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Diagonal

Ending Diagonal On USDCAD Indicates A Probable ReversalUSDCAD has been trading higher for the last few weeks, especially since crude oil has turned south. On Loonie we see higher highs and higher swing lows but with overlapping price action between two converging trendlines so pair can be making an ending diagonal as shown on the 4h chart. That's a strong reversal pattern which could send price south this month, maybe already from current levels as we see small break beneath the support line. Based on latest update, invalidation level is above 1.3700, as wave 3) must not be the shortest wave. The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when price has moved too far and too fast. Some ending diagonal triangles appear in the C wave of an ABC correction. In all cases, the ending diagonal terminates the move of larger patterns. They consist out of five waves, with each having three more sub-waves.
Short
by ew-forecast
1
COVERING VXX SEPT 16TH 13/MAY 6TH 17.5 SHORT CALL DIAGONALI put this on on April 1st, thinking it might be a while before I could take it off, but covered it today on this pop, freeing up the buying power for another go should be strike $17 again. I put it on for $373/contract, and took it off today for a $419 credit, yielding a $42.93/contract profit in six days. Naturally, this isn't hugely earth shattering profit-wise, it's always best to take off a VXX setup of this type as soon as possible. The contango helps your short call in the long run, but also eats away at the value of your long over time ... .
CBOE:VXXLong
by NaughtyPines
WHAT I'M LOOKING AT NEXT WEEK: MON, EWZ, VIX PRODUCTS, FXEWith VIX at sub-14 levels and without much on the earnings calendar that is ideally playable with options from a premium selling standpoint, next week is likely to be a schnooze in the absence of a broad market volatility pop. Nevertheless, there are a couple of plays I might consider. MON: MON announces earnings on April 6th before market open. With an implied volatility rank of 58 and implied volatility of 32, it's not looking all that sexy for premium selling at the moment, with the preferred rank/IV metrics being >70 and >50, respectively. Nevertheless, the run-of-the-mill short strangle is offering up more than 1.00 credit ($100)/contract in premium at the moment, so it might be a worthwhile play (April 15th 81.5/94 short strangle). EWZ: The Brazil ETF still has a bit of "kick" in it, with implied volatility rank at 72 and implied volatility at 58. For lack of premium selling elsewhere and to offset in part a tested iron fly setup I have on (see Post below), I've dispersed risk by laddering setups in this underlying (short strangles/iron condors) through several expiries, which doesn't tie up much buying power given the price of the underlying. VIX/VXX: With VIX at these levels, I'm considering loading additional long positions here, although I don't want to go all crazy large at once. My setup of choice has been VXX long-dated diagonals/synthetic longs/poor man's covered calls with the back month long option in the September expiry, which allows me plenty of time to be right without having to leg into and out of, for example, short put verticals repeatedly. This also allows me to "swim with the tide" with the short call, since we're in contango here, which exerts a downward pressure on price (although this also affects the value of the long-dated option in the short term). (See VXX Posts, below). As a side note, I'm avoiding plays in leveraged products like UVXY and SVXY due to pending SEC regulations that may affect these instruments. Although these regs are mainly focused on 2x and 3x leveraged products, I don't want to be in any leveraged product with a long-term setup whose liquidity and/or viability might be affected by implementation of the regs. FXE: With the Euro hovering slightly below my sell area (1.14), I'm looking at getting into the Euro proxy FXE with a short play of some kind going forward. However, it may pay to be patient here, since we've have had "dovish gruntings" from the Fed which may put a damper on Greenback strength for a bit of time, as well as some modestly positive ECB data. As compared to spot, I could still potentially pull the trigger on a short FXE setup of some kind here, steering well clear of recent strength areas (e.g., 8/24 "risk off" spike to 114.81 or the Fib line at 116-ish).
AMEX:FXE
by NaughtyPines
TRADING IDEA: FXE MAY 20TH 111/JUNE 17TH 113 LONG PUT DIAGONALI don't frequently put on debit spreads, but here's an instrument in which I have a fairly firm directional bias and which, additionally, has extremely low implied volatility at this point in time, making it ideal for either a calendar or a diagonal, both of which benefit from expansions in volatility (which will occur in the instrument assuming further weakness in the Euro and/or Greenback strength). Here's how the setup plays out: (1) Going into expiry of the short option, price stays above the short put, at which time you generally roll it to create a long put vertical with the back month expiry; (2) Price breaks below your short option, at which time you take the entire setup off in profit when the opportunity presents itself, but prior to the expiry of the short put. There aren't really any metrics to present for this kind of spread, beyond the fact that this will cost you a 1.54 debit to put on ($154), which represents your max loss in the setup. This is because maximum profit will be dependent on how much the underlying moves for the duration of the setup ... .
AMEX:FXE
by NaughtyPines
USO JAN 17 7 LONG CALL/APR 1ST 8.5 SHORT CALL DIAGONALTruth be told, things like calendars and diagonals are best suited for a low volatility environment, but I'm looking for a bullish assumption setup in oil that offers me some flexibility over a larger time frame than, for example, a 45 DTE credit spread would (which is generally just a "one and done" kind of thing). As an alternative to a covered call, I'm going long-dated diagonal here since I can do it more cheaply/smaller than buying USO outright (although at 8.33 a share, it's pretty cheap to begin with). Here's the setup, although it's off hours and the option pricing is unlikely to be accurate: USO Jan 17 7 Long Call/Apr 1st 8.5 short call diagonal Max Profit: Undeterminable Buying Power Effect: $1.52 debit/contract Notes: You want to work this setup like a covered call, leaving the long option untouched as you roll the short option to rake in credit for the life of the trade, taking the entire setup off when the amount of credits received exceeds the debit you paid to put it on by some measure. Naturally, you can also continue to work the short call for credit all the way toward long call expiration as long as it remains profitable to do so. This is why the max profit of the setup is "indeterminable" -- it all depends on when you take the trade off and how much credit you've received for it up to that point.
AMEX:USOLong
by NaughtyPines
Long SUNE: Entry at Thrust Target Through Completion of (iv)On the daily TF, we are in the midst of the fifth and final wave of an expanding ending diagonal, counted as C of an ABC zig-zag correction. The monster buying opportunity will be at the completion of this C wave, however, we may be presented with a short term long opportunity with a R/R of 8.5. The current count is wave-b-of-(c) in a potential flat correction which may complete the fourth wave corrective structure in the last leg of the ending diagonal of C. The triangle thrust is confluent with AB=.618CD and is supported by wave-iii low, so a tight stop is not unreasonable here. There will be two targets, one at (a)=(c), which is conservative, and another at the more aggressive yet probable fourth wave terminus at (a)=1.5(c) in previous fourth wave territory. If the trade triggers and travels to target, I will not be taking a short position but instead will wait for C to complete for a long term buy-and-hold.
SLong
by glennmercer
1
AUDUSD GREAT H4 SHORT POTENTIAL VERY TIGHT STOP GREAT CHANNEL £$Very clean detailed S/R x Fibonacci retrace analysis, 62.8% retracement occurring last 2 candles suggest bullish momentum is dying out! This trade for me is a channel trade, I use Fibonacci and S/R to add confluence. Please zoom out and examine these areas The diagonal channel is 3 - 4 months old and very valid and we have seen price already bounce off the top channel 4 times. Very tight stop any violation of channel suggest full trend reversal. Commodity channel index overbought currently heading south with break of diagonal bottom Good luck and happy trading :)
Short
by XavierAlexander
AUDUSD: Revised Wave Count + Wolfe Wave + POTENTIAL BatAfter re-analyzing this pair with more focus (admittedly, I was all over the place yesterday as almost EVERY pair I follow is setting up for some kind of major move), I have revised my wave count. Taking a closer look at the wave (iv) to see where are the high probability turning points, I've also located some patterns as well. There is a possible Wolfe Wave forming as well as a POTENTIAL bearish bat that both may signal the end of wave (iv0 and the beginning of wave (v0. So both patterns are trend continuation patterns. Be aware that although the Wolfe Wave point 5 is set at the top of the ending diagonal, point 5's in a Wolfe Wave are allowed to exceed the diagonal in a "throwover". Yes, the ending diagonal is also a bearish wave pattern and again, point 5 can be a "throwover". The POTENTIAL bearish bat completion may also signal where the end of wave (iv) will be and the beginning of wave (v). That would be a very good place to sell. 4HR CHART - Update Wave Count MY TRADE PLAN I have my SELL orders set at the completion of the bat pattern. However, I will monitor the price action closely as there is a possibility that prices may fall just short of completing the bat before reversing. If I see bearish price action before the bat completes, I may trigger the SELL orders before then as there is a strong possibility of wave (iv) ending around this area. So saving a few pips by waiting for the bat and then potentially missing the trade would be penny-wise but pound-foolish. Again, this is allowed under my trading plan so you must follow your own trading plan. I will usually only short-entry patterns if they are trend-continuation patterns as this one is. I will not usually do this on a counter-trend pattern. *DISCLAIMER: Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading! If you like my posts and find them helpful, please take a second to hit that LIKE button and follow me so I will know my posts are useful to you. Doing so will encourage me to post more! As always, all constructive comments are welcome. Agree or disagree.
Short
by EverythingForex
4
Copper yet has not bounce but still can do it.This is a follow up of the last elliott wave analysis published 8 months ago www.tradingview.com The basic change is in the extended 5th. The diagonal as we expected did not work due keep the original wave count as originally stated is impossible due now will see the 3rd wave as the shortest. This can't be even in diagonals. So the best way to update it is by extending the 3rd wave as a double zigzag and then count the following up sided zigzag as a wave 4. This give us space for the fifth wave that is getting near to the 1 to 1 proyection for the 5) vs the traveled from the start of 1) to the end of 3) measured from the end of 4).
COMEX:HG1!
by 7pasos
1
Cooper about to bounce?If we take a look from 2006 the full view seems very probably we are in a expanded flat. Actually the decline from 4.6480 seems to be the 1)) wave o a C] wave The decline have several hints to confirm this view: Wave 4th has a near to 50% retracement and is in a contractile triangle shape Wave 5th is the extended one and are near to its 61.8% portion of traveled by waves 1 to 3 Under this theory we must expect a deep retrace (probably in a zigzag fashion) to get back as much as the 4.000 area
COMEX:HG1!Long
by 7pasos
3