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Weekly FOREX Forecast: USD Is Strong Vs EUR, GBP, AUD NZDThis is an outlook for the week of Nov 4 - 8th. In this video, we will analyze the following FX markets: USD Index, EUR, GBP, AUD, and NZD. Enjoy! May profits be upon you. Leave any questions or comments in the comment section. I appreciate any feedback from my viewers! Like and/or subscribe if you want more accurate analysis. Thank you so much! Disclaimer: I do not provide personal investment advice and I am not a qualified licensed investment advisor. All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. I will not and cannot be held liable for any actions you take as a result of anything you read here. Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this channel, expressed or implied herein, are committed at your own risk, financial or otherwise.
CME:6N1!
by RT_Money
6
Correction down for SPX500USD is almost finishedHi traders, Last week SPX500USD dropped and slowly went up again. I think next week we could see the finish of the complex correction down (wave 4) and the last leg up to finish wave 5. Trade idea: Wait for the complex correction down to finish and after a change in orderflow to bullish and a correction down on a lower timeframe you could trade (short term) longs. If you want to learn more about wave analysis, please make sure to follow me, give a like and respectful comment. This shared post is only my point of view on what could be the next move in this pair based on my analysis. I do not provide signals. Don't be emotional, just trade! Eduwave
OANDA:SPX500USDLong
by EduwaveTrading
18
AMD - ALTERNATE Bear Case - Confluence at $95Warning - before you come attacking me full force - this is an alternate bearish scenario for AMD - not my primary scenario, but I noticed a few things that I must point out. 1. 2 5-wave structures - Between Oct 2022 and Mar 2024 we completed 2 structures that can be counted in 5 waves, but the resulting pullback from Mar 2024 to Aug 2024 came back a bit deeper than I would have expected for an impulsive move. This is suspect. 2. ABC Corrections - a 3 wave correction can be seen all over the place but what I want to point out is the structure I outlined in point 1 above can be seen as impulsive. The pullback off the first 5-wave structure only retraced 38.2% - which is fine - but - that only works in a very bullish market - which we were in - but where's the follow through? After Mar 2024, there was a severe lack of follow through. 3. From Mar 2024 - we see a clear 3-wave correction - but now that we have the monster ABC correction outlined in point 2 above, measuring it puts the 61.8% internal retracement fib (the golden zone between 61.8-65%) at $95 AND if you measure the correction from Mar to Aug 2024 and project it from the pullback in early Oct 2024, you get a 100% extension target at.... $95 - coincidence? Well, that also happens to be the bottom of the Oct 2023 correction as well. TL/DR? I'd be a heavy buyer at $95 if we get there.
NASDAQ:AMD
by bitdoctor
14
Deciphering The Mysteries Within A TrendIn this video, I breakdown trend dynamics to help you understanding what is actually happening in a trend. I cover the following: What is climatic activity? What climatic activity means for a trend. How to spot climatic activity with price action. How to spot climatic activity with an indicator How to measure trend strength with price action How to measure trend strength with an indicator When trading pullbacks, it is imperative to understand strength of trends. You do not want to enter a pullback at the end of a trend.
AMEX:XOP
by JoeRodTrades
2
MOASS: BOOM!TLDR of video: -MOASS is happening now -Elliott Wave Idealized Target: 100K -Ideal Target for your average retail investor: 1800 - 2400 -Psychologically, Wave 3, which we are in, is the most intense -VWAP is your guide as price will stay above identified VWAP and will only touch it again once MOASS is over -Fibs are your guide as well Expect price to begin running next week folks We will break above identified VWAPS and that will be the surefire signal that MOASS has lifted off for the last time SEE YOU AT THE TOP!!!
NYSE:GMELong
by Heartbeat_Trading
41
Increase the difficulty level on yourself. Often, traders like to make things a lot harder for themselves than they need to. Everyone is seeking a silver bullet, truth is "less is actually more". Dow Theory is actually the Grandfather of technical analysis. If you have never heard of this, or even if you have and brushed over it, you are missing out. Some people will say things like "it's over 100 years old it can't work in today's market" Yet, humans have changed very little in those last 100+ years. Sentiment driven by fear and greed is where the secret is hidden. Let me explain by saying Dow theory has 6 "rules" (tenets). 1) Market Moves in Trends Markets have three types of movements: primary trends (long-term trends that last for years), secondary trends (medium-term trends that retrace parts of the primary trend), and minor trends (short-term trends that are typically noise). You will notice I used the weekly for the larger and the daily for the second. When I journal my trade setups; I simply use a traffic light system red lines size 4 for primary, then orange line 3 for secondary and green size 2 for the trigger phase. In addition to that, I mark the trends with 3 boxes and arrows pointing up down or sideways. The second rule; Each trend has three phases: Accumulation Phase. In this phase, informed investors start buying or selling, counter to the general market opinion. Public Participation Phase, more investors notice the trend after it is already underway, and media coverage expands, driving the trend further. (Wyckoff called this a mark-up or mark-down phase) Excess Phase (or Distribution): At this point, speculation is rampant and detached from actual value, leading informed investors to prepare an exit. This is where a lot of Wyckoff, Elliott and other tools such as Smart money concepts all overlap. Then, the 3rd rule. The market reflects all available information, such as economic conditions and sentiment. Therefore, movement in the market averages considers and reflects this information. (in simple terms, discount the news). 4) For a trend to be validated, different market averages must confirm each other. For example, the trend in the Dow Jones Industrial Average should be confirmed by the Dow Jones Transportation Average. If one index moves to a new high or low, the other should follow suit to confirm the trend. (I like this one less, but in some instances it can make the next move very obvious.) Rule 5) The trend is your friend, until the end. Until you see a clear change in the direction, a market shift. The trend is still in play. This one, I feel most just can't comprehend. As you can see below, I have marked up the extreme high and low, I know both my primary and secondary trends are down. So now, I can use my EW bias or start looking for a Wyckoff schematic. (if I believe we are about to see a shift in the trend.) You can start to look for information for areas of interest, look into volume and volume profiles. The last rule. Confirming the trend volume expanding in the direction of the primary trend. For an uptrend, volume should increase as prices rise and decrease during corrections. In a downtrend, volume should increase as prices fall. In this example, the Fibonacci levels line up, the volume is slowing, the EW count makes some sense and zoomed out you can see a shift. Now, with all of this info - we could look at "areas of interest" We are in a demand zone on the higher time frame. At this stage, there is no trade entry, but if we were to view a change in the character we could simply take a trade as a pullback on the primary trend down. Something like this; You see, all you are doing is following the trend and taking a look at other tools, auction areas, fib extensions, an EW bias, and hints of a Wyckoff schematic. But under the hood, the 3 trend principle is a simple-to-follow process. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years' experience in stocks, ETF's, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Education
by Mayfair_Ventures
9
COUNTER-TREND TRADING...SAFE OR RISKY?....EURCAD LIVE EXAMPLEWhat is going on everybody! Hope you are having an amazing weekend so far! Just wanted to come on here and speak a little bit about one of my favorite trading subjects which is counter-trend trading! I personally do counter-trend trading as one of my trading strategies so I wanted to come on here and share a real life example of some things I look for and the mentality behind trading against the current trend of price Hope you guys enjoy! Please boost and follow my page for more breakdowns! Appreciate you all! Cheers!
by JosePips
6
Bitcoin Stays True to “Uptober” with 11% Pop. What Happens Next?Bitcoin BTC/USD saw elevated demand in October as the surge nearly led to a new all-time high. Now the looming US election on November 5 is shaping up as a catalyst for growth, depending on who gets to become President of the United States. Bullishness is in the air. The OG token — Bitcoin BTC/USD — pumped hard in yet another October. Staying true to the “Uptober” tradition , BTC added 11% over the month, kicking it all the way up to more than $73,000 , just a few hundred bucks shy of its record high logged in March . The powerful surge is now taking a breather with prices diving back under the $70,000 threshold. But not for long, according to some analysts who are already living post November 5. What’s that? It’s the biggest event of the year — economically, politically, and … cryptolitically ? Gloves on, bell rings, the main event is here — in the blue corner is Democrat Kamala Harris facing her red-shorts opponent, Republican Donald Trump. The current Vice President and the former President are squaring up for the top spot in American politics. And both have vastly differing viewpoints on crypto. If we were to play favorites, it’s fair to say that Donald Trump is winning the hearts of the crypto faithful. Throughout his rallying and campaigning, he’s made it clear that he believes in Bitcoin’s growth potential. What’s more, he’s embraced digital assets in general and wants to see the market thrive in the world’s biggest economy. The promises don’t stop there. Trump has vowed to make the US the “crypto capital of the world” and dig out all the remaining Bitcoins from within US grounds. He also pledged to set up a Bitcoin strategic reserve and fire Securities and Exchange Commission Chair Gary Gensler, who is seen as a roadblock to future crypto growth. Hence the so-called “Trump trade,” which has been propelling the orange coin to higher places. On the other end of the spectrum is Kamala Harris who has adopted a warm, but not that warm stance toward crypto. She’s all about casting a sweeping regulatory framework over the industry. The Democratic candidate has vowed to “encourage innovative technologies” like digital assets. Still better than President Joe Biden’s crackdown on the sector. More interestingly, Trump has recruited a key player on his team. Elon Musk, the world’s richest guy (depending on the day) and CEO of Tesla TSLA , is a major donor to Trump’s campaign. He is looking to potentially get employed by the government as head of — can you guess? — Department of Government Efficiency, or DOGE (a nod to Musk’s beloved coin). "I will create a government efficiency commission tasked with conducting a complete financial and performance audit of the entire federal government," Trump said at a rally back in September. “I look forward to serving America if the opportunity arises. No pay, no title, no recognition is needed,” the eccentric billionaire wrote on his X platform . How is that bullishness trickling into the markets? Besides the obvious price leap, options traders are ramping up their bets for $80,000 Bitcoin by the end of November. Implied volatility on November 5 is elevated — BTC options flag a 30% chance of a 10% swing in the price. Stay cool, stay ready. On the ETFs front, exchange-traded funds that hold genuine Bitcoin and offer spot trading pulled in around $4 billion of net new money in October. The biggest winner of all 11 spot BTC ETFs is the BlackRock-owned iShares Bitcoin Trust, which holds more than $26 billion in assets. Traders broadly (not just the crypto space) may be pricing in a Trump victory and scooping up some of the assets that are likely to do well under his term. But while Trump is ahead in prediction markets, he’s neck-and-neck with Harris in the national polls, making Election Day all the more uncertain. With that said, Bitcoin is up 57% on the year, outperforming other large-cap assets, such as gold XAU/USD , up 35% in a stellar year of its own , and the S&P 500 SPX , up 20% year to date, also enjoying lots of buying appetite . Whose side are you on and do you think we'll see a huge swing in the price of Bitcoin come November 5? Share your thoughts below!
BITSTAMP:BTCUSD
by TradingView
18
Moving average crossover strategy by Cripto SolutionsI have been working with the crossover strategy for some time, I have been doing backtesting and I have been surprised by the level of success that they leave me with when it comes to putting it into practice. It is simply based on looking for where we have moving average crossovers, which are areas where The price ALWAYS has a reaction no matter how the movement comes. If it is going up it reacts downwards, if it is falling it reacts downwards. I have an operation precision level of more than 97% and with SL that does not exceed 1%, reducing unnecessary risks. The ideal is to identify the crossings from highest to lowest temporality, (Weekly, daily and 4H) smaller temporalities to polish the entries well. Put it into practice, you will never use an indicator other than the EMAs (5,20,200)
Education
by CriptoSolutions
9
MATH - This is how you REALLY use Elliott WaveThis is a great example of a beautiful setup and how to lay out a low risk, high reward trade, especially for those that are still learning and wondering how to apply Elliott Wave. Or maybe you are unfamiliar with Elliott Wave or someone who thinks it's nonsense. Well let me show you how I do it and hopefully help you learn the best technical strategy. These are the setups I salivate on. And I don't care if I lose 8 out of 10, because the 2 that hit will more than pay off the losers. Support box is clear. Below the September low and I'd be out as we'd be below the reliable 61.8% retracement. Breaking that fib retracement level means that it can do anything from bullish, to diagonal, to sideways, to bearish moves. And we don't want to waste our time with stocks that aren't trending. Nothing is reliable anymore - therefore, we don't want to trade it below that. Toss it away. Move on to the next one. For this play, you could accumulate shares under $2.25 which is the previous high. I have it labeled as a Wave (1) but it could easily just be an (A) wave. As a quick refresher, trending impulsive moves happen in 5-wave moves. Since we don't know for 100% certainty that this will become that, we have to prepare for the other likely scenarios. We are already protected from significant downside with our stop below the 61.8% retracement, so I just don't care what might happen in a bearish count. So for bullish, I want to accumulate under the last high and catch the breakout. Once broken out, minimum target is $4.25. That's the 100% extension of (1) from the bottom of (2), the first resistance. If this ends up being a 3-wave (A)(B)(C), it would top out there at the 100%, so we want to make sure we have all of our money back by then. A full bullish follow through could take it anywhere between $12 (161.8% fib) and $22.50 (200% fib, which is where a standard impulsive 5-wave rally is expected to end with no extensions). If you buy a stock like this with stop below the 61.8%, you can go net free (return of original equity) by selling however many shares are needed to get your original money back at the previous high around $2.25 which should reject at first try (as it is the most likely landing spot for Wave 1 inside of Wave (3). Once a higher low forms from there (Wave 2 of (3)) between $1.20 and $1.75, you could go in even harder, buying more shares, and moving your stop on all shares to that higher low, providing a very low risk scenario. By the time $4.25 is hit, you should be completely net free with plenty of shares left and maybe even take some good profits. Remember, this is an outline NOT A PREDICTION. That's why we have a stop, a plan, and multiple targets. As it plays out, we gain more clarity and update our outline. Probably even find a trend channel. This is Elliott Wave. This is Fibonacci Pinball (the creation of Avi Gilburt at elliottwavetrader,net). It's not telling you what's going to happen. It's telling you what could happen, laying out the most probable path, limiting your risk, and telling you when it might be wrong and how to pivot. And don't go thinking this will happen all at once. Keep good notes of your entry and all sales. This likely takes 1-3 years. Standard disclosures: 1. This is 100% my idea. It was not sourced from any other avenue. 2. I am not invested in this company, though I am likely buying shares soon. 3. I am not paid to post content nor do I receive any contributions of any kind. 4. While this is outlining a potential profitable setup, this article is not investment advice. You should do your own due diligence on any company you invest in and apply your own trading strategies. 5. I know nothing about the fundamentals of this company. I suggest doing your due diligence if fundamentals are important to you. 6. Readers should always remember that markets are their own creature made up of millions of individuals and institutions each following some combo of inherent bullishness, inherent bearishness, fundamentals, technicals, stupidity, and pure emotion. Elliott Wave, and specifically Fibonacci Pinball (developed by Avi Gilburt at elliottwavetrader.net and prominent Seeking Alpha author), merely provide a framework based on the observed price action to date. 7. I know that while my wave outline is based on years and years of data and application from not only me, but some of the best in the game, I also know that markets do not follow a set path and that sentiment can remain irrational far longer than I can remain rational. That is why you MUST consider the alternatives and manage risk appropriately. Know the pivot zones that could lead to the primary path failing. I warrant that the information created and published by me on TradingView is not prohibited, doesn't constitute investment advice, and isn't created solely for qualified investors. My analysis is not a recommendation for a specific trade. My analysis outlines a potential scenario and provides risk assessments for multiple alternate scenarios. My analysis is purely educational.
NASDAQ:MATHEducation
by mazag08
1
U.S. Bancorp Buy opportunity setting upU.S. Bancorp is a financial service holding company. The Company’s major lines of business are Wealth, Corporate, Commercial and Institutional Banking, Consumer and Business Banking, Payment Services, and Treasury and Corporate Support. The Company provides a range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services FUNDAMENTAL METRICS Exchange- New York stock exchange Market capitalization- $75.73B Basic EPS- $3.27 Total Net revenue- $28.1B Net Income- $5.4B Average common shares outstanding- 1.5B Total assets- $663B Deposits- $512B Provision for credit losses -$2.3B Dividends declared per share- $1.93 Financial metrics as at year ended Dec 31, 2023, Market cap as per 24.10.2024 Q4 EARNINGS SUMMARY (Date of release 16.10.2024) (Next report date Jan 16,2025) 1. Net income of $1,714 million and diluted earnings per common share of $1.03. Revenue missed analyst estimates by 1.0%. Earnings per share (EPS) exceeded analyst estimates by 4.5%. 2. There shall be a share buy back program of $5 billion. 3. The bank is focused on organic growth & broadening their reach. Not interested in mergers & Acquisitions currently. The bank's latest large investment was the acquisition of Union Bank, which closed in December 2022. This meaningfully expanded its presence in California. 4. Net revenue of $6,864 million, including $4,166 million of net interest income on a taxable-equivalent basis 5. Noninterest income of $2,817 million driven by year-over-year increases in: i. Commercial products revenue of 12.1% ii. Trust and investment management fees of 6.4% iii. Payment services revenue of 3.1% iv. Mortgage banking revenue of 7.6% 6. Non-interest expenses dropped by 1% compared to last year, but increased slightly by 0.4% compared to the last quarter, when accounting for previous notable expenses. 7. The bank's return on common equity was 17.9%, return on assets was 1.03%, and efficiency ratio was 60.2%. TECHNICAL ANALYSIS RULES 1. Structure drawing (Trend line drawing on past price chart data) 2. Patterns identification (Naming patterns on past price chart data for future wave)- Corrective flag forming 3. Future indication (Reading indicator for future wave)- MACD 0 crossover to signal buys 4. Future wave (Drawing on future price chart using future indication from indicator)- highlighted 5. Future reversal point (Identifying trend reversal point on price chart using structure)- Target price $67.35 (top of bigger correction) Look for the trade on lower timeframe by identifying impulses & correction as shown Recommendation: Buy price range: $44.8- $48 Target price: $67 Top Shareholders The Vanguard group- 8.64% BlackRock Institutional Trust Company- 4.85% State Street Global Advisors- 4.26% MUFG Bank- 4.22% Charles Schwab Investment managers- 2.92% Fidelity Management- 2.66%
NYSE:USBLong
by thesharkke
8
EURUSD - 4hrs ( Buy Trade Target Range 200 PIP ) 🟢 Pair Name :EUR/USD Time Frame : 4hrs Chart / Close Scale Type : Large Scale ------ spreading knowledge among us and to clarify the most importan+t points of entry, exit and entry with more than 5 reasons We seek to spread understanding rather than make money 🟢 Key Technical / Direction ( Long ) ——————————— Bullish Break 1.08600 Area Reasons - Major Turn level - Visible Range Hvn - Fixed Range Hvn - Channel Break - Choch Zone Bearish Reversal 1.10400 Area
Long
by GoldenEngine
12
Solana May Move Down After Pattern CompletionSolana May Move Down After Pattern Completion Solana has completed a large bearish harmonic pattern near $183.30. The pattern looks solid, and given that it was created in a strong historical zone, the odds are that we may see Solana moving down as shown on the chart. This time, we have an aggressive bearish scenario, because the market is also speculating about the US elections and USD strength. However, this is the nature of this pattern—it can push the price down aggressively when we least expect it. I am watching for support zones at $165.00 and $154.00. Let's see how the market unfolds. You may find more details in the chart! Thank you and Good Luck! ❤️PS: Please support with a like or comment if you find this analysis useful for your trading day❤️
Short
by KlejdiCuni
21
BITCOIN Gaussian Channel telling you the rally has already begunBitcoin (BTCUSD) is illustrated here on the 1W time-frame from the 2011 Cycle until today. We've used the Gaussian Channel (GC) after a long time and the reason is simple. Since the August 05 2024 Low, it has been supporting the uptrend up to today's test of the All Time High (ATH). ** Gaussian October support every 4 years ** This continuous support is a critical feature moving forward as every time the GC held at this stage of the previous Cycles (October 2020, 2016 and 2012), BTC started its final (and most aggressive) Parabolic Rally of the Cycle. ** Resistance turned Support ** What's equally interesting is that during those stages, the price also re-tested and held the former Resistance (of the previous Higher High), turned it into a Support (while the GC held) and bounced to the Parabolic Rally. This is a remarkably consistent feature taking place every 4 years! ** The green GC length matters ** Now as to the GC in more detail. What we want you to keep from it, is that the green part of the GC has lasted in the previous Cycles 123, 144 and 148 weeks respectively, which translates to 861, 1008 and 1036 days, until it turned red. As a result, we can expect the current green phase to last until December 08 2025 (minimum) and June 01 2026 (maximum). It is more reasonable to expect the longer case as the recent Cycles tend to have stabilized most of their common time patterns. The Bear Cycle tends to start when a 1W candle is closed below the GC. Until then, based on the parallel Channel Up patterns that encompass 3 Cycles each time, we can even expect a price as high as $200000 for this Cycle Top. Do you think that's realistic? And if so, do you also expect the GC wave to support a parabolic rally all the way to the top? Feel free to let us know in the comments section below! ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
CRYPTO:BTCUSDLong
by TradingShot
21
GOLD 1H AND 4H CHART ROUTE MAP UPDATEHey Everyone, Another PIPTASTIC day on the charts today with our 1H chart complete and 4h chart targets also smashed. We got the EMA5 cross and lock above 2762 opening 2772 and 2781, which were hit today completing this 1h chart idea (please see below) Our 4h chart also had ema5 cross and lock above 2737, opening 2760 and 2779, which were both hit completing this range. We now have ema5 lock above 2779 opening the range above. We always take caution chasing targets all the way to the top and that why using our Goldlturns to buy dips is the safest way to chase targets in a new range We will keep the above in mind when taking buys from dips. Our updated levels and weighted levels will allow us to track the movement down and then catch bounces up. We will continue to buy dips using our support levels taking 30 to 40 pips. As stated before each of our level structures give 20 to 40 pip bounces, which is enough for a nice entry and exit. If you back test the levels we shared every week for the past 24 months, you can see how effectively they were used to trade with or against short/mid term swings and trends. BULLISH TARGET 2760 (EMA5 LOCK ABOVE 2737 WILL FURTHER CONFIRM THIS) - DONE POTENTIALLY 2779 - DONE EMA5 CROSS AND LOCK ABOVE 2779 WILL OPEN THE FOLLOWING BULLISH TARGET 2797 POTENTIALLY 2814 BEARISH TARGETS 2737 - DONE 2715 EMA5 CROSS AND LOCK BELOW 2715 WILL OPEN THE SWING RANGE SWING RANGE 2693 - 2669 As always, we will keep you all updated with regular updates throughout the week and how we manage the active ideas and setups. Thank you all for your likes, comments and follows, we really appreciate it! Mr Gold GoldViewFX
OANDA:XAUUSD
by Goldviewfx
19
Spotting EUR/USD Rebound Potential with Key Technicals!Today, we’re analysing the EUR/USD daily chart to see how key technical indicators align to impact trading decisions. Here’s what’s shaping up: ➡️ Current Support: We have an uptrend in place since April which is coinciding with a 78.6% retracement around the 1.0760/75 level (spanning June lows to September peaks). Adding strength to this support zone is the RSI divergence, signalling a potential corrective rebound. ➡️ Resistance Levels to Watch: For potential rebound targets, I start with Fibonacci retracements and key resistances: • First Resistance: The 200-day moving average aligns with the 23.6% retracement at 1.0872. • Second Resistance: The 38.2% retracement around 1.0950, showing multiple resistance touches, making it a significant challenge for further price movement. Disclaimer: The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
Long
by The_STA
6
USD/JPY rally facing fundamental test with US job openings data USD/JPY remains a play on the US interest rate outlook, sitting with an incredibly strong correlation with US two-year Treasury note futures of -0.98 over the past fortnight. When short-dated US debt futures have moved in a particular direction, USD/JPY has almost always done the opposite, mirroring US Treasury yields. With there's no obvious reversal pattern in US two-year note futures in the right-hand chart, providing reason to be cautious about getting to aggressive, with the first of the week’s major US economic releases on the way in the form of JOLTs job openings for September, the risk of profit-taking in USD/JPY appears elevated. After a surprise bounce in August, markets are looking for only a minor decline in openings of 50,000 to 7.99 million. Notably, this survey tends to bounce around and we haven’t seen back-to-back increases since late 2022. That hints at the potential for a downside surprise that could spark downside for US Treasury yields and USD/JPY which have run very hard in recent weeks. If the price holds below 153.19, you could initiate shorts with a tight stop above for protection targeting a return to the 200DMA. Good luck! DS
Short
by FOREXcom
4
What Is a Falling Knife in Trading? What Is a Falling Knife in Trading? It’s often repeated that traders should ‘never catch a falling knife.’ This phrase highlights the risks of buying into a rapidly declining asset. Understanding what a falling knife is, its causes, and strategies for trading it may help traders navigate these sharp declines more effectively. This article delves into the intricacies of falling knives and offers insights on how to approach them with caution. Understanding the Falling Knife Pattern A falling knife consists of candlesticks that depict a significant rapid drop in an asset’s price, including stocks, commodities, forex pairs, indices, cryptocurrencies*, and more. This situation is often driven by negative news, poor earnings reports, or broader market sell-offs. Identifying a falling knife involves recognising several key characteristics. Firstly, the decline is steep and sudden, typically marked by large red candlesticks on a price chart. The volume often increases as the price falls, indicating panic selling. Technical indicators such as the Relative Strength Index (RSI) might show oversold conditions, suggesting the asset is undervalued in the short term. Common tools used to identify falling knives include: - Moving Averages: When short-term moving averages cross below long-term moving averages, it signals bearish market sentiment. - Bollinger Bands: Prices breaking below the lower band can indicate a falling knife. - Volume Analysis: Spikes in trading volume often accompany these sharp declines, confirming the intensity of the sell-off. In terms of candlesticks, a falling knife typically produces several bearish candles with long bodies and small wicks. They may appear as a large engulfing candle on a higher timeframe. Recognising these patterns is crucial for traders. Misinterpreting a falling knife can lead to significant losses, as attempting to catch a falling knife—buying during the steep decline—without proper analysis can be risky. Instead, many traders wait for signs of stabilisation or reversal before considering an entry point. Causes of Falling Knives A falling knife generally occurs due to several specific catalysts, each capable of triggering a rapid and substantial decline in an asset's price. Understanding these causes, including technical factors, is essential for traders aiming to navigate such volatile situations effectively. Economic Events and News Releases One primary cause of falling knives is significant economic news. For instance, announcements of interest rate hikes by central banks can lead to widespread stock market sell-offs. Similarly, unexpected changes in economic indicators like unemployment rates, inflation, or GDP growth can trigger sharp declines. Traders react swiftly to such news, often leading to panic selling and steep price drops. Earnings Reports and Company-Specific Issues A falling knife stock pattern can be triggered by poor earnings reports or disappointing financial results from a company. When a company misses earnings expectations or issues negative guidance, investors may lose confidence, resulting in a rapidly falling stock. Additionally, company-specific problems such as legal issues, management scandals, or product recalls can lead to rapid price declines as investors reassess the company's prospects. Broader Market Conditions and Trends Broader market trends and conditions play a significant role in causing a falling knife in stocks and other assets. During periods of market volatility or bear markets, negative sentiment can spread quickly, leading to sharp declines in asset prices. For example, during the financial crisis of 2008, widespread fear and uncertainty led to massive sell-offs across various sectors. Similarly, market corrections or crashes can create environments where falling knife patterns are more likely to occur. Geopolitical Events Geopolitical events such as wars, political instability, or trade tensions can cause abrupt market reactions. For instance, escalating trade disputes between major economies can lead to uncertainty and fear, causing investors and traders to exit positions rapidly. Technical Factors Technical analysis also plays a crucial role in falling knife patterns. Key technical factors include: - Breaking Support Levels: When an asset's price falls below critical support levels, it can trigger further selling as traders perceive a lack of price stability. - Overbought/Oversold Conditions: Oscillators like the Relative Strength Index (RSI) showing overbought conditions can precede a falling knife as prices correct sharply. At the same time, the RSI may enter the oversold area during the falling knife pattern. - Bearish Chart Patterns: Patterns such as head and shoulders, double tops, or descending triangles can signal potential sharp declines, leading to falling knife scenarios. Risks Associated with Falling Knife Trading falling knives carries significant risks, primarily due to the rapid nature of the price declines. Understanding these risks is crucial for traders aiming to navigate such volatile situations. Potential for Significant Losses The most apparent risk is the potential for substantial financial losses. When an asset's price plummets, catching the falling knife can result in buying at prices that continue to drop, leading to immediate and severe losses. False Bottoms and Dead Cat Bounces Traders may mistakenly interpret temporary price stabilisations or minor recoveries as the end of the decline, only to face further drops. These false bottoms and dead cat bounces can trap traders in losing positions. Increased Volatility Falling knives are often accompanied by heightened market volatility, making it challenging to analyse short-term price movements. This volatility can result in rapid and unexpected changes in asset prices, complicating risk management. Psychological Challenges The psychological impact of trading falling knives should not be underestimated. The stress and emotional strain of dealing with sharp losses can lead to irrational decision-making, such as holding onto losing positions for too long or making impulsive trades. Technical Analysis Limitations While technical indicators can help identify potential entry points, they are not foolproof. The rapid and severe nature of falling knives can render technical analysis less reliable, as price movements may not follow traditional patterns. Liquidity Issues During sharp declines, liquidity can dry up, leading to wider spreads and slippage. This makes it harder to execute trades at desired prices, potentially exacerbating losses. Examples of Falling Knife Events Now, let’s take a look at a couple of falling knife examples. To start identifying your own falling knives, head over to FXOpen’s free TickTrader platform to explore real-time charts across different asset classes. Onset of the Coronavirus Pandemic and the Nasdaq 100 In early 2020, the onset of the coronavirus pandemic triggered a dramatic fall in global financial markets. The Nasdaq 100, heavily weighted with speculative tech stocks, experienced a sharp decline as investors reacted to the uncertainty and potential economic impact of the pandemic. From mid-February to late March 2020, the Nasdaq 100 dropped by over 30%. This steep decline represented a classic falling knife pattern, characterised by rapid sell-offs and increased market volatility over the course of several weeks. Traders who attempted to buy into the market too early faced significant losses as the market continued to fall before eventually stabilising and recovering later in the year. EUR/USD After Strong US Inflation Data On April 10, 2024, the release of March US inflation data led to a falling knife event in the EUR/USD currency pair. Traders had been closely monitoring the Consumer Price Index (CPI) report, anticipating that a lower-than-forecast reading would prompt the Federal Reserve to lower interest rates later in the year. The forecast was set at 3.4%, with a lower or at-forecast figure expected to weaken the dollar. Instead, the headline CPI YoY reading came in exactly at 3.5%, defying expectations. This unexpected data triggered a rally in the dollar and a sharp sell-off in EUR/USD. The pair plummeted rapidly, and the decline persisted until the end of the trading week, illustrating how sudden economic data releases can lead to sharp and sustained price drops. Strategies for Trading Falling Knives Understanding the catalyst behind a falling knife is crucial for determining whether it’s likely to rebound soon or persist as a trend. Events that cause fundamental repricing, such as poor earnings data, significant or unexpected news/economic releases, or unique risk events like currency intervention or financial crises, often lead to prolonged falling knives. In contrast, temporary sharp corrections might be due to overreactions to already priced-in news or transient market fears. Recognising these catalysts helps traders decide whether to take a position or wait for volatility to subside. Additionally, the timeframe of the falling knife provides valuable context. A falling knife on a 5-minute chart could indicate a sharp intraday decline, potentially recovering before the trading day ends. Conversely, on a 4-hour or daily chart, a sharp decline may suggest a continued downtrend over several days or weeks. Traders can use this information to look for short opportunities on lower timeframes or prepare for longer-term moves. Common Strategies Traders Use The insights gained from analysing market conditions can help traders to decide whether to short the falling knife or stay out of the market and wait for a bottom. Shorting the Falling Knife Traders looking to short a falling knife should exercise caution. Increased volatility during sharp declines can make it difficult to set appropriate stop-loss levels without a sub-par risk/reward ratio. The best entry can potentially be found during a pullback. As some traders think the price is bottoming out, their stop losses being triggered as the price continues to decline can fuel another leg lower. Traders can look for breakouts from bearish chart patterns like rising wedges, bear flags, or bear pennants. Alternatively, waiting for the bullish structure of the pullback (higher highs and higher lows) to break down into a lower low and lower high can indicate the next leg lower is underway. This approach offers traders confirmation that the knife is continuing to fall and an appropriate place to set a stop loss above the pullback’s high. Buying After a Falling Knife For those looking to catch the bottom, confirmation is essential. Using a pair of moving averages, such as 20-period and 50-period EMAs, can help. When the 20-period EMA crosses above the 50-period EMA, and the price closes above both, it suggests the downtrend might be over. However, momentum indicators like RSI and MACD can falsely signal market turns during steep declines, but they may have some value on higher timeframes. Generally speaking, one of the potentially effective strategies for catching a falling knife is to wait for the price to break above the previous lower high of the downtrend. This would demonstrate that the market has been able to break above a point at which it previously found resistance, allowing traders to potentially switch their bias to bullish and seek entry points. The Role of Patience and Discipline in Trading Falling Knives Patience and discipline are paramount when trading falling knives. Impulsive trades driven by the fear of missing out can lead to significant losses. Traders are required to wait for clear signs of trend reversal or continuation before entering a trade. This involves adhering to predefined strategies and not deviating due to emotional reactions to volatile market movements. Likewise, maintaining discipline in setting and following stop-loss levels, adhering to risk management principles, and avoiding premature entries can potentially enhance trading effectiveness. The Bottom Line Navigating falling knives requires careful analysis and disciplined trading strategies. By understanding the causes and employing effective techniques, traders can potentially better manage these volatile situations. To explore these strategies further and enhance your trading skills, consider opening an FXOpen account. With the right tools and knowledge, you can approach falling knives with greater confidence and precision. FAQ What Is a Falling Knife in Trading? A falling knife in trading refers to a rapid and significant decline in an asset's price, often triggered by negative news, poor earnings reports, or broader market sell-offs. This sharp drop can be volatile and difficult to analyse, making it challenging for traders to time their entries and exits. Should You Ever Try to Catch a Falling Knife? Catching a falling knife is highly risky. Therefore, the theory states it’s not recommended for most traders. The rapid decline in price can continue further than anticipated, leading to significant losses. To minimise risk, traders wait for signs of stabilisation or reversal before considering an entry. How to Catch a Falling Knife? Catching a falling knife involves identifying potential reversal points through technical analysis. Traders often wait for confirmation, such as a break above previous resistance levels or a moving average crossover. Patience and strict risk management, including setting tight stop-loss orders, are essential when attempting this strategy. What Is a Falling Knife in Crypto*? In the crypto* market, a falling knife refers to a sudden and steep decline in the price of a cryptocurrency*. This can be triggered by regulatory news, security breaches, or market sentiment shifts. Due to cryptocurrencies*' high volatility, falling knives can be particularly severe and difficult to analyse. *At FXOpen UK, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rule. They are not available for trading by Retail clients. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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