Blog: Market Analysis

Precision market timing refers to making an entry just as the move is about to start. There is nothing magical about it. It simply involves reading the price action and behaviour of the market.

In this case, after I went long at 5.47pm, I knew a breakout was coming soon, and true enough, within 30 seconds, price shot up strongly as shorts took profits and the buyers stepped in.

Since this move was sharp and fast, I already knew where my target exit price was – 1.2776. Although it wasn’t at the exact high, it was close enough for me, as price continued the trend down in the next few bars (not shown).

This setup is known as the BIG Bounce, because it involves taking a position against the trend, hence speed is essential.

What is the BIG Bounce about?

When the mark-up and mark-down campaigns are coming to an end, the BIG Boys will deliberately play up market emotions, triggering a strong climatic move to trap unsuspecting greedy or fearful traders, which the BIG Boys use to offload their positions and take profits. This creates a BIG snapback in the opposite direction as trapped traders cut losses and try to get out.

Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.

Forex Trading | A Quick “Trend Play” in the Forex Markets: Profits Secured for EUR/USD and GBP/USD

On Monday, the stock markets were rather quiet, but the forex markets were setting up a nice trend play on the EUR/USD and GBP/USD. This observation was made simply by observing the price action, as I do not believe in using wave counts or esoteric patterns to forecast the future. That is not what real trading is about.

I took large short positions in both currency pairs and shared it in the private discussion forum for our graduates.

For those new to forex, 1 pip is 1 tick of increment on the forex movement, and for EUR/USD and GBP/USD, it is 10 USD for 1 lot of a contract. For a 50 pip move, it would be calculated as such: 50 pips x 10 USD = 500 USD.

Today, after returning from my game of morning tennis, I was delighted to find that my targets have been hit for both pairs. Overall, the trend is still bearish, and I will continue to look for high probability setups.

Weekly Market Outlook: Oct 15-19

Last week, we saw a strong bullish bar breakout of the range, however this week ended with a strong bearish bar back into the range. This shows the strength of the bears, and bulls will not be looking to buy until prices have dropped to the area of the green horizontal line. If prices fall through, we will see a double top; if prices hold, we will see more range trading. A key event is the EU Summit this Thursday, where Spain may or may not request for a bailout, and this will have a significant impact on the sentiment.

Highlights from “The Synapse Forum”

The falling apple is acting as a drag on the NASDAQ, and hence the US markets in general. The US markets are likely to be ranging or bearish.

Although the general market is bearish, the commodity stocks are showing signs of bullishness, such as this chart of Noble.

S&P 500 – Slow and Steady

Following up from my last post, the S&P 500 has been halted within the uptrend channel, once again maintaining the integrity of the channel. While the sentiment of the uptrend is not exactly at the stage of exuberance, it is still strong nevertheless, creeping up slowly and steadily. This means that it has a good chance of heading for the next level of resistance.

This is a good example of the “trend play”, one of the seven setups which I will be covering in tomorrow’s free seminar. I will also be giving an outlook on the Singapore markets, so do drop by tomorrow after work if you’re free! https://synapsetrading.com/the-synapse-program/preview/

Pre-elections QE3 Boost – How Sustainable?

For the past few weeks, I have been rather bearish on the US indices, expecting them to stop the ascend at their respective key resistance levels. However, a major news catalyst (QE3) has changed all that. With the new tweak in money supply, and the added confidence (real or perceived is debatable), we could continue to see the market drift upwards till the elections in November. There is also likely to be “words of encouragement” by the leaders to prod the market in the right direction.

Hence, the reversal could instead occur at the next resistance levels, which would more likely coincide with the end of the elections. This is not a forecast, merely a guess. At this point, I would look to buy on a weak pullback, or be ready to short if I see a sudden strong breakdown of the bulls.