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Trading plan for a broadening top pattern or the megaphone pattern.

Megaphone pattern technical tradingCompare the high starting the first move down to the high at point 2.  It is a higher high, then we go to the next high point 4 and see that it is even higher.  The S&P500 emini futures is playing into a technical trading pattern known as the megaphone.

What are the Characteristics of the bullish megaphone pattern?

The characteristics of a megaphone is that the highs are getting higher and the lows are getting lower on 2 consecutive legs of a trading chart.

Compare the high starting the first move down to the high at point 2.  It is a higher high, then we go to the next high point 4 and see that it is even higher.  The Lows at point 1 and point 3 are relatively the same.  Drawing a trend line from the beginning to point 2 and 4, and then a supporting trend line from Point 1 and 3 you can see that the form diverging, this is called the megaphone pattern.  The most optimal one would have the lows at point 3 lower but  being the same also is a key to the pattern.

Point 4 is the temporary new high with a 61% pullback or retracement to point 5.  This sets up the Green Zone where we can see the pattern from point 1-3 repeat or a break to new highs after a pull back to 50% of the distance of the move from point 4 to 5.  Note the green supporting line at 2070.  If this acts as support, then we might see a break of the top in the near term with a target to 2140.

Incorporating the bullish megaphone pattern into your trading plan.

If price breaks the support of the green zone, then watch for a move to 2000, the pschological support and where the 200MA is headed, and then further retrace to 1960.  There is an open gap at 1940 that has not been filled. Remember to do your own work, study the charts and if you don’t know what you are doing, don’t trade.  Trading is high risk, and you need an executable trading plan.



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Day trading course S&P 500 Managed Trading Accounts –

Take a look at the S&P 500 and what do you see?  Up? Down? Sideways?

Do we see this as as an opportunity to buy?  Or a set up to reverse?   On the daily chart we see price has retraced to the previous daily swing high at the 2080 area of resistance.   If we see price hold under the 2080-85 area we could see it turn to test down lower to the 2055 area of support around the 50 Day MA.   If we see price move up through the resistance and above the 2085 area, we will likely see price retest the previous highs once again and even possibly move to test new levels of resistance.

For the next few days the 2080-85 area will likely be the key in looking for the next move.

The post S&P 500 – Set up to continue higher? appeared first on Day trading course S&P 500 Managed Trading Accounts.

Weekly Trading Plan – Money Maker Edge™  day trading course March 2015

Weekly trading plan sp500 eminiTrading plan looking at the weekly chart on the S&P500 emini futures market for March 2015. Last week we closed with a Doji and a move down of 30 points. The range of the week was 50 points and showing move commitment on the seller side volume.

The sellers have taken a little of the steam away from the buyers but have not made a big enough commitment to carry through to break the next level of support and open gaps from previous trading sessions.  Watching for the buyers to move in and bring this back up 12 to 18 points before loosing momentum and turning back over to seller to continue this move down to 2035-40 where the next level of support can move in.

If we see large buyer support at the 2035 to 40 area and some follow through in the days that follow this could be enough to engulf this past weeks price action and keep is moving in  long term bullish trends channel.

If we see sellers commit to more volume and a move through the 2035 support then we could see a test to previous swing lows and area of consolidation from from 1964 to 2035.  The S&P500 emini futures consolidated in this zone for 5 weeks before getting enough pressure built for the three week move to highs.

Note the uptick in volume last week on the sellers moving in and how far below the Moving average we were on the move to the highs.

Trading Plan on the Daily Chart for the S&P500 emini futures contract.

Trading plan daily chart S&P500Trading plan for daily price action. We moved to close this open Gap as noted in my previous article, and if we bounce off of support for 50% of the previous trading days range to 2080 area and loose momentum with buyers, then I will be looking for this to reverse and sellers to pick up and gain enough momentum to break the previous sessions low and move to 2056 where the 50 MA could add support.  If there is a lot of momentum we could see this break to the next support level and break through to the 2026 support and then further to 1998 area of psychological support and follow through the  swing lows of 1960.  There would have to be some type of stimulus for this type of price action.

If buyers do hold this area and price bounces around in the 2065-80 range then we could see a test down and then spring through the resistance at 2088 and a break through of resistance and a move back to the consolidation zone at the top of the market.

There are many clues in the this market for direction and if you are not familiar with risk management and making a written trading plan it is probably better not to trade.  Trading can be high risk and there are many variable to be monitored and understood before trading.

Trade your plan. Trade what you see, and never listen to anyone. It is your money, be responsible.




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Trading Plan – managing open gaps in the S&P500 emini futures.

trading plan open gapsWe are looking at the Daily Chart with regular market open and close on the S&P500 emini futures.

The first open gap at 2070 was filled today. Next support is the 50MA at 2056 then the 2020 open Gap.

Keep these targets in mind as the Topping pattern on the S&P500 emini futures executes.  Remember this is a supported market and there is always a chance of a snap back rally.

The dollar index has made an equidistant move on the market and is showing more strength for a continued move also.


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So far this week we have seen quite an amount of volatility in the markets.  Starting out with oils run back up into the 50’s.  In tandem with the squeeze on the USD, and rally in oil producing countries such as CAD, and AUD.  Not to mention hugely volatile days in the S&P 500 with 20-40 point days occurring regularly in the last couple months.  There has been some wild action in the markets this week and it likely isn’t over yet.   Euro zone is miles away from any kind of economic settling, Japan and Euro zone QE is off and away, and don’t think we have heard the last of Russia or China either.


AUD/NJD Trading

Looking at this pair I think we are looking at a longer term short.  This pair has been trading down for a long time and just had a bit of a bounce on the daily / weekly time frame.  We see a classic flag pattern in the price action and also the MA’s have fallen into a triple death cross formation on the daily chart now as well.  I am looking to short this pair with multiple entries and looking for targets in the 1.0250 – 1.0350 area in the next couple weeks.






GBP/USD Trading

GBP/USD saw a large move back to the upside this week.  Taking back over 300 pips since the beginning of the weeks trading.   Right now price is testing the long term resistive trend line and is also the area of the 50MA on the daily.  Careful buying here as the trend line will likely show big resistance unless price moves quickly through it, I will be looking for the possible test back to support.  It price does move through then the 1.5500 area will be the next area to watch for on the upside.




USD/CAD Trading

The CAD took back a small bit of it’s recent losses on the USD this week.  The USD has traded back to the 1.2440 area from its highs of 1.2800 against the Loonie.   If a larger retracement on the move is due, the 1.20 – 1.21 area is where things could go from here.

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Daily trading plan, where is the market going?

daily trade set up SP500Daily Trading set up, first we look at the general trend and what is occurring now.

First the Pink Square that is outlined is showing a consolidated range.  Price has been chopping traders out in this zone for weeks.  Trading days have been moving from 20-40 points with very fast moves of 5- 10 points occurring with in fifteen minutes.  This has been painful for quite a number of traders waiting for the sell off only to be robbed as Price approaches the 200MA.

I have noted on the chart Fib extensions along with projection zones.  The small zones above the present price action are revealing some fairly easy buy side targets.  With Europe falling into the back and forth around Greece exit – Grexit, and the oil squeeze by the Saudis against Russia, we can expect these large moves as risk on, risk off, QE support and central bank purchases of equities is increasing.  Read more about it here: Collision of Outliers.

Remember it is not often that markets run up or down in a straight line so there will be some consolidation in the present price levels looking for news, QE and or market makers to move in when no one is looking.  Use your stops in this and don’t trade open positions.

On the Downside I have noted a few areas of support which are open gaps based on a regular trading day, on this 24 hour chart.  Breaking down to the previous swing low is also an easy target that would fill two open gaps.


daily trading set up feb 4Daily Price Action Projection for Daily Trading plan February 4, 2015

This is where the fun starts. The Trading set up for tomorrow that we are looking for is a bounce equivalent to 50% of the previous days price action with a maximum of 23 points retraced from yesterdays close.  From here we are looking for a buyers market in control with a new high coming.

The expected range is 16 for a consolidated range day, 23 points for a mid range trade day and 41 points for a volatile range day.  There is a chance that we could put in a doji as the market consolidates more before a break of the channel.  This could be 2 or three days.

Also expecting a small range day on oil as we had a volatile day setting new swing highs and giving some relief to the Canadian Dollar.


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Calgary, Alberta – Trading the Canadian Dollar and the Mexican Peso. 

Coming up to Calgary to trade with my partner for the week.  There was a lot of volatility and some really nice trades available.  Calgary is a boom town that is famous for the Stampede and has a sky line that is populated with skyscrapers from the previous 12 year oil boom. The almost 15 % change in the Canadian dollar is making it seem a little less expensive here.  There are Audi’s everywhere and people spend money consuming expensive dinners and wearing Lulu lemon.  The cost of living is pretty high (compared to southern California), but people make a pretty good living and it seems that the economy is doing well..  Seems

Rolling into 2015 I am watching as the Canadian Dollar is trading at 1.26 to the US dollar. I have been up to see Fort MacMurray and the 10,0000 people oil camps last year with my son.  Last night I met with a group of investor/traders at the Calgary Day Trading Group.  It seems the property bubble is still in tact, that jobs are OK, but some workers from the “Camps” are coming home as collapsing oil prices are causing lay offs at the sands.  I am putting up two charts of the USDCAD and the Mexican Peso.  There are some similarities which you will see almost instantly.

Canadian Dollar trading – the charts show a parabolic move up to what is presently resistance.

USD CAD trade - feb. 2015 targets

Canadian dollar monthly trading chart

and now the Peso.Mexican Peso Trading chart 2015
Neither of these charts are giving a pretty picture for any currency strength in either Canada or Mexico.

What I am seeing in Canada is the convergence of many factors which can fundamentally weigh on the currencies strength and ability to weather this Oil storm.
Technically we could see the Canadian dollar heading to 1.30 then 1.40 over this next 6 to nine months. Unfortunately, it all is reliant on Oil and consumption in Canada. If we look at the chart you can see how the CAD dollar acted at this present price level and that it consolidated at this range for 3-4 months. This would put us into the second quarter.

Canadian dollar Oil trading

Weekly Oil trading chart

Oil is the pressure trigger for a stronger Canadian Dollar.

If we see oil recover to a price target of $55 to $60 there will be short term recovery for the Canadian Dollar.  If there is further selling, down to the critical price supports the Saudi Oil ministers said they can support we will see unemployment raise, Oil revenues fall and probably a housing correction under way.   Presently, there is a stall in the housing market as always occurs when you have a harsh winter.  The interesting thing is, that it was 55 degrees outside this week and the sun was bright and shiny.  These two rectangles are showing where price could extend or where it could re trace.  Both of these levels are crucial to the Canadian Dollar but won’t pull it back to the 1.06 level to the dollar experienced in 2014.  Oil would have to soar back to the $70 plus range for strength in the Canadian dollar.


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Day trading course S&P 500 Managed Trading Accounts –

The S&P 500 has been trading in quite the volatile range lately.  Moves have been large and quick, with little warning before 20 point swings.   Last weeks move to touch to lower support in the 1980 area and then turning has set a picture for what could come next.

S&P 500 Trading

The S&P E-mini futures are trading into an important area of resistance in the 2050-2060 area, on the weekly and daily charts.   Here is where we will see the continuation of the direction or the turn to test back to previous support.   If price trades to break through the 2060 area then we will be looking to see it move back to test the 2090.00 area again, with a longer term target up at the 2140 level.    Price has had a tendency of being very choppy around the top in previous new highs, so some turbulence will be expected in the 2090 area without a clean high volume run through.


If we see price get stuck in the 2060 area of resistance then  could be looking for a test back to previous support before continuing the move.  Support is in at 2010 and at the 1980-90 previous low.   In the last two attempts at support, the ES S&P500 has failed again to break below the 200 Day MA and now looks to be breaking back above the 50 Day MA as well should we see the move above 2060.00.



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Gold trading 2015 where is price going?

2015 Gold trading has taken off with buyers moving into the market as a “disaster hedge” as more and more pressure is being put on the Euro.  Gold bugs might finally be getting their day as trust in the Euro has fallen and Europe lies on the edge of economic disaster.  Remember the risk off trade fluctuates between the Dollar, Yen and bonds.  The volatility of Gold makes it a high risk “disaster hedge” when economies or countries are on the brink of devastating economic change.

Price fluctuation and Gold Trading  2015

Gold Trading January 2015 Price targets

The average daily range for gold is getting more and more volatile in 2015 as Central Bankers are manipulating interest rates and adding liquidity to markets through Quantitative Easing.  This means the incestuous buying of their own bonds and purchasing of equities.

Gold buyers moved in and bought through a major resistance at 1252-1256.  This is of major importance because the door is open to further buying to 1300 which is the first psychological resistance and could signal the end of the bear market.  Watch for gold trading to consolidate at 1290 to 1320 area. as noted in the zone market on the chart.

Buyers moving in above this level could get through the next area of resistance at 1340.  Gold trading above this area will start what could be the next Bull market in this commodity.  The next area of resistance is the red zone from 1340 to 1356.  Previously, sellers moved in and kept the direction of the bear market here.  There was a lot of market makers in the futures side selling on this move, but physical demand was not being met.

As mentioned on the Money Maker Edge™ blog if you are using a “Plan B” buying physical gold on dips for gradual accumulation will give you an edge as a hedge against what could be coming with the confluence of international banking manipulations.  Don’t put you self at risk by buying so much that you can’t afford to live.  Remember this is a disaster hedge, not a risk off trade.

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Futures Trading January to February – Where are we headed?

market direction 2015 day tradingThe S&P500 emini futures have been very volatile this month coming out of multiple international crisis level events.

The S&P500 is presently in a chop zone that is roughly 120 points in consolidation on the daily chart.  The support came in at 1965 and has moved back and forth between there and the swing high.  I have placed a fibonacci extension over the previous correction to the swing high to show possible price extensions.  You might note the area from 2060 and the swing high to 2090 is where the market could consolidate and then spring board for the next targets around 2120, 2159 and 2220.

Futures trading January 2015 could see more quick short lived corrections than 2014.

You can probably see again how corrections are taking 4 to 7 days to move down and then 2-3 days to move up when it breaks out of consolidation.  Presently,  if price falls from this level, we could see a bit longer move down as we are in a Head and Shoulders Bearish pattern.  Note that Head and Shoulders Bear patterns have not taken a full extension down for the past few years and that I would expect to see them quickly reverse.

Central Banks are moving the markets and creating a very volatile intra-day trading situation.  Futures trading is an overnight market so Central Banks policy, intervention through Quantitative Easing and use of interest manipulation will first show up in the futures market.  Be aware that some of these swings have been 20 to 40 handles (points) in the after hours only to be followed by volatile gaps, and intraday reversals covering 20 to 40 points.

Trading Gaps in 2015.

I have highlighted the open gaps on the chart above, you will see them as small rectangles showing where the previous days close and the next days open have not filled.  Noting these as downside targets for sell offs. and of course the major psychological support of 1800.  If we break under here watch for the bid to be pulled and maybe some free fall.  Always remember that trading is risky, don’t trade unless you know what you are doing and have risk capital.  Don’t trade with your rent money, that is gambling!

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