DXY is this a possible diaganol in the making?Regardless of this making the ending diagonal, we have a bunch of built up divergence and need to correct the previous impulse. Let's see!!
Diagonal
BTC will we get the deep correction soon?Maybe a diagonal type of structure will present itself. Follow along in the updates!
Bund Trading In A Minor Triangle CorrectionBund is trading quite slow, choppy and overlapping since September of last year which gives us an idea that a bigger Elliott Wave triangle correction within wave 4 consolidation is in the making. If that is the case, then more slow price action may follow on Bund and ideally afterwards make a new recovery into black wave 5 as part of a higher degree Elliott wave ending diagonal .
At the moment however, we see wave b trading in final stages and searching for resistance near the upper triangle line
Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All our work is for educational purposes only.
EURCAD - A reversal soon?Will EURCAD repeat what it has done back in early June? We are seeing a similar pattern forming recently -
1) Price has been inching higher with a loss of strength and momentum;
2) We are seeing a divergence in RSI and price; and
3) Price is entering the minimum expected area of wave 5.
All these factors gave us the expectation that price has a higher probability of reversing to the downside than going much higher.
Whether we are seeing a short term retracement to the downside, or a full reversal lower, our short term interest remains a sell bias.
*Disclaimer - this is just a humble perspective of the market. Do not take this as a trade call. Make sure you have your proper trading and risk management plan before engaging on any trade.
GBPJPY - Short term sell before another buyWhile my medium to long term perspective on GBPJPY remains bullish, I am expecting a short term downside before the buyers come back to push price higher.
This gives me a short term sell opportunity this week -
1) Price is forming a diagonal structure, a reversal pattern;
2) We are seeing a RSI divergence, showing a lack of strength and momentum to push price higher; and
3) Price has reach a 200% fibonacci extension, completing the minimum criteria for wave 3, giving me an expectation that we might be seeing a wave 4 correction soon.
However, taking reference from USDJPY, we might still see price continue to inch higher first before the fall / correction comes.
Keeping a close watch for a potential sell setup this week.
P.S. USDJPY, EURJPY and GBPJPY are all presenting similar setups.
**Take reference from USDJPY as it will 'lead' the others :)
NZDUSD - Expecting an impulsive drop soon...Looking at next week risk events, we do not have any pre-planned events specifically for the Kiwi.
However, looking at the price development since mid June 2017, we have a strong bias that we will be seeing an impulsive bearish move real soon.
Here are my technical reasons -
1) Price has entered into an extreme region of 200% - 261.8% extension area;
2) Price has been inching higher, but losing momentum and strength - forming a diagonal structure; and
3) We are seeing a RSI divergence forming.
Combining these technical factors, I am expecting a dip in price towards 0.7080 area.
P.S. This is not a trade call, so plan your trade and trade your plan :)
TRADE IDEA: TLT AUG 18TH 125/OCT 20TH 121 PUT DIAGONALHere, I'm just looking to do some old school inversely correlated action in treasuries to compliment a bullish SPY diagonal I'm working separately. Ordinarily, I'd hedge a bullish SPY setup with a bearish SPY setup (e.g., an iron condor or a double diagonal) but working the call side of SPY is somewhat pesky due to skew, and I'd rather keep things somewhat simple in this low volatility stretch we're enduring here.
In this particular case, I'm looking to receive a small net credit for the setup (.08) so that I'm not starting out "in the hole" in terms of reducing cost basis in the back month long (currently worth .88).
As with all diagonals, there aren't many metrics to show, since it all depends on what happens during the life of the setup. However, here's what we do know:
Max Loss/Buying Power Effect: 3.92/contract
Theta: .63
Delta: 9.66
During the life of the setup, look to roll the short put out for additional credit. Ideally, I ordinarily do this when it has lost 50% of its value, although it can naturally also increase in value; in the latter case, I consider rolling the short put away from current price -- again for a credit, particularly since narrowing the spread will decrease setup risk. Look to exit the setup for a debit that is less than total credits received during the life of the setup.
EURCAD - At Decision Point: Break down or one more up?Tonight's US Oil Inventory and tomorrow ECB press conference will potentially be the catalyst to move this pair.
What we are seeing now -
1) Price is forming a diagonal structure
2) Price has entered the potential reversal zone between 123.6% to 161.8% fibonacci level
3) An RSI divergence
A technical break of the lower trend line of the diagonal structure will potentially fuel the sell down lower towards 1.4650 area.
OPENING: SPY JULY 2ND 237.5/AUG 18TH 235 PUT DIAGONAL... for a 1.07 debit.
This is really part of my SPY core position, but I thought I'd set it out separately here, since I will manage it as a standalone trade.
The reason why I put this on here is that (a) I'm in need of long delta for my SPY core position; (b) we're in a low volatility environment and diagonals benefit from a volatility expansion; and (c) the other options available to add long delta to the position aren't particularly palatable (i.e., long call vert at all time highs and short put vert in a low volatility environment).
I don't pick up any long delta net net on the position because the front month short is at the 30 delta; so is the back month. However, the short put aspect of the setup does have +30 delta in it in the short term, which is naturally better than a poke in the eye with a sharp stick.
I'll look to roll the short put out for duration and credit to reduce the cost basis of the long and look to take it off when the credits received exceed what I paid to put it on ... .
EURAUD - Short Term downsideA good opportunity to short this pair for the short term with the following confluences -
1) We have an RSI divergence
2) We have a technical wedge pattern
3) We have a completed 3rd wave structure between 161.8% and 200% extension
Elliott Wave analysis: S&P500 May Face A ReversalS&P500 can be trading in late stages of a wave c), final wave that is part of a three wave correction. As we can see current wave c is displaying qualities of an ending diagonal, which means a sharp and sudden drop lower could be in for the stock. Break of 2379 can cause and confirm a sell-off.
An ending diagonal is a special type of pattern that occurs at times when the preceding move has gone too far too fast, as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B- C formations. In double or triple threes, they appear only as the final “C” wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement. Its formation is a 3-3-3-3-3.
Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All our work is for educational purposes only.
5 WAVE DIAGONAL IN CRUDE OIL - DAILY CHARTHey Guys,
Simple Idea. Either one more up and then Breakout, or directly breakout from the actual point.
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Idea simple. O realiza uno más arriba para caer abajo o rompe directamente desde donde está.
Carlos
OPENING: TLT JUNE 16TH 117/MAY 19TH 119.5 PUT DIAGONALGetting long bonds here via a net credit diagonal that I filled for a .01 credit.
For diagonals and calendars, there aren't much in metrics to look at, since how much you make will depend on a wide variety of factors (i.e., IV, underlying price movement, etc.):
Theta: 1.02
Delta: 7.24
Notes: The idea here is basically to reduce your cost basis in the long option with the short one. Here, the long cost .50 to contract to put on ... .
EURUSD WEDGE/DIAGONALCurrent position looks prime for a short entry with minor risk and great reward potential. Looking for price to continue to build the current corrective pattern taking place (wedge). Enjoy!
OPENING: XOP APRIL 21ST 33.5/JUNE 16TH 30 PUT DIAGONAL... for a .03 db.
At its outset, you short put is basically completely "financing" the cost of your long put (but for the $3 it cost to put the trade on). Your goal is to roll the short option forward for duration, collecting credits along the way and to exit the setup for a debit that is less than what you collected in credits (as you would do with any credit spread).
Unfortunately, the metrics of such a setup are indeterminable, although it does cost about $350 in BP to put on. A number of things can potentially happen during the life of the setup, and the credits received for any roll of the short put are unknown.
Basically, however, I'm going to work the short put as I would a naked, but with the benefits of the long option keeping the risk defined ... .
DIAGONAL IN DXY - 4H CHARTHey Traders,
We have been analyzing this structure for a few weeks already in DXY (US Dollar Index)
We are expecting a fifth move in the diagonal and then a breakout towards to the -0.27 fibo level potentially.
When this happens, all USD pairs will be affected.
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Hola Traders,
Hemos analizado esta estructura durante semanas en DXY (Índice del Dollar Americano).
Estamos a la espera de un quinto movimiento dentro de la diagonal para luego tener una rotura que de un movimiento hasta el nivel Fibo -0.27 potencialmente.
Cuando esto suceda, todos los pares con el USD se verán afectados.
Carlos
GOLD short on a diagonals3.amazonaws.com
We have a diagonal created since the uptrend of the gold after it reached it's bottom for last year.
I believe a small breakout has already occurred which might retrace a bit to give us a chance to short it before it falls.
A good entry on this would be around 1245.00. This is a long term trade and I personally am aiming for 2000+ pips.
SPX500 - Leading Diagonal?I believe this is a leading diagonal.
Looks like a 1-2 1-2 pattern at the start of a wave 3 of 3.
Get into it.
Leading Diagonal? - USOIL LONG Entry Approaching.Looks like a leading diagonal forming in the right place.
Give it some time to develop.
Elliot Wave Analysis - Medium TermWe are currently in a bullish correction of wave 4 which can be a Flat correction or ZigZag
The breakdown of the green line confirms the end of bullish correction of wave 4 . A short entry is possible after the breakdown of that green trend line to the target of wave 5 shown in the pink circle
The correction of the current wave 4 can go up to the 2.618 red fibo level which intercept the upper red line of the current main bearish channel which seem to be a Diagonal Pattern
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NZDUSD May See More Weakness, But After Temporary CorrectionNZDUSD is in a strong downtrend for the last few weeks, which is expected to continue soon if we consider a five wave fall from 0.7402 followed by a recent bounce towards the 0.7171 level, which could be the first leg of a minimum three wave rise in corrective wave 2), labeled as wave A. If that is the case then drop from the mentioned level was sub-wave B that seems completed and current bullish development could be wave C the final leg of this three wave rise. As we see on the chart, we labeled a possible ending diagonal in wave C, that may unfold because of overlapping price movement. The ideal reversal zone for this whole correction may be around 0.7240 area.
The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when price has moved too far and too fast. Some ending diagonal triangles appear in the C wave of an ABC correction. In all cases, the ending diagonal terminates the move of larger patterns. They consist out of five waves, with each having three more sub-waves.
OPENING: IWM DEC 16TH 136.5/JAN 20TH 140 CALL DIAGONALTruth be told, I'm not a big fan of low vol strategies such as calendars and diagonals, but am going to putz with one here.
From a trade management standpoint, the notion is to take off the short call at or near worthless or roll it to the Jan expiry for additional credit, resulting in a Jan 20th 136.5/140 short call vertical. You then manage the setup as you would any credit spread.
As with calendars, this particular setup doesn't have a set profit potential; the profit will entirely depend on what occurs with price and whether volatility expands. However, the front month, short option's theta will decay faster than that of the back month ... .
Filled for a .01 db.
