Market Analysis for 8th Ocotber 2018 - Stock Market & Investing It was a very exciting trading week ended on Friday 04th October 2018, it just goes to show that what goes up must definitely come down.
Based on the last 2 trading sessions, the question we should be asking now is how far down will the markets be going? What does this new week bring? Some weeks it is difficult to technically forecast the market movement and I guess this is one of such week. There are lots of signals we can get into more like a month of bearishness but this does not look like a major reversal upheaval.
The nature of the market is up and down. To help you understand the market and give you confidence that in years to come the stock market will go up and down. Last week saw a size able sell off but it was not unexpected because it happens in the stock market every so often. Up and Down is the nature of the game, it is just like the natural cycle of the seasons, we just need to get ready and ride the season through.
Do not get caught up in the fake news, hyperbole and prevalent news occurrences be confident that up and down is the nature of the market. I am not worried about the future even though you were not set up for bearish market last week such things happen.
We will be taking a balanced look at this market trend. Don’t be worried about the future of stock trade. Just to let you know, I don’t trade the fundamentals or the news, I am a technical trader by looking at the big picture. Since May the market as gone up and at some point we need to come back down.
Since May 2018, the Moving Averages crossed and rallied with a little sell off on the DOW, this continued to move up and down and it happened last week. Interestingly same pattern on the S&P 500 -0.13% and NASDAQ.
DOW JONES (DOW)
On Wednesday night the chart showed a shooting star and gravestone Doji candlestick occurred and it precedes a selling off (quite a reliable candlestick pattern) with such candlestick pattern you tighten your stops. We saw the warning and it happened because Thursday market we had a bearish day it gives a 3-day evening star reversal candlestick pattern which happened meaning a continuation of the bearing market and may probably lead to the DOW selling off to 26000 points.
On Thursday we sold off to the 10 period moving average and on Friday we had a long lower shadow which means buying pressure. On a 5-minute chart pattern to see the intra-day view, we notice the technical opening showed we traded down and close to the end of the day we traded back up. At the end of the day we had buying pressure despite the bearish market.
What Do We Expect?
The trending behavior setup is either bullish or bearish . Monday 8th October 2018 market is a coin toss because the trading set up is positioned for either a sell off or buy on.
We knew the bearish trend was coming in because it was all overbought and the candlestick splitting. In the event the bearishness continue we need to look for extreme ranges of maybe 25500 but 26000. However, a lot of buying pressure like we saw during the summer hopefully the correction will be done by Wednesday and we will be on the way to our bullish trend .
Sadly, Oscillator are heading down may enter the oversold region. None of the oscillator is supporting buy. RSI is back to 50% and with a full blow move to oversold we may end up to the 26,000 points index.
The Moving Averages are not compromised, the trend looks strong in the bullish picture. The Ebbs and Flows are natural.
S&P 500 -0.13%
This is pulled back to a good support at 2885 and buying pressure coming in last week. There were lots of selling pressure for 6 days preceding the sell off last week to the 50 period moving average along with a buying pressure end of last week. There is an equilibrium leading to an unconvinced market. What gives me optimistic is we are on a support and if it doesn’t hold then aim for 2800.
Similar assessment on the S&P -0.13% as the DOW. The sell off was fast, scary but not to be too concerned.
Oscillators pulling back and a bearish divergence on stochastic and a weak divergence on the MACH-D. with stochastic there seems to be a hold point at the 50 mark and may not go below to the oversold range. See the trend line and the horizontal line in the image above.
Bollinger band is in a squeeze. It is not a fully confirmed bear or bull market .
NASDAQ
This closed below the 50 period MA and it is alarming because it sold off to 7399. The buying pressure on Friday is a good sign to a bullish trend if not the NASDAQ could be a complete reversal.
Oscillators are bearish and the Bollinger band squeeze seems to be breaking bearish possibly down to 7250 and a bullish market continues. The Bollinger band squeeze breaks downwards happens with force but reverses also quickly from my experience. ADX is moving up which is sign of a bearish strength and the parabolic is bearish .
The NASDAQ is definitely the outlier.
Conclusion
I believe the big picture trend is still intact there is not enough to change our outlook on the market despite the sell off from the last two trading sessions. The market is 50 percent but we do not need to change our outlook on the market.
This seems to be the overall outlook on the market.
Candlesticksignals
GBPUSD Long in ActionOANDA:GBPUSD
Understanding Japanese Candlesticks give us insight to market psychology in a given time session.
We see the buyers stepped in from our support line we can conclude that a bullish move to 1.32300 as a TP1 and possibly to TP2 @ 1.32630 for an additional 33 pips.
Expect a test of Dynamic Resistance at the 200 EMA.
Look for EURAUD short trigger hereEURAUD is inside shadow pre-identified in previous post. Goto back story for basis of this discussion.
The boundaries of current resistance/shadow zone are 1.5717 and 1.5618. Black candle last Friday is a price reaction or rejection to this zone.
Since today is up we have luxury to wait and see if another rejection in the daily chart. Window panel below shows CCI with period setting 14. CCI already touched and rejected 100. If there is a concurrent rejection of 1.5717 by price candle accompanied by another indicator rejection at CCI=100 then this could be trigger. SL would be placed above high of black candle last Friday of this a new high is created before the trigger appears.
AUDUSD - Daily Chart AnalysisRecent Price Action: Bullish
Pattern: Rising wedge (short-term correction)
Long-Term Momentum: Bearish
Short-Term Momentum: Bearish
Bias: Short
Action: Potentially enter short position after price breaks 4H trend support. Otherwise, wait until price closes and tests trend support on the daily chart.
Comments: Price had a strong retracement after a huge sell-off. Price was able to test the 29 EMA but failed to continue to push higher after. The red candle that closed above the 29 EMA indicates major indecision and is often followed by a reversal which we are experiencing now.
AUDUSD Double-Bottom showing bullish strengthI posted a trade setup yesterday where a very large bullish pin bar candlestick had formed on the weekly charts that coincided with a previous low (which acts as a major support line) as well as an important price level of 0.75. You can view that analysis here . Price continued to creep lower from yesterday morning into yesterday evening. Then last night the bulls showed up and a nice bullish Double Bottom pattern appeared in the hourly's. You can view the double bottom on multiple time frames I have chosen the hourly chart here.
Reversal setups are always riskier because the reversal must occur into a long term counter trend. That means the force and momentum is tremendous and not easy to flip. Due to that it is not uncommon to see a reversal signal and then watch the markets bounce within that reversal candle range as the market begins shifting. For this reason reversals are most risky than trend-trading but when they do work out the reversal can be quite explosive as many positions are forced to unwind quickly, a.k.a. long/short squeeze.
I will be watching this closely to see if the short term momentum can build into long term momentum and we finally get a trend change in this pair.
GBPUSD, WHAT ARE THE OPTIONS?Option 1: Buy after the trend line break. We wait for a retracement back to 1.39037 and go long until 1.40651.
Option 2: Price respects the trend and bounces off the trend line after touching it, without breaking it. Wait for a reversal confirmation candle or pattern and short it till 1.37593
BTCUSD - Still have time to play alt coins!Note: this idea is extremely time constrained and may be irrelevant by time you read it.
1 hour just closed with a doji candlestick! We still have time to play alts as long as BTC is carefully watched.
+ Closed right on the 38.20% retracement (peak is drawn from $11185.10)
+ Jumped speed resistance fans like it was made for puppies
+ BTC can definitely drop a few dollars and ride the fan line, no $100 drop (yet)
- RSI has flattened out
- Price stagnation and a bad candle close can lead to a big dump (or a pump but it looks bearish as of posting)
+/- Inside main trend channel. Good because we're safe, but we may hit the bottom of it if support fails.
- Extreme divergence from the two moving averages. Usually when this happens we're bound for a correction.
- Buy volume lacking
Stay safe out there!
VIBE Trade Setup Possibility: Reversal off Lower Bollinger BandSee notes on chart. This is a very low risk type of setup that I like very much. My sell points are either when I think a resistance level is being tested OR if a strong trend develops (hopefully!) I draw a trend line. If the trend breaks down, I know that is a good exit point until my next entry.
USDJPY Weekly Trade AnalysisUSDJPY > 10/15-20/17 Trade Analysis
Timeframe: 1W
Shooting Star candle signals roll-over @ week's beginning.
Break and Hold below 112.00 signals to 108.00 level. Expecting these levels to be Buyers area.
Break and Hold above 112.00 can signal further rise to 115.00 level.
High volatily expected as I believe we are in the "wacky" season where up is down and down is up!
* Personal analysis only. Please use your own rules and strategies prior to entering market.
** Forex trading involves HIGH RISK.
Before entering a trade, carefully consider your objectives, financial resources and level of experience.
EURUSD Weekly Trade AnalysisEURUSD > 10/15-20/17 Trade Analysis
Timeframe: 1W
Previous break of strong Hammer signals possible very strong bullish trend to continue up to 1.21000 level.
Firm break and hold above 1.21000 expecting further rise to 1.25000 level where fall is expected to begin toward 1.167000 level.
Current expected closing price @ end of month is now projected near 1.19000 level due to strong bullish trend analysis.
High volatily expected as I believe we are in the "wacky" season where up is down and down is up!
* Personal analysis only. Please use your own rules and strategies prior to entering market.
** Forex trading involves HIGH RISK.
Before entering a trade, carefully consider your objectives, financial resources and level of experience.
USDJPY > Simple candlestick signals easy to recognizeEducation > Basic Candlestick Signals
Chart > USDJPY > Non-Farm Payroll News Release > Friday, Oct. 6, 2017 - 8:30 A.M.
Analysis in chart
1. Large body w/small wicks indicate strength
2. Larger the body w/smaller wicks indicate greater strength
3. Long wick w/body at opposite end of candle indicates shift in trend momentum
4. Wicks at both sides w/smaller body in middle indicates indecisiveness and both sides have equal strength
5. Larger wicks w/smaller body in middle indicates increase of indecisiveness
* Personal analysis only. Please use your own rules and strategies prior to entering market.
** Forex trading involves HIGH RISK.
Before entering a trade, carefully consider your objectives, financial resources and level of experience.
EURGBP > Strong Bearish leg possiblityEURGBP - 0.9011 > 0.8640
Details in chart
* Personal analysis only. Please use your own rules and strategies prior to entering market.
** Forex trading involves HIGH RISK.
Before entering a trade, carefully consider your objectives, financial resources and level of experience
GBPAUD Short possibilityTimeframe: 4H
Expecting uptrend due to Three Outside Up Bullish Reversal and Engulfing Bullish during last session.
Corrective Fall expected.
Resistance @ 1.6331, 1.6422, 1.6494
Support @ 1.6168, 1.6096, 1.6005
Choose Entry Point within rules/strategies accordance
Previous session:
H = 1.6361
L = 1.6174
O = 1.6305
C = 1.6237
Pivot Point = 1.6257
Personal analysis only. Please use your own rules and strategies prior to entering market.