- Charts on selected symbols with STOPD Levels are posted
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Started the week holding Y-0. Upside breakout tagged target Y+2 and stalled. Struggled to hold Y+1 since. Closed the week above Y+1 and near midpoint.
1.13 and above rejected but support below Y+1 has fended off the selling twice too. One side must give in. Until then, hands off this pair.
Best setup is a clean break of B-1 with that turning into resistance, which will give us B-2 quickly with B-3 in the card.
As expected, ninja started weak and failed to clear even Y-1. That opened the door to Y-3. Flushed down to Y-3 and bounced. Closed the week below Y-1 and above midpoint.
The flush was partially a lucky drop (not that I am not happy) thanks to the problematic BOJ officials. At this point though, the bounce was a bear flag on 4 hours. It is quite bearish with Y-1 / B+1 strong resistance. First reaction there should lead to at least B-0 retest. A break of the bear flag support points to a drop to B-2.
NQ resistance at Y-1 sent it down to right above Y-3 when 100% absolute range expansion was reached. NQ then staged a bottom right on time for a run back up to above 3800 round number for option expiration. Closed the week below Y-1 and near midpoint.
As long as B-0 acting as support, NQ can force a run up to at least B+1. But it is not a bullish setup because until backfill down to B-1 is done, there is really no fuel for NQ to go higher.
If NQ dropped to B-1 first and found support, it may start to form a longer term bottom on weekly level.
Euro cleared the resistance zone mentioned last week, staging Y-0 support for a run to Y+1 and above. And that’s exactly what happened right after. 100% absolute range expansion stopped euro from going higher. Closed the week above Y-0 and near midpoint.
Decisive rejection of the 1.28 to 1.29 zone. FBO against Y+1 in place on weekly. As long as Y+1 acting as resistance, we get a flush back down to B-1 and likely Y-1 soon.
Started the week gap lower to challenge Y-1 and bounced. Y-0 resistance sent Aussie lower to retset previous week close. That held and a squeeze was resulted. Yet, Aussie failed to push much higher and stalled. Closed the week below Y-0 and near midpoint.
Inside week closing near the midpoints implies indecision. Strong push above Y-0 yet failed to hold Y-0 is weaknesses. Aussie will likely be forced to retest Y-1 and below first even if it wants to go higher.
This is also telling us that gold will face sell pressure this coming week.
As expected, 2-way big swings ended up going nowhere. Started the week pushing against Y-0 and failed. cable dropped until 100% absolute range expansion was reached. Bounced back to the pre-flush price and immediately swinged back down to the the low. Yet, cable held the low and took off. Closed the week near Y-0 and above midpoint.
The 2-way swing has produced a bottom-like formation but not strong enough to produce a bullish close. This implies cable has to defend Y-1 / B-0 this week or B-1 and below will be in play.
The expected bearish scenario unfolded. Dow failed to hold Y-1 and then dropped in a waterfall pattern clearing Y-2 and Y-3 in 1 go. The drop unleashed some panic selling but option expiration saved the week. Closed below Y-1 and above midpoint.
Island reversals do not work well in general. Dow will have to somehow take care of the gap below to prove its strength before it can go higher. Y-1 / B-1 very strong resistance.
Given the current volatility level, it will not be a suprise that Dow will drop all the way back down to Y-3 / B-1 zone before deciding what to do next.
Similar to Dow, ES simply dropped as expected. After clearing Y-3, ES found support and bounced. ES rallied all the way up until Friday. Closed the week below Y-1 and above midpoint.
As long as Y-1 / B-1 not breached, ES is likely to go lower into end of October.
Cable simply bottom out at Y-1 and rallied to Y-0 as expected. Went sideway since and holding the week mid at the time before took off again to tag the pre-break down crime scene. Strong reaction there leading to a steep pullback to 1.60. Closed the week below Y-0 and B-0.
Strong reaction to the crime scene above implies lots of trapped long have not been flushed out from the system. Upside will be capped for a while until enough volatile down side actions taking out the longs. It does not translate to much lower price level. Just more 2-way big swings in the card.
Euro rallied from Y-1 as expected and cleared Y-0 in 1 go. The counter-trend rally was triggered as mentioned last week zooming it back up to near 1.28 before stalling. Closed the week near Y-0 and below midpoint.
Euro rejected above Y+1 and 1.28 decisively. It will be difficult to clear Y+1 again until a proper bottom on 4 hours is formed.
As long as euro cannot clear Y+1 we are looking for a retest of Y-1.
Aussie found support at Y-1 and cleared Y-0 decisively. Y+1 was tagged and pulled back to Y-0 as support. Y+2 target was stopped short at the 0.89 round number. Selling resumed since. Closed the week below Y-0 and midpoint.
The initial rally last week played out as expected but it was not as explosive as I hope for. The weaknesses going into end of week has turned Y-0 / B-0 into strong resistance zone for a retest of the Y-1 low.
Only until Y-0 / B-0 zone turning into support that a swing long will stand a better chance.
A pullback was expected and ninja dropped to Y-0 and below support area. Then its inability to clear Y-0 triggered a go for Y-1. Y-1 tagged and failed to push higher since. Closed the week below Y-1 and near week low.
Pullback turning into a run down to Y-1 was a nice bonus. From here ninja can choose to hold the zone between Y-2 to B-1 and resume its weekly match higher. What we need is proper bottom setup on 4 hours before jumping onto the long side.
Tagging Y-2 is likely as long as Y-1 is not cleared.
Pullback as expected but not the consolidation type. First move back down to Y-0 pierced thru decisively triggered the Y-1 target. Eventually price moved near Y-1 and bounced. Closed the week above Y-0 and midpoint.
Last week is a wild consolidation week as it is still an inside week. Closing near midpoint added to the uncertainty. Normal consolidation will lead to continuation so a test of Y+1 is expected. If Y+1 is cleared, we are looking for B+2 in one go.
Failing at Y+1 implies a potential double top on daily level in the making where a more significant pullback can send this back down to at least Y-1.
As mentioned last week, “there is no upside at all for NQ”. The price level NQ opened at was pretty much B+1 of the week. Big swings dropped NQ down to Y-1, back up to open and back down to Y-1 finally cleared the Y-1 support. Closed the week below Y-1 and at week low.
Lots of bottom picking last week ignoring the bearish daily setups. Next support zone on daily is 3800 round number level. Strong reaction from there is likely given the bulls in their minds that they have no choice but to double down on this one.
Until daily bottom pattern is formed and confirmed, long trades are counter-trend and less likely to workout.
As expected, bulls tried hard right from the beginning of the week gapped Dow higher yet failed to turn around the established down trend. Dow dropped to Y-1 and bulls stepped in to force a sharp rally. As mentioned last week, they do not stand a chance until they can gather more support. Closed the week below Y-1 and at week low.
There is no support from here down to B-2. The whole zone is a void. There are evidence that longer term long side players are exiting the game in the components. This implies a lower price level is necessary to attract them back.
As long as Y-1 is not acting as support yet, more downside is expected. And more wild rides are likely due to the increasing volatility.
As indicated last week the end of week rally from the week before was not a sign of reversal. That trapped a lot of longs. ES gapped higher at the start of the week and dropped lower since. Y-1 minimal target tagged and a powerful sequeeze followed. Yet, it failed to produce any support to ES which led to another drop lower to clear the Y-1 support. Closed the week below Y-1 and at week low.
2nd rejection of Y-0 with directional selling below Y-1 implies Y-1 to B-0 is now very strong resistance. Until that is cleared, given both daily and weekly trend is down, long trade should not be considered until significant support zone is reached. The nearest weekly support is below 1870 at B-2.
Quick Access to Weekly Outlook Over Last 3 Months
2014 Oct 20 – 2014 Oct 24
2014 Oct 13 – 2014 Oct 17
2014 Oct 6 – 2014 Oct 10
2014 Sep 29 – 2014 Oct 3
2014 Sep 22 – 2014 Sep 26
2014 Sep 15 – 2014 Sep 19
2014 Sep 8 – 2014 Sep 12
2014 Sep 1 – 2014 Sep 5
2014 Aug 25 – 2014 Aug 29
2014 Aug 18 – 2014 Aug 22
2014 Aug 11 – 2014 Aug 15
2014 Aug 4 – 2014 Aug 8
2014 Jul 28 – 2014 Aug 1
2014 Jul 21 – 2014 Jul 25
2014 Jul 14 – 2014 Jul 18
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.