Welcome to the video update for Monday, May the 10th. With the plunge in the stock indexes in Thursday’s trading, it is imperative to protect your trading account by reducing your position size if you trade multiple contracts. Widen your stop loss and reduce your position size, or stand aside until the volatility dissipates.
First chart up is the eurostoxx 50 weekly chart where we have an ab=cd pattern with a 1.27 fib extension.
If you watched last Thursday’s video update, Trader Rick pointed out a buy on the yen daily chart. The very next day the yen skyrocketed higher when the stock market crashed. Not very often do we get instant gratification off a daily chart. At the time of the last video update an opportunity to get long off the 60 minute chart was shown. See how this setup played out if you took the entry.
Next chart up is the EUR/USD pair weekly chart where price tested the last major swing low back in March of 2009. This is not a good place to go short but any bounces will be analyzed for high potential shorting opportunities. Be patient!
Take a look at the EUR/JPY pair weekly chart. Great example of support becoming resistance. Check it out.
Next chart is the gold weekly where price moved higher again last week, approaching the overheard 1.618 fib target of $1250.
Crude dropped considerably this past week, putting in an outside week. See where the near term targets are to the downside. If you trade crude look at the daily chart where price is currently trading outside the lower keltner channel. Trader Rick shows how to take advantage of price trading outside the keltner channel by dialing down to smaller timeframes. Don’t miss this. If you understand this concept you will have a trading edge nobody else knows about.
Be sure to watch Trader Rick discuss the stock indexes. This could be a very important juncture in the markets. We have not seen a change in the price action to the upside as price continues making higher highs and higher lows. From a technical point of view, damage was done this past week with the big decline.
Remember the megaphone pattern Trader Rick pointed out a the end of April? Be sure to watch this. This pattern does not happen often but it is important to pay close attention when it does.
Good trading!
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Tags: ab=cd pattern, megaphone pattern, outside the keltner channel, position size, price action, volatility
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