Way of a Trader Blog

OK - we have a new strain of COV19 detected in the UK.

What do we know about the mutation?

( important excerpt )

 Just a quick update on gold, which we have been highlighting recently in our market blog posts.

Gold reacted off important higher timeframe F3 nodes, and will be interacting with Monthly MACD Predictor.

GOLD Weekly Chart

This came after Price 'printed' a RRT against golds 200 MA.

Our techniques have given us plenty of 'clues' to get on board this trade on the long side.

The question now is how will gold trade from here?

My take :

GOLD Daily Chart

As long as gold trades above its 200 Moving average we need to maintain an upside bias. Currently we should face some resistance against COP f3 agreement nodes but the real resistance will be against F5 + important structure highs.

Gold needs to break above that in order to begin a new trend higher - which is what we are seeing now on Bitcoin ( which broke previous all time highs last week )

BTC-USD

Gold and Bitcoin share some similarities in that they are both a hedge against inflation risk. Current weakness in the US dollar...

Below are just some market updates following some of the posts we did earlier within our Weekly Focus Members group.

Gold Update

Gold broke back above its 200 Day moving average.

We also had RRT type price action on the daily chart.

Daily MACDP have also turned up. 

Crucially we are trading above 1829.20 node.

This could be significant.

TSLA update

We identified Significant Monthly and weekly Dinapoli Expansion cluster at around 597.10.

WE already saw a significant pullback off those higher timeframe resistance nodes.

Found support at OP K Agreement and currently retesting resistance again.

597.10 is the market fulcrum.

We need to break above it and see follow through - to see further continuation on tsla stock.

The longer we trade/stay below this level... the odds of a deeper retracement increases.

Jim Rogers Take on Gold - and Central Banks.

Fundamental Analysis :

 Bullish case :

1. Continued Quantitative Easing by the Fed - Dollar Weakness, Inflation Risk

2. Contest Election - Election Fraud - Civil Unrest

3. 2nd Wave of Cov19 Infections - Partial Shutdown of the Economy

4. Continued rise in Fiscal Government Spending ( Stimulus )

I believe it is a matter of when, not if, gold will eventually find support.

Bearish Case :

3. Stronger than expected Economic Recovery in the US.

4. Early Success with Vaccine Treatment and its Distribution

5. Peaceful Transition of Power from Trump administration to Biden administration

Any the bearish case plays out - I cant see it as more than a short term retracement to be bought into later. Longer term, 1-2 years from now, gold should still be in an overall uptrend, given the longer term horizon of the bullish fundamentals.

So do we trade higher from here... or do we break below 200MA and retrace to a deeper support node first.

I think...

ES 240min chart

We found support at that OP/XOP expansion cluster... had a significant bounce of that level late monday...

but we have traded and stayed below that important Daily f3 node throughout the trading session.

Weekly, Daily, 240min trends were all pointing down... so we should see this rally on tuesday fizzle out... and continue trading lower.

Thats my bias but I am watching tat 3410 level closely - as I do not want to see us trading back above that level.

On monday , during the over night session, we traded significantly lower, below daily f3 node - which suggested that the Triangle failure has worked its course... only allowing us a intraday move that got us up to daily f3 resistance node.

By the time the US session opened we were trading close to daily f3 support node.

I warned about a break of that support node as a possibility - and if we do, its likely that we see an acceleration to the downside, which was exactly what ended up happening within an hour into the open.

DJIA traded more than 900 points lower at one point - finding support at intraday op, XOP expansion cluster as highlighted.

The wallstreet narrative for that move was rising COV19 numbers in the US, but the real reason for the drop was essentially - the break of critical Daily f3 support node, which had been holding price on more than several occasions prior to that break.

It has been a while since I send out a blog post and a big part of that has been due to the impact that COV19 has had, on our way of life...

Personally I've had to make adjustments to the way I go about my daily life, 

but I am sure it is the same for all of us, as we learn to deal with this new reality.

Having said that, day trading the markets have gone incredibly well during this period, with the unprecedented market volatility providing for good trading opportunities.

With the nov 3rd 2020 elections coming in about 10 days, I'm sure alot of us are wondering how markets will trade!

Making predictions on how markets will move, especially post election  is futile, given QE and monetary stimulus  will continue regardless of the presidential outcome, while we all are still learning to deal with longer term impact of COV19, as we await the possibility for a viable vaccine. 

There are just too many variables, and market...

Markets can stay irrational longer than you can stay solvent.

That was my feeling for the most part during the past few weeks, as I see record unemployment numbers in the USA, with economies all around the world locked down, with all signs pointing towards a long period of economic uncertainty for businesses due to the COV19 situation...

Wallstreet continued to trade higher and higher, day after day, week after week...

Until now... which is the reason for this post.

Previously, we warned our members about the multi year resistance node on the DJIA ( 28520.20 - 28869.88 ), which preceded the outbreak of COV19 from Wuhan.

We have also highlighted the likelihood of a strong bounce when we hit Critical yearly support nodes at 18567.51.

Now here is my next warning.

In my opinion - the worst is yet to come, for the markets, and for the global economy.

The COV19 virus is more contagious than you may have been led to believe, and the health consequences are far more serious than what the...

The Dow rallied more 2000 points on Tuesday 24th March 2020.

But IS THIS THE MARKET BOTTOM?

First, if you have been following us on this blog, you will know that I have centered our recent market discussions around COV19, since the virus first surfaced out from Wuhan China back in January 2020. This was because I understood early, the implications and the potential impact the epidemic would have on the markets, as early as January, when we were trading at all time highs - against multi year resistance nodes.

I was also short the markets, largely most of the way down to recent levels, predicting on March 8th 2020 that we were entering into a Pandemic, that things were going to get worst - and governments worldwide were likely all going to close of their economies, modelling after what China and S.Korea did.

You can check out some of our earlier posts...

It was a result of simple math and extrapolation of data, to see that cases worldwide will dwarf cases within China.

...

Have been holding my short positions for much of past 3 weeks, exiting at major support nodes, and re-entering on the short side on rallies into resistance.

I've managed to ride most of the move down. It was an incredible few weeks of trading.

Could I do some things better?

Most Definitely.

There was a clear trade trigger that would have given us a nice fill still near the highs ( will break this down during DiNapoli Masterclass ). I had been warning about the Muliti year resistance nodes for months, since Dec 2019... I made money off those levels twice... but I missed the big break, that 4000 point down week ( 3 weeks ago ).

Our techniques did allow us the criteria to go short the market during the break, but your ability to execute the trade and get your fill is a function of your discipline, and level of preparedness as a Trader - Which takes significant work - on your part - to stay sharp, much like an athlete.

It didnt help that we have super computers and algo systems...