Ichimoku Trade Blog

Everyone is expecting a pull back. This is what is being said everywhere from CNBC, analyst calls, etc.

We have had a minor pull back believe it or not. It occurred two days ago on 5/24. It did a minor pull back to the Fib value of .707. When you have a major trend occuring as we do right now, there are a lot of minor pull backs that occur. The minor pull backs are “healthy” for the trend to maintain its momentum. See chart below.

Sooner or later a major pull back will occur. However, it is not here yet. Therefore, if you have not entered the trend trade, here is a possible setup for a trade IF you are comfortable with it. Since the trend has been occuring for awhile, we are going to use the 8 hour timeframe to enter the trade. Since we are entering the trade late in the trend, the stop at the beginning of the trade is going be huge. If you are not comfortable with this risk, DO NOT enter this trade. This is for the aggressive trader. If you are a conservative trade, do not enter the trade. Be PATIENT.

Once you have entered the trade, use the 480 timeframe until the entry price is above the daily Kijun Sen value. At that point, switch to the daily timeframe and use it to manage the trade.

For EDUCATIONAL USE. Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .

I have been in the CADJPY for awhile now.  A lot of people are asking if they should get in and where? Usually, it is not good to get into a trend when it has been occuring for awhile. If you do, you need to play it very cautioniously until you have a “free trade” i.e. where you Stop is above your entry value.

As an analyst, you observe the past behavior in order to determine future price/time movements. When an instrument is at it’s all time high, you can not determine support/resistance values from the past. As a result, it is hard to determine where you should take profits or where to get into a exisiting trend trade.

For the CADJPY currency pair, we have no resistance value since it is at it’s all time high. Therefore, we are going to use Fib. values in order to “watch” our trade as it progresses up through various Fib. values.

If you look at the chart, Ichimoku tells us that the pair is still in a healthy bullish trend due to the Kijun Sen on the daily time frame. Therefore, if you have not entered the trade, we can set an entry level based on a break of a Fib. value or last resistance value. Once we are in the trade, we will be using Ichimoku to manage the trade. However, we will be watching price move upwards through the various Fib values until we have a free trade. At that point, we will not use anymore Fib values.

Lets look at this currency pair in Harmonic Analyzer to determine Fib values. Here is the chart. Notice that today’s high was the Fib value of 3.618 extension. Therefore, tomorrow could be a possible turning point. If price breaks through today’s high then chances are very high that we will move to the next Fib value. The next important Fib value is at 117.389. There are smaller fib values which we will draw but this is the big one.

Below is our analysis on the CADJPY currency. We have drawn the small Fib values along with the important value. Also, we have drawn the entry value at 3.618. Price was a little below 3.618 so we are fine in using this value instead of using today’s high with a buffer. Also, we really can’t use the daily Kijun Sen as a Stop since it is at 109.69. It is far away since the bullish trend has been occuring for awhile. The daily Kijun Sen is almost 500 pip away from the current price.

Since we are entering the trade late, we are going to use the Kijun Sen from the 8 hour as our stop. This is drawn already on the chart.

For EDUCATIONAL USE.    Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .

The Singapore/USD currency pair is setting up for a possible bullish trend. It has broken through the Kumo cloud on the daily timeframe. Right now, it is consolidating so we are going to set an entry on a bullish breakout.

Here is the chart. Since we have a Kumo “Shadow”, we need to watch this trade all the way up since we are going to experience consolidation through the trade. If you can’t handle consolidation, don’t enter the trade. This currency pair has been going down since 2004! That has been a long time. Therefore, we know we are going to experience consolidation on a bullish trend.

For EDUCATIONAL USE.    Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .

NZDJPY currency pair has been going sideways for close to two months now. We are going to setup for a bullish breakout long term trend trade.

Below is the chart. All the Ichimoku indicators are indicating bullish. Also, price is getting ready to run into a huge Kumo cloud where it would have to penetrate the huge width of this cloud in order to move into a bearish sentiment.

Profit targets are unknown at this time since this is the all time high for this pair. There is no history to give us some resistance values. If you use Fib values, price targets could be 89.074 (1.414), 89.775(1.500), and 90.736(1.618). We will be getting in right after the 1.414 Fib value so the next Fib value is 1.50 at 89.775. This will be our first resistance value we should expect and watch. The next will be at 90.736 which will be our second resistance value to watch.

For EDUCATIONAL USE.    Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .

ICLR is setting up for a bullish seasonal trade.

The seasonal chart (not predictive of future results) shows that 8 out of 8 years, it has posted min. a 40 cent again from 6/1 – 6/25.

2007 could be the first year where it doesn’t post a profit for this timeframe. As a result, we are going to analyze the chart. Here is the chart analyzed.

Looking at the chart, it has been a very nice bullish pattern. This is show through the white regression lines on the chart.

The Ichimoku indicates there is a bullish sentiment. However, that could change. The Tenkan Sen and the Kijun Sen are very close to each other. Also, the Chikou Span can go bearish fast is prices goes down $2.00. Therefore, we are going to enter on the next resistance value shown in yellow. The stop will be a couple of points (.40cents) below the Kijun Sen. Therefore, the total stop value is $1.50 below the current price. This should be enough to cover all the “noise” from the day traders. The ideal stop is 42.87, the bottom of the Kumo cloud where completely negates the bullish sentiment. However, that is for the aggressive trader. The conservative trader will use the one outlined in the chart. If you are playing this aggressively, please decrease the normal number of positions you hold by half to min. risk.

For EDUCATIONAL USE.    Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .

WDC stopped out today.   Price closed above the Kumo cloud so out sentiment has completely changed. In the 480 timeframe, the bearish sentiment is no longer present.

Below is the chart.

For EDUCATIONAL USE.    Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .

The first profit target (P1) on the chart was reached. We exited out with a 42 pip profit. As mentioned earlier, we are going to exit out at P1 because we do not want the headache of going through the Kumo cloud which usually causing consolidation.

The second entry is not set with the Kijun Sen as the Stop (1.6545). Once the second trade has triggered, we will adjust the stop to the new Kijun Sen value. Also, the support values are shown in blue. Once the trade has triggered, we will analyze the charts to determine where to take our profits. We have to be careful because the last support line is very close to a huge Kumo cloud on the daily timeframe. A situation where we do not want to be in a trade through a Kumo cloud.

For EDUCATIONAL USE.    Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .

Today, as we mentioned in yesterday’s Dow blog, we predicted the market to go down. During the morning, price got very close to our Stop which was 100 pts away from yesterday’s close. At the end of the day, the Dow closed 85 pts below yesterday’s close.

During the last 10 minutes of trading today, it was very interesting. Even though there was a lot of selling i.e. more declining stocks over advancing stocks throughout most of the day, there was a lot of buying during this time period. In fact, look at the chart below. It shows the declining volume vs the advancing volume for the NYSE. The green represents the declining volume and the purple represents the advancing volume. The timeframe shown in the chart is from 12pm to 4:15pm. Let’s look at the advancing volume(purple) and analyze it. From the afternoon to close, the bulls tried a couple of times to break a certain volume barrier (white line). However, they never could break it until 3:50pm today. After 3:50pm, the bulls made their last run and it was soo powerful that the bears could not stop them from breaking this resistance line. Therefore, there was a huge buying power push towards the last 10 minutes of the day.

Now, let’s look at one particular equity: PEIX (Ethanol stock). Look at the chart. The stock was drastically down most of the afternoon except for the last 10 minutes of the day. In the last 10 minutes, huge volume came in and caused it to move from $14.00 to $14.25. A .25 cent move in less then 5 minutes with huge volume.

Furthermore, tomorrow is Friday, the last working day before Memorial Day weekend. Most people are off tomorrow so they can have a long weekend. As a result, volume should be low. With volume being low, volatility will probably be very high. The question now is whether the low volume be buyers or sellers?

3 factors make me believe tomorrow will be a bull today. They are as follows:

1. The buying power towards the last 10 minutes of the day.
2. There has been a lot of people that have been on the “side line” waiting to get into the “bull run”. These people have been waiting for a pull back. Today, a minor pull back occurred. This may be enough to get these people to trade.
3. Look at the VIX for the DJX for 1 month (see chart below). Notice, it is at the highest today for the entire month. There are high chances that the VIX needs to adjust so price should go higher for the VIX to go down. VIX and price TYPICALLY has an inverse relationship.

If you decide to trade the market going up today, make sure you exit by the end of today. Typically, the day after Memorial Day weekend, it is a bearish day. If you don’t exit, use a tight Stop in order to PRESERVE profits.

For EDUCATIONAL USE.    Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .

The Dow in the morning went up due to the housing data. It went up almost 100 pts, close to our stop. However, it quickly reversed towards late morning. We closed down 85pts! Since we determined to enter the trade last night, the entry occurred this morning. I actually entered when the Dow was up 30pts.

My preference for this trade was a selling a Dow mini-future along with purchasing some put options. At the end of the last 10 minutes, there was a lot of buying that was occuring. As a result, I am going to close out my trade to PRESERVE my profits. I am not going to let greed take my profits.

Here is the chart for today.

For EDUCATIONAL USE.    Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .

The WDC trade has been triggered.

Below is the chart with our sto, entry, profit targets,etc.

For EDUCATIONAL USE. Commodity Futures Trading Commission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose .