Get started

Falsebreakout

A 7 Month Look Back At The S&P 500 (SPY) - What Now?Several conclusions can be drawn from this DAILY chart of the SPY. Even more questions will no doubt come to mind as a result of those conclusions. If you thought you might find the answer to the above question you can stop reading now. The easy answer to the question is not in here. I surely can't foretell the future. Honestly, you wont get the answer anywhere. Maybe you should keep reading after all... Let's talk about some possible "What Now" scenarios. The market could just continue higher... Now this is a very unpopular scenario. When was the last time you heard a majority of the investment news guests leading you to believe that everything is good and the markets are poised to go higher? Yea, I can't remember that either. So it doesn't seem like many people are in this camp. To all of the people calling for a correction, all I have to say is look at the chart. The market just broke above a resistance level that was established in February. SPY has closed above that $212ish level for 6 days now. All I am saying is it is a possibility... The market could go sideways for a while... Lets say the SPY sinks back below the $212ish level and hits the green uptrend line before going back up to the $212ish level where it is rejected again. It goes back to the green uptrend line again before turning higher. Etc... This could go on and on and on. It might be July before the "Wedge" is resolved. And then you will still have to play the break of the wedge properly to profit from it. All I am saying is this too is a possibility... The market could go lower any day now and make a bunch of business news guests look like really smart people... If this is the market reality we are faced with as so many are predicting, let's look at what has to happen and how to deal with the possibilities. First thing is the SPY will have to go back below the $212ish level. This would, at the very least, give us a "false breakout". If you want to see an example of this occurrence just look at December of 2014 on this chart. You will see SPY broke above the $208ish level then came back down below it. The SPY was at $198.5ish in 4 days. The next thing SPY will have to do is close below the $208ish level. If this happens then SPY will break recent support. At this point SPY will probably be below the green uptrend line as well. Now things are beginning to get interesting. Let me say that this is the point where you should get concerned about where the market may be going. The $204.5ish level is the next support line to focus on. If the SPY is going to find support this is a logical place for it to happen. There are no guarantees but keep your eyes on this level. Let me put this hypothetical SPY decline into perspective. If SPY closes below the $204.5ish level, it will be about 3.5% below its highs. If SPY closes below about the $201.5ish level, it will be about 5% below the highs. Many are calling for a 5-10% correction. So at this point they would begin to be correct. The next support level the SPY would have to close below is the $198.50ish level. This would be a 6.5% decline. Below this level is a level in the mid 180's. These are not the areas where you want to be getting out. These are the levels where you want to try getting back in. Many big players will begin to lighten up on their longs if SPY goes below the $212ish level. When they lighten up, you need to be light on your investing feet too. It would be a good idea to raise some cash at that point. With each support level that is lost, the big players will sell more. This will push the market lower. What is their goal? It should match yours. Simply to lose less, have cash available to buy back shares at some lower price, and make more money on the way back up.
AMEX:SPY
by TheTrendLineInvestor
Stophunters at the ready.. Will the bat take off?The markets appears to be trending within an 3 drive uptrend channel. However, when drawing some fibs from March 2013, I saw the 0.236 retracement level has not been touched yet. So this got me thinking.. If i was a BIG investor/trader with lots of money, at which levels should I be looking at? Well, drawing in some more fibs from 2014-09, 2014-11, 2015-01 i came up with a nice cluster of fib retracements around that same 0.236 retracement level: a 0.236 retracement at 1.8694 (2013-03) a 0.5 retracement at 1.8618 (2014-09) a 0.618 retracement at 1.8685 (2014-11) a 0.786 retracement at 1.8700 (2015-01) a 0.886 retracement at 1.8532 (competion bull bat) This gives me a zone of roughly 168 pips. Also, if you look left, you can also see that this zone is lined up with previous structure zones. So is it possible that this channel can be broken to the downside only to hit that zone, complete a bat and immediately reverse back north? Could it be that stophunters think this way? Can they push the market lower to that zone? So if I was to go long now, I know i would definitely place my stops below that zone. From a risk:reward perspective I would wait for the bat to complete to go long.
Long
by Mikoxl.
2
Reviewing my trading scenarios on $GBPCAD$GBPCAD was the Requests Zone analysis on my last Weekly Markets Analysis newsletter addition two weeks ago.. The setup was based on the rising wedge and I've suggested to try and catch a continuation trade, following a daily Pinbar that came after a successful double top trade. As you can see, the setup was violated as $GBPCAD broke out of the Wedge pattern and made new high. At this stage, the Elite Zone received a setup for the bearish AB=CD pattern you see in the chart. In my members letter I mentioned that I think that eventually we would see the price breaking below the Wedge and that the new high could turn out to be a false break. That's exactly what happened.. The setup generated more than 500 pips profit. Those who didn't receive the letter (not being members of the Elite Zone), could have traded the False Break to the Wedge formation once the price broke below the pattern and stalled for few days.. This setup generated only 300 pips Overall, although the initial setup was violated, $GBPCAD turned out to be one of the most successful trades we had in the Zone in recent weeks.
by themarketzone
4
Building a case for shorting the GBPAUD short/mid termA couple of observations: 1 The 1.618 extension with a prior 6.18 retracement seems to have slowed down the pair from moving higher. 2 A daily AB=CD pattern / 3 drives pattern have completed. 3 The pair recently broke out of ascending triangle on the 4H chart. 4 The Bollinger band shows extreme price movements on the 4H chart. Looking for an entry setup with at least a risk:reward ratio of 1:1.40-1.45 to 1.9629 as my first target.
Short
by Mikoxl.
Is AAPL Ready To Continue Higher?If you want to try AAPL Long right here, just use UT 2 (the green uptrend line) as your guide. It could be a short ride but you never know... As long as AAPL is above UT 2, stay the course. But if AAPL closes below UT 2 before you have profits, get out of the trade. Once you have profits you have the ability to make "small adjustments" to trend lines. Just remember to never let a winning trade turn into a losing trade. Today, in the last hour of trading, you will notice the first candle to close above the red downtrend (DT) line. This is your first hint that AAPL may be ready to continue even higher. The Trend Is Your Friend... Until Its Not. I really like trade setups like this. The price moves above the DT line and that leads into a long trade. Nothing is a sure thing but this works many times. The key is to keep your stop tight so you don't lose too much money if the setup was a false breakout. You have to be willing to let the price close below the green DT line on an HOURLY chart if you are using this chart to enter the trade. When the market opens, DT 2 will be about 60 cents below today's closing price. If you want to short AAPL, I would suggest waiting until we get a close below DT 2. At that point you could look for the price to get back to UT 1. If any of this happens, you will be able to draw another red downtrend line as your guide. Trade What You See... Not What You Think, Or Feel, Or Hope, Or ... The Trend Is Your Friend... Until It's Not. ~ Protect Profits & Limit Risk Want to learn more? Check out the blog : trendlineinvestor.blogspot.com
NASDAQ:AAPL
by TheTrendLineInvestor
GER30 : DAX recover to 8900 zone , dancing around resistance :)After breaking 8900 important resistance zone last week DAX recover compleet from the 8400 resistance. The oversold RSI bring DAX up again. DAX had a false breakout from 8900 , and DAX return back in 8900 supportzone. The new earnings season bring good results mostly , and DAX will recover to make a positive balance for 2014. We wait for second test from the 8900 resistance zone. If 8900 hold DAX have again a strong supportzone for jumping to 9600 zone. If 8900 break again we can confirm the bearisch outlook for DAX.
FX:GER30
by carman
2
USDJPY Elliot Wave, false breakoutI don't regularly use Elliot wave theory in my ideas so I'm not 100% on this one, any advice is very welcome. Things to note are that USDJPY is in a consolidation pattern on the daily. It tried to breakout a few days ago but failed. Going up for another test but is running into a lot of resistance. Put in a long wick right along previous structure support, which lines up fairly closely with 382 fib confluence I tried to add the elliot wave theory as an after thought but I'm not quite sure if this is valid. Leg 3 is nice and leg, leg 4 doesn't close above leg 1 lows. ABC pattern seems to be completing right around the beginning of leg 4 which is about right. I'm expecting a move downwards about the length of leg 1, though it could reach all the way to the bottom of the consolidation pattern
Short
by SoxKeepYouWarm
Continue to Like Russia HereRussia is a market that I like as a standalone. I have already one phase in as I stated nearly a month ago. Here is why... "Russia is currently trading at .6 times book value. The reason for this is quite clear, if the US and Europe pose sanctions on Russia, the companies within will be harmed economically. The question for investors is by how much will sanction effect demand and therefore how much pressure will be put on earnings. Couple this with already poor economic conditions and high inflation in the region, there is no question why market participants hate this market. This is where I see opportunity. The book value of .6 is currently 26% of the 2.2 price to book value of the S&P 500. The only times this ratio was at this level was 2008 and 2001. On a price to cash flow basis, this is the lowest level since 2001. On a price to sales basis this is the lowest level since 2001. Now this may take some time to materialize, however I think the recent the market discounting future negative economic performance has provided an attractive entry point for investors in Russia. I am looking to implement this position in two phases, one sometime this week, and next level if we see 10% lower. That’s it."
RLong
by _SeanDavid