- Charts on selected symbols with STOPD Levels are posted
- Recap and outlook commentaries are added to some posts as demonstration of applying STOPD in actively traded markets
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Aussie bounced back to resistance as expected early in the week. But instead of crashing downward, it held Y-1 and then zoomed back up to Y-0. Closed the week below Y-0 and above midpoint.
Gold dictated Aussie’s every move last week. Not the best environment to trade this pair unless you monitor gold closely.
4 Hour bear flag clearly in place so a retest of B-0 downto Y-1 likely. If Aussie holds there, a run to B+1 and breakout to B+2 will be in play.
The more likely outcome is bear flag breakdown with a retest of B-1.
Instead of a quite week, we got Japanese officials who refused to shutup. That guaranteed the flush to new low for us when ninja failed to clear the pre-breakdown level. Closed the week below Y-1 and near week low.
Long term support around 92.
Intervention at B-1 will send it back up to B-0 easily. As long as B-0 upto Y-0 acting as resistance, I think ninja has to move down to 92 first before bottoming out on weekly basis.
NQ did not zoom higher and failed to clear Y+1. That opened the door to retest of Y-0 and we got that from a fierce gap down. NQ bounced off Y-0 and filled the gap above, yet failed to go higher right after. NQ breaking Y-0 led to full scale selloff down to almost Y-1 yet not touching it and bounced. Y-0 rejected NQ’s rally attempt. Closed the week below Y-0 and midpoint.
Inside week breakout mode in place. NQ failed to hold Y-0 points to its strength from the week before last was fake. That also means the real direction for now is still down until invalidated by a rally above B-0 and that turning into support.
Would not consider going long until B-0 acting as support for a run to B+1.
Bias towards a flush down to B-2.
As expected, Canadian dollar consolidated around Y-1 with downside bias. Closed the week around Y-1 and below midpoint.
No strong directional bias because loonie is so close to par level its attraction cannot be ignored. A flush to 1.00 vs downside wedge breakout to the upside with target Y-0 to B+2 are equally likely.
Breakout play on both ends are just 100 pips. There are better opportunities out there.
Cable held the breakout level nicely and rallied to retest Y+1 as expected. Once Y+1 was tagged cable went into consolidation. Closed the week at Y+1 and above midpoint.
Potential rounding top in the making. Spike new high that stalls below B+2 back down to below Y+1 will signal a pullback to at least below B-1.
Euro drifted higher around Y+1. Closed the week above Y+1 and midpoint.
Completely artificial rally since 3 weeks ago by empty promises from ECB. A tight up channel is visible on 4 hours and 8 hours.
Rallied like cable and keep extending to the upside in a well defined structure cannot continue for a long time. Expects quick snapback down to B-2 once the up channel support line is broken.
Original accessment that Dow would consolidate between Y-0 and Y+1 was correct for the first part of the week. Then the b.s. gap up in mid-week failed to pop the market higher. Dow flushed back down to fill the gap below. Closed the week below Y-0 and near week low.
Looking for further downside to create a swing bottom at Y-1 down to B-2. Dow can go lower than that but not necessary.
The rare case scenario is that Dow popping higher above B-0 quickly and B-0 acting as support. That can launch Dow up to B+2 in a few weeks.
ES failed to clear 1650 and dropped down to the gap below as expected. Multiple 75% swings producing a triangle pattern on 30-min. Closed the week below Y-0 and midpoint.
Triangle breakout mode.
A surprise to some, but chart pattern points to slight favour for breakout to the downside with target B-2 down to Y-2.
Upside breakout needs to clear B+1 first.
First time since beginning of the year where Y-0 acted as resistance and gave us a selloff down to my target area 14800-14900. As I warned last week, beware of government intervention and got just that to zoom everything higher at the expense of trashing US dollar. Closed the week above Y-1 and midpoint.
The first big challenge of the managed market environment coming this week.
Although the coordinated effort to pop the stock markets worldwide worked like a charm last week, it cannot stop the market from going down again unless more intervention is coming. The way the unloading of stocks over the past month implies major players are no longer interested in the stock market.
As long as these money are not coming back into the stock market, it will not be able to produce a stable environment for stocks to go higher for prolonged period of time.
This week Dow should consolidate within B+1 and B-0. Once the short term overbought condition is neutralize, as long as Dow is still holding above B-0, it can go higher.
NQ flushed to Y-2 in the beginning of the week and bounced off. Similar to Dow, its test of Y-0 failed to push higher and opened the door to retest Y-2. NQ flushed through Y-2 and tagged Y-3 before it could find a bottom. Intervention produced a very strong squeeze landing NQ above its multiple weeks resistance line. Closed the week above Y-1 and midpoint.
NQ is strongest in its overall reversal as it also cleared its multiple week resistance. As long as NQ can zoom higher quickly early this week, next upside targets are B+1 and Y+1.
BOJ and Japanese government did not know what to do in the beginning of the week after its big corporations told them it is not a good idea to trash yen any further. That alone was enough to crash ninja back down to pre-breakout level down at Y-5. Later in the week Japanese government announced the use of their government pension funds to support their stock market which then helped induce bottom picking. Closed the week below midpoint and Y-3.
Ninja is in a mess. Their government does not know what to do at this point and the yen related markets are all shocked. It will be erratic trading at best this week until traders sort out the consequence from all these intervention initiatives.
Consolidation around B-0 at 50% previous week range is the normal expectation after a shock as long as there is no new shocks coming from their government again.
Aussie breakout upside tagged Y+2 yet failed to hold Y+1 giving us a FBO setup with Y-1 and Y-2 targets. Flushed down to Y-2 and bounced. Failed to clear Y-0 and sold off back down. Closed the week below Y-1 and midpoint.
Aussie simply followed every move in gold as gold was trying to breakout upside from its current trading range. This will likely continue into this week. Once gold find a direction, so will Aussie.
If Aussie is trading on its own, the whiplash action points to more downside as it failed to hold its upside breakout and Y-0 acted as resistance. As long as Y-1 acting as resistance, Y-3 and B-2 is in play.
As mentioned last week, got our violent retest of Y-0 and flushed to the downside targets. Closed the week near week low and below Y-2.
Consolidation with more downside.
If B-0 is cleared in 1 strong move and that it turns into support, we get a zoom back up to Y+1.
Moved higher as expected and then it turned into full power rally. When cable cleared Y+3, a short squeeze / stop run was induced. Closed the week above Y+3 and midpoint.
Cable snapped out of its pullback on weekly.
As long as it can hold Y+2 to B-0 zone on a potential pullback, B+1 will be retested.
Y-0 held as support, zoomed higher at the end of the week to Y+2 and above as expected. Closed the week above Y+2 and midpoint.
The last part of the rally is pure stop run thus the pre-breakout price of B-0 will likely be retested.
Euro is not in a long term rally setup, it is more like a trading range in weekly thus upside is limited. Looking for sudden reversal to take it back down to B-1 once the excessive bearish sentiment is washed.
Similar to Dow with even weaker price action, ES failed to tag Y-0 and flushed down to clear Y-2. Bounced after 100% absolute range expansion was reached. Gapped above the multiple week resistance line. Short squeeze from there sent ES all the way back up to the week high. Closed the week above Y-1 and near week high.
1650 line in the sand on daily chart. If ES fails to clear B+1 or turns back down from 1650 to below B-1 making a FBO, ES will be forced to retest B-0 and the gap below.
As long as ES can hold B-0 as support, the daily correction is over.
Quick Access to Weekly Outlook Over Last 3 Months
2013 Jun 17 – 2013 Jun 21
2013 Jun 10 – 2013 Jun 14
2013 Jun 3 – 2013 Jun 7
2013 May 27 – 2013 May 31
2013 May 20 – 2013 May 24
2013 May 13 – 2013 May 17
2013 May 6 – 2013 May 10
2013 Apr 29 – 2013 May 3
2013 Apr 22 – 2013 Apr 26
2013 Apr 15 – 2013 Apr 19
2013 Apr 8 – 2013 Apr 12
2013 Apr 1 – 2013 Apr 5
2013 Mar 25 – 2013 Mar 29
2013 Mar 18 – 2013 Mar 22
2013 Mar 11 – 2013 Mar 15
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.