EURUSD-Weekly Market Analysis-Dec22,Wk3EURUSD is on a Bullish Trend. However, I am waiting for a counter-trend trading approach. I've two ways of engaging the trade.
The first way is to wait for candlestick confirmation and take the trade based on the Weekly Chart's Key Resistance Level in combination with a Bearish Crab Patterns trading setup, a more aggressive approach is to wait for a break and close below the trendline on the 4-hourly chart to engage the trade. So let me know if you need the analysis on this.
Countertrend
USDJPY-Weekly Market Analysis-Dec22,Wk2I remain bullish bias on the USDJPY, but I can still look for a counter-trend move for the time being. At 136.67, it gives me a shorting opportunity potential, so long the market doesn't break and close above 136.88, I will be looking for a shorting opportunity when the market opens.
EURUSD-Weekly Market Analysis-Dec22,Wk2The Overall Trend of EURUSD is a Bullish Trend. There are a couple of ways you can engage in this trade.
Wait for market retest at 5-0Pattern at 1.0515 for a buying opportunity or a shorting opportunity at 1.0581 by using the Type2 Bearish Shark Pattern as a counter-trend trade that could form a combo trade with EURUSD Bearish Crab Pattern on the Daily Chart.
EURJPY - Key Resistance levelI like to make it clear over here. EURJPY on the Weekly Chart, Daily Chart and 4-hourly Chart shows a bullish trend setup. However, I'm waiting for a shorting opportunity at the retest of the key resistance level at 141.91. This analysis will stand for me if the market doesn't break and close above 142.18.
GBPUSD-Weekly Market Analysis-Dec22,Wk1The simplest-looking analysis often is the toughest to plot. I'm waiting for shorting opportunity as early as the market open.
One thing to take note, make sure the market didn't gap up and close higher than 1.2311 for this to be a valid trading idea.
An RSI Divergence did help to give me the push to look for a shorting opportunity on the 1-hourly chart that coincides with the Daily Chart key resistance level.
EURUSD-Weekly Market Analysis-Dec22,Wk1If you missed the trade ideas of EURUSD on Friday, this might give you a 2nd chance to engage in the trade. With that said, do your market analysis and not follow blindly.
What's nice about this trading setup, the three primary timeframes I'm looking at has all the bearish trading setup I need.
Daily Chart - Bearish Crab setup
4-hourly Chart- Ascending Channel with RSI Divergence on overbought region
1-hourly Chart, Bearish Shark Pattern retest
EURUSD - Bearish SharkFinally, a bearish shark pattern qualifies as a shorting opportunity. It has been a long waiting opportunity for this shark pattern trading setup.
As you know or may not know that Shark Pattern can have as many as three different trading zones.
What is needed is patience; failure to do that results in the loss of profits from trying to capture it and losing confidence to trade the next trading setup.
A double top forms on EUR/USDA bearish outside candle has formed on the daily chart, which is part of a double top at the 1.0482 high. The candle also has a large upper which to suggest strong supply at those highs, and a bearish divergence has also formed on the RSI (14). We are now looking for prices to retrace towards 1.0200 as part of a countertrend move, near the 38.2% Fibonacci level.
Resistance Levels Where AMD Could Fail in a Bear RallyPrimary Chart: Bollinger Bands (Yellow Shaded Volatility Channel) with Fibonacci Levels, Downward TL and VWAPs
1. As discussed earlier this month, AMD remains in a severe downtrend at the primary degree of trend. This means that the path of least resistance on higher time frames remains lower unless and until AMD can do a substantial amount of price work and recover into the mid $80s (the area of the downward trendline shown on the Primary Chart) and preferably the $100.60 level (the .50 retracement of the 2020-2022 rally).
Supplementary Chart A: AMD's Linear Regression Channel Reflects Severe Downtrend
2. In every trend, however, corrective retracements and mean reversions will occur. In a downtrend, market participants commonly attempt to pick bottoms especially in former market leaders and darlings—and when this bottom-picking is combined with heavy short positioning that requires covering when major downside moves exhaust, ferocious bear rallies ensue. On October 11, 2022, SquishTrade prepared the following chart showing some of the powerful bear rallies that have occurred since November 30, 2022 (all-time high date):
Supplementary Chart B: Percentage Gains for Bear Rallies in AMD Since All-Time High
3. The VWAP anchored to the all-time high on November 30, 2022, shown on the Primary Chart, reveals that the downtrend at the primary degree of trend remains in effect. The lower highs and lower lows on daily and weekly charts support this conclusion, and the downward trendline—also shown on the Primary Chart in orange—has not been broken. Price remains significantly below both the orange downward TL and the all-time-high VWAP, showing the profound weakness in this former market leader.
4. Price has even fallen beneath the April 2018 anchored VWAP (shown in red on the Primary Chart above) having a price value of $61.95 on October 20, 2022. AMD's rapid decline since August 4, 2022 peaks appears to have stalled just after breaking below this VWAP. This 4.5 year VWAP provides strong near-term resistance at $61.95. This level of interest should be monitored during any bear rally and on any subsequent decline. Price may rally and whipsaw above it during a mean reversion only to fail and slice back below it.
5. Price has fallen beneath the .786 and .618 retracements of the entire rally from the Covid 2020 lows. These levels are at $64.08 and $85.54 respectively. This is significant because it reflects the strength of this downtrend. Any bear rally will meet strong resistance when rising back to these levels. Before considering these levels as resistance however, price must first break above the April 2018 VWAP (about $61-$62), and the 21-day EMA at about $63.31 as of October 20, 2022. Until the 21-day EMA and the April 2018 VWAP are reclaimed ($61-$63 approximately, the higher retracement levels remain irrelevant.
6. Some evidence of downside exhaustion appears on AMD's charts. These suggest that a short-covering and FOMO-driven rally may occur in the coming weeks between now and year end. SquishTrade hinted at this possibility recently with the following chart, showing how AMD was approaching the bottom of its downtrend channel:
Supplementary Chart C: October 11, 2022, Post Showing Higher Risk For Shorts Near Downtrend-Channel Support
7. On AMD's daily chart, RSI now shows a positive divergence despite price making lower lows. This is further evidence that shorts should be cautious and wary of a bear rally or, at a minimum, choppy action over the next few weeks.
Supplementary Chart D: RSI Positive Divergence on Daily Chart
8. The Bollinger Bands also suggest that the downward price move from August 4, 2022, swing highs may be nearing exhaustion. Note how the bands (set at two standard deviations) are contracting now, which suggests either chop or mean reversion in the coming days or weeks. The %B indicator in the subgraph also shows weakening downside price action. As price made lower lows over the past two months, the %B indicator made higher lows. This reflects that price moves were less powerful even though they made lower lows on the main price chart—when price cannot pierce the bands as deeply with each subsequent low, and when price eventually cannot even tag the band with a new low in October 2022, this shows price may be ready to consolidate or mean revert.
Supplementary Chart E: Bollinger Bands Signaling Exhaustion and Temporary Pause in Downtrend
9. For anyone trying to catch the bear rallies, watch out for false breakouts above resistance as discussed in the following linked post, showing a false breakout this month above a shorter-term trendline. When the primary trend is down, countertrend moves can be challenging and tricky, so tight stops make sense.
Supplementary Chart F: False Breakout above Resistance—Example from October 6, 2022
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Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed.
Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders.
DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
Where Does The Future Hold For The S&P500 ?With the consistent hike in interest rates, it really would not be surprising to see the SP500 take a dip after a corrective month of price action. There are 2 classic indications that we may see this turnaround this week on the chart illustrated. 1) Countertrend line break and 2) A possible head and shoulder formation. Let's keep track of this!
nasdaquri, anyone? its lime flavored.technicals have proven heavy selling is leading to countertrend movement. were getting lots of rate of change bullish signals daily indicating a trip toward supertrend, but longs really want to position themselves with momo in the index. daily highs breaking and holding .5 of the bounce would be good signs.
AUDUSD - Bullish SharkOn the higher timeframe analysis, my analysis on the Head and Shoulders trading setup still stands, despite the setup going off a bit.
My plan to engage in the trade depends on this Bullish Shark Pattern setup. A candlestick pattern confirmation at 0.6357 is vital for that trading decision.