Silver might recover the gap and continue it's uptrendSilver looks like to follow gold into higher prices. I expect a potential entry at around the 200ema on the 1hr timeframe to recover the created gap in the price to keep following the trend.
Meanreversion
Flush of $62k liquidation of BitcoinWatch a quick drop on BTC today! We got many liquidations there. This would also be a 4hr mean reversion!
Last Leg upwards for AAVE?This idea shows the formation of a top at AAVE. It's still a long move because currently it looks like we are doing a mean reversion. Let's see if the EMA50 holds on the 1 hour time frame and if we could see higher prices.
Bearish scenario for the weekThis is the bearish scenario for the week. We have two clusters of liquidity. One at GETTEX:64K and at $65k. I expect a sweep of the previous FWB:65K highs and then a reversal if we turn into an correction.
15 min mean reversion into playWe are doing a mean reversion on the 15 min timeframe right now. This could be a good entry for the europe session today. The orderbook shows alot liquidity in the area at around $64.5k.
Points of Interest on BITCOIN before FOMCI'm watching the price action closely today as we approach the CME gap at $61.5k.
We have not yet taken the previous high on the CME chart. The gap is still open a little bit. We've also accumulated some liquidity at about $57.2k. It is also wednesday, which is know for it's trend reversal.
False move monday on BitcoinWe are currently sitting at the EMA50 on the 4hr timeframe. It looks like we are doint a mean reversion here again. The top was quick and formed a wick but I couldn't finde any vector candle that could be liquidity pools to recover. We also have a CME GAP at $54.2k which will be recovered soon in my opinion. We had the retest of the $58k level which was very important but I expected it to happen on wednesday. Lets observe price action but my observation leans towards shorting.
Quick pump on monday? BITCOINWe could see a rapid rally on Monday that will last until Wednesday when the CPI data is released. We are currently in a mean reversion as show with the arrow. We broke through the ema50 and are retesting it right now. The order books are also pointing to $56k as there is a lot of liquidity in the form of orders looking to be filled.
Gamestop (GME) local bottom?Look at this retest of this horizontal support at around $20.
GME has also retested and held the EMA50 on the weekly time frame, which looks quite promising, like a mean reversion and even more bullish because it is a higher time frame.
BITCOIN BULL & BEAR SCENARIO FOR THE REST OF THE WEEKIn this scenario, we retest $58k and move lower to reach the low at $54.6k. These price moves should be watched closely as they can become volatile with falling stock prices and economic data. Today the JOLTS job openings will be released which could cause volatility. If the economic data turns out to be bad for the dollar in the next few days, the upside scenario could continue and we would re-enter the area where we are trading sideways.
4hr BITCOIN mean reversion rejection - Leave the rest for laterIn #Bitcoin's 4-hour chart scenario, we reject the EMA50 we are currently at and take the low at $56k in the next couple of days. We get a lot of economic data in the next few days until Friday, which could strengthen the US dollar and lead Bitcoin into a sell-off. Chart-wise, it looks like a rejection of the 4hr EMA50. The first target would be $56k and if things look really ugly, we should also consider $51k as a possible target.
Bear and bull scenario for today (MONDAY)We recovered the wick from Sunday with the move lower just before the close of the weekly candle. I could see some mean reversion here on the table and a possible break or rejection near the daily open (offset) at $58.4k. Like always $58k region is key. A possible rejection can happen at the psychological low at $58.2k. Right now we are still in the range of $58k - $61k. London Session starts in 8 min and will start the day. Let's go. Trade safe!
Potential double bottom on ICP on the 1WHere's an idea about the Internet Computer Protocol. It looks like we are forming a double bottom at the orange market support level. We are still trading below the EMA50 on the 1W which could be the biggest short term resistance for a breakout. This is a long term idea that might be worth keeping an eye on.
Potential PO3 in formed on BitcoinThis fundamental analysis shows the potential of a PO3 pattern forming. We went to the EMA50 on the 1 hour time frame which was the manipulative move in the Po3 pattern. At the moment we are back in the consolation area, but there is a chance to go back to older lows that were respected by the last decline, which could have its turn now. So $56k is the target for now.
Retrace and recover the CME Gap?We could rise to around $61.8k to close the CME GAP on Bitcoin. After filling it, we could fall further. Let's see how the price performs around 4pm. Economic data will be released today at around 2:30pm. Let's go! Safe trade.
Bearish trend continuation for the weekThat's my idea for the current downtrend if we continue it. Nvidia earnings today at 10pm could be a factor for volatile price action. I see the possibility of a move up to the 1hr EMA50 at around $61.2k if earnings come out well. This is a scenario where we continue the current downtrend. Check out my bear scenario for this week here on tradingview to see the bigger picture. The level to keep an eye on is the $56k level as the price could be interesting there due to pools of liquidity. I have also marked the current price levels where we are again. These are the levels of the consolidation range we were in last week.
It's been a Volatile Tuesday Trading Gold
I would prefer to see the 2531 -2532 area taken out first.
However, BUY GOLD at current price. The price action is looking healthy.
Besides, good consumer confidence can't be ALL-Bad
Bitcoin bearish scenario for the weekI made this analysis yesterday. In this case, we also expect a move closer to $62k, so based on this analysis, we have time to analyze until Tuesday to decide which way to go. The bears case explains the price action as the following. We broke out of last week’s consolidation with a manipulative move over the weekend/late Friday, so we trapped the longs by let the believing in higher prices by hold the price at the GETTEX:64K level. The EMA will not hold in this case and we go back to the lows of August 6 at around $51,000.
Bitcoin bullish case for the weekI did this analysis yesterday. The case is the following. I expected this drop to the current levels of $62,000 to lead to a meanreversion to the EMA50 on the 4-hour time frame. In the bullish case, we hold the EMA50 and see higher prices. The targets for upside continuation would be $66k and $69k for this week.
ASX futures snap 9-day streak, further downside loomsYesterday I outlined why I was suspicious of the ASX 200 rally, and today I see it has now retraced. The ASX 200 futures market snapped an 11-day streak after forming a bearish pinbar perfectly at a 78.6% Fibonacci level, below the 8,000 handle. Volumes have been declining during the entire ‘rally’ which shows a lack of bullish enthusiasm, and potentially points to a deeper pullback.
A bearish trend has developed on the 1-hour chart, and the support zone ~7917/25 has now been respected as resistance. The bias is to fade into rallies towards that resistance zone in anticipation of a move down to 7860.
NQ Power Range Report with FIB Ext - 8/14/2024 SessionCME_MINI:NQU2024
- PR High: 19128.00
- PR Low: 19087.00
- NZ Spread: 91.5
Return back to daily Keltner average cloud (20-32)
- QQQ gap fill above 455
Key scheduled economic events
08:30 | CPI (3x)
10:30 | Crude Oil Inventories
Evening Stats (As of 11:25 AM 8/13)
- Weekend Gap: N/A
- Session Gap 7/24: -0.32% (open > 19946)
- Gap 10/30/23 +0.47% (open < 14272)
- Session Open ATR: 465.90
- Volume: 20K
- Open Int: 239K
- Trend Grade: Bull
- From BA ATH: -9.0% (Rounded)
Key Levels (Rounded - Think of these as ranges)
- Long: 20954
- Mid: 19814
- Short: 17533
Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
BA: Back Adjusted
BuZ/BeZ: Bull Zone / Bear Zone
NZ: Neutral Zone
USD/JPY bull flag forms at extremely oversold levelsBy Monday's low, USD/JPY had fallen -12.5% from its July high and the daily RSI (14) had reached its most oversold level since 1996. And with a bullish inside day on Tuesday with a potential bull flag forming on the intraday timeframe, dups look good over the near-term for bulls. Whether it can truly capitalise on any decent rally depends on appetite for risk in general, but for now we look at a cheeky long.
Zero Spread Milestone: Strategic Trade in Micro Yield FuturesIntroduction
The current market scenario presents a unique potential opportunity in the yield spread between Micro 10-Year Yield Futures (10Y1!) and Micro 2-Year Yield Futures (2YY1!). This spread is reaching a critical price point of zero, likely acting as a strong resistance. Such a rare situation opens the door for a strategic trading opportunity where traders can consider shorting the Micro 10-Year Yield Futures and buying the Micro 2-Year Yield Futures.
In TradingView, this spread is visualized using the symbol 10Y1!-CBOT_MINI:2YY1!. The combination of technical indicators suggests a mean reversion trade setup, making this a compelling moment for traders to act on such a potential opportunity. The alignment of overbought signals from Bollinger Bands® and the RSI indicator further strengthens the case for a reversal, presenting an intriguing setup for informed traders.
All of this is following last Wednesday, July 31, 2024, when the FED reported their decision related to interest rates where they left them unchanged, adding further context to the current market dynamics.
Yield Futures Contract Specifications
Micro 10-Year Yield Futures (10Y1!):
Price Quotation: Quoted in yield with a minimum fluctuation of 0.001 Index points (1/10th basis point per annum).
Tick Value: Each tick is worth $1.
Margin Requirements: Approximately $320 per contract (subject to change based on market conditions).
Micro 2-Year Yield Futures (2YY1!):
Price Quotation: Quoted in yield with a minimum fluctuation of 0.001 Index points (1/10th basis point per annum).
Tick Value: Each tick is worth $1.
Margin Requirements: Approximately $330 per contract (subject to change based on market conditions).
Margin Requirements:
The margin requirements for these contracts are relatively low, making them accessible for retail traders. However, traders must ensure they maintain sufficient margin in their accounts to cover potential market movements and avoid margin calls.
Understanding Futures Spreads
What is a Futures Spread?
A futures spread is a trading strategy that involves simultaneously buying and selling two different futures contracts with the aim of profiting from the difference in their prices. This difference, known as the spread, can fluctuate based on various market factors, including interest rates, economic data, and investor sentiment. Futures spreads are often used to hedge risks, speculate on price movements, or take advantage of relative value differences between related instruments.
Advantages of Futures Spreads:
Reduced Risk: Spreads generally have lower risk compared to outright futures positions because the two legs of the spread can offset each other.
Lower Margin Requirements: Exchanges often set lower margin requirements for spread trades compared to single futures contracts because the risk is typically lower.
Leverage Relative Value: Traders can take advantage of price discrepancies between related contracts, potentially profiting from their convergence or divergence.
Yield Spread Example:
In the context of Micro 10-Year Yield Futures and Micro 2-Year Yield Futures, a yield spread trade involves buying (or shorting) one contract (10Y1! Or 2YY1!) while shorting (or buying) the other. This trade is based on the expectation that the spread between these two yields will move in a specific direction, such as narrowing or widening. The current scenario (detailed below), where the spread is reaching zero, suggests a significant resistance level, providing a unique trading opportunity for mean reversion.
Analysis Method
Technical Indicators: Bollinger Bands® and RSI
1. Bollinger Bands®:
The spread between the Micro 10-Year Yield Futures (10Y1!) and Micro 2-Year Yield Futures (2YY1!) is currently above the upper Bollinger Band on both the daily and weekly timeframes. This indicates potential overbought conditions, suggesting that a price reversal might be imminent.
2. RSI (Relative Strength Index):
The RSI is clearly overbought on the daily timeframe, signaling a possible mean reversion trade. When the RSI reaches such elevated levels, it often indicates that the current trend may be losing momentum, opening the door for a reversal.
Chart Analysis
Daily Spread Chart of 10Y1! - 2YY1!
The main article daily chart above displays the spread between 10Y1! and 2YY1!, highlighting the current position above the upper Bollinger Band. The RSI indicator also shows overbought conditions, reinforcing the potential for a mean reversion.
Weekly Spread Chart of 10Y1! - 2YY1!
The above weekly chart further confirms the spread's position above the upper Bollinger Band. This longer-term view provides additional context and supports the likelihood of a reversal.
Conclusion: Combining the insights from both Bollinger Bands® and RSI provides a compelling rationale for the trading opportunity. The spread reaching the upper Bollinger Band on multiple timeframes, along with an overbought RSI, strongly suggests that the current overextended condition is potentially unsustainable. Additionally, all of this is occurring around the key price level of zero, which can act as a significant psychological and technical resistance. This convergence of technical indicators and the critical price level points to a high probability for a potential mean reversion, making it an opportune moment to analyze shorting the Micro 10-Year Yield Futures (10Y1!) and buying the Micro 2-Year Yield Futures (2YY1!) as the spread is expected to revert towards its mean.
Trade Setup
Entry:
The strategic trade involves shorting the Micro 10-Year Yield Futures (10Y1!) and buying the Micro 2-Year Yield Futures (2YY1!) around the price point of 0. This is based on the analysis that the spread reaching zero can act as a strong resistance level.
Target:
As we expect the 20 SMA to move with each daily update, instead of targeting -0.188, we aim for a mean reversion to approximately -0.15.
Stop Loss:
Place a stop loss slightly above the recent highs of the spread. The daily ATR (Average True Range) value is 0.046, so adding this to the entry price could be a way to implement a volatility stop. This accounts for potential volatility and limits the downside risk of the trade.
Reward-to-Risk Ratio: Calculate the reward-to-risk ratio based on the entry, target, and stop loss levels. For example, if the entry is at 0.04, the target is -0.15, and the stop loss is at 0.09, the reward-to-risk ratio can be calculated as follows:
Reward: 0.19 points = $190
Risk: 0.05 = $50
Reward-to-Risk Ratio: 0.19 / 0.05 = 3.8 : 1
Importance of Risk Management
Defining Risk Management:
Risk management is crucial to limit potential losses and ensure long-term trading success. It involves identifying, analyzing, and taking proactive steps to mitigate risks associated with trading.
Using Stop Loss Orders:
Always use stop loss orders to prevent significant losses and protect capital. A stop loss order automatically exits a trade when the price reaches a predetermined level, limiting the trader's loss.
Avoiding Undefined Risk Exposure:
Clearly define your risk exposure to avoid unexpected large losses. This involves defining the right position size based on the trader’s risk management rules by setting maximum loss limits per trade and overall portfolio.
Precise Entries and Exits:
Accurate entry and exit points are essential for successful trading. Well-timed entries and exits can maximize profits and minimize losses.
Other Important Considerations:
Diversify your trades to spread risk across different assets.
Regularly review and adjust your trading strategy based on market conditions.
Stay informed about macroeconomic events and news that could impact the markets.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
