By: Omar Eltoukhy
Hey Trade Fans!!
Back again with another outlook for the NY session. It has been an interesting week once again, with opportunities out there, if you were patient and knew what to key in on. With a big oil trade under the belt from yesterday and the decent gold trade from the day before, it once again proves that it is not necessary to make a lot of trades in one week to have an outstanding week. Getting the idea of quality at all costs and not caring about quantity was one of the things that really moved me forward in my own trading career. I hope you enjoy the outlook and information.
Keep in mind some of the terminology has to do with the system our team uses in the program. That said, I have tried to point out the actual areas since I know many of you reading this will not have the actual tools. Also keep in mind that this is a VERY tough week to trade ANY market, so please use caution. And AS ALWAYS, this information is for educational purposes only. It is NOT a recommendation to buy, sell or trade any instrument or financial vehicle.
The news is a little lighter in the NY session compared to the Eurozone news we have been fed throughout the day. There is a special emphasis on the Pound, and I would continue to exercise caution on the FTSE and forex. NY session will either bring us some nice movement, or we might recognize the lack of movement as a reason to simply shut it down till next week. There is nothing wrong with that, after all, it is both August and the big news week. Hopefully many of you profited from Wednesday, which should make the potential decision to take it easy today easier to follow through on.
OUTLOOK BY INSTRUMENT:
GOLD: As mentioned above, I have taken a smaller position short from the breakout of 1086 area. However, we have failed to break the secondary trendline at around 1084 and that will be important to add to the short position. The real “final” area I would like to see closed below is 1083 and that will give me much more confidence to add to my original short position. I do not want to give back the great gains already made this week, so even with the push down, I won’t be risking a full stake. On a major reversal, we need a breakout and secondary move above the bullish dynafib at 1089.75ish and ideally a close above the mid-term fib of 1093.75 which would also take out the triangle outlined earlier. If you have not downloaded the newest iteration of the manual chart, I would suggest doing that as I have updated both gold and silver with some new trendlines. If you can’t find the link, simply go to the London outlook from today and it is there under the gold section.
SILVER: Broke the very short-term trendline placed on the chart today, which we discussed confirming gold’s break of 1086. Now we need the secondary and lower trendline to break to confirm gold’s lower trendline and 1084. Since I already have a position in gold, I will not be directly trading silver, but using it for confirmation. However, silver could very well be traded in its own right on a breakout lower than 14.44 with a secondary move from this trendline area. I know that seems like a long way because of recent ranges, but it is very possible if we start to move.
OIL: Has slumped off today after the amazing trade we got yesterday. We need a pullback to get me excited to trade this today. I would at minimum want a refresh into the MM system at around 45.50 followed by a fresh move down with a good setup. Alternatively and more desirable would be a bigger pullback and rejection at least to the SCZ at around 45.90 followed by a rejection lower for a trade. If it does pull back even higher, we have s/r at at around 46.25 (bearish dynafib) followed by a range of areas from 46.55-46.88 (bullish dynafib, 2 SCZs and the mid-term fib). I doubt that it will pull back that far though, and if it does, it is extremely important to see the rejection before trading, because it might be a reversal instead. I am not interested in trading long unless/until we get a secondary move above 46.88 but that is a decidedly big move, and would require a huge daily range, so I probably wouldn’t trade the long anyway. Brent has taken out the 50.00 area but it is hanging just below this level. We would need a good push lower from here on Brent to consider the move lower on crude if we wanted to trade the standard setup after a weaker pullback to the 45.50 level and rejection. We would want to see Brent confirm with a close below 50.00 to give that a “good to go” confirmation.
INDICES: The FTSE unsurprisingly has moved up in the course of the news so far today, but it stands alone in that respect and has been moved by news without a juicy setup or confirmation from other indices. I would personally leave this one alone until after the cash markets open in NY. However, if we get another pullback and rejection from the 6718-6720 level (mid-term fib and trendline) for a long signal, it would be attractive. If the index markets broadly rally, then we can look for a secondary move from the breakout/pullback/rejection higher of the SCZ at 6767. The DAX has not moved much and we are still awaiting a pullback and move higher from 11562.5 for a good long setup. Neither the FTSE or DAX I would take a short on. The US market are mixed with the DOW in bearish territory, the SP500 in neutral territory, and the Nasdaq bullish. The DOW seems our best choice if the broad indices sell off. The DOW just needs either a pullback and rejection lower from 17576 that closes below 17500 for a nice standard setup that might also be a PFT if it is done quickly. Alternatively we might get a pullback to the bullish dynafib at 17613 followed by a close under 17576 that could work as well. The SP500 and the Nasdaq both are positioned to be taken advantage of in a bullish situation and I don’t recommend shorts for either unless the SP500 broke under 2093.8 but that would require breaking through a major Triple Convergence (more like quintuple convergence with multiple SCZ and both dynafibs) to do so, and I would only attempt it with a secondary move. However, that does leave the option of looking for the buy limit on the SP500 for the TC trade itself. Normally I would be “all over this” but considering the mixed signals on the US indices, I am leaving it alone (again, I don’t want to chance giving back the profits from yesterday). But if the markets were in better shape I would look for a buy limit at around 2096.00 Use your best judgement and look for confirmation across other indices before considering any trade on the index markets today. I personally think this is the toughest group today.
Contact me directly with any questions about the wonderful program we have at: Omar@goldtrademaster.com