Natural gas - trade idea

Looking at this weeks natural gas graph a trade idea stand out to me.

Provided that we are in a longer term down trend on the weekly natural gas tends to range on the daily chart.

Now that the stochastics has turned below the 80 line and MACD is also lower on the daily chart, we could try to ride it down to the bottom of the range at 2.43

We need to be careful at the 2.50 handle as it is the current inner channel boundary and a major psych level. So at that point look what the chart is telling and reconsider whether it is worthwhile to get  the extra points.

The stop loss will be at 2.87 a few points above the current top of the range.

Nat gas - daily

Weekly outlook week 9 2012

After last weeks fail to put up a weekly outlook I am resuming this week again. It just a matter of getting into the routine I suppose of putting up the things I do anyway in the blog.


In this week blog:

• EURUSD
• AUDJPY
• USDJPY
• Gold
• Silver
• WTI

Let start with the EUR/USD.


EURUSD


Two weeks ago I told you that because of the divergence I was bullish EURUSD and that panned out well. This week EUR/USD has to make a decision whether it was 'just' a correction or whether it will be a reversal altogether.

EURUSD - Weekly

As you can see we are at a cross roads on the weekly chart. The 50% retracement from the last down move has been reached, we have crossed the EMA and the EMA has gone flat.


This 50% fib by the way coincides roughly with the 38.2% retracement of the complete move from the 1.50000 levels.


This means that at this moment I am rather neutral on EURUSD. For me to become bullish again we have to break the 61.8% fib level and the EMA should turn up.


When on the other hand the 50% fib is holding and EMA will go down I will change to become a bear.


But what is the daily chart telling us?

EURUSD - Daily

On the daily chart we see a MACD that has just crossed the zero line and is bullish, the stochastics is in overbought area but has not crossed back yet, still this is bearish.


Furthermore EURUSD is traiding near the inner envelope of the EMA which also indicates that sentiment may start to shift downwards. The EMA itself is pointing up however indicating an upwards trend.


All in all it is rather mixed slightly biased towards bearish, as price will always try to get back to the EMA.


From this I might want to go short later this week, when both stochastics and the MACD turn around and there is still room between price and EMA, becuase when MACD turns around we will have a divergence set-up.


AUDJPY


I figure that most of the move is over reaching a major resistance at 87.20. Also the MACD has reached a level where I would be very hesitant to open new positions.


When AUDJPY is able to break through the 87.20 level  the next big resistance is at 89.60.

AUDJPY - Weekly

USDJPY


The USDJPY awoke from hibernation and took off. Gained 350 pips in two weeks where it has been ranging in a 150 pip band for nearly 14 weeks.




Without hesitation it took out the resistance at 80.35 and stopped short of the 81.30 - 81.80 resistance zone.

USDJPY - Weekly

Looking at MACD I can imagine that the thrust is exhausting and USDJPY  is taking a breath and move on to the 83.00 levels where the 38.2% fib level from the down move starting from May 2010 lies.




When this pair is not able to break through 81.30 right away it might fall back to 80.35.




As I probably will not trade this pair, you might want to look for some counter trend trades on the lower time frames <1h as I can see this pair falling back a little the coming week.


Gold


It seems as if gold has reestablished its uptrend as it broke through the trend line that was formed off the peak of 1900 in September last year.




Also the EMA turned up again and MACD is confirming it.

Gold - weekly

There is resistance at 1800, as there normally is at such round numbers and when gold is able to tackle this I can see it move up and challenge the all time high of $1912 per troy ounce.

Gold - daily

The daily chart looks a bit exhausted, the stochastics being in the overbought region and price at the boundary of the inner channel. MACD seems not be able to take off.


So although in an uptrend there might be some good counter trend possibilities on the lower time frames <1h this week.




Silver


Where as gold managed to break the trend line and so technically ended the correction, didn't silver manage to break through. It touch the downwards trend line but it held.

Silver - weekly

This is indeed very interesting as it can bring a nice trading opportunity in silver. When gold is continuing its uptrend, I cannot see silver staying at the same levels or below as it is trading right now.


As soon as silver leaves the down trend, the next resistance will be at 38 and 41. On the down side the support levels are 34 and 31.




WTI - CLJ2


The MACD of crude nicely rejected the 0-line of the MACD as talked about in then last weekly update two weeks ago.


When that happened it was a strong bullish signal and indeed it was. Crude is now heading to its recent high at 114 which also happens to be the 1.382 fib extension.

WTI - CLJ2 - Weekly

This 1.382 fib is so important because the correction in December last went to the 38.2 fib level. When price retraces to that level than more often than not a trend continuation will go to the 1.382 level.


Personally I think we will see a crude go straight to the 114 and then take a rest to decide to go on to the all time high at 140.


When it will fall back from this levels the next support is at the 108.50 and 103.30 levels.

Inflation rising exponentionally

Unfortunately I didn't manage to put my weekly outlook online. Today I also haven't found the time and it makes no sense to put it on in the middle of the week. So it stays with the gold outlook.

I hope that next Saturday/Sunday I can do it again.

As constellation I have found a graph made a few weeks ago showing you how our government with the help of the central banks are actually killing our currencies. It is a kind of a gold index. I took the price of Gold in February 2002 and normalized it to 100. This factor was then applied to the gold graph.

When you take gold as the only stable currency in the world, this would show the relative inflation factor of the currencies among each other. You can clearly see that the Australian dollar suffered the least from inflation against gold.

You can also see that the euro, the whole world seems to bash nowadays, does actually quite well. From the majors only AUD, JPY, NZD and CHF are doing better, leaving EUR in the middle of the leaugue (JPY, NZD and CHF are not shown).

I must admit that the graph is a little bit exaggerated due to the fact that there is also a bit of 'gold rush' going on, meaning that the price of gold might be a little overvalued (when that would be possible).


Judge for yourself.

Week 8 - Weekly outlook

First of all let's look at the AUDJPY which I past on last Tuesday. Well I can be short about it I should have taken it, it would even have reached my target profit on Wednesday.

Gold - bullish


It looks as if gold is resuming it's uptrend. The MACD crossed zero and the EMA is pointing up. You can however argue that the downwards channel is still intact. Also the very small candles during the last month do not express overwhelming strength.

I am bullish gold, but a sign of more strength is highly welcome

Gold - weekly

-- to be continued

Week 7 - To trade or not to trade

In my outlook this Sunday I stated that I would watch the AUDJPY for longs.

One could say that the signal I have been waiting for just came. Still I decided to not to take it. Why?

AUDJPY - Daily

The EMA is indicating a nice steady uptrend and the price just broke through resistance at 83.75. This would call for a trade. Looking at the MACD and the stochastics in particular made me decide to pass. The MACD is not really supporting the move and is 'recovering' from a bearish divergence, and might even make tripple bearish divergence.

The stochastics just turned back to the overbought area and although currencies can stay oversold for quite a longtime and still go up, I rather wait for it to be in healthier regions.

A wise decision? Only time will tell.

Week 7 - 2012 - Weekly outlook

So after a pause of so many years I am going to blog again. You can make bets how long I will keep it up this time. :)

On Sundays I will start-off with the instruments I follow and what trades I am looking for. Whenever applicable I will also comment on any closed trades that week.

My system boils down to looking at the weekly charts for direction and then find the actual entries on the daily charts.

I follow the following instruments:

• AUDJPY
• USDJPY
• EURUSD
• WTI
• Natural Gas
• Corn
• Soybean
• Wheat
• Gold
• Silver

My biases for week 7:

AUDJPY -> looking for longs
EURUSD -> looking for longs

all the rest is neutral, meaning no trades.

USDJPY (Neutral/Bullish)

USDJPY - Weekly

Posted a nice bull candle last week, making the MACD to do a zero rejection. Technically the EMA also started to point up, but it is not visible by the naked eye really.

So I am getting bullish on the pair, but not fully convinced yet.

AUDJPY (Bullish)

AUDJPY - Weekly

We are in a nice uptrend, shown by both a rising EMA and MACD. Because the trend is well established already I would like to see it come back to the EMA before actively looking for trades.

EURUSD (Bullish)

EURUSD - Weekly

The EURUSD actually has the most interesting constellation of the three currencies I am watching. Week three from this year completed a bullish divergence (blue line) which makes me very bullish on this pair.

You can see why, when you look at end of May 2010, when there was also a bullish divergence (purple line) and the impressive uptrend of 3000 pips EURUSD started then. I don't think that we see a rally that big this time, considering the fact that the preciding downtrend was not that fast this time (37 weeks as oposed to 27 weeks), but still I think EURUSD will reverse.

Although EMA is not confirming the trend yet, I will start looking for good entries. The MACD has crossed the 0-line signalling bullish which, together with the divergence is enough for me. Whenever EMA changes her mind too, I will start to pyramid.


PS: Don't mind the buy and the S/L you see on the screenshot, those are positions on the demo I needed to show someone. :)

WTI - CLJ2 (Neutral)

WTI - CLJ2 - Weekly

Please take note that I switched to the April contract since coming Friday the CLH2 contract will roll over.
The EMA is still bullish, but since the MACD is approaching the 0-line I am cautious and will not look for trades in crude this week.

The divergence we saw 2nd of October 2011 has probably played out, so I want to see MACD reject the 0-line before starting to look for longs or the EMA to turn downwards to look for shorts.


Natural Gas - NGH2 (Neutral)

Natural Gas - NGH2 - Weekly

I haven't changed the chart here yet, because the chart didn't want to load and I was a bit impatient. But for the analysis it shouldn't bother you too much.

The downtrend we were in since June 2011 is loosing steam when the support level from August 2009 was reached. This is clearly shown in the MACD returning to 0. Furthermore one could argue that there is a very long-term divergence in play taking the peak of MACD in March 2010 and the levels reached beginning of this year.

EMA on the other hand is still pointing down indicating a downtrend. Before I will be looking at entries again I will wait till price came back to EMA.


Corn - CH2 (Neutral)

Corn - CH2 - Weekly

EMA being horizontal and MACD returning to zero I am neutral on corn, although slightly bullish because of the divergence.

The MACD was significantly higher in November 2011 than in September of the same year. At the same time prices didn't go up as the MACD would have suggested. Although this is divergence, I don't like it.
First of all I would have been much better when the MACD had retraced close to 0 and secondly becuase prices didn't reach a lower low, but merely reached the same levels as in September 2010.


Soybean - SH2 (Neutral)

Soybean - SH2 - Weekly

Very boring chart, EMA horizontal hence nutral.

Wheat - WH2 (Neutral)

Wheat - WH2 - Weekly

Same as with Soybean, EMA neutral, but here the MACD is even returning to 0.

Gold (Neutral)

Gold - Weekly

 EMA only so slightly bullish and the MACD about to cross. So with a little bit of luck we can change the outlook to bullish next week. This week however no gold trades for me.

Silver (Neutral)

Silver - Weekly

Same as for gold applies for silver as well. EMA slightly bullish and MACD bullish. When looking at the charts I think silver is stronger than gold however.

It has already a MACD above 0 and there is a bullish divergence in play. But one of the kind I don't like as much as explained in the analysis of corn.

No silver trades this week either, but ready to take action.