week2-04-2015

Technical Research Weekly

Sunday 12th April 2015

Author: Golam Saklinehttp://ae.linkedin.com/in/golamsakline/en

WWW.CHRONOSTRADERS.COM �1

http://ae.linkedin.com/in/golamsakline/en

http://www.chronostraders.com

IntroductionThe greatest dilemma in trading or investing is primarily not knowing how far the price has

advanced within a trend or if price found a temporary bottom. Through extensive research and taking into account some of Johansen, Ledoit and D. Sornette’s work we have built proprietary overlays to constructs a setup that attempts to identify position with a trend and reversal points.

This report is created for the Financial and Investment Community to supplement their existing methods and views, with an alternative insight to Market Micro Structure. Assuming the price carries all the information available at any given point in time, the flow of information with time creates the changes in market state giving indication to the possible change in trend after some extreme reaction from the market participants.

Technical Analysis is a discipline derived from observation of market participants feedback effects. This behaviour is captured in price movements which in turn influences the future choices of Buys and Sells. This report illustrate peaks and troughs in market using statistical and stochastic matrices of investor extreme behaviours at an unfair price level.

Our philosophy is that market starts to reverse from a point when strength of its trend is at its extreme and markets usually breakout and breakdown after an extreme battle between buyers and sellers at a relatively narrow price range. We avoid trying to read too much into candlestick pattern since sometimes it can be counterproductive and difficult to know on what timeframe the market is gyrating. The system also considers horizontal volume pockets also knowns as LVN as gaps in liquidity for resistance or support prices and horizontal high volume also knowns as HVN at price as targets.

The scope of this report is essentially limited to Currency, Commodity and Index Futures. The market reversal pattern is known as the price exhaustion signal. The market breakout or breakdown pattern is known as price compression signal. Exiting a trade is left to the investors risk appetite in terms of price level and trade duration, however it is believed that the best results of a trade can be seen after as much as 10 bars or candles.



Exhaustion signals appear on chart as cyan coloured candles. These signals show up on our charts when the software thinks a trend is coming to an end and often occur at the point when momentum starts to wane. Sometimes green & red bars are another form of overlays that signal exhaustion however these signal are best read with Chronos_HE indicators value greater than 0.48. as confirmed trade entry zone.

Compression signals attempt to identify when new trends are beginning (in direct contrast to the price exhaustion signals that attempt to identify when trends are ending). The compression signals appear as yellow bars on the charts that indicates a big price move is about to occur. This signal is considered to be even stronger when the Chronos_HE indicator has a value less than 0.38.

White Bars are identified as price crossing over pivot zones. If price does not cross the pivot zone with confidence it is likely that the markets will chop around or do a temporary pull back from that zone.



Cocoa Futures

Cocoa has seen a recent bottom illustrated by the price exhaustion around the 2730 level. At the same time Chronos HE marked a value above 0.48 to show conviction on the bottom price zone. Since then the price have been continuing upwards and got rejected by a temporary resistance around the 2850 horizontal volume trough. Looking at the Chronos_HE indicator which suggests that it could be few days before price starts taking a trend towards 2900 if it can break above 2850 resistance zone.

The 4 hr chart has seen a recent top confirmed by the Chronos_HE indicator value greater than 0.48 since then this value has been nearing 0.38 which could lead the way for another compression signal to start the next onward trend.



Wheat Futures

Wheat price is currently experiencing a compression, suggesting a breakout or breakdown is imminent targeting either of 566 or 487 in the near term.

Looking at the 4hr chart, Wheat is currently crossing through the a horizontal volume peak suggesting that it is more likely to be targeting higher prices in the near term.



Copper Futures

Since the bottom illustrated by the price exhaustion around 2.419 confirmed by Chronos_HE value greater than 0.48, the Copper price have since recovered touching nearly the 2.950 resistance where the horizontal volume trough exists. The price is currently being supported by another horizontal volume trough and awaiting further upside or break below the support around 2.700. The consolidation in this area could continue for few more days until the Chronos_HE reaches a value closer to 0.38

Copper in the 4 hr chart is confirming the consolidation pattern with a price compression .



Gold Futures

Gold has seen a recent bottom illustrated by the price exhaustion around the 1143 level. At the same time Chronos HE marked a value above 0.48 to show conviction on the bottom price zone. Since then the price have been continuing upwards and has reached a price magnet illustrated by horizontal volume peak. After the recent daily move it is now suggesting that it is on its way for further upside.

On the 4hr chart Gold seem to be balancing slightly above the horizontal volume peak of 1194. However the Chronos_HE indicator is suggesting that in order for a new trend to begin it could be few more days until the Chronos_HE indicator comes closer to 0.38 to trigger the next trend.



WTI Crude Futures

The daily chart on crude has been sitting above the 49.20 horizontal volume peak price suggesting unless it can break below that price Crude has 54.20 as the near term target. This target price, which also acts as the closest resistance due to horizontal volume trough, if broken could take the price to 59 in the coming weeks.

Looking at the 4hr chart Crude seem to have bounced off the 49.90 horizontal volume peak price and the fact Chronos_HE indicator has still some length to go to 0.48 it is very likely that higher high will be seen in the near term.



Natural Gas Futures

Natural Gas has seen a price compression on daily chart in the recent days and since been breaking down, however the Chronos_HE indicator suggests that it would not do so for too long as it is already nearing the 0.48 mark with some possibility of excess to 0.50

On the 4hr chart the green candles together with Chronos_HE indicator value above 0.48 suggests that a pullback is imminent.



Nasdaq Futures

Nasdaq in the recent days seem to have found support near the 4250 and since then been breaking to the upside. If the price could stay above the 4420 level for a day or two the recent all time high of 4483 would become the near term target. This fits nicely with Chronos_HE indicator which still has some room to move until the 0.48 mark.

The 4hr Nasdaq chart is seeing some near term exhaustion confirmed by the Chronos_HE indicator nearing the 0.48 . There is a possibility the the price could pull back to 4390 where the horizontal volume trough exist before taking the next step higher.



Dow Futures

Since the recent compression on price illustrated by the yellow candles confirmed by Chronos_HE value less than 0.38 Dow have since started the upside move focusing the next target around 18050 Given a situation if the price breaks this level the potential targets for price could reach the highs of 18270 again in the near term. Looking at the Chronos_HE indicator it seem the price has a long way to go until the indicator value reaches the 0.48 mark.

The 4hr chart is showing a possible pullback towards 17940 since the Chronos_HE indicator is not far from reaching 0.48 suggesting a temporary end to the move.



S&P E-mini Futures

Since the recent compression on price illustrated by the yellow candles confirmed by Chronos_HE value less than 0.38 the E-mini have broken out suggesting more upside toward the level of 2117. Looking at the Chronos_HE indicator it seem the price has a long way to go up until the indicator value reaches the 0.48 mark .

The 4hr E-mini chart is experiencing some resistance after reaching the micro structure horizontal volume peak at the same time Chronos_HE indicator nearing the 0.48 suggests trend slowdown. Since the previous exhaustion illustrated by the cyan candles around 2045 which acts as the best trade entries location, the price is yet to see another suggesting further upside from here.



Euro FX Futures

Since the breakdown below the horizontal volume trough around 1.0720 Euro Fx Futures now has the recent lows as the near term target. However looking at the Chronos_HE value, which is yet to reach below 0.38 the price the could be spending few days in a consolidated area before picking up the pace in a new trend.

The 4hr Euro FX chart is experiencing a price exhaustion state suggesting a temporary pullback higher from here towards the horizontal volume trough resistance level of 1.0720. By that time the Chronos_HE indicator could be near the 0.38 mark to allow a new trend to trigger from there most likely to the downside.



Disclaimer

Trading on Securities and Futures may not be suitable for everyone and involves the risk of losing part or all of clients money. Commentaries in this report are educational by nature and are designed to contribute to your general understanding of financial markets and technical analysis using various overlays. Clients are expected to use this report at their own risk. The information in this report reflects Chronos Traders opinion based on certain statistical and geometric specification fed to a system to understand Markets Dynamics. Therefore this is designed for clients who consider themselves sophisticated or professional and is not a recommendation to any one individual. Clients are requested to consult their own broker or Investment Advisor before taking action. Controlling risk through the use of protective stop loss is essential. Trade Alerts are educational insights and not a recommendation to Buy or Sell investments.

Chronos Traders (A subsidiary of Chronos Guardians Ltd)5 Sequoia Park

57 Brighton RoadCrawley

United KingdomRH11 8UA

Email: [email protected]: Chronos.TradersTwitter: @chronostraders

This weekly report is available for free for client trading/investing through our close linked brokers. Alternatively we charge $200 per calendar month for institutions and $50 for individuals.

We also produce single page Research Note on Stock, Commodities and Indices upon request.


mailto:[email protected]


week2-04-2015

Documents

Transcript of week2-04-2015