above its 2012 highs, 2011 highs and is trading miles above its WMAs. The price pattern in wheat seem to suggest and reflect the drought realities around wheat growing areas. Wheat will lead food inflation this year and hence we may just be tipping over into a bout of high inflation in food grains and commodities in general.
On the slightly longer term picture, the junk vs safety seems to be lagging inside the 200 DMA AT 0.3126 but still has made a start to play catch up with SPX. The bond markets while supporting the general risk on moves continue to lag the super inflation of prices being witnessed in the equities markets. The longer term picture will be far more comfortable once the JNK/TLT clears the 0.32 level. Till that time, the risk on train will be susceptible to one more strong slash down before proceeding.
The story is a little more complicated as we look the 10Y yield which for the first time has taken out the 50 DMA at 1.59. The rally of last was supported by selling in EU bunds and US 10 Y both of which hold billions in safety.
The yen index made tremendous spurt above 20,50,100,200 DMA all in a weeks time. But the index is now clearly becoming volatile and getting into a disutrbing pattern of throwing off those who are trying to trade it.
The percentage of stocks above their 50 DMA in SP500 index is now at a healthy 74%. The structured uptrend seen in many of the stocks is lending support to the overall market structure and creating momentum. The percentage now reflects strength last seen in April 2012.
lets get to some more meatier stuff as we look at some trading setups for the week. Ofcourse this is where your free journey ends and our subs can continue reading.
You need to be a subscriber with Captial3x Trading portfolio or Combined Indicator member to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio. You also have access to Trade Room of Capital3x.
That ends the official charts and setups.
The indicators (Gladiator and Falcon) have been exceptionally brilliant as they notched up 25-30 handles in ES trading while over 500-600 pips combined in EURUSD, EURJPY and USDCAD.
The Gladiator makes another profitable week as it notches up anywhere between 30-40 handles this week. It is the regularity and surety with which gladiator catches these uptrends and downmoves which otherwise can be quite difficult to catch, is what makes Gladiator so useful.
The Falcon EURUSD (hourly) indicator gave over 150 pips (net of stops). It was right on the money as on Aug 3, it gave +1 at 1.2276 and simply went ballistic as EU notched over 100 pips in that one session.
The Falcon EURJPY (hourly) complimented Falcon EURUSD brilliantly as it nurtured over 200 pips. On Aug 3 itself it gave a buy signal at 95.8 and since then has not even dipped into below +1 as EJ went on short squeeze carnival notching over 150 pips. Earlier signals this week gathered nearly 100 pips but two fake out costed 25 pips thus brining the tally from 27 July to 3 Aug to be 200 pips.
Falcon USDCAD (hourly) has been suggesting all week to lay off this pair as it struggles to get into a strong trend. There were couple of fake outs but the current sell at 1.0023 has USDCAD drop well below parity.