There is a number of interesting chart setups today; illustrating some of the concepts and methods I use to analyze the futures markets. Let’s look at a couple of them.
First let’s look at the June Gold futures. The recent activity in gold has been forming a triangle, with the apex of the triangle around 892. Yesterday’s bar touched the lower trend line, violated the upper line during the session (when I drew the upper line, I connected it to yesterday’s high rather than the high from April 1) and ended up with a doji. This gave a breakout setup today; the lower line of the triangle was broken early in the session, and it gathered steam as it took out the 50% retracement level of the past two week’s rally. Note as well that the last Fibonacci support level, at 879.20, has held so far today.
Next, the June Treasury bond futures.Retracement levels are one of my favorite tools for determining support and resistance levels; Fibonacci retracement levels have given a couple of useful levels on the daily chart.
First, a 50% retracement of the April 2 to April 13 selloff is at 128-08, which was yesterday’s high-a level I recognized before yesterday’s session. I left it off the chart below, but the momentum indicator was also on a short sell signal. This meant we had a price level to look for, and a directional signal-the two factors needed for a trade signal. Once short, looking at the 50% retracement level of this week’s rally gave a price of 126-29. This gave a profit target for a short sale, and 126-29.5 has been the low of the session.
Many traders make trading into something more complicated than it needs to be. By picking a reasonable number of indicators and/or patterns, then studying them well and applying them consistently, you can give yourself a coherent view of the markets, and improve your bottom line.
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