Technical analysis is a risk management tool. You need a map of the territory that you are wading into. Without a map you will be tossed around by the volatility of the market. With a map you have solid mathematical points to make calculations of risk and reward.
News over the weekend that the Chinese delegation left because they didn’t want to be seen to be interfering in American politics means that the trade deal is still on the cards, so prices leapt out of the gate in the overnight market (Monday morning Australian time) and the E-mini S&P 500 futures are up about 15 points at 3004 currently.
With the startling news over the weekend of an attack on key oil infrastructure in Saudi Arabia, the week has started off with a bang. Whether it turns into a whimper or not remains to be seen.
We have been following developments in the E-mini S&P 500 futures closely over the past few weeks, because the technical picture has been quite interesting now that a monthly sell pivot has been confirmed a few months ago.
The current situation is quite explosive because there are now plenty of dominoes lined up beneath the market. What I mean by that is that there will be stop-losses below recent lows that will feed into bigger stop-losses below the 200-day moving average.
Prices collapsed as expected and the low in the E-mini S&P 500 was right in the buy zone of the most recent wave up. Exactly where I showed you prices would bounce from.
The double whammy of a disappointing US Fed commentary after the rate cut and Trump’s new tariffs has caused a weekly sell pivot in the S&P 500. So, until we see a weekly buy pivot the S&P 500 is in weekly downtrend according to my model of price action.
WTI Crude Oil is set up perfectly for more weakness ahead. It is not often you see a set up like this where the weekly and monthly charts have lined up around a very important long-term Point of Control. It takes a long time for the picture to unfold, but once the set-up is complete, the opportunity may not last long.
Uranium prices have been under extreme pressure for many years, but are showing signs of creating a classic reversal pattern...
The cornerstone of an effective trading strategy is defining exactly where you are proven wrong and making sure your stop loss is below that level. You want to be proven wrong as quickly as possible so that your risk/reward on the trade is as high as possible.