Chris Capre's  Instablog

Chris Capre
Send Message
Chris Capre is a professional forex, index futures and commodities trader, specializing in Price Action & Ichimoku trading. Chris applies his methods to the markets both intraday and medium term swing trading, and has been trading for over 13 years. He is also the manager for a private fund... More
My company:
My blog:
My book:
Trading Price Action and Pivot Points
  • Weekly Price Action & Icimoku Outlook - Aug. 19th - 24th 0 comments
    Aug 19, 2012 7:51 PM

    For the last 7 days, the price action for the Euro has been stuck inside a 125pip range playing see-saw with the bulls and bears changing color almost daily. This could be due to typical August / low volatility, investors waiting for their CB's to hit CTRL+P and help Bank Executives save the ailing banks and countries to prop up the market, or people just uncertain what will happen in the EZ. Regardless, if this continues, its best to employ shorter term trading strategies on the 1hr or lower time frames while the range holds and play reversion to the mean plays.

    Near term levels to watch on the upside are 1.2385 and 1.2441 (short/medium term), while 1.2260 and 1.2166 to the downside.

    (click to enlarge)price action reversion to the mean aug 19th

    Closing for the first time below the daily 20ema and dynamic support in 15 days, this is the 4th time it has done so since the bounce off the yearly lows on June 1st. Each time it did this (close below 20ema), the next day was an up day or bull close. Although the day is starting off like this and price retreated towards the medium term channel bottom, for some reason this time looks a little different.


    Well, this is the deepest penetration and close on the other side since this channel for starters. But its also the longest pullback of the 4 so far, telling us the bears were able to hold the bulls back for a longer period of time. Keep in mind the pair has gained over 1000pips in 2.5mos so it might be time for a deeper retracement before seeing if the bulls really want to give the upside another go.

    If the channel holds, then the downside should be kept in check between 1.0360/1.0390-ish. However, if that fails, then expect further unwinding with 1.0242 and 1.0175 coming under pressure but bulls wanting to get in have their levels and play while bears can wait for a break of the channel before getting short, or a pullback that fails to make it above 1.0524/30 area where price sold off aggressively and sellers entered the market heavy along with stale longs taking profits.

    (click to enlarge)price action channel trading dynamic support aug 19th

    In early August, the commodity broke above the Daily Kumo for the first time since the end of March. Since then, it executed a textbook kumo break pullback to the flat top which I have talked about as a common thing amongst kumo breaks. Since then, it has climbed for 5 days in a row, clearing the key resistance at $95.30 (May swing low support).

    With the chikou now clear of the Kumo, along with the tenkan and kijun, the commodity has clear skies ahead of it, along with a clear ichimoku N wave structure, so I am expecting more gains ahead. The next layer of resistance comes in at $98.06 but after that, I don't see much stopping it until 3 digits ($100) a barrel. Keep in mind, any news coming out of Iran or the middle east could exacerbate upside gains.

    (click to enlarge)ichimoku strategy kumo break flat top aug 19th

    True to form, Gold has for the last 15weeks in a row alternated perfectly between bull and bear closes without fail. Last week the price action was threatening the pattern, but sure enough, it closed bear side (albeit slightly). This highlights the indecision of the market on both sides, but no doubt, there is a subtle fight going on. Although there could be another leg down towards the $1550/30 area which has held for almost a year now, I suspect there is a subtle accumulation going on while the precious metal is cheap.

    Central banks have been buying up large amounts of gold along with China, and this slow but subtle lifting of the lows suggests this may be happening.

    Regardless, the twin compressions of the larger one year triangle and shorter term wedge in play (see chart below) are coming to a terminus point soon, and rarely do these go to the full end, so I suspect a breakout very soon, likely by early Sept at the latest. Bulls can wait for a pullback either to the $1580/90 area for the more aggressive players, or towards medium term support around $1550, while bears can look to sell above the key resistance at $1631 which the metal has not closed above since the first week in May.

    (click to enlarge)price action trading aug 19th

    For those wanting to learn to trade price action or ichimoku, access to the traders forum, lifetime membership & more, visit my online traders course pages.

Back To Chris Capre's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.