Morning Coffee Studies

I’m starting this for a spot to keep all my daily thoughts, not necessarily to post trades. Every morning I look over the charts for what I believe are the possible battle lines for price so to speak, areas to interest,and a reason for trading that day. Hopefully they may be of some use to others here.

Enjoy,

a

Just some thoughts about how this week ended. Looking at the Euro, it doesn’t take a rocket scientist to see that it’s a stampede, large Euro dumping and stop running resulted in a parabolic drop blowout once the 5280 level caved. Every indicator oscillator and eyeball are now screaming over sold! But they can stay that way and price keep dropping, I threw in what I consider the important lines for support but they mean nothing in a free fall.

There will come a point where everyone starts to be aware that a correction is due and not wanting to short into it and be caught, will slow the fall and a base or ending pattern will eventually form. Will that be Monday? We’ll know it when it happens but until then tis’ foolish to jump onto the tracks and try and play superman.

I agree, supports don't carry much weight in a free fall. Just keep selling it as long as it is falling.

Call it what you want, either we are in a correction for the Euro, or in a new down trend for the dollar, but what confirms the initial view is the breaking of the last support/resistance turn level. Here it was the 5280 range bottom.

In an uptrend the focus is on rising support levels (higher lows), conversely a down trend look for lower highs, when the preceding level is broken we can start looking for a reversal. Take notice that several different types of consolidation patterns will fail to make new ground in the direction of the trend, however the supporting/resisting base will continue to build in the trend direction and finally continue, this gives to the rule of thumb the corrective patterns break in the direction they entered.

it's a simple concept, and is built into several systems and methodologies.

Reversals happen in one of twos ways, either failure or non failure of the move. And result in either a reversal trend (price doing a 180) or reversal consolidation range ( in here we find our triangles, flags, pennants, ect...) each are traded different. But the initial factor is price breaking the last turn, until this happens price is still in trend.

The basic Sample of failure/non-failures are shown.

Just laying the foundation, for the charts that will follow, it's important to view price action as either impulsive or ranging and what is the direction of price for the time frame we are trading as it will be the foundation for setups.

more to come when time allows

Looking back at the Euro, at the moment, how far up does the Euro have to retrace to resume the uptrend in this current time frame?

For the base to form the impulse wave will stall, a retrace will happen then a retest of the bottom. From here it will either fail, or continue with a lower turn point. But almost all moves are retested, giving us the 123's doubles triples, and such but its that back side turn that has to break to give us the signal.

To note the break is not the trade, more it's the following correction of the break that's the entry. will get into that later when we see a setup on the charts.

great weekend.

No doubt we will have significant buying interest at the next support level in 1.4955 area. But given the downward momentum we have, that level could be easily breached after the initial bounce.

Looks like a small base has formed ( shadowed in gray) for a retracement. Looking to buy Euro from just above the top to midpoint of the base. Targeting the larger prior broken rage bottom (retest) around 5280, some profit could be taken at the 5150.

Note when trading against the move in retracements, reduce size and watch for signs of the trend returning, trail your position. Once in profit don't let that trade turn into loss.

auxesis,
Incidentally I bought euro at the same level as in your chart yesterday based on my analysis which turned out to be same as yours, and had to close it for loss of 15 pips when it showed no respect to that support. I was quick to join the bear camp later in the US session. Watch out today , a sharp bounce in EU and GU. I am betting the US guys will resume the downtrend as before.
Look forward for your analysis.

We have been in a consolidation triangle this week, with a false break to the topside this morning and a sharp continuation of the Dollar trend today but not much follow through so far ending the NY session. With the Euro zone being out tomorrow, this may be back in range till Monday.

Look to sell the retrace/retest of the broken triangle. Price breaking out the top again should be seen as signs of Euro strength an the awaited retrace of last weeks plunge, but as we have seen, there's bigger players at large smashing levels, so as always trade carefully the market may be thin until next week.

We never got that pull back to finish off the south move. Instead price made a deeper high and it's easy to see price now making higher highs / higher lows.

Looking to go long again from another pull back in the Asian/London sessions.

Price needs to stay above the 4750 and inside channel for the better look. Look for friday to finish off the week north. Price dropping below 4670 and it's more consolidation or the south move is back on again. Below 4750 and above 4670 caution should be exercised, look for smaller charts to turn before jumping on north.

fwiw,

Price has been in a slightly descending range over the last couple of weeks, and going into the extended labor day weekend, the possibility exists that most have already checked out, so watch carefully tomorrow as the market may be thin.

looking for one of three possibilities coming out of the range, something to keep in mind for next week how ever it sets up.

great weekend everyone.

Dont expect much today as it's the start of a long weekend here in the US. Flip side to the coin is it's the last trading day of the month. Thoughs are to keep size small due to possible low liquidity.

Looking to play the trigger line of the inside mini parallel set, preference atm is to the south. Will try to short the break leading into a small H&S and lower to the center median of the aqua down fork.

North possible once it clears the upper median.

scalps only in play for the day

A small short off the roof and upper median retest, spike came on news release, and could not get filled on the top, trade is in +15 atm, set stops to b/e and watch to see if it will break lower support levels



edit, stopped out b/e......time for the weekend

Lol, looks like I pulled the plug way to quick this morning, price is diving the fork nicely.

imho, price needs to make a final push coming out of NY lunch and make 4600 to end the week. Doing so She'll be on track to finish off the height of this inner H&S set on time to coincide with the center median and larger channel.

Note the upper turn on the larger channel, failed to make the line so you'll need to subtract that distance off the bottom for full measure.

Price starting to turn before the parallel line drawn from the preceding low would be a caution sign. Imho, that would set up a horizontal range with the 4575 low acting as a spring and this being the test of it.

Any way next week should set up for a good long, once we get past the extended weekend.

speaking of which, wishing all a greta one.

Price is approaching the levels discussed last week as it has continued south starting the week. Looking to scale into the move or add if price gives the opportunity. See how it goes his week, looking for it to turn tonight/tomorrow.