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Prop Trading Futures

Commodities, Financials and FOREX Special Situations – Oct 27, 2014

Today the central bank disclosed the results of the European Banks stress test. Let’s see how the market will digest the data before reopening on Monday. Anyhow, expect some volatility early this week and, if that happens, stay tough and kick the chimp away. Going back to the markets, here are my views of what is going on and the charts that I will look into going next week:

  • Patterns in play: Russell 2000, Canadian Dollar, Singapore Dollar, Gold, Silver, Eurodollar, Natural Gas.
  • Developing Patterns: Euro, Australian Dollar, CHF-JPY.

Chart Patterns in Play

Russell 2000 (TF futures, IWM ETF)

The pullback that occurred in the main US indexes during the last 2 weeks has reached a point where soon should be clear if the bounce is over and a new leg down will start next week or, more likely, all the action since October was nothing but a bear trap. TF and S&P charts (the latest is not shown here) are currently hitting key resistance levels.  I’m not willing to short the market here. Moreover, we are entering in the latest week of the month and some “window dressing” by big fund should help the markets to stay up.

TF futures

Canadian Dollar (USD-CAD spot; 6C futures; FXC ETF)

The long term chart is suggesting higher prices head. But the daily reveals an indecisive momentum that is all but constructive: each successive consolidation results in smaller swing higher. I’m long, but not willing to stay in a market is not going anyway. Unless I witness some more strength, next week I may bail my long for a small profit.
Canadian Dollar
Canadian Dollar

US Dollar-Singapore Dollar (USD-SGD)

The 3 weeks sideways consolidation in USD-SGD may be over and a new up-leg could start as early as next week. As you can see, the daily chart for this pair (below) shows a different story than the one of USD-CAD (above). I’m long and ready to add another layer to my position.
US Dollar-Singapore Dollar
US Dollar-Singapore Dollar

Gold (GCZ futures, GLD ETF)

For an immediate resolution of the bear case $1255 shall not be violated on a closing basis and if Gold is heading lower the weakness we saw during the last 3 days shall continue all next week. A break of October low will seal the deal for shorts.

I’m currently short.
GCZ futures

SIZ futures

Silver (SIZ futures, SLV ETF)

Support is at $1670 (October low). Resistance is at $1845.5. I’m expecting the support to be broken next week.

I have no position in this market.
SIZ futures
SIZ futures

December 2016/December 2015 Eurodollar

The lack of follow through on the breakout we had 2 weeks ago makes me believe that we have already seen a top in this market. I’m glad to have closed my position (in March 2018 contract)  prematurely. Now I’m flat.

 

Eurodollar
Eurodollar

Natural gas (NG futures, UNG ETF)

This is a decent short setup even if it lacks of a clear breakout on the daily. The market shall not close above 3.802 for the target at 2.872 to remain valid. I’m flat, but I will likely open a short on Sunday with a stop at 3.802.
NG futures

Mexican Peso (USD-MXN)

This market is holding up well. Above the targets are at 15.027 and 17.091.
Support can be found at 13.336, while resistance is 13.605.

I’m long.
Mexican Peso
Mexican Peso

Chart Patterns in Formations

Australian Dollar (AUD-USD Spot; 6A, M6A futures; FXA ETF)

The Aussie is consolidating at a key level.

0.8834 and 0.8674 are on my radar for next week. I will be long above the fist and short below 0.8674.
Australian Dollar
Australian Dollar

Euro (EUR-USD spot; 6E, M6E futures; FXE ETF)

Is still consolidating in what could be a massive multi-month Triangle formation.

Shorter term a small flag was completed on Wednesday. I will be watching closely 1.25140 and 1.28157.

I’m short.
Euro
Euro

Swiss Franc-Japanese Yen (CHF-JPY)

The multi-year chart (below) indicates that this pair may be headed to 157.930.

Looking at the weekly chart, there there is a possible descending Triangle that is forming in this market. Depending on how this congestion area gets resolved, we may get a move higher to 122 or lower to 105. Given also the long basis provided by the long term setup, I favor the long side.

The daily chart offers a potential small Cup and Handle to open a small antipatory position.

Swiss Franc-Japanese Yen
Swiss Franc-Japanese Yen
Swiss Franc-Japanese Yen
Swiss Franc-Japanese Yen