South Winds, Red Skies & Clouds in the West

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Thursday / January 16, 2020 / 4:33 p.m. PST

At 3:58 PM, AUDUSD was intraday bearish when a 5-Minute candlestick popped up above the baseline (0.68978). Based on the Riverbank/Shoreline Touch strategy, this was an ideal opportunity to purchase a short-term binary option put contract. I wanted to test this out live...in real time.

But unfortunately, Binary dot com doesn’t allow the purchase of any contracts under five hours long between 1 PM and 4 PM, so I had to wait for two more minutes, and by that time, the structure (0.68966) was no longer ideal! However, I went ahead and purchased the contract anyway...

Fortunately for me, the bearish attitude dominated and price continued falling so that the contract was in-the-money at expiry anyway.

So now that I’m back to trading one-minute charts, I can theoretically make winning trades all day long, but the only problem is that in the beginning, executing 0.01-sized trades, they are going to be very small, some as tiny as 14ȼ...

 

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Note to Self: Be on the lookout for EURUSD to start heading north again.

CADJPY is in an uptrend. If this is to continue, it might climb at the start of the week given that Friday formed a red candlestick. The same is true of NZDJPY.

EURGBP, which has been falling ever since August of last year, looks like it might be losing its appetite for descending, having pretty much gone nowhere since December 19, 2019.

 

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AUDJPY
Looks like this pair is attempting to execute a southbound reversal, so sell if it climbs up anywhere in the neighborhood of 76.18 (if nothing else changes).

AUDUSD
Turned south on Friday.

CADJPY*
Bullish ever since the eighth of this month with no signs of a reversal yet, so Friday’s red candlestick has structured this pair for a potential long position if and when the intraday trend turns north.

EURGBP
Bearish for two days now, so sell if it climbs up between 0.8531 to 0.8564 and then turns south again.

EURJPY
Looks like it is attempting to execute a southbound reversal.

EURUSD
See previous comment.

GBPJPY*
Bullish ever since the eighth of this month with no signs of a reversal yet, so Friday’s red candlestick has structured this pair for a potential long position if and when the intraday trend turns north.

GBPUSD*
This pair turned bullish on Thursday with no signs of a reversal yet, so Friday’s red candlestick has structured this pair for a potential long position if and when the intraday trend turns north.

NZDJPY*
Bullish ever since the eighth of this month with no signs of a reversal yet, so Friday’s red candlestick has structured this pair for a potential long position if and when the intraday trend turns north.

USDCHF*
Bearish ever since the thirteenth of this month with no signs of a reversal yet, so Friday’s green candlestick has structured this pair for a potential short position if and when the intraday trend turns north

 

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USDCHF*
Bearish ever since the thirteenth of this month with no signs of a reversal yet, so Friday’s green candlestick has structured this pair for a potential short position if and when the intraday trend turns south.

USDCHF's 0.9671 open changed its day-to-day sentiment from bearish to bullish, so the above plan has now been rendered null and void.

 

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Wednesday / January 22, 2020 / 6:30 p.m. PST

Thanks to the release of economic data, AUDUSD (0.6874), which is currently day-to-day bearish, is approaching primary intraday resistance, currently at 0.6879, with extreme intraday resistance at 0.6906. Extreme daily resistance is at 0.6897 with ultra daily resistance at 0.6923.

So will it be turned back soon, or was the employment change enough to reverse the day-to-day trend from bearish to bullish?

EURAUD is in a similar situation. It was day-to-day bullish, but the news pushed the rate down to 1.6135. The pair is not yet near extreme or ultra daily support, though primary daily support is at 1.6113. Primary intraday support is also at 1.6113, with extreme intraday support at 1.6049.

 

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So will it be turned back soon, or was the employment change enough to reverse the day-to-day trend from bearish to bullish?

Current price action suggests that the economic data did not have the power to reverse the day-to-day trend and that the pair is being turned back.

 

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Sunday / January 26, 2020 / 9:00 a.m. PST

Last week I traded successfully using the one-hour "NADEX in-the-money" chart template (configuration). However, over the weekend I assembled an alternative one-hour "Proving My Point" setup derived from daily position charts which looks to have a couple of advantages in certain respects.

According to the former chart, I should short EURGBP if it climbs to 0.8442. According to the latter, it would be okay to short the pair now at 0.8429, which is, after all, a difference of only about 13 pips.

So if the pair does not gap down at the open, purchase a contract as close to at-the-money as possible with a daily expiry as far away as possible and see what happens.

Note...

On the one-hour "NADEX in-the-money" chart, the riverbank envelope is neutral, but the shoreline envelope is slightly bullish.

On the five-minute chart, the riverbank and shoreline envelopes are BOTH slightly bullish, but the directional tendency of the intraday envelope is currently bearish.

Since the daily charts indicate GBPUSD is still bullish, you (I) should enter a long position as soon as the lower-time-frame charts begin to form a hinge or hook to the north.

 

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Since the daily charts indicate GBPUSD is still bullish, you (I) should enter a long position as soon as the lower-time-frame charts begin to form a hinge or hook to the north.

With a 1.3079 open, GBPUSD now qualifies as bearish.

 

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Though the intraday trend is definitely bullish, technically speaking, EURGBP is still day-to-day bearish, and at 0.8448, first level resistance is only 14 pips away at 0.8462. If the pair were able to climb that high, it would be an almost ideal level from which to purchase an at-the-money put contract, as counter-intuitive as this would seem (provided the pair really is still bearish). Should things unfold in this manner, it will be very interesting to see how it all works out in the end, especially since there are no economic events scheduled for today to mess things up.

USDCHF has formed an upturned hinge/hook on the hourly chart, which means I have the go ahead to purchase an at-the-money call contract with a strike price of 0.9700 and expiry set at approximately 17 hours away.

 

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Sunday / January 26, 2020 / 8:15 p.mp PST

At 0.8444 EURGBP has failed to climb any higher in the last two hours. It is time to purchase a put contract with a strike price of 0.8440 with expiry set approximately 16 hours from now.