Gold Pausing - factor trading - peter brandt

Gold is Pausing

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Gold is Pausing

While I believe Gold has experienced a cyclic bottom, gold is pausing here.  I have for several months openly expressed my opinion that the advance would be choppy at best. In recent Factor updates (premium service) I have highlighted the significant problem with the composition of open interest – the commercial interests with a record short position and the large specs (hedge funds and large traders) with a record long position. The Gold market gained way too many friends too early. I am not surprised by the lack of upside follow through in Gold. I might be interested in buying a retest of the falling wedge on the weekly graph in the 1170 to 1180 zone.

 

Gold Pausing - factor trading - peter brandt

 

Gold is Pausing - factor trading - peter brandt

 

Factor Membership is now available.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.  Or watch my 30 minute webinar where we cover the Factor service in depth.

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Factor Update – May 29, 2016

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Factor Alert – Forex and other markets

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This Alert provides my current thinking on the overall technical condition of specified markets.
U.S. Dollar Index
The sustained advance from the 3 May low in the DX is EXACTLY what I would expect from a major bear trap. The shorts are trapped and the market senses blood in the water. This explains the nature of the recent rally -- not allowing shorts to cover on a reasonable break. The second chart shows that the large spec shorts (funds) remain heavily short while the commercials remain heavily long. DX should remain relatively well bid until prices reach 98 to 99. I expect major resistance at 100 to 101. Factor is fully long the Dollar Index.
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Long Term Euro Charts Point to Trouble Ahead

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Long Term Euro Charts

For a considerable period of time I have held a very negative opinion on the Euro. The Euro currency has a complicated history. The Maastricht Treaty of 1992 obligated certain Euro nations to adopt a common currency – although it was not until Jan 2002 that currencies such as the D-Mark were officially replaced by the Euro currency mechanism. It is possible to create a proxy EUR that dates back to 1992. In fact, IMM and proxy price data exist back to the early 1970s. Several technical developments on the EUR graphs are worthy of note.

 

Long Term Euro Charts Points to Trouble Ahead

 

A 6-1/2 year descending triangle on the quarterly graph was completed by the decline in Jan 2015. This pattern has an unmet target of 84 cents, the area of the 2001 low. The monthly graph also displays a dominant multi- decade trend-line connecting back to the 1985 low. The decline in the first quarter of 2015 found support at this trend-line. It is interesting to note that the price range in the first quarter 2015 has contained the market ever since. The weekly graph displays a possible 27-month congestion. It is my contention that this congestion will eventually be resolved to the downside – and that the simultaneous violation of the lower boundary of this congestion zone and the multi-decade trend-line will tie into a crisis in the Euro currency mechanism.

 

Euro chart - Peter Brandt

 

The daily graph displays a completed 14-week rising wedge with a target of 1.0822.

 

Euro chart daily - Peter Brandt

 

Factor Membership is now available, including a quarterly option.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.

I hope you will consider joining the Factor community.

 

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Factor Update – May 22, 2016

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Misc Stock Index Markets

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Greetings from Berlin Germany.
The stock index markets are becoming quite interesting from a classical charting perspective.
The DJ Euro Stoxx chart displays a possible continuation symmetrical triangle pattern. This triangle is arguably serving as a retest of a H&S top. I say "arguably" because a H&S top ideally should reverse a previous advancing trend. As seen on the weekly graph, it is hard to argue that the advance from the 2009 and 2011 lows is hardly the type of bull trend that normally precedes a major top pattern.
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stock market updates - Factor Trading - Peter brandt

Stock Market Updates

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Stock Market Updates

It is with some discomfort that I am always pointing out potential tops in the U.S. stock market indexes. But, I must call them as I read them. The S&P daily chart has made ZERO upward progress in 18 months. A possible complex H&S top formation is under construction. Also note the appearance of a 7-week H&S top pattern. I am willing to short this smaller H&S pattern if given a well-defined risk point. I will give up on a bearish interpretation of the S&Ps if a new high is made – but this does not mean I would have any interest in being long in new high territory.

The Nasdaq is tracing out a possible broadening top, although as I have pointed out in recent updates, the rally from the Feb 2016 low has exceeded the normal construction of a true broadening top. Outside of the Nifty (India), the Dow Utilities (dividend play) and the Japan Mothers Index, I have a hard time finding a futures market index I am willing to own.

 

S&P 500 completed head and shoulders top - Stock market updates - Factor Trrading - Peter Brandt

 

Nasdaq is tracing out a possible broadening top - Stock market updates - Factor Trrading - Peter Brandt

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Factor Update – May 15, 2016

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bullish on the US dollar index - Peter brandt - Factor Trading

Bullish on the US Dollar Index

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US Dollar Index

I remain bullish on the US Dollar index. Like every other chartist in the world, I am well aware that the DX penetrated the important line of support at 93.00 this past week. I had absolutely no desire to short the apparent breakout of this level. In fact, I believe the decline below 92.00 was a gigantic bear trap – bringing in new shorts and washing out stalled longs.

A chart showing the recent CFTC COT data is also shown. Commercials have the smallest short position and large specs (hedge funds) the smallest long position since June 2014 – the month of the last major low in the DX. I am willing to “bottom-pick” DX should the 93.10 level be retested. My goal is to establish a 60 BP position near the lower boundary of the rectangle in DX. My long term target in DX is 120.00. Along the way I would like to build to a 100 to 150 BP position.

 

$USD bullish on the US dollar index - Peter brandt - Factor Trading 1

 

$USD bullish on the US dollar index - Peter brandt - Factor Trading 2

 

$USD bullish on the US dollar index - Peter brandt - Factor Trading 3

 

Factor Membership is now available.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.

I hope you will consider joining the Factor community.

 

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Factor Update – May 8, 2016

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