Hello everybody .. welcome to our Weekly Analysis Video ..I’m Stef Breschi and today is Saturday 31st October 2015.
Today’s analysis has a strong American flavor as we’ll be looking at the S&P500 index and the US Treasury Long bond ….…as always the rest of the markets we follow will be analyzed for the privilege of our STTS Subscribers only.
(Weekly Chart) as you all know we enjoyed a great trade earlier in October going Long at 1900 and exiting on a trailing Stop at 1995. After that we remained bullish but waited for a retracement to 2000 to go Long again which never happened so we missed out on the second leg of this rally which reached 2100 on Friday which we had identified as a target in our recent daily reports where we also anticipated price would stall..which it did.
(Daily Chart) the daily chart shows that 1995 level where we exited and how price shot up too quickly never allowing us to get back in, so we have been sidelined for the last 2 to 3 weeks.
So what now? Price formed at Friday’s close a bearish engulfing pattern at key 2100 resistance and the top Bollinger band so it is safe to say that the market next week is likely to either trade sideways or retrace rather than break through to the upside.
If the market does retrace where could it go? Running a Fibonacci retracement of the recent rally we can immediately see that the 38.2 level coincides with the 2015 significant level and also the rising mean Bollinger band is about to reach the 23.6 retracement level around 2046, we can expect the market to first reach the 23.6 at 2045-2046 and beyond that the 38.2 Fin at 2015.
So short term traders next week should be looking for price to break out of Friday’s candle range and reaching the 2 above mentioned targets.
(4 hr Chart) the 4hr chart shows how price has been trading inside a rising channel last week. An early indication of whether the market will retrace will be if price , breaks the bottom of the channel so short term traders should be looking for a continuation price action signal at the bottom of the channel or a strong reversal signal in the middle of the channel or indeed at the top of the range.
(1 hr Chart) the 1 hr chart shows interestingly that the 13 ema is crossing the 40 ema on its way down which is a bearish signal, and if the market does retrace it could reach the 365 period average which coincides with the 2040-2045 area we deduced from the analysis of the higher time frames. So Day and short term traders should be looking for the 1hr time frame to become overbought maybe on an early retracement and act on a price action signal in that area.US 30Y
(Daily Chart) Last week was disappointing as we took on what would have been a great trade in the Long Bond December future going Short on Tuesday’s pin bar at confluent resistance of the upper trendline and the 159.05 static level plus a fakey inside bar setup. All the premises were there for a great trade and our 1st target was 155.80. Sadly we reacted to FOMC statement jitters we deviated from our trading plan and decided to get out of the trade for a tiny profit, basically break even, after Thursday’s reverse pin bar which meant we missed Friday’s collapse which actually reached our ‘would be’ target.
As part of our ongoing education commitment to our readers we published an article for our subscribers in our Lessons Learnt section where we analyzed the trade, the mistakes that were made and the reasons, with more importantly action to be taken by way of adjustments to be made to your trading plan.
This is to show that people who subscribe to our STTS service do not just get a signal service but a much broader ongoing education service which helps them develop good habits through positive and negative re-inforcement, learning from both our successes and our mistakes, in the hope that everyone of our subscribers, whether they are day traders, short/medium/long term traders or indeed take on the same trades we do, all benefit from this service to help them become a successful, disciplined and confident trader.
Thank you for watching .. please take a look at our subscription service STTS (Short Term Trade Setups) which covers also other major currencies and other markets which we are likely to trading and includes entry levels, stops and targets combined with our tried and tested risk management strategy.
Come and find us on tff-onlinetrading.com/market analysis
Have a great week!