The chart is very messy, so I will walk through everything I've drawn.
1. A weekly H&S pattern, it's clear on the daily too. Target about 60$. A weekly close below 68-69 would confirm the pattern.
2. After a lateral movement since the start of the year, CME broke the rectangle and retested it.
3. Look where the last retracements ended, at 50% of the rally/decline. It seems like the current rally rejected the 50% fib of the decline.
4. Look at the volume and its MA of this rally. It is very very light.
5. The MACD histogram is allready at a level where rallies usually end, and started ticking down. It looks overbought, and consider how little the price advanced.
6. The EMA's are perfect dynamic support/resistance areas, from where to enter in the main direction. Currently price is at its EMA's.
7 Suport levels are taken from the weekly, and if you zoom out you can see their importantce also on the daily. What is really nice is that we have a confluence of harmonics exactly at these levels. The 2nd and the 3rd targets both have the 'D'/'d' points of an AB=CD pattern. Besides this, target number 2 has also the 1.618 fib of the 'bc' rally.
All these facts point to a clear short for me. My bias is short on the US market, and I believe Monday will be an important day which will give us some hints of future prices. But, CME does not have a good correlation with the US market, so that is a plus, cause if I am wrong on the US market, CME doesn't necessarily move with it, at least not for long.
Because of the clear support areas, I wan't to make a trade plan and follow it. I will manage the trade as follows:
1 Open a trade if there is no big gap up at the open, that would automatically put this trade on stand by. Stop loss at 72.30$.
2 Take 30% off the table at the first target, and set the stop to breakeven. If CME is going to continue down, it shouldn't touch my entry level, as it is quite far away.
3 Take 40% off the table at the second target. I will move my stop above a swing high above the first target, by that time there should be a clear one, at least on the smaller time frames. IF, after reaching the second target, there will be a retest of of the 65-66$ level, with a shorting signal, I may want to add to my short position. Otherwise, I won't be adding anymore to my original position.
4 Close out the trade at the 3rd target. This is very far away, and if CME will go there, I do not want to keep anymore of my original position.
1. A weekly H&S pattern, it's clear on the daily too. Target about 60$. A weekly close below 68-69 would confirm the pattern.
2. After a lateral movement since the start of the year, CME broke the rectangle and retested it.
3. Look where the last retracements ended, at 50% of the rally/decline. It seems like the current rally rejected the 50% fib of the decline.
4. Look at the volume and its MA of this rally. It is very very light.
5. The MACD histogram is allready at a level where rallies usually end, and started ticking down. It looks overbought, and consider how little the price advanced.
6. The EMA's are perfect dynamic support/resistance areas, from where to enter in the main direction. Currently price is at its EMA's.
7 Suport levels are taken from the weekly, and if you zoom out you can see their importantce also on the daily. What is really nice is that we have a confluence of harmonics exactly at these levels. The 2nd and the 3rd targets both have the 'D'/'d' points of an AB=CD pattern. Besides this, target number 2 has also the 1.618 fib of the 'bc' rally.
All these facts point to a clear short for me. My bias is short on the US market, and I believe Monday will be an important day which will give us some hints of future prices. But, CME does not have a good correlation with the US market, so that is a plus, cause if I am wrong on the US market, CME doesn't necessarily move with it, at least not for long.
Because of the clear support areas, I wan't to make a trade plan and follow it. I will manage the trade as follows:
1 Open a trade if there is no big gap up at the open, that would automatically put this trade on stand by. Stop loss at 72.30$.
2 Take 30% off the table at the first target, and set the stop to breakeven. If CME is going to continue down, it shouldn't touch my entry level, as it is quite far away.
3 Take 40% off the table at the second target. I will move my stop above a swing high above the first target, by that time there should be a clear one, at least on the smaller time frames. IF, after reaching the second target, there will be a retest of of the 65-66$ level, with a shorting signal, I may want to add to my short position. Otherwise, I won't be adding anymore to my original position.
4 Close out the trade at the 3rd target. This is very far away, and if CME will go there, I do not want to keep anymore of my original position.