play the non-playable coin for 500% gainsMYX:NPC has tagged its out range diagonal.
price is currently reclaiming the volume resistance (avwap + poc)
lots of support is in the lower section where the gold zone resides
dips are for buying, if your offered a sweep of the VAL take it
this coin will most likely run above 2.62 fibo
Non
Options Blueprint Series Strangles vs. StraddlesIntroduction
In the realm of options trading, the choice of strategy significantly impacts the trader's ability to navigate market uncertainties. Among the plethora of strategies, the Strangle holds a unique position, offering flexibility in unclear market conditions without the upfront costs associated with more conventional approaches like the Straddle. This article delves into the intricacies of the Strangle strategy, emphasizing its application in the volatile world of Gold Futures trading. For traders seeking a foundation in the Straddle strategy, refer to our earlier discussion in "Options Blueprint Series: Straddle Your Way Through The Unknown" -
In-Depth Look at the Strangle Strategy
The Strangle strategy involves purchasing a call option and a put option with the same expiration date but different strike prices. Typically, the call strike price is higher than the current market price, while the put strike price is lower. This approach is designed for situations where a significant price movement is anticipated, but the direction of the movement is uncertain. It's particularly effective in markets prone to sudden swings, making it a valuable strategy for Gold Futures traders who face volatile market conditions.
Advantages of the Strangle strategy include its lower upfront cost compared to the Straddle strategy, as options are bought out-of-the-money (OTM). This aspect makes it a more accessible strategy for traders with budget constraints. The potential for unlimited profits, should the market make a strong move in either direction, further adds to its appeal.
However, the risks include the total loss of the premium paid if the market does not move significantly and both options expire worthless. Therefore, timing and market analysis are critical when implementing a Strangle in the gold market.
Example: Consider a scenario where Gold Futures are trading at $1,800 per ounce. Anticipating volatility, a trader might purchase a call option with a strike price of $1,820 and a put option with a strike price of $1,780. If gold prices swing widely enough in either direction, the strategy could yield substantial profits.
Strangle vs. Straddle: Understanding the Key Differences
The Strangle and Straddle strategies are both designed to capitalize on market volatility, yet they differ significantly in execution and ideal market conditions. While the Straddle strategy involves buying a call and put option at the same strike price, the Strangle strategy opts for different strike prices. This fundamental difference impacts their cost, risk, and potential return.
Cost Implications: The Strangle strategy is generally less expensive than the Straddle due to the use of out-of-the-money options. This lower initial investment makes the Strangle appealing to traders with tighter budget constraints or those looking to manage risk more conservatively.
Risk Exposure and Profit Potential: Although both strategies offer unlimited profit potential, the Strangle requires a more significant price move to reach profitability due to its out-of-the-money positions. Consequently, the risk of total premium loss is higher with Strangles if the anticipated volatility does not materialize to a sufficient degree.
Market Conditions: Straddles are best suited for markets where significant price movement is expected but without clear directional bias. Strangles, given their lower cost, might be preferred in situations where substantial volatility is anticipated but with a slightly lower conviction level, allowing for larger market moves before profitability.
In the context of Gold Futures and Micro Gold Futures, traders might lean towards a Strangle strategy when expecting major market events or economic releases that could induce significant gold price fluctuations. The choice between a Strangle and a Straddle often comes down to the trader's market outlook, risk tolerance, and cost considerations.
Application to Gold Futures and Micro Gold Futures
Implementing a Strangle in the Gold Futures market requires a keen understanding of underlying market conditions and volatility. Given the precious metal's sensitivity to global economic indicators, political instability, and changes in demand, traders can leverage the Strangle strategy to capitalize on expected price swings without committing to a directional bet. When applying a Strangle to Gold Futures, selecting the appropriate strike prices becomes crucial. The goal is to position the OTM options in a way that balances the potential for significant price movements with the cost of premiums paid. This balance is critical in scenarios like central bank announcements or inflation reports, where gold prices can experience sharp movements, offering the potential for Strangle strategies to flourish.
Long Straddle Trade-Example
Underlying Asset: Gold Futures or Micro Gold Futures (Symbol: GC1! or MGC1!)
Strategy Components:
Buy Put Option: Strike Price 2275
Buy Call Option: Strike Price 2050
Net Premium Paid: 11.5 points = $1,150 ($115 with Micros)
Micro Contracts: Using MGC1! (Micro Gold Futures) reduces the exposure by 10 times
Maximum Profit: Unlimited
Maximum Loss: Net Premium paid
Risk Management
Effective risk management is paramount when employing options strategies like the Strangle, especially within the volatile realms of Gold Futures and Micro Gold Futures trading. Traders should be acutely aware of the expiration dates and the time decay (theta) of options, which can erode the potential profitability of a Strangle strategy as the expiration date approaches without significant price movement in the underlying asset. To mitigate such risks, it's common to set clear criteria for adjusting or exiting the positions. This could involve rolling out the options to a further expiration date or closing the position to limit losses once certain thresholds are met.
Additionally, the use of stop-loss orders or protective puts/calls as part of a broader trading plan can provide a safety net against unforeseen market reversals. Such techniques ensure that losses are capped at a predetermined level, allowing traders to preserve capital for future opportunities.
Conclusion
The Strangle and Straddle strategies each offer unique advantages for traders navigating the Gold Futures market's uncertainties. By understanding the distinct characteristics and application scenarios of each, traders can make informed decisions tailored to their market outlook and risk tolerance. While the Strangle strategy offers a cost-effective means to leverage expected volatility, it also necessitates a disciplined approach to risk management and an acute understanding of market dynamics.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Options Blueprint Series: Straddle Your Way Through The UnknownIntroduction
Options trading offers a dynamic avenue for investors to navigate the financial markets, and among the myriad of strategies available, the Straddle strategy stands out for its unique ability to capitalize on market volatility without necessitating a directional bet. This article, part of our Options Blueprint Series, zooms in on utilizing Options on S&P 500 Futures (ES) to employ the Straddle strategy. The S&P 500 index, embodying a broad spectrum of the market, presents a fertile ground for options traders to implement this strategy, especially in times of uncertainty or ahead of major market-moving events.
Understanding S&P 500 Futures Options
Options on S&P 500 Futures offer traders and investors a versatile tool for hedging, speculating, and portfolio management. These options grant the holder the right, but not the obligation, to buy or sell the underlying S&P 500 Futures at a predetermined price before the option expires. Trading on the Chicago Mercantile Exchange (CME), these instruments encapsulate the market sentiment towards the future direction of the U.S. economy and stock market. Their popularity stems from the leverage they offer, alongside the efficiency and liquidity provided by the CME, making them an effective instrument for executing sophisticated strategies like the Straddle.
The Core of the Straddle Strategy
The Straddle strategy in options trading is a powerful method to exploit volatility. It involves simultaneously buying a call and put option on the same underlying asset, with identical strike prices and expiration dates. This non-directional strategy is designed to profit from significant price movements in either direction. For S&P 500 Futures options, this means traders can position themselves to benefit from market swings without trading the trends. The beauty of the Straddle lies in its simplicity and the direct way it captures volatility, making it a commonly used strategy in times of economic reports, earnings announcements, or geopolitical events that can trigger substantial market movements.
Executing the Straddle Strategy on S&P 500 Futures Options
Implementing a Straddle with S&P 500 Futures options involves a calculated approach. The first step is selecting the right expiration date and strike price, typically at-the-money (ATM) or near-the-market values of the ES options, to ensure a balanced exposure to price movements. Timing is crucial; initiating a Straddle ahead of anticipated volatility spikes can be more cost-effective, as option premiums tend to rise with increased uncertainty. Utilizing TradingView's comprehensive analysis tools, traders can gauge market sentiment, identify potential volatility catalysts, and choose the optimal entry points. Managing the trade requires vigilance, as the key to maximizing profits with a Straddle lies in the ability to respond adeptly to market shifts, possibly adjusting positions to mitigate risks or capture emerging opportunities.
Market Analysis for Straddle Execution
For a successful Straddle execution on S&P 500 Futures options, thorough market analysis is indispensable. Volatility, the lifeblood of the Straddle strategy, can be assessed using various technical indicators available on TradingView, such as the Average True Range (ATR) or the CME Group Volatility Index (CVOL). Economic indicators and scheduled events also play a crucial role. Traders should closely monitor the economic calendar for upcoming reports or news that could sway the market, adjusting their strategies accordingly. By analyzing past market reactions to similar events, traders can better predict potential price movements, enhancing their Straddle trade's effectiveness.
Implied Volatility and CVOL
Understanding Implied Volatility (IV) when trading Straddles is essential. IV reflects the market's expectation of a security's price fluctuation and significantly influences option premiums.
Since the S&P 500 Futures is a CME product, examining CVOL could provide an advantage to the trader as CVOL is a comprehensive measure of 30-day expected volatility from tradable options on futures which can help to understand if options are underpriced of overpriced at the time of the trade.
Strategic Risk Management for Straddle Trades
Risk management is paramount in options trading, especially with strategies like the Straddle that involve multiple option positions. Setting predefined exit criteria can help traders lock in profits or cut losses, ensuring that one side of the Straddle does not negate the other's gains. It's also vital to consider the time decay (theta) of options, as it can erode the value of positions as expiration approaches. Utilizing stop-loss orders or adjusting the Straddle to a more defensive setup, like transforming it into an Iron Condor, are ways to manage risk. Moreover, traders must keep an eye on liquidity to ensure they can adjust or exit their positions without significant slippage.
Case Study: Navigating Market Uncertainty with a Straddle on ES Options
Let's examine a hypothetical scenario where a trader employs a Straddle strategy on S&P 500 Futures options ahead of a potential major expected movement as the S&P 500 gaps up significantly after making a new all-time high which may lead to an unsustainable market condition. The trader selects ATM options with a 50-day expiration, expecting a sharp price movement in either direction.
Key S&P 500 Contract Specs
Tick Size (Minimum Price Fluctuation): 0.25 index points, equivalent to $12.50 per contract.
Trading Hours: Nearly 24-hour trading, starting from Sunday evening to Friday afternoon (Chicago times) with a 1-hour break each day.
Cash Settlement: No physical delivery of goods; contracts are settled in cash based on the index value.
Margin Requirements: Traders must post an initial margin and a maintenance margin, set by the exchange as a recommendation, to hold a position. These margins can vary based on market volatility and changes in the index value. Currently: $11,800 per contact.
Trading Venue: S&P 500 Futures are traded on the Chicago Mercantile Exchange (CME).
Access and Participation: Available to individual and institutional investors through futures brokerage accounts.
Leverage and Risk: Futures offer leverage, meaning traders can control large contract values with a relatively small amount of capital, which also increases risk.
Long Straddle Trade-Example
Underlying Asset: E-mini S&P 500 Futures (Symbol: ES1!)
Strategy Components:
Buy Put Option: Strike Price 5200
Buy Call Option: Strike Price 5200
Net Premium Paid: 195 points = $9,750
Micro Contracts: Using MES1! (Micro E-mini Futures) reduces the exposure by 10 times
Maximum Profit: Unlimited
Maximum Loss: Net Premium paid
Conclusion
The Straddle strategy, when applied to S&P 500 Futures options, offers traders a potent tool to potentially profit from market volatility without taking a directional stance. By understanding the nuances of the S&P 500 Futures options market, meticulously planning their Straddle setups, and employing rigorous risk management practices, traders can navigate the complexities of the options landscape with confidence. Continuous learning and practice, particularly in simulated trading environments, are essential for refining strategy execution and enhancing trade outcomes.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Options Blueprint Series: Iron Condors for Balanced MarketsIntroduction:
In the nuanced world of options trading, the Iron Condor strategy stands out as a sophisticated yet accessible approach, especially suited for markets that exhibit a balanced demeanor. This strategy, belonging to the "Options Blueprint Series," is designed for traders who seek to harness the potential of stable markets. Iron Condors offer a way to generate profit from an underlying asset's lack of significant price movement, making it an ideal choice for periods characterized by low volatility.
Understanding Iron Condors:
An Iron Condor is a non-directional options strategy that aims to profit from a market that moves sideways or remains within a specific range. This strategy involves four different options contracts, specifically two calls and two puts, all with the same expiration date but different strike prices. It combines a bull put spread and a bear call spread to create a profitable zone.
To construct an Iron Condor, a trader sells one out-of-the-money put and buys another put with a lower strike price (forming the bull put spread), while also selling one out-of-the-money call and buying another call with a higher strike price (forming the bear call spread). The essence of this strategy is to collect premium income from the options sold, with the trade being most profitable if the underlying asset's price remains between the middle strike prices of the calls and puts sold.
The Iron Condor is lauded for its ability to generate returns in a stagnant or mildly volatile market, making it a preferred strategy among traders who anticipate little to no significant price movement in the underlying asset. However, it requires precise execution and an understanding of the underlying market conditions to mitigate risk and optimize potential returns.
Market Analysis:
The current financial landscape often presents scenarios where markets exhibit balanced behavior, characterized by low volatility and minor price fluctuations. In such environments, traditional directional trading strategies might not always offer the desired outcomes due to the lack of significant market movements. This is where the Iron Condor strategy shines, serving as an ideal tool for traders aiming to capitalize on market stability.
Balanced markets are typically observed during periods of economic uncertainty or when major market-moving events are anticipated but have yet to occur. Investors' wait-and-see attitude during these times results in a trading range where prices oscillate within a relatively tight band. Utilizing Iron Condors in these scenarios allows traders to define a price range within which they believe the market will remain over the life of the options contracts. Successfully identifying these ranges can lead to profitable trades, as the sold options will expire worthless, allowing the trader to retain the premiums received.
Implementing Iron Condors under such conditions requires a keen understanding of market indicators and trends. Traders must analyze historical volatility, forthcoming economic events, and overall market sentiment to gauge whether the market conditions are conducive to this strategy. This analysis is crucial in setting the strike prices for the options contracts, determining the width of the Condor's wings, and ultimately, the trade's risk-reward profile.
Introduction to Silver Futures:
Silver Futures represent a standard contract for the future delivery of silver, a precious metal with both investment appeal and industrial applications. Trading on the COMEX exchange, these futures provide a crucial tool for hedging against silver price volatility and speculating on future price movements.
Key Features of Silver Futures:
Contract Specifications: A standard Silver Futures contract on the COMEX division of the New York Mercantile Exchange (NYMEX) typically involves 5,000 troy ounces of silver. The price quotation is in U.S. dollars and cents per ounce.
Point Values: Each tick (0.005) movement in the silver price represents a $25 change in the value of the Silver Futures contract. This point value is critical for calculating potential profits and losses in silver trading.
Trading Hours: Silver Futures are traded almost around the clock (23 hours per day) in electronic trading sessions, providing opportunities to react to global economic events as they unfold.
Margin Requirements: Trading Silver Futures requires a margin deposit, a form of collateral to cover the credit risk. The initial margin is set by the exchange and varies with market volatility. The current recommendation set by COMEX is $8,000 per contract.
Options on Silver Futures:
Options on Silver Futures offer traders the right, but not the obligation, to buy (call options) or sell (put options) the futures contract at a specified price before the option expires. These instruments allow for strategies like Iron Condors, providing additional flexibility in managing silver price exposure.
Applying Iron Condors to Silver Futures Options:
Implementing Iron Condors within the realm of Silver Futures Options requires a strategic selection of strike prices that reflect a balanced market's expected trading range. By capitalizing on Silver's historical volatility patterns and current market analysis, traders can construct Iron Condors to optimize their chances of success.
Trade Setup:
Underlying Asset: Silver Futures (Symbol: SI1!)
Market Conditions: Anticipation of a stable to mildly volatile market environment.
Strategy Components:
Sell Put Option: Strike Price $22.50
Buy Put Option: Strike Price $21.95
Sell Call Option: Strike Price $23.85
Buy Call Option: Strike Price $24.30
Net Premium Received: 0.2680 points = $1,340
Maximum Profit: Net Premium Received $1,340 per contract
Maximum Loss: Difference between strike prices minus net premium received = 0.55 / 0.005 x 25 – 1,340 = $1,410 per contract
Trade Rationalization:
This trade setup is designed to profit from a range-bound market, where the price of silver is expected to remain between key support and resistance price levels until the options' expiration. The selected strike prices reflect a balanced view of the silver market, aiming to maximize premium income while limiting risk exposure. The trade's success hinges on silver prices staying within the defined range, allowing all options to expire worthless and the trader to retain the collected premiums.
Trade Management:
Managing risks associated with Iron Condors involves closely monitoring silver prices and being prepared to adjust the strategy in response to significant market movements. This may include rolling out positions to different strike prices or expiration dates, or closing out the position to mitigate losses. Understanding the nuances of Silver Futures and their options is crucial for effective risk management in this strategy.
Risk Management:
Effective risk management is paramount when employing Iron Condors, particularly in the volatile commodities market. The Iron Condor strategy, by design, limits the maximum potential loss to the difference between the strike prices of the inner options minus the net premium received. However, market conditions can change swiftly, leading to potential challenges that necessitate proactive risk management techniques.
Monitoring Market Conditions: Continuous observation of market dynamics is essential. Significant economic announcements, geopolitical events, or changes in supply and demand can impact silver prices drastically. Traders should stay informed and ready to act if the market moves against their position.
Adjusting Positions: In the event of unfavorable market movements, traders may need to adjust their positions. This could involve closing out the position early to cut losses or 'rolling' the strategy to different strike prices or expiration dates to better align with the new market outlook.
Use of Stop-Loss Orders: While not always applicable in options trading, setting conditional orders to exit positions can help limit losses. For Iron Condors, this might mean closing the trade if the potential maximum loss is approached.
Diversification: Employing Iron Condors as part of a broader, diversified trading strategy can help mitigate risks. No single trade should expose the trader to disproportionate risk.
Conclusion:
The Iron Condor strategy offers a prudent approach for traders looking to capitalize on balanced markets, such as those often encountered with Silver Futures and Options. By selling options with strike prices outside the expected range of movement and protecting the position with further out-of-the-money options bought, traders can receive premium income while having a clear understanding of their maximum risk exposure.
This strategy thrives in environments of low to moderate volatility, where the underlying asset—silver, in this case—is expected to fluctuate within a predictable range. The inclusion of Silver Futures and Options in this strategic framework not only illustrates the versatility of Iron Condors but also underscores the importance of comprehensive market analysis and robust risk management practices.
By meticulously crafting their positions, monitoring market conditions, and being prepared to make adjustments as necessary, traders can effectively navigate the complexities of the commodities market, harnessing the potential of Iron Condors to enhance their trading portfolio.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
It caused gold to drop by $100!!!Due to the release of the February non-farm payroll data, gold fell nearly $100. This month, we will soon face the baptism of another major non-farm payroll data, which is a great opportunity for gold traders. As long as we grasp the trend correctly, the profit from a single trade can be considerable. This data will be released on March 10th.
As of the close on March 3, gold has broken through the resistance level of $1850, and the next resistance level of $1860 is within sight. Therefore, in next week's trading, I will continue to go long on gold until the trend changes. I have also prepared myself for the release of the non-farm payroll data, and I believe the results will be very friendly. Let's wait and see.
Here, I will explain how non-farm payroll data affects the price of gold:
The number of non-farm payroll employees is the main indicator of the US employment market, and its impact on gold is significant. Generally, if the non-farm payroll employment number is higher than expected, it means that the US employment and economy are improving, which is good for the US dollar but likely to cause gold to fall. Conversely, if the employment number is lower than expected, it means that the US employment and economy are declining, which is bad for the US dollar but likely to cause gold to rise.
Of course, this is not entirely certain , as unexpected situations may arise. For example, sometimes the market may move in the opposite direction to the data, where the released data is better than the previous value (i.e. bullish data), but gold prices fall. Conversely, sometimes the data is bearish, yet gold prices rise. There are many reasons for this, such as the difference between the released data and the forecast being too small to make a significant impact, the market having already priced in the information before the data release, or other events occurring simultaneously that have a greater impact on the market.
Therefore, when trading, we must pay attention to these aspects of influence and not rely solely on the positive or negative aspects of the data to decide whether to go long or short. I have prepared myself for trading non-farm payroll data, so follow me and let's maximize our profits together!
Q&As: non-market dataThere's some curious personalities that trade (at least claim to trade) based on news, fundamental metrics, alt data n stuff. I don't mean invest, I mean trade. Well that looks like a skill to be proud off, superstimuli always feels cool aye? Good thing tho there no real reason in doing it all.
The most precise term to explain non-market data is, well, everything that ain't have a direct involvement with what happens inside the order matching servers of a given exchange.
So open interest is in fact a great example of non-market data.
The one & only real purpose for using all this data is to know (not to guess/predict/forecast, not to even anticipate), but to understand when the ACTION is going to happen. If you think deeper, ultimately it's all about asset selection to satisfy whatever purpose you got. if you ever got caught yourself feeling fooled when media release a bad info but prices go up, or media release a good info but prices go down, it's ok. It doesn't work that way, direction of prices can't be affected this way. Direction of prices is the result of how buyers meet sellers which is based on +inf number of factors, where a non-market data is simply just one of these +inf factors. It exclusively provokes action, meat, hype, momentum, volatility, whatever you call it. What's happening is that things start to happen very fast. Without a trigger event, the trading activity would've been the same, it just would've take longer to unwind. News don't change the structure, they make it all happen faster, that's it.
Examples of non-market data that can be used to expect action:
1) Trading schedule, eg the US, EU opening times;
2) Economic releases;
3) Commitment of traders reports;
4) Significant news;
5) Changes in yield curves;
6) "Fundamental" stock data;
7) Open interest;
8) etc etc etc
One really important thing to add is that, just like trading activity is understood in context (other resolutions), sizing also includes context (equity control, market impact), the same way every non-market data event lives in the context (previous releases, other releases, overall economy). You're interesting not in a new per se, but rather in what does it mean in the world. For example, inflation reports don't mean much when the rates are low, but when the rates are high, they trigger significant activity.
That's the area where statistical learning, automated learning, "machine" learning, 'Really' starts to make sense business-wise. The ultimate goal is to create a system that will process every kind of data you have (NLP and TDA should help) and output the tickers with raising/already risen levels of interest.
the trend is strong with this ICE: a simple long term approachWas not planning to do any deep dive research for this one, but the long term trend of ICE is too obvious to ignore.
Despite the choppy daily chart with now and then a small jump, it did grind higher and higher, decades-long.
When dealing with such a long time frame, it's important to adjust the pr-ICE to splits, dividends, and rights offerings.
And let the logarithmic trend be your friend.
A drop deep into the lower channel, without breaking it, provides a once in a decade opportunity,
So one simple strategy for long term investors, assuming you did your homework and will keep following the development of the company:
Buy when under the middle line, hold or buy less when above; keep the first tranche light and periodically add a small sl-ICE.
OXYt strategyShort term trade set up to hedge long position, ex-dividend date may trigger sell off.
While price made a higher high, RSI set another negative divergence.
Also noting buy volume is getting thin.
In EW terms, this rally off the June low seems to be corrective 3 waves.
Contra argument: neckline around 57-58, coincide with huge volume profile wedge, may provide strong support.
Gentleman's OXY?Got FOMO'ed in b/c WEB kept buying? Take measure to protect yourself from a potential drop in the short term:
It started with negative divergence in March, noticing that volume did not follow through after the breakout, it might end up with a H&S formation that project to the low 40's (blue lines).
That region happens to coincide with:
- the yellow trendline with multiple tops in the past, which can now function as support;
- an interesting retracement level;
- a volume profile wedge.
This is a short term set up based on technical, invalidation above 70.
With the intention to (partially) take over, it makes sens for a whale to keep buying regardless whether price goes up or down.
Assess your own situation as it might differ.
Long term bear v. short term bull for PYPLClear 5 waves (of a high degree) down + declining technicals suggest more pain to come in the years ahead.
However rebounce to 100+ in the short term should also be very doable.
The 0.618 retracement from ATH is hard to ignore, weekly RSI closing above 24 will confirm the positive divergence.
Wait until the OpEx dust settles on Friday and we should be good to go for sideways to up in the next few weeks/months.
SXLK: time to take profitThe ETF SXLK has been providing an easy access to the US big techs for the European investors, allowing us to piggyback the insane bull run over the past few quarters.
However in the recent weeks, it's showing some weakness. While the (5) waves up off the March 2021 low looks complete, the daily RSI shows an downward trend.
Above all, the weekly RSI and stochastic is leaving the overbought zone, indicating an exhaustion of the rally. When was last time that this happened? It was the covid crash in 2020.
I'm aware of the small sample size due to the rather short existence of the SXLK, but I'm certainly willing to pay attention to it.
If you take a close look at the XLK, the American OG of the SXLK; top two constituents AAPL and MSFT have signaled potential multiple top, while number 3 NVDA is already in a downward channel.
As those three have a combined weighting of about 50% in the XLK, when they head into correction phase, so will the SXLK do.
Currently I'm eyeing 66-69 as initial correction target, that is the retracement range of wave (4), and the volume wedge around 67 on the daily should also provide some support.
The bounce of yesterday 12-Jan provides an exit opportunity, it's prudent to reduce exposure and/or buy protective puts.
Let me be clear that the aforementioned are well run companies, and AAPL and MSFT also pay dividends and buy back shares.
Long term I'm not bearish for them, in the short term however, I doubt the high multiples are still justified by the growth.
I generally do not track US stocks closely and I prefer using ETF for exposures in the foreign markets, so DYOR.
And maybe show some love for the European cyclicals/values?
Some hopium for the TSLA bullsTLDR: short term upside target 1k - 1.1k if 860 holds.
EW interpretation:
On the 4h chart published above, we can see either a i-ii or a a-b movement off the Jan '22 low, with a higher low struct at 838.
If a new higher high presents itself, preferably above 860, both counts will project us to ~1050 in the short term.
The rising trend of the RSI, started prior to the Jan low, gives some extra hopium.
The action off the low today is constructive so far, on the 5min chart I can solidly count five waves up before the pull back begins.
Two probable targets for this mini correction, if this count is correct, would be 0.382 and 0.618 retracement marked with the purple fibs, around 875 and 860.
(5min chart: )
Stop can be placed under the 0.764 fib ~852.
Note: this was a request, not actively following it.
EURUSD next months price. We have to meet 1.08 areaAs we saw last hedge-founder (non-commercial traders) activity on this pair and how to hold this asset so we predicted text months around December price of EURUSD near the 1.08 area
Take a short position in swing trade style and be patient like big players.
Wish you best, good luck
Safer Shot Inc SAFS 0.0009 OTC US Safer Shot Inc (SAFS) 0.0009 -0.0002 (-18.18%) 02/12/21 $SAFS
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Avg Vol 119,329,039
Stochastic %K 59.31%
Weighted Alpha +157.63
5-Day Change+0.0004 (+80.00%)
52-Week Range0.0001 - 0.0016
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USDJPY Possible Trade Opportunities. RetrenchmentOrContinuation? A strong U.S equities market and risk-friendly trading environment have helped push and breakout USD/JPY above a descending trend line on the 1-hour time frame. The pair were consolidated for a while London entered but then somehow the global positive risk sentiment news concern to coronavirus saying "China finding an effective drug to treat people with new coronavirus" pump the pair little higher but I guess there was some more hidden reason for price acting that manner earlier. Before the U.S. ADP report only a few hours away USD/JPY’s may have some possible retracement opportunity if today’s U.S. ADP report prints lower than market already weak expectations. We could see USD/JPY give up some of its gains and revisit 109.063 and this case should be considered to buy the rumors sell the news case. As we can see, the fib 38.2%
level lines up with the previous resistance level 109.063 which is a good take profit level for bearish bias traders if the ADP forecast ends up being the actual or even worst. If today’s ADP release prints better than expected, then we could see USD/JPY trade higher without a significant retracement and bullish momentum may not fade away which will lead to some more new fresh buyers in this major pair!
USD/JPY Stays Neutral and Waiting NFPNon-farm payrolls report will be released later today. At the same time next week Fed will meet regarding their monetary policy. A weak NFP report may raise the chances of a Fed rate cut in March, but we don’t think it’s going to influence the Fed at its next meeting on December 11.
Risk appetite is also wobbly, which means that a softer report could have a bigger impact on USD/JPY pair, one of the most sensitive pair to the market sentiment. If this is the case, the USD should keeps declining. The pair will meet supports at 108.00, 106.80, and 104.45.
Short-term pullback should continue to show opportunities for buying, as the 50-day SMA is now starting to cross above the 200-day SMA. We're looking for Buy position around 108.00 with the nearest TP target at 109.50. As long as 108.27/00 support area holds, rise from 104.45 remains mildly in favor to resume. The appreciating USD will push the pair to highs at 109.51 (upper line of daily BBs), 110.89, and 112.
And, of course, don't forget that the focus for USD/JPY traders will continue to be on the progress of U.S.-China trade talks. So, each Trump's tweet could bring volatility.
What do you think?
NFP Prewiew and EUR/USDUS Non-Farm Payrolls report will be the major focus today. Most of the economists are expecting US NFP to post reading in between 183-200K in November. In addition, they are forecasting the unemployment rate to remain between 3.5-3.6% for the month. Average hourly earnings growth is expected to pick up to 0.3% mom.
Still, there are signs that the jobs report could disappoint. Firstly, the ADP jobs data released on Wednesday showed that only 67K private payrolls were added. Secondly, the four-week average claims increased to 217K from 215K. Consumer confidence data from the Conference Board declined for 4th straight months while the employment component of the ISM manufacturing data continued to decline.
If job growth falls short of expectations and wage growth fails to improve like economists anticipated, USD/JPY could fall toward 108 and EUR/USD could extend its gains to 1.1150/80. You can looking also for bullish trades in NZD/USD, which recently saw a major breakout to 4-month highs and may have further to run from here.
In the event the jobs and the wage data beat expectations, then we would favor looking for short-term bullish trades in USD/JPY, which remains in a near-term uptrend.
Technically, EUR/USD is along the upper line of the Bollinger Bands on the 4-hour chart. The RSI indicator is slightly below the overbought level of 70. We’re looking for the market to get a little overbought on a short-term time frame and to start shorting again for a very small trade.
Until 1.1066 minor support is intact, further rise is still in favor. Corrective decline form 1.1179 could have completed at 1.0981. Rise from there would target a test on 1.1179 first. Break above that level will resume whole rally form 1.0879. However, a clear break of 1.1066 (daily 100 SMA) will turn bias back to the downside for testing 1.0981 instead.
You can share in the comments bellow what's your trading strategy for today.
EURUSD. Turning Up now. Perhaps, NFP tomorrow will take EU back up. Regardless, trade the breakout from 1hr. consolidation period (fast). Red box is just there to help define theoretical high/low period. It's your job to find the 1 hr. high/low period at the bottom.
Trading Criteria:
Regardless which way you want to trade, look for minimum five 4hr. candles in consolidation zones (yellow border boxes), or five daily candles for solid yellow boxes. If you're a pattern trader or pinbar trader, this might be useful here.
Wait for a significant breakout of the 4hr. consolidation or daily consolidation from red border boxes to take the trade. Red border boxes are the High/Low of a consolidation period inside the consolidation zone. I usually aim for 80% of the weekly ATR (or monthly ATR for yellow solid boxes) taking profit but not always at the next yellow box. I place my stop loss above/below red border box.
*These zones, with the inclusion of price action described above, have remarkable accuracy.
Yellow border box: weekly consolidation zone
Yellow solid box: monthly consolidation zone
Red border box: High/Low breakout box (5 minimum candles)
Grey solid box: monthly grid block