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3. Pound had a roller coaster ride last week. Due to the scale of the move, it is only from this longer term PnF chart you would be able to see that the rising wedge structure is broken to the downside. In theory, there is still a strong support from 13100. But I would assign a higher probability for it to break early next week.
Can you help answer these questions from other members on NexusFi?
4. Strong break out in Copper after finding strong support at 2.6 level. It has nearly taken out all the swing points of this down trend line except the last one which means the bears are squeezed hard and the majority of their stops are taken.
5. In contrast, Gold is still a Yo-Yo that it is not going anywhere. After breaking down from a rising wedge formation, it has taken out the swing point made on Monday to run stops. It looks like it is ready to trade to the other side of range again.
The market is dominated by the locals with very little higher time frame interest.
From last week on, I was working on improving the consistency. Just like Mike Bellafiore from SMB capital said once in an interview that the trader has to be able to correctly identify the development stage that he/she is in. There are in general three stages of development:
1. Develop consistency
2. Increase size
3. Improve your edge in ways of adding strategies or use of technology
By taking a hard look at of my result the first half year, I am coming to a painful conclusion that I am not even consistent yet. Yes, I am able to pull up a winning streak of several days, but it always end up in a blow off draw down which erase a substantial part of the my profit. I have identified that I tend to have blow off losses in DAX and Russell, therefore I have decided to cut exposure to those two instruments while increase exposure to Crude and ES the two instruments that i have good consistency.
Last week's result has improved, but there is still plenty of room for improvement that I tend to miss a lot of good entries in these two instruments, because they could slow down dramatically after the open and then my brain would become much less alert hence missing setups. This could be improved by more diligent line drawing and more detailed planning.
The goal of this week is to fill the charts with more prescriptive lines and improve trade plan from minute to minute with the incoming market generated information.
1. ES has opened this week's trading with a bearish gap. Measuring from the highest peak, it is already 20 points lower. However, we are still well above the pre-break out consolidation area at 2918. So long as ES didn't break and close below that level, the upside would remain constructive.
2. The tech sector is clearly under pressure that NQ lags substantially behind ES saying the money is rotating out of the tech sector into the defensive sectors and especially the Dow. While ES remains in the maximum attacking posture, NQ is clearly in a range bound mode. I reckon that the market maker would be interested in taking the stops behind the 7475 mark before rotating higher to the upper side of the range.
3. Crude is extremely bullish that it has just reacted from last Friday's high. If 71.75 would break later this week, the scenario of testing last week's VAH @71.30 would be cards.
NQ has run the stops at 7475 like a clock work.
Due to the thin liquidity in NQ, when big boys stepping in the market they would have to find liquidity to fill their orders.
The stops of the amateurs is the best place for them to do business.
That explains the never ending stop running behavior in NQ.
Dow forming a potential crown pattern topping formation.
It has failed to bounce much higher after taking the stops behind 26612.
If this level were to break, it is bearish for the whole US equity space.
The last down leg was such a vicious stop run that no short term traders are going to hold through a stop run of this scale.
This is a down side when trading a thinly liquid instrument.
