Good evening guys…Just a heads up, I will be Updating you before the New york Open tomorrow as opposed to the morning as I will be making my way back to the office tomorrow morning. As I mention in this post, We have two banks earnings results tomorrow, the one I’m interested in is Charles Schwab…
Here is the calender for the earnings tomorrow – https://www.nasdaq.com/market-activity/earnings
I have so far seen the comments regarding last night’s “Challenge” and the way you guys break everything down surprises me every day. A few of you mentioned a few things that even I said to myself….”Shit, I didn’t even see that myself” I will be doing a video reviewing the responses tomorrow. So you if you have not managed to get through the challenge, I will be talking about it tomorrow night. So you have time.
So tonight’s update involves diving into the FX pairs and SP 500 and Nasdaq…
Let’s get the party started with Euro…
I anticipated that euro would gap down after that strong sell off towards the end of the session close on friday. However the red vector has now been recovered. So now we look to the next zones.
My attention is drawn to the M formation on Euro…
Now face value we look at this chart and think ok, euro looks like a retrace is due, which should falter around the 50 ema cloud on the 1hr time frame…Remember, we need to see price close above the cloud and we want to see green vectors appearing and moving price away from the upper band of the cloud for us to assume that price will continue higher to recover the red vector above.
So for long scenarios: We need price to start closing above the upper band of the cloud.
Short scenarios: We need price to reject the 5o ema line and continue to trade below and within the 50 ema cloud.
Use the Cloud as a support and resistance mechanism. the more time they spend within the cloud the more consolidation there is, so you anticipate a fast move to occur away from the range either above or below the cloud.
If you see price move fast away from either the upper or lower band of the cloud, then this will suggest the truth of the move and price will continue in the direction from the range it broke from.
The second image “Euro Vol Profile” shows us a Huge imbalance within the volume profile.
This is where it gets interesting. DXY is not open for trading just yet…DXY will open once asia starts. So whatever move euro does now may not be sustained.
The Dxy image attached must consider that if Dxy recovers the green vectors, euro will recover the red vectors above.
So we are in a stalemate right now until dxy starts trading.
If the strength of the dollar is going to continue, regardless of the macros suggesting the dollar is going to collapse or BRICS, investors can only go one place right now and that is dollar if they are in fear of the market dropping or they need to hedge themselves.
Well how on earth has USDJPY gapped up, and even euro…You can see that we are in line for a very interesting week…
That means scalping must be your goal if scalping is part of your repertoire…Swing traders, I have labeled the zones I anticipate USDJPY to take.
Now when we look closer, we have had such a strong move up by USDJPY, do we anticipate a retrace? Yes. We are looking for the green vector candle continuation to prove that the move up is not a fake move and that price will continue to move up.
With the GVC zone we get information as to whether price will show its worth continuing higher or not. This is what we would call the kill zone where the MM will try and trap traders short, on the recovery of the vector to only reverse and move back up. This area could develop into a V shape play, you are looking for stopping volume candles to appear after a sharp move down if they do decide to break price lower.
Now we don’t have price anywhere near the 50 ema cloud, so we are waiting to see if price can hold the 5 and 13 emas to make us believe the momentum is going to continue higher. A safer approach would be if the 50 ema cloud gets tested before you consider longs in USDJPY.
Gold appears to be picking up momentum to drop lower…I draw your attention to the next zone in the chart on the volume profile that will suggest that the next critical zone of support will be around the 1977 zone…If they break below the 1992.48 zone, we are increasing the odds of price working towards that volume profile zone (1977) as an area of support.
Remember, gold is a safe haven, if they are taking money out of gold, they are returning to dollar. So if gold keeps on moving lower we know traders are trying to avoid risk and then will put money into dxy.
We are entering into earnings season and the Banks have so far given the markets hope that things are ok. But remember, the banks profits have only come because people/businesses still service the loans and products that JP Morgan and various other banks have sold. The proof will be in the next quarter.
Now tomorrow we have the Empire state manufacturing index coming out.
The chart i have attached is the 4hr time frame that is giving us sideways price action in what appears to be the proof that if Nasdaq breaks this range higher…The market is going to run and I mean run higher. If you look closer you can see Nasdaq has recovered a red vector candle…This is promising…and they are trading away from the 50 ema cloud on the 4hr…This too suggests that price could continue higher…Just remember, when Nasdaq moves up, it always likes to sharply come back down, so take whatever profit you make from it and search for more opportunities.
Just like the “the Anatomy of the Trade” post…SP 500 dropped aggressively, and then sharply moved back up…You are looking for this behavior whenever you trade nasdaq and SP 500…They respect the ebb and flow of the market place…unlike crypto, even forex.
Now on Monday, we have two banks declaring earnings, one of them experiencing a lot of pressure in the press, especially given that the main investor in the bank has removed his stake…The bank in question is Charles Schwab.
I would wait till the market receives this information before you start trading.
However, as I stated above I am going to give you guys an Update before the New York Session open to determine the levels for Nasdaq and SP 500 and forex and good old Bitcoin.
Let’s see what will become of this week.
My focus trading pairs this week will be Euro and SP 500…So I will keep you guys posted with any movements as and when they appear in the discord.
Happy Easter gang.