While the european Indices saw quite a turnaround this week, the Dow Jones Index retraced slightly from a weekly perspective. Even though a long breakout had been hit before, the current retrace does not negate that breakout and should rather be considered an internal correction. New all time highs are still not far away and the upwards directed momentum overall supports a continous upmove scenario. This of course includes pullbacks on the way, no one knows how long they might last, so patience is important again before this market turns up again.
Here goes a short overview of several markets that I analyzed over the weekend. We do see some interesting market behavior in WTI, NZD and Gold is actually about to move out higher on the daily chart. Let’s see how it pans out.
Some markets really moved this past trading week, however, there doesn’t seem to be much going on for trendfollowing on the higher timeframes. All trades underway (JPY, GBP, USD) have been going on for weeks now, but nothing new showed up on the trend horizon this last week. The NZD, EUR and Indices are still in a major correction on the weekly timeframe, while Gold and Silver have just entered one again. More updates on those developments will follow as soon as the markets have had more time to develop throughout the coming weeks.
Let’s therefore take a closer look at the USDCAD since it has reached an interesting price level.
(Audio is a little bad on this one, hopefully you can still understand everything.)
“Victor Ricciardi is an Assistant Professor of Financial Management at Goucher College. Professor Ricciardi is a leading expert on the academic literature and emerging research issues in behavioral finance. He is the editor of several eJournals distributed by the Social Science Research Network (SSRN) at http://www.ssrn.com, including behavioral finance, financial history, behavioral economics, and behavioral accounting.”
When major markets go back into correction mode, i.e. trading into the balance zone where they can breathe to make a decision where to go next, there are not many new trends unfolding on a nice long-term trendfollowing timeframe for a while. It’s impossible for significant moves to take place all the time – just imagine what kind of world it would be if the prices of butter, milk and coffee move dozens of % each week.
Have a look at this very interesting video from Acorn Global Investments. They are pointing out one important part of the trading process – which does not have in focus the getting-rich part that is everyone’s reason for wanting to trade. Instead a good trading process ensures a sound and robust trading approach including all vital components.
That World Indices are not collapsing during the next trading days as was assumed during the beginning of the year, should be clear by now. So far trendfollowing has taken care of us well in 2016, no matter if markets are up or down, no matter how much they are up or down. Looking at the Nasdaq chart we can see some new developments that are worth mentioning in this regard.
As you can read here, very often people wanting to trade financial markets do not have optimal prerequisites to be successful doing it, which basically isn’t their fault, but it becomes their fault as they move along their trading journey without improvements. That many of us will experience an entire personality change in the search of trading profits, explains the following article.
After having discussed the disastrous indices situation in 2016 ever since the new year had started, these markets were finally able to make a decision. Instead of bouncing around the heavy support areas for yet another week, they are now retracing back up into the balance zone – saying goodbye to a crash scenario. This doesn’t mean that on the long-term timeframes I like to look at, these markets have become bullish. No, they are simply running back into the balance zone – for now telling us that they don’t know where to trade next, therefore taking a break on a weekly timeframe to make out new resistance areas before the World Indices can decide which direction to break out next.
It could be months before we’ll know. Continue reading “[Weekly Recap|09/16] EUR/USD simply Correcting in Ongoing Trend, NQ Trading into Balance Zone, Gold Remains Bullish”
This is the last week of February Trading in 2016, let’s see where potential new trends unfold, pause or need to be exited. As usual, we’re looking at the long-term picture to ensure not missing the big moves that will make the big money.
People who come into the markets usually share three characteristics: a) they had previous success, b) therefore they have capital to trade with and c) as a group they belong in the top percentage intelligence-wise.
These people then put up their money in an account, start to analyze the markets and actually trade it.
Eventually, this ends up at over 90% losers.
Not only when coming into the marketplace as a new trader, even people with years of experience feel the need to predict what the next market movement will be. This stems from thinking that only by predicting, you can achieve profits in the end – “you have to know what the markets are doing tomorrow, you have to be smarter than the market and beat it.” Therefore most traders will set take profit targets for their trades or they operate from a “get it before it gets you” point of view.
The headline already names the markets of focus for week seven in 2016. While January was a great month, February is pausing a little bit in the Indices World Markets. However, those are not the only ones an avid trader is active in – Gold has soared and keeps trading at those highs, Shorts are working well in the JPY Forex pairs.