X, I'm going to hazard a guess that the FTSE downtrend from the 2007 high could be the big technical hurdle. Looking at a weekly chart of it. How's this for simplicity? First test of the line in late February resulted in a weekly doji close and then a pullback. Next test of the line a couple of weeks ago was rejected and resulted in another pullback. By the looks of it price is heading up for another crack at the line, and while the week is still young it may have put in a higher low vs the last pullback. If we can close the week positive, a big plus for the bulls. The Dow has been very bullish lately, clearing all bearish hurdles in perfect technical fashion. If the FTSE can break this downtrend and hold the break, I would say that would be very bullish technically for US markets. That is unless there are other structures/factors that take precedence over what I mentioned. What say you?
You are welcome. Depends on your trading plan, remember what I said about subsequent tests. First is always best.
Well, this was the 5th channel touch, so maybe the wall is getting softer and more penetrable. I trade much lower tf, but it is always interesting to watch the same pa in slow motion. If this (daily) was a 1m chart, I wouldn't short it yet.
Everything is applicable to all timeframes. The lower you go the more noise you will expose yourself to though. Typically what is recommended is that when you have a potential area of support or resistance you drop down a level for clues and/or calibration. For instance, 60min is a good companion to Daily 15min is a good companion to 60min And so forth, it's a matter of preference too, many ways to skin the cat, it's an art afterall. Proper mindset is infinitely more important than technique.
And the hardest - well that is until.... (see last sentence in the post directly above for the until) RN
Nice!!!! I'll see your short and raise you a long....... j/k But here's another one from the week. W/ retest of 1.3280 to boot.
Technical analysis can be tricky, many times it has a perfect short setup while simultaneously providing a perfect long setup. On first look it might sound confusing or indecisive but those are precisely the scenarios I prefer, with patience you let one fail, then the road is clearly painted for you, and the confirmation is when price begins to trend, then the magic begins. Searching for these opposing forces or conflicts in technical analysis are one of the most powerful scenarios one can ever find in trading. How does this fit your comment, well, it just reminded of the times there is a case for both sides. Hence, the above comments. Good trading
I didn't get a chance to do a midweek update but my suspicion that longs would run out of steam and a sideways pattern would set up turned out to be the case. Now it is a matter of looking to see if a much bigger move to the downside sets in. The chart on the left is the 2hr with easy S&R zones to ambush the whips. On the right is the daily with what I call an emergency reversal meaning they had to hit the shorts hard to get the daily close inside the wedge support. It's one of my favorite reversal trades intraday that can often be taken on the 1 - 5 min charts and it ends up with the daily looking full of strength. I have readjusted the top line of the wedge to take account of the prior moves. We know the central banks are buying the big corps to support the fraud that all is well, but this has never worked in the long term. Going back to the 2-day cycle, it's a bit muddy on the Dow but on the FTSE it is much clearer and calls for a move up on the daily to set up the suckers for the bigger move down and I expect to see this reflected in the Dow. Will the central banks step in again and sling it back up? We'll see, but all it takes is a major problem elsewhere and their strategy falls to pieces. In the meantime we have a great baseline on the daily and a clear sideways channel on the intraday and so far it has been clear and easy to trade with an underlying upward trend in the rising wedge. However if the 2-daycycle runs as expected then after the push up it would be the best time since the lows last Aug for the top to set in. This will be a lot clearer after the push up when I can see the extent and timing of the move but for now it looks like there will be some interesting trading coming. So it is long from the intraday base, there's the opportunity for some sideways intraday action but the boss looks up on the daily to set up a bigger move down and possibly the top - that will be clearer after I see the way the move up develops. 1st Res on the FTSE daily is the 5850-5880 zone and then top.
Steve, a friend of mine, put together the following synopsis of Andy Xie's views on the global economy that I would agree with and have alluded to throughout this thread. Andy is an independent economist from Shanghai who apparently called all four financial crises including the Japanese asset bubble of the 1980s, the 1997 Asian financial crisis, the deflation of the dot-com bubble and the U.S. subprime mortgage crisis. According to Wikipedia, the economist published a blog entitled âApocalypse Soonâ heralding the unravelling of the US financial system some one month prior to the collapse of Lehman Brothers in September 2008. Xie has been an economist previously with the IMF and Morgan Stanley. Anyway this article cites comments from Xie who beyond predicting there will be a global inflationary crisis of sorts, believes that central bankers âare leading the global economy to another disasterâ. I want to cite, in part, directly from Xieâs commentary not only on references to what he sees about a forthcoming crisis, but his views on the inadequacies of national and transnational institutions to deal with the worsening global financial conditions and the need for a ânew institutionâ for âeffective global coordinationâ. Slow-cooking Inflation Inflation remains on the rise despite a weak global economy. Fed minutes show that its governors didnât have a clue about the coming catastrophe in 2008. Similarly, ECB experts didnât anticipate the sovereign debt crisis. There is no reason to believe that they will see the inflation disaster ahead, especially as the same people are still running the major central banks around the world. The global economy faces legacy problems (e.g. debt and deficit), secular problems (e.g. aging), and structural problems (e.g. rapid redistribution of production capacity and changing relative prices). Monetary policy can help to stabilize the situation but not revive growth. Central bankers are trying to do the impossible and, inevitably, create monetary excess. This mistake is the reason for the inflation crisis to come. When monetary policy tries to stimulate the rest of the economy to offset the reallocated activities, globalization diverts its impact through global sourcing to meet the demand. Pushing-on-a-string is the norm, not an exception, for monetary policy in todayâs world. When central bankers push harder on the string to achieve policy target, it leads to disasters like bubbles and inflation. Central bankers were superheroes in the 1990s. They seemed to have a Midas touch in smoothing business cycles. Their sterling record of yesterday is questionable. The Midas touch turns out to have been bubble-making. It seems that they havenât learned this lesson and insist on being superheroes again. I believe that they are leading the global economy to another disaster. And on global policy coordination, he writes: No economy is bigger than global trade in todayâs world. This has fundamentally weakened the effectiveness of economic policy by any one country. Global coordination is critical to reviving the global economy. The global economic institutions are the WTO, IMF and the World Bank. The WTO deals with trade disputes, the IMF handles balance of payment crises and the World Bank focuses on poverty alleviation in emerging economies. None is equipped to cope with todayâs global crisis. The eurozone debt crisis has exposed the ineffectiveness of the IMF. Globalization has effectively turned many developed economies into developing ones. The IMF couldnât handle their sizes. It would be a stretch for the IMF to broaden its mandate to deal with global structural issues. Europeâs control over the IMF prevents other countries from embracing it to handle global issues. Globalization has happened so fast that no sovereign country can deal with its consequences alone. Most experts think that the eurozone crisis shows that one currency needs one government. The challenge is even bigger than that. Currency flexibility is a limited tool. Emerging economies that have half of their economy tradable canât freely rely on currency flexibility. The whole global economy behaves somewhat like a one-currency economy. A new institution that both developed and emerging economies can trust should be created. One possibility is to institutionalize the G20. As these economies are two-thirds of the global economy, their coordination could be effective. Without effective global coordination, the world is in for volatile and difficult years ahead. http://english.caixin.com/2012-03-20/100370448.html