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Loads of Money... Print
Written by Site admin   

Loads of Money -

 

Keep the stimulus rolling Joe...

Dear Trader and Clickevents reader

We've almost made it to the end of January '21. Market volatility is low, Brexit got 'done', Vaccines are rolling out and Joe's about to get the $ printing presses rolling again - it's stimulus to infinity folks....

No worries now that Orange man bad has skulked away, we must be almost to Nirvana. But is it all just too perfect in stock markets? Could that low volatility be telling us something we don't want to hear?

Commentators had beenwaxing on about how big the stimulus package will be, from $1.2 trillion to more than $2 trillion, according to some.

However, words of caution are now rumbling as we are reminded from Goldman Sachs, it's not yet a done deal.

Historically, the first presidential year often brings recession and tumbling markets so the previous administration can get the blame, and there's plenty of that flying about!

Read on for a reasoned argument from Elliott Wave International and a no cost deal, below....

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Stock Market: Why You Should Prepare for a Jump in Volatility This volatility indicator "has made a series of higher lows" -- and it's not a good sign

By Elliott Wave International

Stock market volatility is like a roller-coaster ride -- extreme ups and downs.

However, unlike thrill-seeking roller-coaster riders who often rise from their seats after the ride with a smile, investors often exit with a frown.

That's because extreme volatility after a stock rally often ends with prices much lower.

Having said that, many investors -- even professionals -- do not anticipate a jump in volatility right now.

Indeed, the San Diego Union-Tribune asked the senior principal of a financial advisory firm on Jan. 15:

Will 2021 be a volatile year for the stock market?

He replied:

NO: If 2020 had not been a volatile stock year -- what with the pandemic, recession, elections, and riots -- then it is reasonable to expect that 2021 should be relatively stable.

Yet, a key stock market indicator is revealing.

Here are insights from the Jan. 15 U.S. Short Term Update, a thrice weekly Elliott Wave International publication which provides near-term forecasts for major U.S. financial markets:

The chart shows the DJIA in the top graph and the CBOE Volatility Index (VIX) in the bottom graph. We've inverted the scale of the VIX so it aligns with stock prices.

This index measures investors' expectations for market volatility for the coming 30 days. Most of the time, the VIX trends and reverses with stocks.

When the behavior changes, it's time to watch both stocks and the VIX closely.The most recent intraday low in the VIX occurred at 19.51 on November 27. Since then, the DJIA has made a series of higher highs while the VIX has made a series of higher lows. This divergence is denoted with a red trend line on the chart.

The Jan. 15 U.S. Short Term Update goes on to describe a "clue" in spotting when volatility might start to spike.

Moreover, subscribers are provided with the Elliott wave labeling of the DJIA, which provides even more precision in ascertaining when to expect a change of character in the market.

Right now, you can read EWI’s U.S. market analysis FREE inside the State of the U.S. Markets FreePass event.

Now through February 3, you’ll see what Elliott waves show next for U.S. stocks, U.S. Treasuries, the U.S. dollar, gold and more

Follow the link to see everything that’s included and join now: State of the U.S. Markets FreePass

Don't miss it...

Kind regards

 
Could this be an Explosive New Year Print
Written by Site admin   

12/01/2010

Could this be an Explosive

 

New Year?

(Watch the video)

Dear Trader and Clickevents reader

We've just completed the first full week of trading of the New Year without too much market drama. Trumpism has finally expired, exploding in Washington.

Biden-Harris will of course be a safe pair of hands, the Vaccine is on the way and markets are behaving themselves. What's not to like?

And Bubbles...

Jo and Kamala will just keep the money supply, inflation pump pumping, and all that debt will miraculously melt away.

They can then allow the Stock market bubble, Bond bubble, Bitcoin bubble, Gold bubble to deflate gradually.

Alternatively, it all becomes explosive. Watch the New Year video here.

It's going to be a great year for traders.....

As ever, send in your views by replying to this email

Kind regards and best wishes for 2021

 
Who da thought it Print
Written by Site admin   

31/10/2020

WhoDaThoughtIt!

It's Trump, no Biden's
got it, or has he?
 
Dear Trader and Clickevents reader
The four yearly madness is upon us, only it's more insane than ever this time. I guess we will know outcome, win/lose/draw or a gladiatorial fight through the courts.
Remember the 'hanging chads' that decided the Bush presidency? That was a side show compared to how this one could turn out.
Does it matter to traders?
Probably not. Volatility has been rising in the markets and is bound to continue and that's all traders want, place your bets and the smartest win. So is this now a gamblers' market, or will cool calm analysis win the game?
There are those who feel that Trump is good for domestic industry.In 2016 he was going to make 'America Great Again' and bring back all those jobs off-shored over the last three plus decades or so.
He was also going to bring the troops home and that implies reduced defence spending. Perhaps he could accelerate all that if he gets a landslide victory, or perhaps not.
And Biden/Harris, are they committed to the globalist cause that off-shored those jobs and will they re-ignite tensions and wars of aggression against those countries still not within the US orbit? Perhaps they are ready for the big one, direct action against Russia or China, or why not both?
All this is wild speculation and both could turn out to be exactly the opposite of what the acres of newsprint have led us to believe.
And then there is Covid.
I'm sure we all have own beliefs about its outcome and also the economic impact of job losses, endless debt and stimulus. All the above fits neatly into project fear. Fear has been a running epidemic since, well, forever. It just gets ramped up from time to time to suit certain agendas.
And the stock market? perhaps it's time to consider that old adage 'Equities climb a wall of fear'. Plenty are fearful of a collapse in the Dow. Contrarians would argue they are totally wrong.
So what of the US Dollar.It's been zig-zagging up down and back to where it was when Trump first came to the White House.
Perhaps the charts have an opinion....
Last month gave us a technical signal. A key reversal month, that most bullish of candle signals, a Bullish Engulfing. These can result in some of the most powerful reversals.
They are not always the instant reversal that some would have us believe of course. Earlier this month we saw one on the AUDUSD.This is what happened:
It failed. For three days the signal was ignored. Then three days ago, on Wednesday, we had the signal again. This time might be different.
For a candle pattern to work, price action must follow through. It didn't at the start of October. This latest one has started to and now needs to break decisively below the blue box.through.
The overall pattern is a Triangle with a flat, or almost horizontal, lower side. When these break price action often runs through as many points as the depth of the triangle.
Forex moves
Forex had lost some volatility during October then it came back strongly this past week. The market had decided the time was right to start buying the US Dollar.
If it continues after the election, expect much higher levels for USDCAD, USDCHF, USDJPY and the opposite for the Euro, British Pound and AUDUSD.
These moves are discussed and shown in the regular twice weekly videos for Traders Class members, let me know if you would like to view the most recent one.
Also, if If you missed the previous, newsletter which explained why we were expecting a reversal in the Australian Dollar, just send a request by replying to this email.
Best regards.
 
Patience could be about to pay off Print
Written by Site admin   

21/09/2010


Patience could be
    about to pay off...
 
Dear Trader and Clickevents reader
The holiday season turmoil caused many of us to change plans and patiently accept that this was to be a very different year.
For me, it wasn't just adjusting to Covid rules but also the weather. A sailing trip which should have taken in Plymouth had to be cut short, with what turned out to be a very pleasant, but storm bound week, in Brixham enjoying the local brew and cream teas, etc..
Patience
That old proverb: "Patience is a virtue" could be about to work to the advantage of USDCAD traders who have been patiently waiting for a reversal to develop.
Dating from way back in the fourth or fifth century, the proverb has served those who understand it's simple message very well.
Patience is usually in short supply in the 'gun slinging' trading community and those traders who don't discover its virtues find it can be quite a short career!
Canadian dollar
My last newsletter in early August featured the Canadian dollar and its linkage with the price of oil. If all other influences remain static: Oil up, Canadian dollar up, US dollar down, and vice versa.
Throughout August oil just kept rallying up and up, reaching its peak on the last day of the month. And then it collapsed by seven dollars, a 16% tumble.
Over to the USDCAD chartand we should expect to see a similar move if the linkage, the correlation, is working. August saw the US dollar falling against the Canadian as oil rose.
Technically, it was in a mature fifth down wave coming into a support zone and ready for a trend reversal..... (all explained in the Great Reversals course and the twice weekly TC videos).
Right on cue, at the start of trading the very next day, 1st September, as the oil price peaked, so did the Canadian dollar against the US dollar.
What's happening now?
It's a potential reversal, possibly a major one, but for now it has formed an inverse Head and Shoulder pattern.
If price action today should close above the blue neckline it could run through more than 200 pips worth $2,000 trading just one contract. Traders Class video update members are already in on the action!
If you missed the previous, early August, newsletterwhich explained why we were expecting a reversal, just request it by hitting 'reply'.
Best regards.
 
It was a Gartley but it just failed Print
Written by Site admin   

05/08/20

It was a Gartley, but it just failed... 

The latest course, Great Reversals, includes many of the standard, and not so well known, chart patterns that we see frequently. Triangles, Wedges, Flags and a-b-c's, etc., are the basic fare that traders use.
Whilst no pattern will always be reliable, they all occasionally have their day. But one of the interesting features is that those that fail - having built up traders hopes of a text book break out move - more often, become a great fade trade.
The USDCAD can be tricky to trade and catches out many traders with false, fade moves against the dominant trend. It has popped up, then sideways, then down,  since early June, but is still in a down trend since the middle of March.
The longer term weekly chart made an explosive up move in March as the oil price collapsed. Since then it has dropped all the way back to the 2019 support zone, where it started with a large a-b-c pattern, which then morphed into a potential Gartley.
Gartley within a Gartley
Yesterday, the four hour chart revealed another potential Gartley pattern as price recognised (briefly) the all important PRZ - potential reversal zone.
It then failed, dropping lower on the day negating that inner four hour Gartley with a clear bearish engulfing candle which, in turn, triggered  a sell stop order.
The next major level was the low on 29th July and further back on the 19th June. This Hammer day resulted in  a reasonable a-b-c rally of 200 pips.
Overnight the USDCAD sliced through those lows confirming the two failed Gartleys. Failed patterns, particularly against a major trend, so often give the best trades as described inGreat Reversals.
Now the low of the 19th June has given way. It's in a fifth wave that could take the USDCAD on down to the next significant round number of 1.30.
Could it bounce again and reverse the trend?
Fifth waves are well known as the last gasp wave as momentum runs out of steam. And, whilst the weekly chart now shows a fifth wave, look closely - the daily chart is now init'sfifth!
So yes, at some point the trend will reverse and traders need to be 'on their toes' and ready. But, until it does, the trend is still very much the traders' friend.
Technical Analysis is all very well, but price is driven by more than just a pretty picture. That picture reflects the hopes, fears and biases of all those who are trading and, of course, the underlying reality of supply and demand.
The Canadian economy has a very large oil sector. It's their largest export and contributes about 10% to GDP and tax revenues. So, when the world oil price rises it's great for Canada, but not so good when it tanks, as happened this April.
Crude oil has since recovered strongly, all the way back to fill the breakaway gap from when the Russians decided not to cut production with OPEC at the end of February.
Despite the global slow down from the virus response, which  has much reduced real oil consumption, the oil price remains supported by the very strong vested interests of producing companies and nations.
To see where the Canadian dollar is going, just take a look at Crude oil.If Crude breaks into a new down move, that will bad news for the Canadian dollar and the US$ will likely soar against it. If oil continues to rise, the USDCAD will likely stay within its down trend. 
Best regards.
 
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From the blog

Range bound EURGBP

Stuck in a loop &

Range bound

Dear Trader and Clickevents reader

As we all await release from lockdown, our enforced daily routines are tending to merge into a Groundhog Day world.

Socialising has become distancing, with WhatsApp the vital connection to our extended families. We've adjusted to taking virtual afternoon tea and barbecues with friends on Zoom and have amassed so many films and series to watch on DVDs and downloads we are starting to hope lockdown doesn't end too soon!

It's been quite a lesson in adjusting to changing circumstances and that should be no great difficulty for traders. Market dynamics never stay the same for long, morphing from one stage to the next.

Massive trends

As virus realty took hold, the Dow Jones collapsed into a rampant down trend, losing over 5,000 points in three weeks.

Then the Oil debacle between the Saudis and Russia was preceded by the collapse in demand as countries closed borders and trade.

These massive moves in oil and stock markets have been partially rescued by Trump's printing press, but many of the  currencies have stalled.

Since late March many of the currency pair charts are showing a distinct change from deeply trending to range bound.

The EURGBP is typical of these.

Read more...

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