Thursday, 28 December 2017

Gold and Crude Examples of How Markets Play Trader with Traps

There're many ways where markets screw with traders. One of such a way is through the use of traps. The traps looking like the markets sticking their tongues at you, taunting you (see 2 charts below).


Miss Market taunts you by sticking out her tongue

 Energy Trap 
When i wrote in my post (dated 19 July) Crude Oil Price Bottoms 2017? about a double bottoms in XLE, this signals a trend reversal in crude / energy complex.

XLE etf chart showing trend lines and bull and bear traps
XLE etf chart showing trend lines and trap (aka tongue)
(Click image to enlarge)


It did give a tradeable bounce just as i pointed out. I wasn't sure that the double bottoms signal the start of the trend reversal for crude. As it turns out, the double bottoms did signal the trend reversal, but not before it reverses sharply (marked by "Oh no!") on the chart to the downside.

After this plunge from "Oh no!", it traps the bulls (like yours truly) who are thinking that this is the start of reversal, but then it reverses just as quickly to trap the bears, who are thinking that the bearish trend continues especially when it falls back below the double-bottoms as well as the down trend line. Both bulls and bears lost money in this V-shaped trap.

That's why i label the V-shaped price formation as Trader's Trap, and not bull nor bear trap because it traps both:  first the bulls and then the bears.


 Gold Trap 
Of course, crude oil isn't the market that makes life miserable for traders. In fact, gold market loves this sort of traps even more, causing the gold traders' heads to spin like Linda Blair in The Exorcist (1973). (I won't repeat her/the Devil's profanities).

Gold chart showing trend lines and bull and bear traps
Gold chart showing trend lines and traps (aka tongues)
(Click image to enlarge)


Time again and again, the gold price just drops below the trend line, making bulls give up and bears all excited, and just as quickly it reverses direction sharply and makes new high, causing the excited bears shaking their heads in defeat. The market likes to make you pay, nor making your trading life easy.

It certain has made a fool out of me when i wrote the article Gold Lining Up behind the Gate for a Breakout (dated 22 Nov) when i expected price to break out of $1300 level, the market was then up to its old trick once again by dropping its price below the uptrend line to create a trap.

Is price action of the next few months going to repeat the July - September price actions? In other words, after price drops below the trend line and getting the bears all excited, and only reverses suddenly and sharply and making new high?

If it repeats the price action of July trap, it should at least break above $1300 level, and then proceed to make higher high (above $1360).

I feel this is a high probability event given that the 1st 6 months is a gold's strong season.

Today (28 Dec), the price has already moved back above the uptrend line that hangs the trap / tongue. RSI tells me that the gold price is bullish and likely to break above the green line ($1300).

U.S. Dollar Index (DXY) is developing a H&S formation (as well as Bitcoin).

If DXY breaks below 90.5 cents, gold bull market is assured (at least, a move above $1380 is highly likely).



Wednesday, 27 December 2017

Bitcoin Head and Shoulder and Fib Retracement Targets

This drop in Bitcoin price is a "buy the rumour, sell the news" event. The BTC price runs up in anticipation of the 2 listings of Bitcoin Futures on Wall Street. During this time, the crowd piled into the FOMO (Fear Of Missing Out) trade. Once the listing is complete, it's time to sell.

As i said in my previous post The Rise and Rise of Bitcoin, (dated 11 Dec), in the final paragraph, i said "If no further milestone event continues to emerge, i expect prices starting to fizzle out as they did in the past". Well, it's fizzling out.

A head and shoulder (H&S) pattern is forming at the moment, and the chart below shows the measured target, which coincidentally is also 78.6% Fib retracement. Is it a coincidence?


Bicoin chart showing Fib retracement levels and head and shoulder pattern
Bitcoin price chart as of 27 Dec 2017
(Click chart to enlarge)

Other possible targets are of course those of the Fib retracement.

For example, we already had a brief one-day test of the 61.8% retracement last week on 22 Dec. This also "coincides" with 50 day MA. This explains the stunning bounce off this level (~$11,200).

The 50% Fib retracement  ($1,250 to $ 1,300) also gives BTC price 2 bounces during this H&S development (One on 9 Dec, and the other on 24 Dec). It 's also provides a good support for the next down move.


The measured target of the H&S is around $8,741 level (consider the band $8,600 to $8,800) . This also "coincides" with the rising trend line from September, as well as the 78.6% Fib retracement level.

When you have a confluence of more than one important pivot levels, they tend to lend strong support. In this case, there're 3 coincidences. I would put my money where my mouth is when the price reaches this level.

While the price could settle on the 50% Fib retracement (or even 50 or 100 day MA), i think it's very unlikely prices would fall below the 78.6% Fib retracement.





Saturday, 23 December 2017

Christmas Light Up Around Singapore 2017

 Bugis Junction 

Saw some Xmas decorations in Bugis Junction while i was on my way to my post-surgery follow-up visit in Raffles Hospital. So i thought i captured the Xmas spirit while it lasted. I think "spirit" is the right word (not alcohol, although there's part of the festive cheers). Is Christmas fairy or pixie a spirit?

Christmas decoration, Bugis Junction, Singapore
Is she the Xmas fairy? Well, where's the wings?
Is she a Xmas pixie?  She's rather tall for a pixie.
Ok, it's Xmas, let convince your brain to go on holiday. That's the spirit. Hey, where's the fairy dust?

Xmas fairy, Christmas decoration, Bugis Junction, Singapore
I didn't create the halo with Photoshop (i can't afford the software or the time). It's the midday sun.
It's perfect timing. A Xmas miracle !

Xmas fairy, Christmas decoration, Bugis Junction, Singapore

Xmas fairy, Christmas decoration, Bugis Junction, Singapore



 Vivocity 

Was there shopping for my $2 reading glasses at Daiso (a Japanese dime-store, and a dime is now $2 SGD). Without my reading glasses, pray tell me, how i'm going to write this post?

Palm trees, rooftop, Vivocity, Singapore
There're toddler pools and ponds on Vivocity's rooftop. But this is a puddle of water after the rain.


These pools are filled with chlorinated water, not rain. So have fun with chemicals.

Pool, rooftop, Vivocity, Singapore Paddle boat, Pool, rooftop, Vivocity, Singapore


In the West, snow is a magical time during Xmas. In the tropic, maybe rain does the same as snow for Xmas? No? At least, it provides nice reflecting surfaces to enhance photos.

Christmas tree, rooftop, Vivocity, Singapore


Christmas tree, Vivocity, Singapore Christmas tree, Vivocity, Singapore


Christmas tree, Vivocity, Singapore


Christmas tree, Vivocity, Singapore


Christmas tree, Vivocity, Singapore


Christmas tree, Vivocity, Singapore


Christmas tree, Vivocity, Singapore
The same puddle of water but at the opposite angle



 Harbour Front 

I went to Harbour Front next-door for some Vietnamese. There's a photo booth / box where the chairs are affixed to the ceiling, and everything else are upside down. Is this Singapore or Australia? Since Singapore is located on the Equator, shouldn't the chairs be nailed to the walls, instead?

Christmas decoration, Harbour Front, Singapore Christmas decoration, Harbour Front, Singapore


 Orchard Road 

I went to Orchard Road to get some Xmas shopping (well, i'll go there anyway. To get myself off my butts and take some Xmas photos. No Xmas photos are complete without including those that are decked Orchard Road).

Christmas Light Up, Orchard Road, Singapore


This is the 1st time i saw some religious displays on Orchard Road. Perhaps it was always there, i was just blind. But this wretch can now see. Amazing !

Nativity scene, Christmas Light Up, Orchard Road, Singapore
Nativity scene
Jewish Menorah, Christmas Light Up, Orchard Road, Singapore
Jewish Menorah
(Usually 7, 9-branched Menorah is used during Hanukkah)

While Hanukkah is the most common used spelling, there're other spelling like "Chanukah" was used (see photo).

Another trivia, if you google "Hanukkah" during this period, you'll get this Google banner, instead of the usual plain Google banner.

Hanukkah, Google page banner


Christmas Light Up, Orchard Road, Singapore
The white peranakan building on the left is the Visitor Center

Christmas angels, Orchard Road, Singapore


Christmas Light Up, Orchard Road, Singapore Christmas Light Up, Orchard Road, Singapore


Christmas Light Up, Orchard Road, Singapore


Christmas Light Up, Orchard Road, Singapore Christmas Light Up, Orchard Road, Singapore


Christmas Light Up, Orchard Road, Singapore
Peranakan style is a mixed between Chinese and Malay,
but his building has a rich architectural elements from the Colonial style.


Christmas Light Up, Orchard Road, Singapore



Wheelock Place

Christmas Light Up, Wheelock Place, Orchard Road, Singapore
The cone of Wheelock Place looks like a Xmas tree. It's even green in colour.
So it only needs to hang some tinsels to turn the cone into the largest Xmas tree on the road.


Christmas Light Up, Wheelock Place, Orchard Road, Singapore


Christmas Light Up, Wheelock Place, Orchard Road, Singapore


Christmas decoration, Wheelock Place, Orchard Road, Singapore
Is it just me or that rectangular eyes are becoming fashionable for cartoon characters


ION Orchard

This is one of the prominent building on Orchard Rd. It's corner location certain helps it to stand out more. Because of this, its Xmas decorations wouldn't stand out as it would in other places. But its giant wrap-around undulated media screen would be best served by displaying festive season motif.

Christmas Light Up, ION Orchard, Orchard Road, Singapore
ION Orchard Mall and the Orchard Road's main Xmas street light up decoration.

Christmas Light Up, ION Orchard, Orchard Road, Singapore


Christmas Light Up, ION Orchard, Orchard Road, Singapore



Orchard Central

Every year, Orchard Central comes up with installations for Xmas photos like this windows with flying snow flakes (polystyrene beads).

Christmas decoration, Orchard Central, Orchard Road, Singapore Christmas decoration, Orchard Central, Orchard Road, Singapore

Christmas decoration, Orchard Central, Orchard Road, Singapore Christmas decoration, Orchard Central, Orchard Road, Singapore


Orchard Gateway

Orchard Business Association runs the Best Dressed Building every year to encourage Xmas decorations on Orchard Road. Orchard Gateway tends to put in extra efforts in this regards, coming up different theme every year. I remember their marine and arctic themes in the last 2 years . This year, it's deep space. For that they won the award once again.

Christmas decoration and Light Up, Orchard Central, Orchard Gateway, Singapore

Christmas decoration and Light Up, Orchard Central, Orchard Gateway, Singapore Christmas decoration and Light Up, Orchard Central, Orchard Gateway, Singapore

Christmas decoration and Light Up, Orchard Central, Orchard Gateway, Singapore



Bucket List Check (Houston, Houston...)

egg nogg
I finally sampled some egg-nog from the supermarket and crossed it off from my bucket list.

Believe it or nog!

Which part is unbelievable? The fact that egg-nog is on my bucket list? Or that it takes me so long to try it.

Well, it takes me so long because my list is very long, and this item is near the bottom. The list is considerable longer than the 10 Commandments, but i only require 1 tablet for the list (my tablet has at least 300 GB memory, if my memory serves).

Moses holding 2 tablets with 10 Commandments
Moses (played by Charlton Heston, real name John Carter,
who's not the fictional hero who goes to Mars,
leaps like a frog,  floats like a butterfly  and stings like a bee)
holding 2 tablets of the 10 Commandments.

These 2 tablets hold less than 1 KB of data. Very low tech. The upside is that the data storage would last thousands of years. Especially in the dry desert condition.

Another shortcoming of using stone tablets was that there's no room in the future for extra Commandments (even God can change his mind). Or in modern computer jargon, "Insufficient memory".

So i asked Moses, "Why didn't you use smaller fonts just in cases there're new Commandments?"
"I can't read small fonts. Can you?" Slightly miffed, he said. He wears no spectacles.
Aman! (or Awoman! Clearly,  'amen' is grammatically incorrect).

I, too have problem reading smaller fonts. Also, i suspect it's very hard to chisel words that have font size smaller than 80. So what type of font are these words on the tablets? Not Times Roman font, i hope! These pagans put Christ on the cross. Damn you! Ah...God damn you all to hell!

Oh, you haven't seen that movie with Charlton Heston (ala Moses) playing the lead? Here's a quick refresher.



Where was i? Oh yes. The egg-nog brings back old (i mean childhood) memories. I remember i went to "the gym" in my teen years. Since i grew up in Saigon (for the millennials, Ho Chi Minh City) during the Vietnam War, the gym is a place for lifting weights and nothing else (actually, there was a lot of self-admiring at the mirror. It's  not just the place for inflating muscles). Grown-ups recommended raw eggs and milk for muscle build up. Well, egg-nog is essentially that with sugar added. Too sweet for me. I should put some coffee in to make it more agreeable with me (others would probably prefer whisky and rum).

While the list is long, it's considerably shorter than Donald Trump's tie.

Anyway, the bucket list is now (negligibly) shorter. On that short note, Happy Holiday! (i'm told it includes Happy Xmas, Happy Hanukkah, gong hei fat choy (close enough. Some years), etc).