Index Swing Trading & Technical Analysis - Latest Posts

Despite spending most of the Week in bed with the Flu, a couple of set-ups did trigger entries whilst one of my most anticipated set-ups slipped me by. As you'll know from previous posts, SPX has achieved the top of the multi-year megaphone pattern. On its own a megaphone top pattern is not reliable, and there isn't anything else really supporting it (fundamentals aside of course), but in my efforts to be a hero I took the trade anyway entering short at 1596. On the basis that a pattern shown on the Monthly chart is likely to offer a multitude of opportunities for entries, I covered half the position 24 hours later for 14 points which isn't a bad profit for an SPX trade over such a short period and couldn't be ignored. The plan is to keep entering the trade at this perceived resistance, taking profits when they become available but leaving half the trade to run at all times until the set-up either pays off, or fails and proves the set-up wrong.

Although I promised myself the NZD:CHF swing long would not be closed until the 0.8210 target was hit, this mornings rally had a bit of a blow-off look to it and I couldn't resist closing the trade at 0.8064 to bank a 109 point profit. Taking that profit probably wasn't a professional thing to do as it technically makes the risk vs reward on the trade less than 1:1 because the stop loss was around 200 points away. Anyway, its done now and the trade is closed, but I probably wouldn't discount re-entering the position if circumstances become attractive again.

This Week has not been kind to me! Of all the analysis I've carried out either here or on the ADVFN forum, the results have been almost consistently spot on yet I've still managed to trade poorly by not taking the right trades or through poor trade management. Starting with the open NZD:CHF swing long, I recognised very early on whilst the trade was still in profit that a correction could be close by, but instead of banking profits and waiting for a better entry I chose to hold the position which now shows a loss in excess of 100 pips. The trade could still turn out to be a good one but as soon as uncertainty came into the equation I should have made the decision to trail the stop loss or take the profits whilst they were available. As things stand I'll still hold the trade because no real technical damage has been done to the overall picture so I'll just monitor it on a day by day basis.

Following previous GBP:CAD analysis today I entered a swing long position from support. To understand the history behind this position you'll need to read this post  and this follow up post. I still believe we'll see an eventual break down through the support thats held GBP:CADs trading range over the last 3 Years, however as I pointed out before, another test of major support was very likely due to the lack of consolidation following the previous test.

Following on from this post where probability suggested the small rising channel seen on the 4 Hourly DOW chart would likely break to the downside, we've actually seen the opposite occur. The short position I held at that time was stopped out at break-even and I now hold a long position with stops at break-even. The following charts should just be viewed as information only because they're based only around a short term view, whilst momentum and sentiment can change very quickly. Over the last fortnight my day trading system hasn't really triggered any new long positions, with the last one being at 14,386 on 18th March. However, it has been signalling a number of potential short set-ups but none have actually triggered an entry. This could imply that large players have begun positioning ready for a correction, but until a short signal actually triggers, the best position is to stay flat, or remain long with the trend if you are already positioned long.

Following last Week's analysis of NZD:CHF I spent the earlier part of this Week looking for an entry, but the pair just wouldn't pull back. Every time I checked the chart it had rallied further than so in view of the fact it just rallied and rallied on its previous break out I decided to just take the plunge and run with it using wide-ish stops. Entering trades mid-rally has never been something I'm particularly good at as it almost guarantees an instant correction and although NZD:CHF initially rallied when I entered the trade at 0.7955 it has since retraced a little and the trade goes into the Weekend showing approximately -10 points. Looking back its fair to say I may have left this set-up too long before taking it but if it can still reach my target of 0.8210 that would give a gain of 250 points whereas if my stop loss is taken out it would incur a loss of around 170 points. I guess the risk vs reward is OK for a high probability trade, but its certainly not brilliant.

Whilst waiting for previously discussed swing trade entries (aside from NZD:CHF where I entered the proposed swing long), here's a snap shot of whats going on with Indices.

FTSE 4 Hourly.

No obvious direction but I'd probably want to wait for the outcome of this descending triangle before taking any position. A descending triangle is usually bearish and a breakdown would offer a technical measured move target of 6135