Technical Analysis from "Iced Earth" Point of View

[iced earth]

GOLD-13 MAY 2010
as predicted before, gold hits the target of HEAD & SHOULDERS (around $12300)

 

[tech/a]

Well done
Great when it comes together.

Enjoy your analysis at least it has content.

 

[iced earth]

wti oil - 15 May 2010:

The support line of the blue channel has been broken definitely , the target could be around $ 60 . The red channel is also on the verge of break, this could have a target even lower than the blue one.

 

[Sir Osisofliver]

thsnks for your comment,

Do you think 10 % is low??? actually I am thinking of 50-51 as the target( upper line of white channel, it must be more than 15%. Important thing is the trend is completely upward and we are at the support line and in accordance with the trend...

I would place an SL at 38.6.

BHP has also strong balance sheet & Income which leave little room for any RISK. the global recovery also would apply demands for Iron ore, base metals...

Hi Iced,

How much do you know about divergence patterns?
*snip*
This doesn't mean that BHP will fall back to $20 overnight, but is indicative to me that the potential for negative news (IE murmurs regarding growth from China), will result in sharp downwards movements.

Cheers

Sir O

Dear Sir Osisofliver

Thanks for your comment. I know all about divergence between Price and Indicators ( such as RSI , CCI, MOMENTUM,MACD,...)both Normal and Hidden.

And as far as I know in MACD histogram you cant say you have divergence if the histogram has some lows under zero line ( as your example)...

and more importantly your uptrend line should be passed from tops not lows ( as my example at the attachment)

Mohsen

So how's that BHP divergence working for you?

Cheers

Sir O

 

[iced earth]

Dear Sir Osisofliver

Because BHP has fallen doesn't mean your concept of Divergence is right.

First of all as I said before, for a negative divergence ( normal one not hidden one) you should define your price uptrend line from highs not lows, as I attached as pic 1 for HISTOGRAM MACD and CCI in weekly view , and for HISTOGRAM MACD as you brought here, when you have some negative amounts ( some lows lower than Zero line, as yours) it is not valid and it should not have any lows between highs.

and second it was not divergence that made BHP falls, but breaking the support line of the channel was the main reason ( technically rather than fundamentally which the reason is Global Economy Recovery doubt) for this downtrend movement of BHP.- attached pic 2

Cheers , Mohsen

 

[iced earth]

AUD/USD - 20 May 2010

will the support line ( The Green One) prevent AUD/USD from further falling???(PIC 1)

we have also important fibo 38.2 % as a support level for AUS/USD (around 0.81) , if this cant hold this pair, the next level will be fibo 50 % around 0.77 ( PIC 2)If

 

[iced earth]

EUR/USD 20 May 2010:

the Pair is moving within a downtrend channel(pic 1)

in weekly view, the pair has passed the long term support line, we should be careful about this current uptrend as only a possible pull back. (pic 2)

 

[Sir Osisofliver]

Dear Sir Osisofliver

Because BHP has fallen doesn't mean your concept of Divergence is right.

First of all as I said before, for a negative divergence ( normal one not hidden one) you should define your price uptrend line from highs not lows, as I attached as pic 1 for HISTOGRAM MACD and CCI in weekly view , and for HISTOGRAM MACD as you brought here, when you have some negative amounts ( some lows lower than Zero line, as yours) it is not valid and it should not have any lows between highs.

and second it was not divergence that made BHP falls, but breaking the support line of the channel was the main reason ( technically rather than fundamentally which the reason is Global Economy Recovery doubt) for this downtrend movement of BHP.- attached pic 2

Cheers , Mohsen

So what happened to your BHP trade? Did you stop out? Did you place a short when it broke your channel?

Enquiring minds want to know.

Cheers

Sir O

 

[lusk]

So how's that BHP divergence working for you?

Cheers

Sir O

There was a divergence in the MACD all the way up, would you sell because of this divergence or the trendline being broken?

 

[Sir Osisofliver]

There was a divergence in the MACD all the way up, would you sell because of this divergence or the trendline being broken?

What me personally?

My cost base is too low. I paid $8.50 for BHP back in mid '03 and then averaged up in Late November 2008 at $26.10 With my CG in the postion there is no point in selling my long term holding.

Instead I shorted the position in January when it was $43.98 - exited on the trailing stop loss at $41.55 and shorted it again at $43 .60 at the beginning of April.

My analysis leads me to suspect that the fall has not yet finished and my position is still open as the recent countertrend rally did not engage my stop loss. I would not be surprised to see a range between $30 and $29 for the bottoming of this corrective movement in BHP, where-upon I will most likely close out my short position and possibly purchase more BHP for the long-term Hold position.

Cheers

Sir O

 

[tech/a]

SO
What do you use for shorting?
Or who?
Why not the index or SPI.

 

[Sir Osisofliver]

SO
What do you use for shorting?

CFD's

Or who?

MF Global

Why not the index or SPI.

Short answer = 'coz

Long answer = has to to with periodicity and amplitude of certain sectors when considered against indicie products I can get access to.

But this isn't my thread Tech it's Iced Earths so if you want to know more PM me or start a new thread so we don't derail.

Cheers

Sir O

 

[iced earth]

So what happened to your BHP trade? Did you stop out? Did you place a short when it broke your channel?

Enquiring minds want to know.

Cheers

Sir O

Dear Sir O,

I did not buy BHP, I could not although I wanted to. I live out of Australia and in My country it is not easy to trade International shares. Also I bought similar mining stock in my country and I sold it when the channel had broken .

I will move to Australia soon and I want to get familiar with Aussie stock market. and Forums are one of the efficient way for this. so I can exchange our knowledge and experience with other folks like you.
I am one of the manager of a prominent forum (http://www.farabourse.net/showthread.php?t=888&page=3) in my country and I have been active in stock market and forex more than 3 years .

by the way I see that you are long term trader, you must apply "Value Investing" for your trade as "W.Buffet"

Cheers
Mohsen

 

[Wysiwyg]

Greetings. I am amazed at the number of members who were on that forum today and also that it is in Persian language. An Iranian financial forum Iced Earth? I thought there were restrictions on internet usage in Iran but I wouldn't know for sure.

 

[Sean K]

I am one of the manager of a prominent forum (http://www.*****house.net/showthread.php?t=888&page=3) in my country and I have been active in stock market and forex more than 3 years .
Cheers
Mohsen

Amazing how this happens.

 

[Wysiwyg]

you should define your price uptrend line from highs not lows
Cheers , Mohsen

My very first book on trading says this about trend lines ...

"When market action is bullish (rising) the trend line is drawn across across the low points."

"A trend line in a falling market is drawn across peaks of the rallies."

That is word for word but at the end of the day it is whatever tickles ones fancy I suppose.

 

[iced earth]

Greetings. I am amazed at the number of members who were on that forum today and also that it is in Persian language. An Iranian financial forum Iced Earth? I thought there were restrictions on internet usage in Iran but I wouldn't know for sure.

Dear Wysiwyg

Yes , as I said that forum is the most prominent forum in Iran related to financial market. There are some censorship ( unfortunately) in Iranian internet access but Internet is very popular among people.

most young traders share their ideas and trades with others in Forums. If you could log in you would see lots of useful advanced fundamental and technical analysis there.

Best Regards
Mohsen

 

[iced earth]

My very first book on trading says this about trend lines ...

"When market action is bullish (rising) the trend line is drawn across across the low points."

"A trend line in a falling market is drawn across peaks of the rallies."

That is word for word but at the end of the day it is whatever tickles ones fancy I suppose.

Dear Wysiwyg :

Your are absolutely right about uptrend , uptrend will be define with cross the low points. but what i said was about negative divergence : when price has higher top compare to the previous top but indicators ( such as RSI,CCI,MOMENTUM,MACD,...) has the top lower than its previous one, ( it can not have the new top higher than previous one and it shows that price can not prevail uptrend and should have some correction)

I have attached some example of negative Divergence ( the 3d and 4th pics are picked from famous book :" Technical analysis of the financial market: by John Murphy")

Hope it helps

 

[Sir Osisofliver]

Dear Sir O,

by the way I see that you are long term trader, you must apply "Value Investing" for your trade as "W.Buffet"

Cheers
Mohsen

It's a part of what I do. I've recognised that the market is a cyclical beast for a while now and that there are periods of time where the effective holding cost for a long-term "blue-chip" assets is nil. Setting up a portfolio that doesn't take up too much of my time that chugs away and doesn't add to my grey hairs is relatively easy. I also maintain an amount of capital that I use for a short-term trading strategy under a systematic basis. I usually devote my spare time (if I'm lucky enough to have spare time) in testing strategies and attempting to improve my system.


Cheers

Sir O

 

[iced earth]

oil- WTI : 25 MAY 2010

As been mentioned before, the short time rise in oil was only a pull back after breaking the channel. the goal would be around 60$