Welcome to the video update for Monday, January 3rd, 2012. Happy New Year! A quick note to Russell futures traders….as of January 1st you must subscribe to ICE Futures service to access real time data. Cost is $70/mo. Unfortunately, they no longer offer a standalone service.
This video update will include some big picture charts with the beginning of a new month. First chart up is the monthly EUR/USD pair where last month was an inside month, indicating hesitation. The month of November triggered a 9/30 short setup so the bias is to the downside. Trader Rick wants to see a move below the lows of November for downward continuation in price. IF price exceeds the high of November then the bias moves to the upside and the lows of 2010 will probably mark the C leg of an A-B-C correction. IF price moves lower then the larger target becomes D leg of an ab=cd pattern at approximately 1.1408. The daily EUR/USD chart has a possible ab=cd pattern which has bearish implications. Note where the D target comes in.
Next chart is the monthly Canada where December had the highest close since May of 2008. Note how price found support at the lower keltner and the 30wma and the 50 sma. Price traded in the buy zone for multiple months. For traders familiar with the 9/30 setup take a look at the 600 tick Canada chart. This is a good example of price action outweighing lack of indicator confirmation, allowing experienced traders to consider the 9/30 long setup. Check out the chart.
Trader Rick next looks at the monthly gold continuation chart where price traded outside the upper keltner channel for the 3rd consecutive month, indicating current strong momentum and trend to the upside. No signs of weakness so look to buy pullbacks if price reaches the buy zone on a larger timeframe.
On the crude monthly chart, price closed at its highest level since 2008. Note the fib levels on this timeframe. Higher oil prices could be a factor in higher inflation in 2011. Another market that reflects inflationary pressure is the interest rate futures. In November, the 10 year note put in a possible double top and a reversal bar. December saw lower prices with a wide range down candle, indicating higher interest rates. See what possible pattern Trader Rick is looking for IF price continues lower.
In the stock indexes, the monthly S&P cash chart shows price moving higher with a lot of ‘air’ above the market. The 1300 level could be the next area of resistance. The month of December was the highest close since August of 2008. The last chart is the ES 60 min day session only where price is in a tight trading range of about 8 basis points. Watch the 1251 area for current support.
Good trading!
Tags: 9/30 Setup, ab=cd pattern
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