What divergens looks like (EUROSTOXX50)Not a clear signal yet, but we are building up before QE release next week. For now neutral, later short.
Good luck to all and have a nice weekend.
ESX50 trade ideas
EUSTX50 - Super lift. The only way is up...???It looks like it can never ever fall again! Central Bankers invented the perpetum mobile :-).
Yes, this market is very bullish, and it will remain bullish (that is something what we have learnt in last 3-4 years as a natural side affect of QE). But as everybody knows it will pull back at some point within the trend. I've been also waiting for the pull back trigger signal for some time now, so as we have a major mkt moving US NFP data today, which can influance global risk sentiment, let's see what is the picture and what are the chances now?
Daily:
- Ichimoku setup is bullish, no signs of exhaustion really until Price can not even come back below Tenkan Sen. No Kumo overshade either, Chikou is in open space. Kijun Sen is slowly catching up to Price.
- The more we look at it, the most likely is that we see high degree wedge being built. These short term rising wedges within the major bullish trend tend to break eventually on the lower side, simply because as time passes, the probability of keeping the same pace of buying is decreasing. The move since January was pretty straight and vertical.
- Heikin Ashi had only one day of hesitation, followed by two green candles. The only minor signal that worths attention is the haDelta, which shows negative divergence. This means the pace of Price increase (bullish momentum) is decreasing, and getting less strong compared to the previous move from 3050 to 3400, when haDelta printed its top.
4H:
- Bullish Ichimoku setup with only minor pull backs (called as Kijun retests). Bulls won't worry, until Price holds above Kijun Sen
- Short term support and break point is now up to 3520 - 3540 area.
- DMI/ADX is still bullish, with some minor drop in ADX.
- Heikin Ashi signals very short term bullish sentiment is getting tired, mkt might be ready for a minor pull back to Kijun and trend line again. HA candles with small body, haDelta turning down.
As a basic rule, correction and counter trend has chance to start only if Price makes a lower low, and breaks some relevant supports. Looking at the 4H chart, this should take some more time, so for now just keep our eyes on the 4H supports, and on daily Tenkan Sen (3562 at moment), and most importantly on the wedge! Sooner or later the time will come.
Any short trade attempts before a real sell signal has to be considered as a top hunting. It may work, but you must know its risk-reward is lower, so play only in small if you play it at all!
EUSTX50 - 4H support higher, sell only break of bearish wedgeDaily:
- Ichimoku setup is long term bullish, but Price is far above equilibrium levels (Kijun Sen and Senkou B)
- Price has been trading in a short term flag, stuck at flag top. First support is Tenkan Sen at 3398.
- HA candles are more bullish, but in every third day some undecision comes to the mkt, forming doji-like candles with both upper and lower wicks
- The Oscillator is bullish, but haDelta shows some negative divergence. Is it a sign of a short term decreasing bullish momentum?
4H:
- Is it a bearish wedge forming? We will only know if it breaks on the lower side.
- Ichimoku setup is bullish still, with Kumo and 100 WMA support up to 3395-3400 now.
- Recent HA candles show some undecision, haDelta moving lower below zero line.
All in all I think Bulls are slowly getting a bit exhausted. The ultimate question is what happens at 3400 if Price puls back there again. Will the wedge, 100 WMA and the Kumo break? If that happens, then finally we could see some deeper correction.
For now just set an alert to 3398. We'll check Price action when we get there.
EUSTX50 - Bullish, but chance for short term pull backWeekly:
Not much to write here, on weekly time frame this index is very bullish
- Price is well above Kumo, Tenkan and Kijun Sen. There can be some pull back at some point, but still Chikou Span will be in open space. Most important note on this chart is the Key Support at 3130. Until Price is above that, it has to be considered as bullish biased
- HA candles are bullish, no sign for a pull back (but pls keep in mind this week has just started)
Daily:
- Ichimoku Setup is bullish, but Price got a bit far from equilibrium and is trading ard the top of the trend channel.
- Today's HA candle will be important on close, as haDelta already suggest the bullish momentum may slow down a bit at this high. haDelta/SMA3 cross with a lower recent high of the indicator (some minor negative bias)
- Supports are: Tenkan Sen = 3390, Kijun Sen = 3232. As Kijun is measured in 26 periods, if you check last 26 candles, you can see that Kijun will pick up to ard 3280 in next few days.
Strongest support is 3190-3200 at the Kumo bottom and trendline
4H:
- Red HA candle together with haDelta and the Oscillator suggest some pull back for today. How deep is a question. There is a support ard 3400 in form of Kijun Sen, trend and Kumo. Meanwhile it looks like a wedge has been building here. Obviously if there were an agreement today with Greece, the Index would break out on the topside. However if negotiations won't lead to solution soon, then the bearish reaction would leed to a very serious move on the downside, as the Kumo is very thin now below the Price, so there is less technical support.
- Level to watch for a counter trend short trade is 3385. Until Price trades above that, it has to be considered only a pull back.
EUSTOXX50 - Watch short term key supports. Correction downDaily:
The picture shows a possible bearish swing ahead.
- Two doji-like Heiken Ashi candles followed by one clear red with no upper wick
- haDelta is below SMA3, both lines dropped below zero
- HA Oscillator is bearish too
Possible retracement tgt is 3200-3220
4 Hrs:
On the lower time frame the picture is still neutral, but with increasing bearish bias.
- Price is still above the Kumo and 100WMA, but below Tenkan and Kijun lines. The Kumo is thick below Price.
- Chikou Span is till neutral, swinging around Price candles
- Weak bearish Tenkan/Kijun cross
- HA candles are bearsih, haDelta further down with SMA3 below zero line
- DMI bearish signal with ADX start to increase
The mkt has less power now. We can try to sell smaller spikes and/or the break of key horizontal level at 3320.
EUSTOXX50 - Mixed picture with short term bearish biasDaily:
- The Ichimoku setup is bullish, with supports at 3305 and 3175 - 3210 area.
- Slow Stoch is slightly bearish, but MACD should confirm it with a bearish cross too, or else it can easily turn back to bullish again.
- DMI shows decreasing confidence, but the bias is still bullish
- Heiken Ashi candles show consolidation and undecision for the last four days (both uper and lower wicks)
- HA Oscillator is still bullish, but haDelta/SMA3 gives somehow a warning signal: it looks like a cross down happenning below the zero line. In fact we should see a bearish (red) HA candle and a daily close below Tenkan Sen at 3320 to say with higher confidence a pull back is due. In case of a pull back the retracement tgt will be ard Kijun Sen at 3210.
4 Hrs:
Consolidation starts:
- Price crossed below Kijun Sen. Weak bearish Tenkan/Kijun cross, Chikou hits Price, and is about to make a weak bearish cross below candles too
- zig-zag DMI and low ADX also shows the index stopped trending on the lower time frame.
- Heiken Ashi candles turning to bearish again, bearish haDelta cross to happen below zero line. The Oscillator turned bearish as well.
It looks like there is good chance for further pull back, but I doubt we could see a bearish trend reversal as the Kumo is very thick below Price. My initial tgt is somewhere between Kumo bottom and 100 WMA so 3220-3250.
EUSTOXX50 - Top consolidation or pull back to 3200-3250 supportDaily:
- Ichimoku setup is long term bullish
- Yesterday Heken Ashi inside candle, today is a doji candle so far -> top consolidation or signal for a pull back
- haDelta cross below SMA3 -> top consolidation or pull back
- Oscillator is still bullish
4 Hrs:
- Bullish Ichimoku setup with a thick Kumo ahead
- Short term bullish support is 3210
- Heiken Ashi signals further correction: red candles, negative haDelta and bearish Oscillator
- DMI lost bullish trend bias, also signals consolidation or pull back is ahead
- short term inner trendline breaks
We'll likely see some further profit taking, which can send Price back to 3200+ support.
ESTX50 - The Top will be higher.
The market has flipped energy up.
The last 2 weeks are likely to be a real breakout.
The rounding top may be higher.
ESTX50 could potentially climb another 10% before Topping.
Around 3700, ESTX50 may start a multi months oscillation process that could lead to a collapse towards the end of the year.
EUROSTOXXECB expected to come with 500Bio to 1Trio.
There's a large array of possibilities in the details and the language too.
At this stage market would like precision and decisiveness. If this is delivered than Eurostoxx could enjoy a 10% rally over 6 weeks (just a possible scenario).
Until Draghi tells us how he plans to play it, it is difficult to tell.
Note 3550 in March would be a perfect short.
EUSTX50 - Choppy trading at the equilibriumYours, mine, mine, yours... buy sell? What to do?
As you see no one knows. Price is clearly stuck in a tight range, in fact it is a choppy swinging exactly around the equilibrium level. But there is more!
Daily (Heiken Ashi candles):
Everything stays perfectly together to form a totally neutral picture to increase undecision.
- Flat future Kumo, with Kijun Sen and Senkou B (so the 26 days and 52 days averages) staying perfectly at same level
- Kijun Sen is flat too
- Price is swinging in the Kumo around Kijun Sen
- Heiken Ashi candle is ... hmmm, who knows? Should say bearish, but in fact it is a bearish like doji with huge wicks, which means serious undecision and nervous intraday trading
- MACD and DMI are rather bearish
- first lower support almost got hit today, but the day is not yet finished
How much of QE is priced in? What is the general positioning in equities with expecting the ECB to bring on the biggest secret weapon ever?
4 Hrs:
What the hell is going to happen? Who knows. One thing is sure, it is going to happen soon, as the triangle is tightenning, the clock is ticking.
- Price is exactly trading in the short term equilibrium range now, so it is absolutely neutral, hard to make a bet (still below 100 WMA). But before, on the previous candle...
- ... Price hit the top, then hit the bottom with almost a break on the downside. Ladies and Gentlemen, let me call your attention that is a 3 % move intraday! This kind of volatility is scary, as it defenately not a sign of a healthy bull mkt!
What is happening here intraday? I think Algos, computer based trading accts are about to go crazy. Once these HFT liquidity providers widen their quotes or maybe even plug themselves out, then there will be no one to sell to.
OK, so far it is just a warning signal, things can still get back into normal and we may see a break on the top side, but in fact I started to become really worried about the general risk in the global system, with increasing volatility, less liquidity and such a big leverage, and with these less and less credible Central Banks on the side of the market field.
At some point money printing can not just solve everything. There will be an inflection point, where the exit gets too tight, where even with further Central Bank steps and promises things can go just wild and out of control.
Watch these mkts carefully, and remember, the most important principle is not making money, but protecting your capital through proper risk management and reasonable risk taking! (especially after today's SNB black swan event)
EUSTOXX50 - Update / More signals for troubleWe have more signals todays indicating the selloff can soon accelerate in European equities.
First of all please check my previous post on the link below
Daily:
- Chikou cross below Price candles - weak bearish signal
- Price is flirting with Kijun Sen - If it breaks below, then the very important 3100 support becomes a resistance.
- MACD is close to bearish cross
4 Hrs:
- weak bearish Tenkan/Kijun cross kept valid as Price retested Kijun twice and turned down again.
- Chikou Span is crossing below Price candles
- DMI bearish cross and ADX started to increase, so this time it can be valid
- present Kumo is very thin, no problem to break through 3100. If the breakdown happens, selling will accelerate.
EUSTOXX50 - Read the classic indicatorsDaily: As Price is very volatile, the longer term equilibrium (Senkou B line - Kumo bottom) is not really changing, stays ard 3050. In terms of Ichimoku signals it is very hard to read this volatile daily chart. There is too much noise as Tenkan is almost corssing bullish above Kijun, future Kumo components (Senkou lines) point up) but Chikou is about to cross bearish below Price candles. Still I can not think about European equities as bullish at all for the following reasons:
- DMI is still bearish
- Slow Stoch is about to give a firm bearish signal after Price couldn't break 3220 horizontal key resistance
- Massive bearish MACD divergence and MACD is not far away from giving a bearish signal too
- Increased/increasing volatility is not a sign of a bullis market. This kind of volatility spike happens usually at major top buildings.
- Fundamentals: Greece-Syriza in focus -> EUR collapse fears -> ECB more unlikely to apply full sovereign QE program -> expected monetary stimulus which kept equity prices inflating may be off the table
Real trouble and bear mkt would start below 2900.
4 Hrs: Weak bearish Tenkan/Kijun cross and weak bearish Chikou cross to happen? Price is close to short term equilibrium at 3100. Bearish acceleration could happen below the Kumo. Watch DMI too!
ESTOXX50 - Sell SetupDaily: 3300 resistance refused, Price is touching the short term trendline, which may be broken soon as both MACD and Slow Stoch is bearish now.
4 Hrs: Price down to Kumo and 100 WMA. A break below could bring further selling and then DMI will confirm with a bearish cross too.
1 Hr: Bearish now, with Price breaking below the Kumo, and Chikou Span below Price now. Needs one more confirmation sub 3235, then bearish momentum will accelerate further.
Initial bearish corrective tgt is 3150. Stops have to be placed at 3275.
S&P & the EuroStoxx Wave "Problem"As given: stock markets tend to move synchronously & any downward adjustment is likely to occur together.
One labelling solution as here on EuroStoxx is possible without compromising rules of overlap, wave 3 longest etc. makes wave 4 as a giant months long expanded flat (3-3-5). Not that it was much of a 'correction', it did break the support line. Most indices, 3 US majors: DJ30, Nas, S&P (lightly in the background here), FTSE, Nikkei etc. after end of August correction, all did a 'hockey stick' recovery. All are technically 'in' with an all time or multiyear highs, apart from Euro continent indices, Eurostoxx50, Dax, Ibex etc. (& the Nikkei) which means they either have a failed wave 5 (assuming true motive), or they have a little way to go to a significant top.
The non-appearance of divergence in the RSI also supports this 'high yet to come'. All prior show at least some divergence, e.g recent top of (b). And for a (b) to be that high, almost always, to appropriate timescale, exceeded thereafter. Lets see how the ECB liquidity injection goes (though it is doubted as to whether this is 'real')
And all that, & the tendency to synchronous movement gives me slight caution about calling a top in the US Majors. To be honest, looking over the weekend, in? Could very well be. US & other indices not perfectly together in terms of labels & waves. But, y'know ... should the enthusiasm cross the pond ...
Estoxx50 - Is it a danger zone, or a support buy opportunity?On the daily chart Estoxx50 Index is getting a bit dangerous for Bulls. DMI, Slow Stoch, MACD all bearish, and most importantly Price has touched the uptrend and arrived to Kumo support. Tenkan/Kijun weak bearish, Chikou Span below Price candles too. However a trend exists until it clearly breaks, and until the trend is so strong bullish, we have to suppose that Bulls will try to do everything at this support level to protect it.
Looking at multiple time frames, we can see critical days are ahead of this mkt: both 4 Hrs and 1 Hr is bearish, the counter trend is still intact. Watch if 1 Hr stays above previous low and prints a weak Tenkan/Kijun bullish cross at least. Price action today and tomorrow on the lower time frames will be very important to see if the Index can bottom out and turn up again, but still Bulls really need to do a lot more from here to push price above 3260 resistance level to stay in the game for longer.
Same is true for the Bears if they want to get in power. As I marked on the daily chart, it is not enough just to push Price below the Kumo. They also have to break the previus key support at 3140 to reverse the trend, otherwise the attempt will fail.
EUROSTOXX50 will go down ??There has been a big move down the hill for the index. Next week, this may rise up a little bit as a technical correction, but the fall of the index may follow the move of other index i.e DAX, CAC40 to say the least
Eurostoxx Test Prova 3100 is a very important area where there is a stack of PUT options maturing in April
So 3100 could do to support
First Target 3130 Above which the slope of descent sweeten to enter the channel of volatility RED
Only a rise above 3150 may be more consistent
STOXX50 - Not looking good! Sell now and sell higher too!The whole morning it was sufferring to go higher, price action was very weak.
Daily: MACD bearish cross soon?
4 Hrs: Weak Tenkan/Kijun Sell signal is still valid, price retested Kijun sen and had a sharp turndown. Trend is broken.
DMI turns bearish. Slow Stoch down.
Try to sell on spikes, Target may be 3070. Stop above 3200.
ESTOXX50 - Extremely Bullish... and overboughtIn all aspects Eurostoxx50 Index is extremely bullish, while US mkts are not so much.
Last daily candle is a huge Hanging Man (normally a good indication for short term trend exhaustion), daily Slow Stoch is overbought and started to point down, and watch 4 Hrs ADX, which is close to 50! ADX is a measure of trend's strength, but most of the time when it is so high, market starts a correction.
How to play the correction? There are two ways: you either try to sell it in a spike ard 3220-3240, or you watch for the 4 Hrs Kijun line and sell the break below, which in line with daily Tenkan and horizontal line means a sell below 3175.
In any case do not allocate more than 0,5 unit on this trade, as again, at the moment it is an initial counter trend trade, and we need to see more signals to be confident with building bigger shorts.
ESTOXX50-Show me the way to the next whiskeybar /love me 2 timesWhile the weakest chain is clearly the DAX Index, the broader European equity index actually somehow not yet that bearish. However I think this is a classic example what not to touch as a trend trader, until one day it looks like a buy and the next day seems rather a sell. All in all it is a consolidation, with flat and thin daily Kumo, confusing daily MACD, and also a super low ADX and choppy zig-zag DMI on the 4 Hrs. 4 Hrs Ichimoku is not giving any indications either, except one: leave it alone until it trades in the triangle, and in the range 3050-3100. My longer term bias is generally bearish for equities, so if anything, I would sell the tops or would buy more Put options for May maturity, but only a decisive break below 3000 could bring here a real and massive bearish reversal.
Until we can decide, please enjoy: www.youtube.com
ESTOXX50 - BULLS BACK IN POWERI have to admit, I do not have too much "luck" trading equities this year. My timing is not very good, and my mind is too much influenced by non technical factors, which tend to block me from going long on equities by technical signals. Last sell round worked well on this index (not like on SP500 wichi can not drop in any circumstances), but now looks bullish again. The reason I do not mark this post as a Long recommendation is that I clearly do not see much upside on this move. I rather have the feeling, that 3150-60 will stop bulls again. There are some negative divergences both on Daily and 4 Hrs time frames. On the daily price is floating in a pretty quickly tightenning ascending triangle. The next real heavy move will take place whenever price breaks out of this. Will it bring a correction and the end of the multi year bull mkt, or will it be the start of another 10 % rally? Hard to decide. But as I said at the beginning of this post, I am always a bit afraid of longs, so I will probably rather buy Long Put options if we reach 3150 level.
ESTOXX50 - Corrective move to 3060 expectedAfter heavy selling in European equities I think we'll see some correction now. Estoxx50 indx has chance to come up to 3060-3070 (maybe even to 3090). Slow Stoch is turning up both on daily and 4 Hrs time frames. Watch 4 Hrs px action there and check if we see a new sell signal, like Slow Stoch bearish cross. The bias is still bearish, unless px closes and stays above 3100.
