Monday, May 30, 2011

Short Entry on EUR/USD? 9:00PM CST 5/30

(Chart 1 - EURUSD 60 min chart zoomed)
(Chart 2 - EURUSD 60 min chart)
(Chart 3 - EURUSD Daily w/ minor MML drawn)
(Chart 4 - EURUSD Daily w MML drawn)

1.4400-1.4425 is very strong resistance in the EUR/USD both short term and intermediate term. This recent bailout news got us to 1.4415 and closed at 1.4398 on the 8-9PM hour bar. I like selling the open of the 9PM bar (1.4399) for a move down to 1.4075 and ultimately 1.3675.

Be conservative in your sizing and liberal in your stop. This trade might be subject to 1 or 2 lurches and shakeouts with new highs on low volume before it makes its move for those targets.
You can always sell more once its makes its move and has a pullback.

(Note: If you see high volume doji and/or shooting stars in the 1.4400-1.4430 area on a small time frame chart, consider using that as your entry if you want to wait for one of those instead of just selling right here right now. Might not see one, but if you do, will be a much higher probability setup)

SnP Day Trader Road Map 7:45PM CST 5/30

(Chart 1 - Snp 60 min chart zoomed)
(Chart 2 - Snp 60 min chart)

I will be publishing a "Day trader road map" every evening for a few products. This should give key S/R levels on a more micro basis, as well as highlight possible plans for the days trading.

Here we have a 60 min chart of the SnP mini future (Jun11 contract) (NOTE: For all those who don't know what that is, consider it a fine proxy for the SnP index itself, or the .SPY ETF.)

For today's trading, 1335-1340 should provide resistance. Personally, I would fade this zone on the sell side, and take some down to 1329 with an ultimate target of 1321.
Combine that with that MACD divergence we have over the last 25-30 sixty minute bars, and I think strength can be sold with good confidence.

Should we get above 1340, the buy case most likely is in effect, but we will cross that bridge when we get there.

Russell 2k At Key Resistance. 5/30 7:00PM CST

(Chart 1 - Russell2k Daily Chart Zoom)
(Chart 2 - Russell2k Daily Chart)
(Chart 3 - Russell2k Weekly Chart)

8420 should provide very strong resistance and seal in the dead cat bounce of this previous week. We should be headed lower very soon.

There is the head and shoulders breakdown in this resistance cluster (8420-8780) of the daily chart.

There is also the weekly chart with its most recent large wick hammer. Normally those are very bullish. However, this one smells like a trap. Set upon the already bearish technical picture for the rus2k, we see a few key things about this hammer.
-We have had a large down push, a gravestone doji, and a spinning top, all on very good volume the 3 prior weeks which ultimately pushed us under the 8420 level. This last week we went much lower, but ultimately retraced it all and finished with a hammer high just under 8420. This hammer was on 527k contracts traded. The 3 selling weeks prior were on roughly 700k+ each. For such bold price action as this hammer showed, the volume suggests it is the last swan song of the BTFDers (buy the fucking dippers) as we head lower to 7820 and ultimately 6250.

Gold Going Higher? Daily Chart 5/30 6:45PM CST

(Chart 1 - Gold Daily Chart Zoom)
(Chart 2 - Gold Daily Chart)

If gold can get back down through the support zone that it just broke out of (1501-1464), then I think it will fall to 1350. If that fails it is headed to 1200.

However, I still think given the way it acted when in the 1501-1464 zone most recently, we are headed up. I think any test of the 1520-1480 area can be used to buy and accumulate a position for a scalp to 1560 and an ultimate target of 1615. You are wrong if it trades convincingly under 1464.

NZD/USD New all time highs 5/30

Gonna take a look at the NZD/USD here by request, and we have the monthly and daily charts as we are just passing new all time highs for the pair. As we can see in the monthly, when we reached our previous highs in mar/apr of 2008, we had strong divergence in the MACD on the monthly chart, leading to a huge sell off. Now it looks like we have a pretty healthy rally, with no real divergence forming. On the daily it looks like again, we had a healthy pullback on the move upwards with a retracement to the 38% level (@.775), and now we are looking to break our ceiling here. I think we break here and look to head up to .879-.88 area within a few weeks, and I would look to any small daily pullback to try to get in.

EDIT: Just to note, not a big fan of this trade unless we see a pullback to the .8 area, if so then I feel its buy buy buy.