Triangles Breakouts and Trends for USDJPY Japanese Yen

Sep 8, 2014: 12:35 PM CST

We’re seeing another price expansion or trend phase from a triangle breakout in theUSDJPY (Japanese Yen) FOREX Pair.

I highlighted this opportunity at the beginning of the breakout (reference the earlier post).

Let’s update our chart and highlight the lessons we can learn from two Triangle Patterns:

First, triangle patterns represent price compression (consolidation) and serve as ideal breakout trade candidates when price pushes through – and remains beyond – one of the compressing trendlines.

We can see the original set-up and trigger as detailed in my August 21 “Triangle Breakout Triggering for USDJPY” and we now can see the successful result of this breakout opportunity.

We can even see the 2013 triangle example as I highlighted in the previous post “Three Perspectives on the USDJPY Yen Triangle Pattern.”

As we can see, the USDJPY pair serves as a great example of the “Triangle and Breakout” trading tactic.

Right now, price is expanding higher in pro-trend impulse mode (reference late 2013) and broke to new pair highs this month.

Expect additional continuation to the upside until price clearly breaks under a steep, rising trendline you can draw that connects the August/September straight-up rally phase.

Simply look back at the late 2013 pattern for guidance about open trade management and a lesson in breakout opportunities. Continue Reading…

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September 5 Reversal Play and Market Update

Sep 5, 2014: 1:28 PM CST

The market has reversed course each day this week and today’s session is no exception.

Let’s update our rangebound S&P 500 intraday chart, highlight sector breadth, and end with our strongly trending stock scan of the day.

The S&P 500 has remained in a rather violent trading range the last few sessions as volatility has expanded (along with intraday range).

As mentioned, each session from the start of September has developed a sharp intraday reversal.  Today’s session reversed up from the 1,990 level on divergences.

Study prior divergent reversal examples from the week.

For now, we’ll note the rising trendline into the 2,004 level and will continue to play bullishly above 2,005 (to ‘fill out the range’) or else will be cautious on any sudden movement down against 2,005. Continue Reading…

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BP Breaks Down through Open Air into Key Target

Sep 4, 2014: 1:14 PM CST

This morning’s session for BP has been a windfall for the bears.

However, shares trade on the “edge” of a support level that – if broken – simply opens price to a further sharp decline.

Let’s pinpoint this level and the view our “Color Value Area” Chart for BP:

For starters, BP has reversed into a short-term downtrend after peaking (with a lengthy divergence) into the $54.00 per share area.

Price broke support and the Moving Average Orientation flipped bearish at the start of August 2014.

From there, shares continued the slide and recently triggered a quick bear flag entry into the falling 20 day EMA.

Today’s sharp gap and sell-off took price rapidly into the key inflection point and target near $45.00 per share which represents:

  • The 61.8% Fibonacci Retracement
  • The Gap-UP Opening from October 29th
  • The Lower Bound of a Value Area Pocket (see blue chart below)

Ultimately we’ll watch closely to determine whether shares rally up off this support level (see my prior update on Apple AAPL for a similar support-bounce into target opportunity) or else collapse through it into an “Open Air” pocket.

Let’s take a look at the Value Areas and current Open Air Pocket for shares if price stumbles here:

I’ve customized the Radar Indicator (similar to Market Profile but with better visuals) from TriggerCharts.com.

Without getting too complex, all we need to view is the Value Area (yellow lines with highlight) cluster just above the $46.00 per share level.  That’s our focal point at the moment (and price trades beneath it).

The other focal point is the smaller Magnet (Value Area or yellow line) near $43.50 per share from April 2013).

Should it come into play on a very sharp sell-off, the next target (Value Area Magnet Cluster) would be the $41.50 level.

Nevertheless, the focal point now is the “Open Air” between the $46.00 level and lower $43.50 target.

At the moment, price is falling sharply like a rock through the Open Air which is what one would expect (there wasn’t much “price at time” transacted between $43.50 and $46.00 as highlighted by the lack of yellow lines).

Should price fail to hold the key $45.00 per share target as mentioned above, it does continue the decline toward the $43.50 Magnet Target.

Continue focusing on current levels and the Magnet Areas (yellow) highlighted above when planning trades in BP.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

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September 4 Market Update and Trending Stock Scan

Sep 4, 2014: 12:46 PM CST

What a fun week it’s been so far!

Buyers short-squeezed the market higher each day only to fail to hold the gains as mid-day reversals plagued the market.

Today is no exception as we see another instance of morning strength giving way to afternoon weakness in the stock market.

Let’s look beneath the price to highlight Sector Breadth and what it suggests at the moment:

With a bullish session underway at the moment, sector strength is concentrated in the bullish group which is to be expected. Discretionary and Industrials lead the day followed closely by the “Risk-On” Financials, Technology, and Materials.

Energy once again underperforms the other sectors as relative weakness appears in “Risk-Off” Staples, Health Care, and Utilities. Continue Reading…

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Stepping Inside the Rise and Fall of Apple AAPL into 100

Sep 3, 2014: 2:58 PM CST

Apple (AAPL) shares shook traders today with a “Trap and Collapse” outcome that threw price back to a short-term target level.

Let’s update our Apple charts and step inside the recent action.

For a bit of background (and real-world education), take a look at my prior update entitled “Charting Apple Through the $100 High.”

As was suggested, price continued its upward journey (fueled in part by the stop-losses of the bears which triggered a short-squeeze breakout) through the $100 level.

However, recent headline news and an overbought price resulted in selling pressure, both from buyers taking well-deserved profits as sellers struck the stock with new short-sale positions.

Nevertheless, price now trades into an inflection level which was the prior high near the rising 20 day EMA (and $100 simple reference target). Continue Reading…

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