The Dow(n)

I am more of a FX trader than an equities trader (follow my FX analysis here) but we have hit levels that make me extremely interested in the equity markets now.

Last year I made a forecast on a sell off f=on the S&P from 2050.

I am not actually in yet and my stop loss area would have been too tight (marginally) but I have my eyes well set on it now.

I have about $50,000 I am willing to back my bets with on this.

I'd prefer not to lose it but am also willing to fire a fair few bullets at trying to catch what I believe may be one of our greatest trading opportunities of recent times.

This thread will track my analysis and trades on the indices.

(Perhaps many of them, we will start with just a few though)

This is a personal higher risk project and not something we are offering money management on.

You can follow our FX money management strategies here (add them to your myfxbook watch lists)

Technical analysis on S&P.

Under the red zone I consider this to be very weak and bias into the green zones.

A retest of the red zone I would consider to be a good selling opportunity with the first green zone as the target.

A strong close under the green zone and I would be potentially looking at this as another selling zone into the lower green line.

The dashed red lines are my minimum and maximum stop loss levels for a sell from the red zone.

Sang Seng

I am looking at the same red zone retest scenario, the only difference here the would be target 1 already hit and target 2 is the target on a sell off a retest.

In recent months there has been a lot of money going into call options on the vix (fear index).

One day a while ago in a very short period of time 100M was put on a call option and since then they have build up to be at the highest point they have been since 2006.

http://www.bloomberg.com/news/articl...ds-in-a-second

The Vix closed the last week 120% up from its previous close.

Recording its largest ever move over a week, ever.

http://www.marketwatch.com/story/vix...ver-2015-08-21

We are looking at the formation of three bearish heiken-ashi bars on the Dax 30.

Since 1994 we have see this about 5 or maybe 6 times. One, or maybe two times, it rallied again and was not significant.

I highlighted the other four times.

Crude oil breaks previous supports and even trades under $40 a barrel for a while late in the week (as the indices are dumping and vix is soaring).

Crude oil is what makes the economy go and it is watched as an indicator as such.

Many hedge fund managers etc say that crude much under $30 is sign of a global recession.

http://www.ft.com/cms/s/0/6ed7b4a4-4...#axzz3jb78coj4

But I digress.

Back to the DAX monthly HA chart.

Elliot wave principle can be observed in the three legs up. By the theory of EW, we are due a two leg correction.

Sometimes it is as easy as looking left.

As Twain said, "History does not repeat itself, but it rhymes".

I only marked in one, both are equally obvious.

IBEX

Ibex topped out with a big butterfly pattern.

If there is one thing I know a bit about in this world it is butterfly patterns, I am annoyed have never watched this chart before.

Anyway, the butterfly is the one I have found most likely to break under the lows of the XA leg.

I have marked in the breakout level and the target levels.

NZD100

This has broken just under the supports and holds under for now but we will have to see how the month closes.

I am looking at this as weak under this blue zone. Green lines are supports/targets and red lines are min/max stop loss areas.

Might start to look at setting some limit orders early in the week.

It seems a bit too obvious right now and I expect the markets to spike before they crash (if they crash).

Although the leading markets might just go.

I am most interested in the ones people are not talking about.

They are the ones we can see the selling off pressure really hitting already.

The DAX just screams "SELL" at me.

That Heiken-ashi chart is irresistible.

Even on a maths basis of 75% of the time we have seen the three bear bars we have had a decent - large correction.

The RR on a stop above the high is a +EV trade based on historical chart data.

It should go without saying but ...

The views expressed here are solely my own and the positions I discuss taking are strongly against the prevailing trends of the markets and as such high risk.

I enter into all positions comfortable with the consequences of losing them and if anyone else decides to take trades in any way inspired from my thoughts you do so 100% at your own risk.

I accept no liability for loss or harm caused.

Do not place bets with what you can not lose.

The obvious play for orders on these are sell stops, of course.

I am somewhat shying away from that because I have absolutely no idea what level they will fill me if it is an all out dump.

So I would far prefer to fill limits if I can.

FTSE100 trading into the lower range.

This has been very heavily defended so far and should be considered to be significant if and when the bulls give up this level.

FED interest rates next month are the obvious catalyst.

I said some months ago it is like watching a Final Destination death scene.

So many things can go wrong and you know something will go wrong but you can not be quite sure what it will be.

One thing is for sure, the ones about to die are blissfully unaware.

We have a little bullish pattern on this one, I might be looking for buys on this early into the open.

It may also act as a hedge to take the edge off if I start selling early in the week (which I am not expecting to do)

We will do crude oil too but it is rather important.

I am going to trade it as part of this also since it's sort of a no brainer with it trending down so well.

Big support on 35 here.

If we break under there I think we will break under 30 and are not finding serious supports again until 25-20

Let's get started.

Crude I am just going to be using some basic trend following trailing stops on any successful positions I am able to get into.

I have set three orders.

I expect I may lose the first two, these are set to make sure if it just retraces a bit and plummets I do not miss it all but if it comes back I would expect to sell my larger pending order fill.

All have targets around 26.