NEW YORK (MarketWatch) — The euro on Monday tumbled to its lowest level versus the dollar since January and remained under pressure after European voters rejected pro-austerity candidates in weekend elections, calling into question the region’s control over its sovereign-debt crisis.
This is the 5-min chart of the EUR/USD. After the large gap down in the Euro, it has trended upwards in a trend channel, providing many trading opportunities. This channel could be a bear flag on a larger timeframe, heralding further downside.
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.
This is the 5-min chart from the CMC Markets platform. There were a handful of decent trades today. Prices are stalling at the bottom of a large channel, and look like they might be accumulating longs for a bigger move later on. Let’s watch and see.
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.
This is a 5-min chart of the EUR/USD using the CMC Markets platform, and offers a glimpse of how I trade with 5-min charts. Price action is useful and universally applicable because it can work on most counters and most timeframes, even if the products do not have volume.
This was quite a decent trading day, with 1 scratch trade and 3 winning trades. I started trading at 3pm, which is the time when European markets turn active, but had to end the day early (closed out everything by 6pm) because of dinner plans.
Today was pretty much of a ranging day, which was why I employed a trend channel strategy, using price action to pinpoint the precise entry and exit points. The day started off with a bull flag which failed, forming the start of the channel and providing the setup for the next entry. After that, it was pretty much trading within the range.
One thing to note is that although the bull flag failed, its projected target was hit almost to the precise tick later in the day, showing that classical chart patterns can be traded in different ways, as part of a more advanced price action setup.
Program Graduates: Please refer to the Synapse Forum for real-time postings and more in-depth discussion of the setups.
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.
The selloff continues in the US markets, as the Dow and S&P 500 dropped for a fifth day, with the pullback coming on the cusp of earnings season. This slide marked the S&P 500’s worst day since December 8. The declines were the largest losses this year in terms of both points and percentage drops for each of the three major U.S. stock indexes.
All S&P 500 sectors ended solidly lower, with industrial and materials names suffering the biggest drops. About 80 percent of shares listed on the New York Stock Exchange and the Nasdaq Stock Market ended lower.
Concerns about European debt have resurfaced and could be a catalyst for further declines as the yields on riskier Italian and Spanish debt climbed. Alcoa climbed 5.4 percent to $9.82 in extended trading after the aluminum maker reported its quarterly results.
The CBOE Volatility Index (.VIX) jumped 8.4 percent to 20.39, and was up for the eighth straight day, its longest streak of consecutive gains in nearly nine years. At its session high, the VIX touched 21.06 – up almost 12 percent for the day.
From the chart of the S&P 500, the next level of support is around 1,340, which would represent a correction of about 5.7% from the high. Today’s selldown could be the first leg of a 2-legged pullback which usually follows such a wedge pattern. This bearish spike has changed the nature of the market, confirming the one-sided bearish sentiment.
Avoid going long for now, but get ready to do so when the selling wave ends. Be aware of the major news events, and stick with the trends. “May the odds be ever in your favour”. xD
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.
Although there was weakness in the STI today at closing, the European and US markets have rallied strongly after comments from Bernanke.
“U.S. stocks advanced, sending the Standard & Poor’s 500 Index to the highest level since May 2008, after Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy is still needed to spur jobs.” – Bloomberg
Looking at the chart, the S&P 500 has rallied strongly since the beginning of the year, and during the time employment has marginally improved, while the Fed has continued to keep interest rates low. Clearly, it seems the liquidity that is fueling the stock market is not translating into improvements in the real economy. This could prove problematic if the divergence continues to unhealthy levels.
For traders, it means that we should join the party and ride the trend however high it goes, but be ready to pull out when the music stops. For the STI, the last 2 weeks of ranging action makes the market hard to trade, and I am seeing more signs of weakness. Let’s see if today’s boost from the US markets can translate into gains for the STI.
Historically, April is one of the most bullish months of the year, but we will have to keep an eye on earnings, which may be lackluster since there has been no clear signs of economic bullishness.
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.
