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Weekly Outlook

  • Charts on selected symbols with STOPD Levels are posted
  • Recap and outlook commentaries are added to some posts as demonstration of applying STOPD and classic Chart Reading Techniques in actively traded markets
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End-of-day trader / swing trader looking for useful analysis beyond daytrading? Take a look at our proprietary Weekly Cycle Projection.






Lawrence’s Comment

Recap
Twists and turns in the events leading to Brexit vote caused cable to run the stops above. Due to limited liquidity cable cannot stop its stop run until long term key resistance at 1.50 was tagged. Brexit vote count turned the tide thus giving us equal distance downside target off previous week range. Closed the week near Y-3 and below midpoint.

Outlook
Brexit or not the outcome should still be the same – down, as the one standing to benefit from the fallout of Brexit can only be US. Y-1 / B-0 very strong resistance. Expect more wild rides as margin hikes are reported everywhere.

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Lawrence’s Comment

Recap
Euro drifted higher to test normal Y+2 upside target and failed to clear it. Brexit brings it down below Y-1 and gave us the breakout target of Y-3. Closed the week above Y-1 and near midpoint.

Outlook
Nothing happened, seriously. Euro simply swinged back to the same 1.12 zone before this week. This confirms 1.14 very strong resistance with momentum pointing to a lot more downside. B-0 / Y-0 resistance until proven otherwise.

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Lawrence’s Comment

Recap
Brexit week NQ headed for Y+1 first, setting the stage for the collapse down to Y-3. No surprise at all. Initial reaction after Brexit on Friday open even tagged Y-1 perfectly to set up the sold off into close. Closed the week below Y-2 and near week low.

Outlook
More downside expected. Extreme volatility in the making. Margin hikes reported everywhere. Day traders should trade with caution as central banks and G7 may use sudden announcements to trap the shorts and force a short term bottom.

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Lawrence’s Comment

Recap
Pre-Brexit ramp up from Y+1 to normal breakout target of Y+3. Spike reversal from Y+3 gave us Y+1 and then Y-1. Closed the week near Y+1 and midpoint.

Outlook
FBO against 0.75 long term resistance. Confirmation this week will point to swing top in place with more downside in coming weeks.

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Lawrence’s Comment

Recap
Spike top led to test of Y-1 and wait for Brexit. Spike low against Y-1 led to a rush back up to Y-0 and then Y+1. Closed the week above Y-0 and midpoint.

Outlook
See-saw actions 4 weeks in a row. Outside reversal week is bullish. As long as 1.28 holds, more upside likely.

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Lawrence’s Comment

Recap
Dow gapped higher on news related to Brexit. News driven market all the way right up to Brexit. Brexit led to gap down on Friday to Y-1 and sparked a quick rally back up to midpoint / Y-0. Y-0 resistance gave us 100% expansion off the upside range established. Closed the week below Y-1 and near week low.

Outlook
Outside down week is bearish. More downside is expected. Once key support zone on monthly is tagged we can expect very sharp reversal.

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Lawrence’s Comment

Recap
Y-1 support earlier in the week led to stop run back up to Y+1. Brexit spike reversal gave us the Y-3 breakout target. Closed the week near Y-2 and below midpoint.

Outlook
US dollar is gaining strength against all other majors except Yen. This is classic panic mode behaviour. What the short term moves do has nothing to do with longer term outlook, for which Japan is heading for the same doomed destiny like EU. Ninja w. spring above Y-1 will set the stage for a run to B+1 and above.

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Lawrence’s Comment

Recap
The most timid index out of the 3 major indices. Opened the week near Y+1 and resistance there pressed ES lower. Ledge action led to upside breakout into Brexit. Brexit news shock forced ES to gap below Y-1 to open on Friday. Quick bounce back up to Y-0 resistance and sold off since. Closed the week below Y-1 and near week low.

Outlook
Extreme volatility in effect. Normal nearby support / resistance zones will not be able to bound the price actions. Real support below 2000. Stay on the sideline is not a bad idea if you do not have experience handling such market conditions before.

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Lawrence’s Comment

Recap
Bearish expectations worked out. 100% range expansion capped the move. Closed the week below Y-2 and near week low.

Outlook
Stronger support on weekly basis is below B-2. Very strong support below B-3. Brexit can easily give us that and lead to a strong reaction back up to B+1 and above. Do not bet on the outcome of Brexit. We cannot tell how the markets will react to the outcome. Simply join the side that wins.

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Lawrence’s Comment

Recap
Sudden intraday swings all week. 100% range capped all the moves. Closed the week belowY-0 and above midpoint.

Outlook
Brexit week means wait and see until it is over. This means not just wait for the outcome of the vote but also all the immediate legal challenges on the results that follow right after.

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Lawrence’s Comment

Recap
Support zone mentioned last week worked out well. Upside targets tagged. 100% range expansion led to a mild stop run. Closed the week above Y-0 and below midpoint.

Outlook
Brexit not only affects Cable but also all the other majors. No point in predicts which way the markets will react. Time to sit back and enjoy the show.

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Lawrence’s Comment

Recap
Sold off as expected. Target Y-3 tagged. Easy weekly move completed. Closed the week near Y-2 and midpoint.

Outlook
Gaps above B+1 and below B-1 are in play once Brexit result is in. Wait for the initial reactions to tell us which way to join the game.

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Lawrence’s Comment

Recap
Consolidation play around Y-1 then wild swings due to news shocks later in the week. Closed the week below Y-0 and near week high.

Outlook
Cable anchored itself to the same parking spot over past few weeks. Brexit now the only thing that matters. Staying on the sideline until first reaction to the outcome is necessary before we can tell what the market is intending to do.

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Lawrence’s Comment

Recap
Ninja flushed below Y-3 as expected with no snap back. Y-4 acted as support since. Closed the week below Y-3 and midpoint.

Outlook
Brexit can indirectly affects ninja jumping back up to Y-1 or B-2 quickly. Wait and see mode.

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Lawrence’s Comment

Recap
V-reversal not confirmed by end of week. Range bounded move all week between Y-0 and Y-1. News shock later in the week led to 2-way fade out. Closed the week below Y-0 and above midpoint.

Outlook
Potential spike and ledge top in the making. Brexit will tell us if that is true.

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Lawrence’s Comment

Recap
Bearish expectation worked out. 100% range expansion established. Closed the week near Y-2 and midpoint.

Outlook
Brexit breakout play off the wide range of B+1 and B-1. This means B+2 and B-2 are in play. Will be difficult for swing players to position themselves properly due to spike in volatility expected. Sit back and relax is probably the best strategy for the week.

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Each symbol has its weekly STOPD levels drawn on the chart,

  • Thick blue lines show the range of the week they are drawn on
  • Thin blue lines are the midpoint of the weeks
  • Thick orange lines are 100% expansion levels away from the range of the week
  • Thin orange lines are the midpoints between thick orange lines and the thick blue lines
  • Thick red lines are 200% exapnsion levels away from the range of the week
  • Thin red lines are midpoints between the thick red lines and the thick orange lines

The last 2 weeks on each chart has the weekly STOPD levels labelled,

  • The week just finished has its labels in blue. B-0 is the midpoint of the week. B+1 is the high of the week. B-1 is the low of the week. B-2 is the 50% downside expansion of the week.
  • The prior week has its labels in yellow. Y-0 is the midpoint of that week. Y+1 is the high of the week and so forth.



Following is an example chart showing the forex pair USDJPY in 4-hour resolution.




Related research and articles on using STOPD weekly price levels.


Euro Dollar Price Action Biases At Weekly Extremes


British Pound Price Action Biases At Weekly Extremes


More research articles available in our Latest Articles section.



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