G’day Surfers and welcome to our last trading day of the week. It’s only Thursday I here you say – why the last? Well a couple of reasons really – The “Big Boys” are basically wrapping up there week’s work and closing positions by end of day today or at the latest – mid Asia session Friday. This reduces liquidity in the market to the point where technicals become largely unreliable which produces a treacherous situation for us. Secondly and by no means less importantly – we don’t like to risk the chance of spending the weekend with the dreaded “Trading Blues”. This well-known affliction is a constant companion of the newbie trader and comes about by suffering a loss on Friday, with no market to trade back into profit. Isn’t it nicer to spend your weekend worrying only about how fresh and deep the snow is on the mountains or if the REAL surf is up? You got it!
Well there seems no respite from the see saw nature of this market that continues to be range bound. Take away a couple of spikes and the market has not ventured outside a 100 pip range all week. You have to commend yourself if you take profit from this market and our Pattern Detection Service provided another pip gathering opportunity yesterday by spotting one of our favourite Surfing The Pips setups trading a false breakout of our trendline, targeting the Daily Pivot. I hope you banked the pips on offer. Without any trend, the market continued to ping pong between the Daily Pivot and the first Daily Resistance level.
The market continues to make higher lows and highs suggesting it’s trending North but for each mini rally, there is an instant retracement making trading a very risky business. An established Flag Pattern continues to follow a major trendline in search of higher levels but the candles are all telling. On all time frames we are seeing long tails in both directions which is a sure sign the market is in no hurry to go either North OR South. Sadly, Fundamentals are stalling the market portraying the uncertainty that all financial markets are witnessing. You don’t need me to tell you that, I guess. This doesn’t mean our analysis is not working of course, we simply need to be very alert, especially when we enter. The FREE TRADE technique (halving our stake at our first take profit level) we use is serving us beautifully and we need to be very mindful of using it in the very rough surf we are seeing.
The Day Ahead
Considering the market hasn’t given us little indication of its intent all week, perhaps it doesn’t have one!! My sentiment all week has been Bullish so I see no reason for that to change but I see only a stagnant market so I have little conviction in nominating a Play Of The Day. What appears to be poor liquidity (lack of serious money), combined with the see sawing has left us very few good lines to play with, most of them violated more than once, making them unreliable. My favourite play would be to see price action re-test Daily Pivot and produce a Secret Surfing The Pips Pattern, giving me a long targeting Daily Resistance #1. Very open to what the market provides however.
Have a great day.
Geoff Pyne | Certified SurfingThePips.com Trader