First off, the early and late games tomorrow are going to be fun to watch. I will NOT sit through another New York Kennel Club Show on NBC with my wife (I say that every year...) And while on the subject of NBC, I think I think I have finally outgrown the Macy's Day Parade, maybe...
To the markets. Let's start with the longer term charts of SPX. All along, 1150 is my "level" based on two things. One, the Fibonacci Retracements and two, satisfying the head and shoulders (boy that was an ugly right shoulder). And again, since this is for education purposes only, my opinions can change at any time due to interantional news changing (seems like a very long time since we have heard something out of Europe). To the SPX and then right after, to the GBP/USD on the same timeframe:
Past performance is not indicative of future results
Past performance is not indicative of future results
Intraday, it makes sense that we sell off today ahead of the "long" weekend. It is classic bear market, don't go home the weekend long in equities. That being said, since I have been long the USD for so long, today, I was looking to actually sell the USD in specific locations. Those locations showed up, 2 BUFFALO BOUNCES (one in the EUR and one in the GBP) and then a double bottom in the GBP. Again, I always use limit orders to enter and I pre-set my stop loss and target and then move my stop accordingly as the trade goes in my favor.
Here are the charts from today's action. The second chart is the GBP/USD with the double bottom:
Past performance is not indicative of future results
Past performance is not indicative of future results
Opposite of the double bottom is the double top, shown here in the EUR/USD from Monday's trade:
Past performance is not indicative of future results
Now for a bit of trading psychology. These markets are tough, violent and volatile and you MUST have a trading plan for each and every trade. I made 4 trades this week in 3 trading days. Do NOT over-trade as you are probably forcing and trading without a plan.
Looking forward, I am thinking that equities are getting closer to fair value in some sectors. I am not saying I am bullish, I am just saying the downtrend has a chance to pause a bit and using options and time decay may provide good opportunities to pick up fairly valued sectors and stocks. Fundamentally, we have a very, very busy week next week with the culmination on Friday and the monthly jobs number.
These markets are providing great opportunities, but you must have patience to wait for the correct location and then discipline to execute the trade and mange it from beginning to end.
For a webinar on the above mentioned entry plus stop plus target, please visit this link.
To learn more about Fibonacci's, join me next Wednesday for a free IBFX webinar at this link.
Happy Trading, Happy Holiday's and Be Environmentally Cool. Eat a Tofurkey!!
Coach Brian
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
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