Euro$ - Trade of the week - Analysis Chart
The above H4 chart shows a classic bearish reverse divergence trade. I think that the Euro $ should be shorted and I am short already from Friday at 1.3800. I think it will probably rally in the East so all should be able to get a fill above this.
My stop is at 1.3950 and in this I am risking ½% of my account. If I see a break below 1.3700 and the market can sustain that level for an hour at least I will add to the position.
There are many roadblocks in the way but the final target for the trade is 1.3250.
After breaking a major trend line on Thursday/Friday the Gold price rallied strongly towards the close on Friday. The daily chart of the Gold price shows a marked triangle formation and a bullish reverse divergence. I think that if Gold breaks above Fridays high a strong upward move will begin. I will wait for a close above the downward sloping trend line defining the triangle and then look for an entry. The chart is shown below along with targets for the probable move. A gold price of 2000$ is in sight.
Gold shares should be held.
Dow - five wave continuation pattern
The Dow is charting out a five wave continuation pattern or flag formation. I believe that this is coming to an end. I have a major time turning point coming in this weekend which should show its hand on Monday or Tuesday. I thought that this date would be a bottom but now I am far from sure of that. I remain bearish and will wait for a reversal day on the daily chart prior to looking for an entry. If I change that stance I will report it here.
David Paul