- Very bad week (trigger = Trichet non-"vigilance"). Complete re-think of markets required. Reversals abound.
- USDX : Strong white candle. But should run into better resistance now at 75.63. Actually downtrend is still intact but warning signs present.
- US10YY : In danger of diving further.
- S&P500 : Close below 1344 not good.
- Gold : Reversal candle as well. But USD woes not over, Greek threat to pull out of EU, perhaps the old long gold trade should stay.
07 May 2011
Benchmarks : Weekly Update
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Benchmarks Weekly
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3 comments:
Hi TS,
As I have said before, my trading philosophy is similar to yours, except I look at lower timeframes. Wekly, Daily, 4 hrly. So i am interested in what is your take on reversal candles. How reliable do you find them, in different time-frames? This past week has painted reversal candles in many markets, but the underlying trend in most of them remains intact. So what is your approach to trading such candles?
I took a look at historical reversal candles, and find that the higher time frame candles are very reliable, especially if they occur at a significant S/R point. So silver, is definitely headed for a period of bearishnes or consolidation, but gold may be only a dip. The AUD is still solidly up, while EU may dip a bit more since it broke a daily trendline.
Cheers,
Pandu
Actually I don't care much for single reversal candles, too unreliable and hit and miss.
I prefer to focus on the overall chart formation. On this basis, eg USDX still in a downtrend so make use of the short term strength to sell.
Other times, the lower time reversal combines with the higher time frames to give the picture of a sideway market, in which case there is no longer any reason to stay in the market.
Less often, you get from trend in one direction reversing suddenly to trend in opposite direction, in which case I am fuxxed. (eg equities V-bottom in Mar09).
Thanks TS.
Pandu
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