USD/JPY Bearish Gartley into FRZ

It looks as though USD/JPY finished it's move up this morning into my 103.20 level and put in a nice bearish gartley in the process.

The stop on a gartley is the X wave high.

AUD/JPY

Assuming this pair clears 95.70, I'll be looking to sell in the timeframe and price levels cited in the chart.

USD/JPY - Looking to sell 103.20 either today or Sunday night

I believe USD/JPY is putting in a corrective pattern to the upside. I've been playing small stakes on the bounces here and am looking to take profit on my final position around 103.20 and flip to short. Monday may be a big down day in the US Markets if this count is correct.

SP-500 Daily ADX

The daily ADX is still dropping and has reached levels last seen in December 2012. When the ADX has dropped this low in the past it usually set up a huge, drawn out move, meaning both price increase/decrease and time ran for a long duration. I'll keep you posted once this begins to tick up.

Swing Trend Indicator - FULL SELL

The Swing Trend Indicator issued a full sell signal yesterday, finally closing the full buy signal from February 11th. Only a full buy signal will put me back into long positions.

Chart:

FB - Great Risk/Reward Trade Right Here

Buy FB May 70 Calls under 2.40

Stop-loss is 58.50 on this trade. Risking $4.00/Reward $17.50 per single stock

Option Risk $240/$1,000-$2,000

The Naysayer & The Envious - Emotions

Whenever a person is posting their personal trades other people will always step in to tell them why they are wrong. Some people do this because they are on the other side of the trade, and some do it just to do it, maybe due to envy. You'll never know the reason, but always know that there will ALWAYS be people judging you.

Emotional trading mostly occurs when a trade works against someone. In their mind they still see that the stock, index, commodity, etc. should be going up or down, so they jump even more into a trade.

When I see a trade coming to fruition I will generally research a trade for AT LEAST 4 hours before I set my trade PLAN. Without 4 hours of research I'm just guessing, and that's not how I play. After setting the original parameters of the trade, stop-loss and take profit levels, entry points (which I usually scale into positions) I then measure the risk/reward and see if it's even worth putting my capital at risk. I'm not going to lie, I love my money, so parting with it hurts.

Only after I've researched, initiated thought of the trade, identified the trade parameters, worked through the risk/reward ratio and consulted other related markets will I actually take a trade. Yes, it takes time, but it's my method.

There IS EMOTION in my trading. I do second guess myself, but I know my work and trading plan have identified my risk. I'm always nervous, anxious, excited, worried, etc about a trade, but when you set a plan you don't need to listen to those emotions. You just let your plan play out. 

When I get stopped out of a position, it is just that; a stop out and I'm out. I usually don't move my stops from my original trading plan because capping that risk was the reason I took the trade. I have in the past and it generally didn't work well, multiplying my losses. When I do get stopped I take a look at the trade again. I review my prior analysis, look at the trade setup and plan. I then look at all the information I have at the current time after the stop was triggered. I use all of this information to formulate a new trading plan, or...

I move on. I take that stock off my radar and move on. There are so many markets to trade that I should be able to find a cleaner setup on something. If I can't, I'll save my cash for another day. Capital PRESERVATION should be the number 1 trading rule in anyone's book.

The point of the story is I do feel emotions while I have a trade on. Whether it be doubt, overconfidence, worry, excitement, etc. You can have emotions and trade, but trading with emotions is different. If you can't look back on a failed trade and not feel bad because you did the work setting up a good trade, you shouldn't be trading. Some of my best trades have been losers.

TSLA Short % of Float

Released today, the short % of float dropped 3% but is still at 34.1% of the float with 3 days to cover.

AAPL Wave ii or B - Short Against 553

I was stopped out of my previous AAPL short, but I can't find anything that says this move is a resumption of the uptrend since all the waves up look corrective for now.

I'm shorting here at 545 against a 553 stop-loss which is approximately 2 pts above the prior high. I'm looking for either a wave iii down per the chart targeting 485 or a wave C down targeting 510-515

TSLA - Wave iv of 5 Low in Place?

TSLA sold off to 210 yesterday and I added to my long position. Trading at 222 today, I still don't think this stock is overpriced, so I'd still get in.

The low yesterday occurred in the box where wave iv=.382*iii, iv=1.618*ii and y of iv = w of iv. There is good Fibonacci support so I'm respecting that.

As of March 11, TSLA had 37% of it's float short. If there is a short covering rally my target of 300+ will be hit sooner than later.

FB Wave iv of 5 complete?

FB probably finished it's wave iv of 5 in the 63's and should move higher toward 80 in the coming sessions.

DISCLOSURE: Long FB May 80 Calls Under $1.00

SP-500 Daily ADX

I am still trying to make sure the wave iii top is in, but the indicators and Swing Trend indicator are still whipsawing.

Just checking the daily ADX, it issued a sell on March 12th at 1854.38. Since then it has gone "trendless" by dipping below 21. You can see in the past that a move of this nature usually preceded a large move in one direction or another. To help identify which move we should jump on, up or down, I watch the DMI.

Whichever DMI is on top when the ADX starts to turn up is the direction of the next large move 83% of the time. So when the ADX starts to turn up, if the -di rises above the +di, we should be bearish for a large move, and vice-versa.

Still bearish, but ready to flip if necessary!

Swing Trend Indictor

Today I received another tentative sell signal based on the Swing Trend Indicator, but the way it's been whipsawing lately reminds me of November 12th - December 3rd of 2013. During that timeframe, through all the whipsaws, the SP-500 ended up tacking on an additional 60 pts from the first whipsaw signal. Something to watch out for.

I do feel like we are in a larger 4th wave correction however. The VIX is still due to put in a cycle high Tuesday, April 8th, but the most dominant cycle as of late shows a top can form starting Friday of this week.

All Daily Indicators, beside the ADX which is showing "trendless" and rightfully so, are still on SELL. So I'm still tracking bearish SP-500 counts.

Swing Trend Indicator

The Swing Trend Indicator went back to tentative sell today, even with the market up, which is odd. The tentative sells/buys have been whipsawing lately, but the full buy has been on since February.

SP-500 Stop-Loss Adjustment to 1874.15

I believe the B wave top (bullish count) or wave 2 top (bearish count) is now in place, so I'm adjusting my stop-loss on SP-500 short position to 1874.15.

Mistake - Updated

In a previous post I stated that 2 out of the 3 bullish counts were invalidated when in fact NONE of the bullish counts were invalidated. Only a drop below 1834.43 could invalidate 2 of the counts, and only a drop below 1737.91 could invalidate the third count.

Anyway, I don't have much faith in 2 of the 3 bullish counts which I believed were invalidated anyway.

White Count: Wave 5 Expanding Ending Diagonal. This move can NOT go over 1905.
Red Count: Contains white wave i, white wave ii, then red wave (i), red wave (ii). Still valid while above 1834.43 WCI
Green Count: The whole move from 1737 to 1883 was wave 1. I can count this with an ending diagonal triangle for iii of 1 (the b wave in the chart above).

I believe the Green Count is the most valid bullish count at the moment. So based on that assumption I have figured a target on the chart. The price target box (red box) is drawn from a 50%-78.6% retracement of the move off 1737. The time box (purple box) is the time of wave 1 transferred to wave 2. The box marks 61.8% of the time wave 1 took to 100% of the time wave 1 took. If I'm looking to take a long position in the near future, I will wait until the SP-500 ends up within that box, then look at indicators for reversal signals.

I apologize for saying the bull counts were invalidated when they weren't.

Swing Trend Indicator

The Swing Trend Indicator went back on tentative buy yesterday, and has been on full buy since February. We'll need to start dropping today to get it back on sell.

***USD/JPY*** Entered remaining 80% Short

I was still 20% short USD/JPY and now I added the remaining 80% short at 101.75. I am now fully short this pair 10 contracts, 2 from 103.65 and 8 from 101.75. Stop-loss is at 102 now.

Weekly Cycle Chart

The white vertical lines on the above chart show the dominant cycle in the SP-500 for the past 30 years or so. On the left side of the screen you can see that the cycle was due to top in March 2007, but the ultimate top didn't end up coming until October 2007. It was also set to bottom the week of April 24th, 2009, which was close to the ultimate bottom. Since then I was looking for a topping formation close to July, 2013 but the market just kept on going.

When I was looking at the chart this morning I noticed a similarity in the structure contained in each box as well as in time. Those boxes are of equal duration. Just something to keep in your mind.

I believe white wave (iii) in the chart above has completed. If the move from 2009 has been a correction, the white wave (iii) would actually be wave 5 of C per the alternate count on the chart.

I think the market will either now drop in wave (iv) or a larger move to a correction since 2009.

Counting waves with MACD:

MACD is Moving Average Convergence Divergence so you should also be able to count Elliott Waves with just moving averages, with or without price even being on the screen.

Moving averages will usually overlap on second waves and come close together, even sometimes cross, on fourth waves.

See how clean the above chart is without price bars?

PBR - A High Risk / High Reward Trade

I'm taking a position in PBR at 10.25. I'm planning to risk 20% on this trade so I'll set the stop-loss at 8.20.
The balance sheet of this company doesn't look too hot, with 131.5 BILLION in debt, but it's taken a fairly severe beating and I think it's time has come.

Chart:

SP-500 Bullish Options

Here are a couple of the bullish options. The white count has the previous high as a wave iii high. Since wave i is longer than wave iii, and wave iii can not be the shortest wave, wave v would need to top before 1905. There are no limits for red wave (iii).

Cycles are showing we are in a downtrend until March 24th, give or take 2 days. We already has the VIX cycle low on March 10th, so bullish counts are going against those cycles currently.

Swing Trend Indicator and Daily Indicators

The US Indices recovered enough to void the Swing Trend Indicator's intra-day sell signal, and that's why I use it as an EOD indicator.

The SP-500 Daily Indicators are currently a mixed bag with some on sell and some neutral (meaning still bullish).

 The ADX issued a sell signal, but sell signals based off this indicator allow the SP-500 to run up 20-40 more points and still be valid. In most cases it causes an immediate sell-off, but there are occasions when the market runs higher before it reverses. Also, the ADX didn't reach a level that gives better short/buy opportunities (the 35-40 level). If the market starts down tomorrow, I'll probably jump into shorts.

 There's no good trendline that can be drawn on the MACD at this point, and there has yet to be a cross, so I'll just monitor it, but we can basically trash this indicator for now.

 RSI Gave a change in trend (CiT) on Monday, March 3rd when it broke the uptrend line and put in a negative divergence on the new high in the SP-500. This indicator is bearish, but moreso if it breaks the 60 level.

 StochRSI broke it's uptrend line, but still resides in bullish territory. It needs to drop below the red line to be on sell.

Stochastics broke below the prior low created on March 3rd and below the 80 level, issuing a sell signal. This indicator is bearish.

The SP-500 broke the newly drawn uptrend line connecting the February 5th and March 3rd lows (can be seen on every chart except the STI). Today, it backtested that broken trend line. That could also be bearish.

The indicators are too mixed for me to change the blogs stance from bullish to bearish, so I'll wait another day. Obviously caution is warranted for the bulls.

USD/JPY ***Book 1/2 Profits***

Booking 1/2 profits in USD/JPY for 68 pips. US Equities are NOT gaining downside traction at this time, so I've been working on an alternate count for USD/JPY

This would allow for another move higher in the pair and US Equities. Stop-loss to breakeven @ 103.38 on the second 1/2. Will look for places to re-add if the downside prevails.

Swing Trend Indicator

As of this second, the swing trend indicator is on TENTATIVE SELL.
It is an EOD indicator, so I will need to see the close before establishing positions.

Updates

AUD/NZD - I guess booking 1/2 profits for 68 pips and adjusting my stop-loss to breakeven on the remaining 1/2 was the prudent trade to make. Trade closed. We'll call it 34 pips of profit since it was only 1/2 position.

USD/JPY - Trade still open. Am 40% short from an average price of 103.38. Action started looking a little better today. Reducing my stop-loss to 103.785. Will look for an opportunity to add the other 60% to this trade, probably on a retrace.

SP-500 - Daily indicators still on buy, but are close to rolling. Also the Swing Trend Indicator is close to giving a tentative sell signal. Nothing has issued a sell signal as of todays close EXCEPT for RUT, which issued an ADX sell signal.

Remember the Forest

If you follow the markets daily, it's easy to get caught up in price movements that don't mean much to the overall structure of the market. I trade a little differently than other EW Theorists whereas I break some rules as long as the overall structure looks and feels correct on larger timeframes.

Here are a couple of charts from 2013 which reflect what I believe the current market structure to be.

Green wave iii topped out at 1850, which was a little higher than the mark I had on the chart, but it was still expected. I had green wave iv around 1720, and it bottomed at 1738 before the next leg higher. This chart was published on July 10th, 2013.

The above chart showed one possible path the market could take to reach the wave 3 target of 1920, which was an expanding diagonal triangle. At the time of publishing, the market was overlapping so it was a viable option at the time. Either way, the forecast was the same. Higher levels to come.

We are now getting near the to wave 3 target published. It has the ability to run up to 2100, but I don't believe it will do so quite yet. There are significant cycles aligning for an interim top in the market. We must be diligent and look to the trees (daily charts) to pinpoint these reversals.

The VIX Cycle low is due on Monday, March 10th. The Spring Solstice is the following week, coming on March 20th. The SP-500 is currently running up the the 50% fib fan line, once these lines break they are very tough to overcome. Fib Fan in yellow:

I will be on the lookout for the green wave iii high in the coming sessions, with a retrace down to 1740-1650 probable.

AUD/NZD Update

I'm still long AUD/NZD from 1.0663 per this post 

http://unbiasedswingtrades.blogspot.com/2014/02/long-audnzd-106630.html

I'm booking half profit right here at 1.0743 and adjusting my stop-loss to my entry price on the remaining half.

Booking 80 pips normalized to 68 pips. Note this is a longer term trade so I shouldn't even be booking profit on it, but the chart is showing a wedge formation.

USD/JPY Booking 168 Pips

I just booked 168 pips in my USD/JPY long trade. I am also entering my first scale short right here. C=A in TIME at around 10:00 CST tonight (vertical, white line on the chart). It is also being capped by the FRZ for a wave 2 flat at the moment (103.10).

Entered 20% of short trade at 103.08 with 105.40 SL and 96 TP.

I will ADD to this trade at the two higher FRZs highlighted on the chart; 20% at 103.65 and 60% at 104.40. I will also ADD to the trade 100% on a break below 101.10.

Previous Chart: Took on a third corrective option, grrrr.

Trade Example: I want to be short 1M or 10 lots. I short 2 lots now, 2 lots @ 103.65 and 6 lots @ 104.40
I will add another 10 lots on a break of 101.10 and be a total of 2M short.

USD/JPY - Flat?

USD/JPY has reached the first fibonacci resistance zone at 103.10.  There are two others above, which are noted on the chart. The white vertical line is where wave 2 = wave 1 in TIME which comes in today/tomorrow based off the daily chart.

USD/JPY - Still Bullish

From this post on February 27th 

http://unbiasedswingtrades.blogspot.com/2014/02/usdjpy-currently-long.html

My initial trade was stopped out, but I did re-enter @ 101.40 yesterday.

The reason why is because I still thought the long setup was valid, and I was still bullish US Equities. The following chart shows the relationship of USD/JPY and the SP-500:

The small b wave on the right side of the chart ran a little lower than anticipated, but has since showed a nice surge off the bottom that formed. The box on the chart represents a price/time relationship that should hold the move up in dollar/yen and also help form an equity market top. The focus range highlighted in the chart is 103-104.50.

I am watching how the c wave moves up to see if it finds resistance at and major fib levels on the way up. Particularly .618 and .786. Until it breaks above those levels around 102.20 and 102.50, the bullish trade is under caution.

Using analysis across markets allows me to focus in on better trades than relying on each market separately. If I was bullish equities, I should've been bullish USD/JPY, and vice-versa. Which I was. 

I am setting sell-stops for USD/JPY @ 101.20 and will be adding a stop-loss to those orders at the prior high once the level is taken out. Because a break of 101.20 should open the selling up to a third wave down to test the 96 level which is shown on the chart above.

SP-500 Update

It's looks like we got the pullback I alluded to in the previous SP-500 post that said caution was coming. The RSI was above the 85 level which usually led to a pullback:

http://unbiasedswingtrades.blogspot.com/2014/02/sp-500-updatesome-caution-from.html

The reason I stayed bullish and didn't change the trend from UP on the blog is because not all indicators were confirming the market was rolling over, and I don't like to chase news.

The Daily charts are still bullish, and most indicators have given the updated trend lines I need to trade. Only until all indicators are bearish will the blog issue a new trend signal.

The ADX issued a buy signal at the lows and has since showed trendless. Discard this indicator for now.

The MACD has given us a little squiggle to draw an uptrend line. This line will need to be broken for a sell signal.

The RSI turned down from the 85 level giving us that short term pullback yesterday. The low it created yesterday gives me the new uptrend line.

The StochRSI Never got below the bearish below line and has since turned up. I have a new uptrend line on this indicator now as well.

Stochastics are still in bull territory.

The Swing Trend Indicator hasn't even blinked since the tentative buy on 2/7 and full buy on 2/12