DuncanParker
Short

Things Could Get Loonie...

FX:CADJPY   Canadian Dollar/Japanese Yen
255 13 3
This morning I shared an idea with a similar chart on Minyanville's "Buzz & Banter" and thought I'd share it with the good folks of TradingView as well.

CADJPY             displays a daunting Head & Shoulder's Top very similar to what we see in USDJPY             . The major pairs always have more trickery involved to some degree and Dollar Yen has been a nervous, noisy trade the last several days. In contrast, CADJPY             has been a cleaner tell as to what's really going on in global macro.

CAD is a commodity currency and therefore often reflects the sentiment of crude oil             and gold             , among others. Last week's COT report revealed record long positioning in front month Crude contracts. The crowd is usually wrong, unfortunately. Further, I was reminded the last few days that the S&P 500             "Is always long Crude." In other words, a breakdown in CADJPY             could foretell a breakdown in Crude and thereby a breakdown in US equity indices.

I'm not sure what came first; the chicken or the egg. Certainly there are many other factors at play in creating this very bearish H+S             formation other than my simpleton takeaway. However, given the CADJPY             correlation to other major currencies that effect US equity markets - I think a triggered formation here has grave implications for US equity bulls.

Keep an eye on the pair as a leading indicator for now. Anything can happen and the risk/reward isn't there to justify a short entry just yet (at least not a full position imo             ). Think of CADJPY             as a proxy for USDJPY             with cleaner price action             in the current market environment (these things change over time).

Good luck out there, keep 'em tight!

DP
Short initiated in the pair.
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Here we go again...
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Still stuck in purgatory. Next day or two should give clear guidance as to direction of the next major move.
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DuncanParker PRO DuncanParker
More bullish move today back above the neckline; if bulls can put in a higher high and hold a higher low, this pair may have escaped big bad Head & Shoulder's Top formation. Stay tuned!
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Alright, well the breakdown area has been re-tested. Aggressive traders (long or short - as stated I believe the short side will play out - but that could be confirmation bias so trade your own plan) should look to build or add to positions here. Next week could be a doozy for the markets.
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Great Work
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DuncanParker PRO StealthTrader
Thanks Stealth!
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Another great idea. I wouldn't have seen this as a Head-and-shoulder, frankly.
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Thanks! Yeah, they don't necessarily have to form horizontally. Most refer to this as a "Sidewinder Head & Shoulders" setup. Currently, price is over 80 pips lower than when I posted the above chart 13 hours ago. I'll be looking for acceleration to 92 then 91 for a bounce. Whether or not it wants to retest the breakdown point remains to be seen. There's nothing out there that says it "must" retest that area, just a common occurrence. Regardless, the pattern has been validated so we should expect the 83 measured move target to be achieved in due course.
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DuncanParker PRO DuncanParker
Here's an updated chart as of near 5 p.m. EST.
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