EUR/USD
From my last writing about the euro and following its downward moves I did account for a possible reversal where the dollar would get weak, and I was stopped out. Finding the perfect resist point is not
possible but on this chart I made a note for a juncture and on this date it did reverse here at t1.18372, it traded down to S1. One major flaw in my strategy was not
covering near the green arrows where I could have exited by 3/4 or 1/2. The charts set up for this pair are made for
intraday trading if not intraweek.
The resistance zones are still valid and personally I interpret the chart as slightly down but indecisive so I feel that is not good to make these directional judgments when it is stuck between highs and lows. Extremes are best!
USD/JPY
There was no reason for me to exit this trade early but I did. The display on this chart shows a profit of 23.2 pips and it is based on an entry below 109; my stop placement was valid and there is plenty of breathing room where it would not choke off any potential movement in my favor. There is still time for bullish momentum but I will be more convinced it cleared 109.25. This one is of a 30 minute time interval
AUD/JPY
The red box is the profit that I gave up this week and my average entry is highlighted in the horizontal green line where it says average entry and that is based on the buying activity between 82 and 83. I had some times where I was shorting AUD and also being long of the JPY for protection. But it was not often enough as the moves were swifter than my thinking and I was caught with a delay in execution. It is hard to trade during time frames when I'm supposed to be sleeping or exercising. So I am only in danger if the chart on a different time frame were more troubling like the weekly candlestick or monthly candlestick and there was a full scale financial crisis and the pair were to drop in the fastest way possible, but I also don't pretend to know what the future holds. There is still plenty of demand and even though this is a daily chart it has a hammer candlestick formation put in for Friday and that is a standalone bullish indicator. Also the support zone in the light green rectangle indicates that there were plenty of buyers on that level and the Bears might take a break but the psychology is overall negative. Next week I will make a theme about hedging with NZD/JPY and a possible return of more Yen strength (which would injure this pair tremendously)
This chart is not showing my entries but I decided to point out all of the lower highs where there was plenty of absorption. The green arrows pointing up show the daily lows and the sequence of buying activity and order flow. When I asked the question about absorption this week it was a really good buy opportunity but I did not want to keep my average entry so close as I did buy this seven individual times. And I would like space in between each entry. If you remember I did cite the 1.27453 level as stiff resistance and it was right on time, the exchange rate fell hard when it tagged that line. This is a test for the dollar to see if 1.26545 can hold, it is a challenge for the dollar index and at the same time the weakness of the Canadian dollar. I will be watching crude oil closely too!
Sometimes when you are involved in so many positions that causes an execution problem and the reason why I did not get involved in the Green zone there below is because I was having a difficulty with another pair and I did not want to take on more risk. But one thing is for sure they are selling the rips, and even though this dip was bought it tells me that there will be another chance to buy it again and that if the pattern repeats itself is currently near a sell opportunity on the 1hour to 4 hour time frame.
DIA
This week showed how powerful the equity selloff can be, this is an eight hour chart and it is a display of the newfound weakness in the Dow Jones 30 and I have found that the index still has plenty of downside as the red candles are becoming more frequent so for every four hours of trading is becoming more obvious that the trendline in red will be followed and that there are some powerful buyers near 21,500, where the yellow shaded oval is placed.
The perspective I have here is that the average range of every weekly candle may repeat itself in this fashion and is likely that there are two key levels to watch for 243.73 which is a breach of this weeks strongest support point. Once that is broken there is support where the market rallied at the end of June and early July and they were a catalyst for the most powerful weeks which happened to be total exhaustion for the bulls, they gave up and are retreating quickly. If institutions are waiting on the sidelines with cash they are waiting for levels much lower. The smart money knows that it is better to wait for severe percentage drops to find competitive buying opportunities. I have found that between 234 and 236 there could be a lot of players involved (green shaded zone)
CBOE S&P 500 Vix Index
The goal was not only met but it was surpassed so the people and control have the task of bringing it higher and as options activity indicates it has the power to go to $21 or higher. This also sets the count to longer than one week of upward movement in the Vix. When the Vix gets very high it presents very low prices for stocks, there is a pot of gold at the end of the rainbow
VXX
I think the blastoff is in large part due to how intensely price was coiling at the blue arrows, the VXX had a daily range of 0.35 on July 31st! This year was marked by plenty of tighter ranges with this ETN, on the weekly chart I'll point out some of the tightest weekly ranges in recorded history (2010 to 2017)
I have highlighted some phases where the VXX spikes and compared the height of those ranges to extrapolate and determine targets on the "Hard right edge" of the chart and use previous highs as references too...
This is the weekly total range from bottom to crest, for every week for the 26 weeks starting 2/13/2017 to 8/17/2017:
1.64, 1.82, 2.27, 0.71, 1.52, 2.1, 2.22, 1.19, 2.08, 1.16, 1.09, 0.61, 0.75, 2.56, 0.78, 0.73, 1.06, 0.93, 0.47, 1.97, 1.21, 1.41, 0.74, 0.89, 0.34, 3.14
Profits are made from periods of low volatility to high volatility
I was pleasantly surprised at how I was able to break off a fraction of my shares and sell them to watch it go even higher where I could have sold for more but I think it is because of that backwardation and contango dynamic where the S&P 500 does not need to be down that much to drive it higher that there is an internal force driving price when the Vix Index averages higher in aggregate during the rush periods. The market drops let's say 5% and the Vicks was 20% this instrument moves at a velocity that is greater than I imagine. Granted it is difficult to manage risk in such a debilitating timeframe but for me I have found that position sizing is my best choice.
This one I do not plan on treating frequently but it would be interesting to think about the best locations for drops based on how the S&P 500 trades and its own momentum. Because they have a negative relationship I do not need to scale this trade the same way I would with VXX. So when the time comes I can show some price points that I think are profitable long entries but I would be a seller at $40 because of the gap that was created. It trades like VXX but it has a different rhythm to it.
Tuning into the the trade timeframe has not been my strength but I normally find myself hedging my risk with this instrument as well. I hope this is straightforward and demonstrates decent support points. I am willing to patiently wait this one for as long as needed. It swings inverse to VXX and frequently flashes excellent levels.
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