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To the best of good buys!

USDCAD hourly has bounced up and down within this quite well defined triangle from late August. 10, 20, 50 and 100 MAs are all converging, and the TTM Squeeze indicator (Bollinger, Keltner and an oscillator) all show the pair is ready for a breakout. Base of the triangle is 300 pips, which gives a target for the first move after the break, whatever the direction.

Will the FOMC stay, raise .25% or raise .50%? I don’t want to guess so I will enter this only after that major event has passed.

To the Best of Good Buys.


I’m on tradingview!

Because other chart apps are too heavy. See what my comments are on the Forex feed.


To the best of good buys

NZDCAD Downwards again

Very clean break of the 200, especially. Turning of all the MAs. Sell at .85500, stop .86200 and targeting .8420


To the best of good buys.

Back to Research

It has been a year since the last post, and before that time, I’ve worked at a trading firm, learned, and left to start the new stage of my career. I have also passed all 3 levels of my CMT exams, and even though I certainly like the novelty of Point and Figure’s boxes, catapults and more, its obscurity (especially in FX) goes against an important tenet of the markets: it may be a self-fulfilling prophecy (if enough people are looking at the same thing).

So what have I learned? Follow the trend, Digested in these few simple points, which has simplified my charting.

1. Trade breakouts. Follow quiet markets, and get in when it breaks

2. There is no too high of a price to buy, or too low of a price to sell (that’s from Livermore). Especially true with all these extremes in FX and indices.

3. Use simple indicators, especially the ones that everyone is following. Hence my use of only 10-200 MAs, and now on hourly charts because that creates more opportunities.


Follow this trade on TradingView!

To the best of good buys.

Yes, I am trading 5m charts on XAU, but only because volatility (though GVX doesn’t show it that much) has been exploding in the Euro and US sessions.

That shooting star (yes, though a blue candle, it comes as a topping pattern) is caused by a short squeeze at 1275, which was taken out within a few minutes. A beautiful confirmation followed (combine those three down candles), making this pattern one of the best examples of an evening star pattern I have ever seen. HA and Ichi confirms. A point and figure chart should show a high pole reversal.

Is this asset driven by ISIL/Iraq, or rates? Anyways, it is at resistance on a falling channel right now.


To the best of good buys.

But this first, from BAML… While everyone was expecting a yield rally this summer, it seems like that hasn’t been the case. Even with food prices jumping due to the winter this year (due partly to higher natural gas to keep everything from cattle to corn warm), core CPI is relatively subdued. There also seems to be a shortage of 30Ys, which naturally means bond prices should go up and yields come down. Talk about a contrarian move.


We are currently entering wave c for 10 Yrs. This pattern, quite dangerously, is also an HS pattern. Though the resistance is quite strong at the neckline with two former tops in 2011 and 2012, a break could spell a lot of danger for the dollar. Even if we don’t break the 2.400% line, the path of least resistance is still down, and we have some room to go. Thus, anything long USDxxx would not be constructive.

For the USDCNH which has thrown out more than a few traders, there might be a good opportunity for those who want to trade the dollar weakness without going USDJPY. The USDJPY is less intervened against, but this post is to see where we can enter a comfortable long term USDCNH trade. Though with the way USDCNH trends, it is entire acceptable to enter with more confirmation.


Watch that there has been a false break once before early April, which was denied by a morning star. But, there are other signs of confirmation for this break:

1.  It is marked with a shooting star on 4/30 (which can be combined into several other reversal indicators with adjacent candles).

2. Negative divergence on RSI, which has also passed below 70 again. Negative CMF too, which indicates less momentum upwards, as well as a cross into 0.

3. Heiken Ashi reflecting that shooting star (though blue), and trend downwards. 

So technically, I feel comfortable enough with a short trade. Probably put in 20k short at 6.2323 (current price), stop at 6.3000 and targeting 5.xxxxx or something. Risk reward back to 6.0000 (not impossible) is 3:1. Will be gaining rolls too.

Also, did you see that descending triangle breakout on gold?


Also, I passed my CMT Level II. However to get my Series 86 exempt, I would need to have a current CRD… (though I can apply for it within two years). Someone hire me?

To the best of good buys.