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Head and Shoulders

4 entry-strategies with head & shouldersContrary to popular belief, which considers the head and shoulders pattern to be a reversal pattern, this pattern can also be a powerful continuation pattern!!did you know?? 1-reversal role: in this case, when the neck-line of the head and shoulder breaks, sell and buy signals are issued (see the 2 items on the left in the picture) And an BULLISH trend turns into a BEARISH trend or vice versa!! 2-continuation role: In this case, you should draw a line parallel to the neck-line, on the left shoulder. The break of this line is equivalent to buy or sell signal. In this case, we move in the direction of the trend before the formation of the pattern(see the 2 items on the right in the picture) Important points of the head and shoulders pattern: 1- Before the pattern, an BULLISH or BEARISH trend should be seen. Just extend the neck-line to the left, if it passes through the body of the candles, then there is a PRE-trend. 2- Pay attention to the head and shoulder time-frame. You should consider a time-frame where the distance of the left shoulder from the head in this pattern is 15 to 55 candles!! If you want to learn more, support me on this page! Regarding training, I give examples on analytical posts. Be sure to follow.
Education
by Eldorado_Land
Uneasy Head!One more day of volatile move down up and each one takes one's cues home. The psychology parts never dismay, many living in the wave 3 environment when wave 5 is in motion. After the FNO measurements, now the actual and required measures in raising the haircuts or removing them from the collateral category, this is the textbook approach and can yield much more than the FNO in the longer term. This also aides in curtailing 50% overnight kind of irrational expectations from the markets. It will take some time for the markets to understand this spin. Till then it is uneasiness in the head. Talking of the Head naturally brings that Head and Shoulders pattern in min. Pencilled in the pattern, the saying goes, don't name the baby before it is born, so the caution is wait for the neck-line break. However, being cautious after seeing one that has probability of unfolding is like Money saved is money made. US inflation surprisingly cools. Dollar gives up the ground, yield fall, equity too fall. Asia is in RED, NIKKI is in deep read, abandoned baby formation. SPX hit the bearish engulf, DOW appears near triple top. All are short term as of now nothing to shake the big picture yet. Once again 24400 holds 24100 is the neckline that is the place of caution and commotion. TCS results out, our own Inflation later (surprise on the upside?) Supports 24280-24230-24180-24130 Supply 24380-24410-24430
NSE:NIFTY
by sreebhashyam
SPY Has Finally Now Neared Its Final Target Of 570!Traders, It feels as though I have been discussing a SPY top at around 570 for years now and I can see from the history of my posts that this is actually true. I first started with the premise that the U.S. stock market would experience a blow-off top of sorts. Elliot-Wave theory and technicals seemed to support this idea. Though admittedly, I am nowhere near an expert in this area, I went with it, following the technical guidance of those who were. It was not too long thereafter I spotted something on the charts that I was very familiar with. This pattern supported and confirmed the idea that stocks would blow-off. What I spotted was a longer-term (2 year) inverse head and shoulders pattern. This inverse h&s played out and gave me my target of 570. 2 years later, we are finally almost there. Targets are not meant to be absolutely precise. Close enough is both good enough in hand grenades, horseshoes, and in calling market tops/bottoms. Therefore, not wanting to press my luck, I have decided to finally start taking some profit and moving to cash. Though, my target definitely could be exceeded, it is also possible that it may not be reached. I don't think the latter will be the case but I have been wrong before and could be wrong again. If I had to guess rn, I'd say this blow-off top could extend to a time frame just before election shenanigans begin. We are already seeing some of the nonsense here in the U.S. and thus, I know time is running thin. Before all hell breaks loose, SPY could touch 650. And then? Anyone's guess. Best, Stew
AMEX:SPY
by stewdamus
Dovish Narrative from RBNZ Triggers NZD SelloffOvernight, the Reserve Bank of New Zealand (RBNZ) held its Official Cash Rate (OCR) unchanged at 5.50% for an eighth consecutive meeting, which was widely expected by markets and economists. What did surprise at today’s meeting, however, was the central bank's shift to a more dovish stance, indicating that a rate reduction may be closer than previously anticipated. You may recall that May’s central bank meeting surprised markets and echoed a hawkish tone. This, in turn, delivered strong upside across the board for the New Zealand dollar (NZD). The RBNZ were expected to lower their forecasts, particularly for inflation and the OCR, yet the opposite materialised: an increase in both inflation and OCR forecasts. Additionally, at the previous meeting, RBNZ Governor Adrian Orr emphasised this at the press conference, where there was a ‘real consideration’ among policymakers regarding possibly increasing the OCR. Nevertheless, although today’s Summary Record of the Meeting stated that the ‘Committee agreed that monetary policy will need to remain restrictive’, the addition of the following sentence: ‘The extent of this restraint will be tempered over time consistent with the expected decline in inflation pressures’ was a crucial point and represents a deviation from May’s hawkish vibe. Adding to the dovish narrative in today’s release, you may also note that the Summary Record communicated that ‘restrictive monetary policy has significantly reduced consumer price inflation’, though, in May’s statement, it stated that ‘restrictive monetary policy has reduced capacity pressures in the New Zealand economy and lowered consumer price inflation’. The Summary Record also largely repeated that headline inflation is expected to reach the RBNZ’s inflation target range of between 1.0% and 3.0% in the second half of this year. Rate Cut This Year? Several desks believe that the dovish shift is unlikely sufficient to trigger a rate reduction at August’s policy meeting despite the central bank having more data to work with at that point. The only tier-1 data the central bank had before today’s rate decision was GDP growth numbers, which revealed New Zealand’s economy had exited from another technical recession after growth rose +0.2% in Q1 this year, which was in line with the central bank’s forecasts. Ahead of the next policy meeting in August, the central bank will have additional data to assess, such as quarterly CPI inflation and job numbers. Therefore, while a rate cut in August is still questionable – the sizeable dovish repricing in rate expectations shows investors are currently pricing in a 57% chance of a rate cut – this meeting may provide a platform for the central bank to voice its case for a rate reduction in the latter half of the year. September’s meeting is now fully priced for a 25-basis point cut (-33 basis points). NZD Hammered Lower on Dovish Shift Following the announcement, the NZD experienced a sizeable depreciation versus all its G10 peers. There was a notable move to the upside in the AUD/NZD cross in the first hour following the release, adding +0.8% and reaching a high of NZ$1.1092 (testing levels not seen since late 2022). The NZD/USD dropped -0.8% in the first hour to a low of $0.6075, with the major currency pair now trading flat on the month. The downside move in NZD/USD completed a head and shoulders top pattern (head at $0.6154) after rupturing the pattern’s neckline, drawn from the low of $0.6098. As seen from the H4 chart below, technical studies show the pair still demonstrates scope for further downside towards the pattern’s profit objective at $0.6067, closely shadowed by another layer of support between $0.6052 and $0.6062.
Short
by FPMarkets