Breaking uptrend on $ES

Today, we saw the ES break a nice 2 week uptrend channel pretty definitively. This retrace back up to the 1100 level after the break should provide some great short opportunities. 1102.50 is the last 5 day weekly pivot.

GBPJPY Short

A lot of interest in GBPJPY after it broke it's 3 month channel to the upside yesterday. However I point out that it's likely a false break and a move back to the bottom of the channel is more likely. CCI confirms divergence here and starting to make its move back into the channel. Also, I like the risk/reward on this trade. The 61.8 fib level above is going to provide my stop level. Shooting for middle of that range first, then bottom of the channel as 2nd target about 600 pips.

More importantly, this gives us a clearer picture of the potentially breakdown of equities in the coming week.

Using ACC/DIST to find true Support and Resistance

Many times, simply looking at Price Action to find support and resistance can be deceiving, One way to spot these is to use the Accumulation/Distribution Indicator. I use a volume based acc/dist to better spot true support/resistance and keeping me out of false breakouts and false reversals. Attached is this morning's S&P Emini Futures chart. I've attached both 1600tick chart on the left, and 512 tick on the Right. One thing I noticed this morning in the first 15 mins of trading was what looked like a double bottom forming in the 1087 area. At the time, just looking at price action, on the 512 tick chart, it looks like a pretty standard double bottom forming, which would be a textbook Long Trade, however looking at ACC/DIST, we clearly see we broke that support from the o/n session lows and acc/dist even came back to test that resistance and was rejected. Based on this, I would have stayed out of taking a Long trade at the double bottom. Which turned out to be a false one.

Now looking at the 1600tick chart. This is a classic Textbook Support turns into resistance trade, HOWEVER, it would not have been clear on the price chart. If we only looked at charts, 1086 would have been the support and we would have been trying to wait for the 1086 area again to short. However, looking at acc/dist we see that as we approached 1083 level, that acc/dist was showing us that, that was the true resistance.

Selloff in Gold is NOT over

We've seen some really ugly, and crystal clear divergence in GOLD for a few weeks now. Finally we broke the downside of accumulation/distribution that I was looking for to confirm the break downward. Initial targets on the downside is the Trendline support in the 1160-1175 area.

Interesting Divergence on S&P

As you can see from this Chart, as prices move lower. there is no confirmation of a break of that 1050 support level from Accumulation/Distribution. Now this is not a BUY signal just yet, but this is definitely a level I'll be keeping my eyes out for. If we see a bounce up on the acc/dist, I would consider that to be a BUY signal. Otherwise, I would be uncomfortable holding equities in my portfolio if this acc/dist line breaks that support line. I'll keep everyone updated on this...