Well this analysis proved to be on the mark in terms of not biting on GEC short unless it broke through the 20 day. Bullish divergence did occur, but I did not post in real time, so I will take no credit for a trade here. I am looking for the bearish divergence on hourlies now as a place for an intermediate short.
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Well this analysis proved to be on the mark in terms of not biting on GEC short unless it broke through the 20 day. Bullish divergence did occur, but I did not post in real time, so I will take no credit for a trade here. I am looking for the bearish divergence on hourlies now as a place for an intermediate short.
I follow 4 currencies at the CME . They are GEC,GJY,GAD and GCD.
I am currently short the GJYM6 contract with a small loss right now. It certainly has not been off to the races like the other three and I am inclined to keep the short here. With regard to the other three, they have made quite a rally with respect to the 60 minute chart. These have been impressive to say the least. The Aussie and the Canadian though both are showing bearish divergences with respect to RSI and the Canadian in particular is showing lower peaks now in RSI. The Aussie has what looks to be a quadruple bearish divergence in RSI along with multiple faiure swings. The Aussie is also showing quite an extensive gradual divergence with respect to the Histogram . Using line charts, the divergences can be easily seen. It is my view that these two markets could be shorted here using a stop somewhere above the recent hourly highs. The stop would depend on your tolerance level and how it relates to portfolio. I would most likely put my stop above 87 on the GCDM6 and above 72.50 on the GADM6 contract. Now the GECM6 contract does also show divergence , but it doesn't appear as strong. It still could be shorted perhaps with a closer stop than the others. Just some musings here out loud.
I am currently short the GJYM6 contract with a small loss right now. It certainly has not been off to the races like the other three and I am inclined to keep the short here. With regard to the other three, they have made quite a rally with respect to the 60 minute chart. These have been impressive to say the least. The Aussie and the Canadian though both are showing bearish divergences with respect to RSI and the Canadian in particular is showing lower peaks now in RSI. The Aussie has what looks to be a quadruple bearish divergence in RSI along with multiple faiure swings. The Aussie is also showing quite an extensive gradual divergence with respect to the Histogram . Using line charts, the divergences can be easily seen. It is my view that these two markets could be shorted here using a stop somewhere above the recent hourly highs. The stop would depend on your tolerance level and how it relates to portfolio. I would most likely put my stop above 87 on the GCDM6 and above 72.50 on the GADM6 contract. Now the GECM6 contract does also show divergence , but it doesn't appear as strong. It still could be shorted perhaps with a closer stop than the others. Just some musings here out loud.
Shorting from last night's post was indeed the correct call. It remains to be seen if the down movement has any continued momentum. The recommendation here would be simply to rein stops in a bit to protect. At the moment, the market showing the best chance to reverse back to the upside on hourlies is the GECM6 contract with that double RSI bottom. At the end of the next bar at 9:20 AM EST, more may be able to be determined about the strength of that or if it is negated with new down movement.
Clearly the failure swing(RSI) on the last hourly bar (GJYM6) was important for at least a short term bounce. I have my longer term stop in as I have no long or short bias where I would be adding to a short here. I will look at trailing a stop in order to cut losses if the bounce is extended.
Aussie certainly is showing resiliency here and clearly had strength to get above the 20 hour MA. I would be a littl careful with a long however as it may bump the 20 day MA at some point and bounce off. We probably need a little more technical strength on the daily for an extended reversal to the upside.
Currently I just have the short GJY trade on . I will keep my stop above 87.00 on this one unless I see something to suggest upside here. (Bullish divergence with RSI MACD on hourly charts)
We closed right near the 20 day MA on continuation and as I have indicated before we need to close below that for more downside (84 and perhaps below) Odds favor the short side as it appears now. I'll stay with my short just now.
With regard to GAD, it certainly has been an impressive bounce so far. When a market dips below the RSI oversold level and comes back so dramatically, then there is usually a chance to catch a pullback to a second, higher trough in RSI that would push the prices higher. I would say that that is a real possibility here. With Histogram coming off such a deep trough, it would be best for a long trade here to have a close stop and pay close attention to this market for a continuation of the downside pressure. Hourlies are a toss up just now, but I can see the potential here of a weakening uptrend and reversal down. It's premature to call it just yet, so I'll stand aside
GEC --Market will be considered in an uptrend to me until the RSI trendline is broken or we have a negative divergence on hourlies. Market ended right near the 20 hour MA on Friday and no strong signals are there right now. Standing aside for now
GCD--This market featured a nice bearish divergence on hourlies and the result was quite a sell off. I would however be careful with this with market when the MACD is this far below zero. Also notice that the low Friday did not meet the low Thurs, so we still have higher lows even though we closed so low on the day. I have seen this type of action many times before and it has resulted in a higher market in a few days--Not always of course. I'm on the sidelines here until I see a good entry for a long on hourlies and then perhaps a new short on decent bounce.
We closed right near the 20 day MA on continuation and as I have indicated before we need to close below that for more downside (84 and perhaps below) Odds favor the short side as it appears now. I'll stay with my short just now.
With regard to GAD, it certainly has been an impressive bounce so far. When a market dips below the RSI oversold level and comes back so dramatically, then there is usually a chance to catch a pullback to a second, higher trough in RSI that would push the prices higher. I would say that that is a real possibility here. With Histogram coming off such a deep trough, it would be best for a long trade here to have a close stop and pay close attention to this market for a continuation of the downside pressure. Hourlies are a toss up just now, but I can see the potential here of a weakening uptrend and reversal down. It's premature to call it just yet, so I'll stand aside
GEC --Market will be considered in an uptrend to me until the RSI trendline is broken or we have a negative divergence on hourlies. Market ended right near the 20 hour MA on Friday and no strong signals are there right now. Standing aside for now
GCD--This market featured a nice bearish divergence on hourlies and the result was quite a sell off. I would however be careful with this with market when the MACD is this far below zero. Also notice that the low Friday did not meet the low Thurs, so we still have higher lows even though we closed so low on the day. I have seen this type of action many times before and it has resulted in a higher market in a few days--Not always of course. I'm on the sidelines here until I see a good entry for a long on hourlies and then perhaps a new short on decent bounce.