View: Week 48 trading stubs, final sprint for 2012

Week 48 trading stubs, final sprint for 2012

Believe it or not traders we are very close to the end of 2012 and the final sprint of this year promises lots of volatility and movement which means potentially lots of sound trading opportunities. Last weeks anticipation played out very nicely especially CAC40 had a rally of about +150 pips well done if you took advantage of it. Also worth mentioning EUR/USD Gartleys that netted about +60 pips of profit before taking out on protective stops. Obviously it was not just roses without spikes, particularly GBP/JPY gave a a busy time managing the losses. This market is topping for a fourth consecutive time according to indicators like Stochastics and RSI, however there was no meaningful movement based on those indicator values yet. That proves the point that indicators on their own if not useless are not enough to make trading decisions if they are not combined with price action analysis. Coming back to GBP/JPY pair example the short at 129.50's area was stopped out almost immediately in the timescale of 3 4 hours candles, taking me out on protective stops. Cutting positions when the market goes against becomes crucial part of trade plan execution in these kind of scenarios, as well as hedging the initial position (short in this case) helps to cut loser significantly and even turn losers into winner in some cases.

The coming week shapes up to be eventful at least based on the fact that US markets should fully kick-in after Thanksgiving holidays, normally fair amount of selling is often the case after post-holidays open.  Ironically DOW stalled just before major pivot area of 12897's on Friday that served as either support or resistance every time there was a test for the last couple of months. There is also 0.681 fib retracement that lined up is that area from the smaller impulse leg. Personally i will wait for more confirmation in form on RSI divergence area, however i may risk this opportunity to run away from me if market decides to dive south immediately. Will be crucial to see where this market will open after the weekend.

Quite similar setup is on ALSI40 South African index. There is lots of confluence and confirmation around 33670's area where 3 drives pattern completes as well as very distinct bearish divergence at that point. All signs that the market reached exhaustion point at least temporarily and very likely pullback south is about to occur. The only counterargument is my book for taking this short is the fact that the market is still in heavy uptrend, so this setup should be treated as counter trend. Again will be very crucial to see where the market will be at the open.

The last but not least is GOLD (XAUUSD). The market may present very good shorting opportunities in my book. Firstly is the area around 1754 where market stalled before ending the week presents very appealing Fibonacci cluster combined of retracemens and extensions. Again will be looking for more confirmation that this area is in fact may serve as solid pivot. Even more appealing setup may present itself if this market will go higher towards 1781's area. Advanced BAT pattern will complete if will get there. This is much more mature setup is my book, however much more risk has to be taken on board,  therefore for some traders the first setups may be more suitable from risk management standpoint than another and vice verse.

That is it for today, will be heading now to see the last F-1 race that promises to have some fireworks, have a good one traders!


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