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Trading Homework For Trade-date Tuesday August 5th 2019

Well, yesterday (Monday) was filled with carnage after China devalued the yuan in response to Trump’s new tariffs. Some commentators are calling the severity of the response by China an “11” when measured on a scale of “1 – 10”. And the markets showed it. ES, NQ and others sold off to the tune of 3+%. Bonds rallied hard along with gold and bitcoin. Weirdly, silver is still inside its range.

Today (Tuesday), most of these markets should back-and-fill – i.e.: “z-days”, possibly forming hourly bull and bear flags.

Commentary

  • GC: Upside breakout; buy flushes
  • SI: Still inside its daily range (weird)
  • HG: Breakdown – short rallies.
  • ZB: z-day – buy deep flushes
  • ZC: Bouncing from strong support levels but now has 5 SMA sale and 2 days up. Might be good for short scalp.
  • ZW: Oversold with two days up.
  • LC: Wicked noise – no trade
  • LH: Trend is down – no immediate trade opportunity
  • NG: Hammer right at support levels. Dicey for longs, dicey for shorts.
  • HO: Oversold into support.
  • ES: Z-day; Note: at 200 period ema on daily. Firmly back inside weekly range.
  • NQ: z-day; same note as ES.
  • YM: z-day; same note as ES.
  • NK: Breakdown on weekly – short bounces (carefully!)
  • FDAX: Same as NK.
  • EC: Breakdown failed! Firmly back inside daily range and wedge.
  • BP: Buy divergences forming negative consolidation for now.
  • JY: Maybe buy flushes? This is so correlated with US equities you might as well short equities – the patterns are clearer on those charts.
  • NE1 – buy with stop at Monday’s low.
  • DX: Failed breakout – back inside range.
  • BTC: Upper end of bull flag – maybe a breakout if you squint but close is inside flag formation.

Most of these markets are now correlated. So for intra-day trading just pick one and work it from one side or the other. If equities rally, you can expect that gold, silver and btc will pull back, currencies will retreat, bonds will fall and copper will rally. So just pick one market and work that instead of trying to work them all – its the same trade now regardless!

Reading Suggestion

A contrarian note: http://adventuresincapitalism.com/2019/08/05/if-hes-tweeting-it/

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