The Time Factor Report - June 17

Edition

06

Jun 2017

THE TIME FACTOR TRADE REPORT

1

Very important information – please read this first

The objective The Time Factor Trade Report (The Report) has been prepared to further the teachings described in volumes 1 and 2 of Trading with the Time Factor. In particular, we will look to apply the methodologies described in the course using real time market situations. Whilst I will publish the trades I am taking, the objective of The Report is to further your understanding of technical analysis. It is not a report that you should rely on to make trading decisions.

Not personal or general advice The Report is strictly an educational tool only. It should not be construed in any way as personal or general advice. I am not a licenced financial adviser, nor do I know your individual financial circumstances.

The contents of The Report are for educational purposes to provide an analysis on how the techniques described in Trading with the Time Factor can be applied to analyse financial markets. It is not intended to encourage you to take a trade in a particular market or deal in a financial product. If you are looking for financial advice, please consult someone who is appropriately qualified to do so.

Contents are strictly confidential The contents of The Report are strictly confidential and for your own use and perusal. They must not be disseminated, shared or reproduced in any way without my prior written consent.

I have spent hours upon hours researching and refining the concepts taught and described in Trading with the Time Factor, and a number of hours have gone into applying those techniques into The Report examples which you see now and which have been created especially for you.

You have paid good money to access this Report, so why would you wish to share it freely for others to see?

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The value of any investment and the income derived from it can go down as well as up. Please, never invest any more than you can afford to lose.

Not trading advice

No liability

We are not a licenced broker, securities dealer or brokerage house. This Report does not and cannot execute any trades on behalf of investors, nor does it purport to provide advice on the execution of any trades. This is strictly an information service only and does not recommend the reader to take any specific action.

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Past performance is no guarantee of future performance Just because a trading system or trading methodology has produced returns in the past, does not necessarily mean that it will replicate those returns in the future. Trading is a dynamic speculation and can produce losses as well as profits.

Now that is all out of the way, let us begin..

24 Jun 2017

2

Fundamentals first

1

Flash boys and crash boys.

The fat finger syndrome.

Grab a copy if you can.

On 6 May, 2010 the United States stock markets experienced what is collectively known now as the “Flash Crash”.

If you haven’t yet read Michael Lewis’ book, then I suggest you grab yourself a copy and park yourself down for a very entertaining read.

The Flash Crash as a one trillion dollar stock market crash which started at 2.32 pm EDT and lasted for roughly 36 minutes during the late afternoon of New York trade.

The Dow Jones lost 998.5 points within minutes before recovering most of those losses within minutes.

At the time, people had put the cause of the Flash Crash down to an algorithm based trader who had a ‘fat finger’ and pushed the wrong button, sending share prices to spiral. It was later determined (almost 5 years later) that the Flash Crash was caused by trader fraud, with a certain individual charged over the incident.

If you aren’t familiar with the Flash Crash of 2010, then it is worth reading up on this via Wikipedia when you get the chance.

The incident attracted further attention in 2014 when Michael Lewis released his bestseller book “Flash Boys” (see image right).

Flash Boys goes into some very good detail into the lengths that firms (and traders) will go to in order to implement their High Frequency Trading (HFT) system.

A university colleague of mine has been with a HFT firm for the past several years, and when we caught up for a beer just a few weeks ago, I was in awe at some of the stories that he had to share with me, including how his bonus this year was an eight figure number.

Yep, you read that right. Eight!

And so it goes without saying that I got him to pick up the beer tab at the end of the night.

Much of what he had to say validated what was in Michael Lewis’ book, and in particular, how computer driven trading systems have basically created a way for themselves to print money at everyone else’s expense. As I will shortly explain…

4

Survival of the… fastest

The need for speed Lewis’ book describes how the advent of HFT began and how it quickly evolved into a multi-billion industry where only the fastest algorithms and computer systems thrive and survive.

I won’t spoil the details of the book (just in case you haven’t read it), but I will say that HFT affects every single one of the trades which you make today, whether you are aware of it or not.

The impact is more pronounced for those of you who trade through Over The Counter (OTC) or market maker platforms.

If you ever wondered why the price of the stock you were about to buy suddenly went up by a cent or two at the very moment you were about hit the buy button, then HFT is the reason why.

In short, HFT algorithms are so fast, that not only are they able to detect your order going into the system within milliseconds of you hitting the button, but they can also send a trade to the system in a matter of nano seconds, beating the arrival of your trade to the exchange even though you placed it in the queue before they did.

5

Running the stops

This is the reason why.

Not only are these HFT systems quicker and faster than you can ever be in placing a trade, these boxes have become increasingly more sophisticated at automatically being able to run off STOP LOSS orders placed in the system, causing a false move higher or lower, which ends up taking you out of a trade right at the high or low, only to then see the trade move back in your favour.

previous high

STOPS run here

You may have noticed that we recently experienced this type of phenomenon in our recent EUR/USD trade this month.

The chart (right) shows the 15 minute counts in the EUR/USD. Anyone who had traded short the “Previous high” would most likely have had their stops placed above that dotted line. Notice however that the stops were all but briefly triggered off in a 15 minute stint, which would have cause a number of people to exit their short positions and buy back their shorts at exactly the worst possible point.

HFT and computer system based traders “hunt” for these stops in the system, often running the market (in this instance higher) into these points taking the opposite side of the trade, and then running their positions lower for a profit.

This type of phenomenon is something which exists on many of the ‘contract for difference’ markets, which are always the subject of manipulation.

This is the key reason why I decided not to place my STOP LOSS on the EUR/USD trade into the system when I originally took it. When the smartest guys in the room have the technology and the rocket scientists to beat you, the only way you can make the fight fairer is the old fashioned way!

6

But it’s not just the tops and bottoms

Fib retracement points as well

Commonwealth Bank of Australia (ASX: CBA)

Another practical way in which the algo boxes will hunt for stops is to identify the key Fibonacci price and support regions as ‘hunting grounds’ to trigger off stops.

Such is the sophistication of these models, that the computer will know when a stock or commodity has reached the 50.0% or 61.8% mid point.

In the case of our recent CBA trade, this is one of the key reasons why I did not exit the trade when the stock traded back through the $78.48 level which was the 50.0% point (chart, right).

A number of times you will see stocks bounce right off these key Fib points, only to re-test and break them (slightly), before resuming back toward the change in trend.

50% point

This is why it is important to give yourself a decent buffer when deciding to place your stops in the market.

If you can, I try to avoid having stops entered into the system, and much prefer to take my medicine as and when the market gets there.

This is a phenomenon which we must increasingly get used to as the advent of computer trading becomes greater and greater.

7

US equity markets

2

The Box check.

Time is up

S&P 500 – daily bar chart

The Barillaro Box guide that we have been following since the beginning of this year has finally expired.

As you can see (right), the S&P500 has consistently traded above our Pitch Line, giving us every reason to believe that 2416 on the S&P500 was eventually going to be broken in this bull move off the Nov 2016 ‘Trump Low’.

During these types of moves, the objective is to remain trading with the trend. In this instance, it was looking for the longs, and this basic technique would have held you in very good stead over the course of 2017 to date.

Barillaro Angle

Pitch Line

I will continue to watch the Pitch Line now in this move to see if it helps call the eventual top. You do this, simply by extending the current Pitch Line to the right at the existing angle (or “speed”) to which it was moving inside our Barillaro Box. It is just another confirmation tool which we will use in conjunction with our other PRICE and TIME techniques to identify the eventual top when it comes.

9

Looking at the Road Map.

Approaching volatility

The WD Gann Road Map for 2017

According to our yearly Road Map forecast, the first half of the year was always going to be the TIME for buying into this bull market.

We have continued to break through to new all-time highs and whilst I still think there is some more upside left in this market, I am now beginning to become very cautious for the first time this year.

Road Map forecast

As you know, I expect volatility in the months ahead, and we could see this begin from as early as this month, but certainly heading into mid July.

For that reason, I am moving my stops higher on my LONG S&P500 position to my level of entry, and will be looking to exit this position in mid July and take a counter trade either directly short, or via some Put Option positions.

Actual prices

I continue to watch the Road Map closely, as once again, this has been a very good guide so far for the US equity markets.

10

Volatility is down

Oh no you don’t.

In Edition 03 of our Time Factor Report, we discussed the importance of implied volatility and the impact this has on the price you will pay for options.

In particular, we outlined that “the general rule of thumb is that when volatility is low, buying options becomes significantly more attractive.”

S&P500 VIX chart – weekly

The VIX index is now trading at its lowest level in this entire Bull Market Campaign

If you have a copy of Edition 03, I encourage you to go back to page 14 and read the section where I talk about the bullish markets continue and implied volatilities remaining subdued until this point.

I think we are approaching ‘that point’, so the next BIG trade to look for will be the Put Option trade to take advantage of a possible correction in the market as (and when) it happens.

11

Dynamic Gann Angles

I’m your Venus.

S&P500 (daily chart) – tunnels thru the air

Without a surprise, the S&P500 continues to trade within the Dynamic Gann Angles that I have written about for several months now in these monthly reports (see dark blue angles in the chart, right).

Mercury

Venus

Those of you have an astute eye will notice the names of two planets to the left hand side of the chart.

The “Mercury” line (dark blue) is the one that I have been writing about in the months gone by, however, there is also a “Venus” angle (light blue) that I have been observing throughout the year which occasionally converges with its Mercury counterpart.

support support Mercury

There are a couple of observations I want to make here. First, the Mercury Angle peaks on or around 8 August this year in this current movement.

Second, the Venus Angle converges with Mercury on or around he 24 August this year in this current movement.

support

support

These are both key TIME dates, so if we have PRICE resistance on these angles at these dates, we have very strong natural forces suggesting a significant change in trend is due.

Let’s watch this space…

12

The Time & Price Angles

These are future indicators.

S&P500 – daily chart

This is a chart which we featured earlier on in the year, which is an outline of the 1x1 calendar day Time & Price angles that I have been following in the S&P 500 index.

I have seen so many “Gann experts” misinterpret the way these angles are used – many of them will use 10x1 variations to suit a particular market (for example the Dow Jones), which is an absolutely wrong way to use them.

If you are going to use Time & Price Angles, these are the variations that must be applied: 1x1; 2x1; 3x1; 4x1; 8x1 or 12x1.

There are geometric and scientific reasons as to why these are the only “true” angles that work.

The chart (right) simply highlights the 1x1’s. My analysis keeps it simple. Use the most important angles and the ones that work.

You can see in the chart (right) how many times these angles have worked to predict future support or resistance points. These are another good tool which can be used to identify trend line support and resistance.

13

Trading to Time

The dates remain the same

S&P 500 – daily bar chart

Nothing has yet led me to believe that our forecasts for significant market volatility is due to commence on 8 August 2017. This is a date which I write about in chapters 11 and 14 of Trading with the Time Factor – volume 2.

I additionally feel that mid-July becomes a significant time period, being 90 degrees from the 17 Apr low, highlighted in the chart (right).

For the month of June, we must watch the 28-30th as this will be 90 degrees from the 27 March low, 180 degrees from the 30 Dec low, and anniversary with the 28 June “BREXIT” low last year.

Our Road Map suggests that this end of June date could represent a low in the market, with one final short term buying opportunity leading into the key date in August.

If we see a reversal signal on or around these dates, we will then know what to do.

14

S&P 500 (United States equities)

Concluding thoughts.

I retain my long position at 2374 however move my stops higher to entry with a view of potentially exiting this trade in the coming month.

With VIX volatility at all time lows, this is an environment where buying Put Options is becoming increasingly cheaper, and I suspect this is going to be a great way to play any market volatility increasing from mid-July onwards.

Everyone is calling for the “Year 7” October Crash. I don’t think this is going to be as large as many are anticipating.

Having said that, we could very easily see a sharp correction that should be short-lived in nature, so my strategy is to: 1.

Be positioned for the short trade into that time period; and

2.

Be ready for the long trade leading out of it.

S&P 500 summary Positions: Long at 2374 (long swing portfolio) Stop loss: At entry.

Directional bias: Long term BULLISH Action: Look to exit positions into our mid-July forecast date.

15

Australian equities

3

Signs of strength?

The 38.2% level

ASX 200 – daily bar chart

The Australian stock market has been beating to a different drum than that of the United States.

Whilst the US markets have traded to all time record highs, the ASX 200 has experienced a 5.5% pull back, before finally finding some support (so it appears) near the 5611 level at 38.2%.

My instinct tells me that we should be headed higher now on this market. The most recent retracement is current shorter in terms of price than the previous two major retracements (see chart, right) and we have found support at the 38.2% point, which indicates relative strength.

The current low at 5630 could certainly be used as a pivot point at which to place STOPS on a long trade position.

This is how I am treating my current $4.8 million long exposure on the ASX 200, where I originally entered the trade at 5282. I have closed my hedge position out (for a profit of around 200 points), and I have now moved my stops on the long term trade to 5609.

With my effective entry position now at 5050 (once I take into account the profits on the put options), my plan is to exit this position in early July, hopefully with the ASX 200 trading at higher levels.

17

Time and Price angles

Active angles again

ASX 200 – daily bar chart

In last month’s report we outlined a weekly chart with the key Time & Price angles, paying attention to the 1x1 line which recently called the last major top at 5956.

For those of you who are struggling to identify which tops and bottoms to start your 1x1 lines from, then a good suggestion (believe it or not), is to ask your 5 year old child (or grandchild) to point out the bits in the chart where they make a big peak or a big drop. These will generally be the places to start your 1x1’s from.

I am not trying to be patronising when I say that either. Sometimes, the simplicity can be obvious to others and not to those who have been looking at the charts too long and too hard!!

The active angles (right) should continue to provide us with future support and resistance, so these are the ones we continue to keep an eye on.

18

Trading to Time

Active angles again

ASX 200 – daily bar chart

The 8-9th of the month continues to be the main active trading to Time date in the Australian market.

The low on 8 Jun confirms this point. It was 120 degrees from the 7 Feb 2017 low, which in turn was 120 degrees from the 11 Oct 2016 higher. This means that the market appears to be working in “trine” / (triangle), with the next leg of this sequence taking us back 360 degrees to the 11 October again.

This 11 October date becomes interesting particular if the ASX 200 makes a significant turning point on or around the 9-11th of July. As we discussed last month, this would be 90 degrees from the 11 Apr 2017 high, and another 90 degrees taking us back to the 11 October again.

At this point, I ask you to revisit last month’s edition, particularly the lesson we gave about anniversary dates, and the significance of October for producing major turning points in stock markets.

19

Australian property

Higher tops and higher lows

S&P ASX 200 Property stocks index (code: XPJ)

I am currently not long any Australian property stocks, but if I had some, I would be holding on to them.

I would be very surprised if that previous high at 1455 is not taken out at some point in this current move.

In last month’s report, I commented that I was looking to go long this market, albeit I was hoping I could get my entry in closer to 1350 on the charts.

This hasn’t happened, so rather than chase this market, I will continue to watch it, and reconsider a long entry if we get a decent pull back in price.

20

The miners

Interesting times ahead

S&P ASX 200 Mining stocks index (code: XMJ)

This is an index which I find to be very interesting, particular as Australia is an economy that is so reliant on commodities, and the index is also reliant on commodity stocks.

After having an enormous run for the best part of 2016, Australian mining stocks have paused for breath, breaking out of the bull channel that we had been following (and which we wrote about in previous editions), to begin trending into a fairly well defined bear channel (see red trend lines, right).

For the ASX 200 to move higher, we need this index to break through this bear channel and move higher.

Based on my ‘form reading’ of this chart, I expect this to happen. This chart reminds me very much of the chart in High Grade Copper futures – a chart that I have been following closely, and looking for a long trade on.

To play this move, I am looking to take long positions (for a short term trade) into copper stocks such as Oz Minerals (ASX: OZL) and Freeport McMoran (NYSE: FCX).

Whilst the trade is likely to be short term, I will enter these positions using my long swing portfolio Stay tuned for more info…

21

S&P ASX 200 (Australian equities)

Concluding thoughts I have closed out my put option (hedge) position on the ASX 200 that I took in my personal account, and maintain a naked long exposure on this index which I originally entered at 5282.

I think the ASX 200 may have one last ‘hurrah’ at going higher, and if it does, I will look to exit this long term trade in early/mid July if the opportunity presents.

My general thoughts (which also applies to the US markets) is that I want any long exposure to equities fully hedged or completely removed by the time 8 August rolls around.

With that said, I cannot rule out the possibility that we have one last (and fast) move higher, which may produce a ‘blow off’ top, before the eventual high in the market comes in.

S&P ASX 200 summary Positions: Nil positions in my trading portfolio or long swing portfolio. I do however, maintain a long position in my personal (private) portfolio at 5282.

Stop loss: 5609 Directional bias: Short term – BULLISH Long term – NEUTRAL Action: Looking to exit my long positions in midJuly.

22

Indian equities

4

Still off the charts

Is time finally running out?

India Nifty 50 index – daily chart

The Indian stock index is a market where you simply wish you had’ve been long. Set and forget.

Whilst the pace of this run so far in 2017 seems extraordinary, as the Barillaro Box shows (right) it is actually muted compared to the massive bull run that the Nifty had in 2016.

The trend however remains firmly UP, and I know I have said it before, but I will say it again‌ it would take a brave human being to attempt to go aggressively short this market at this point in time.

24

Higher tops and higher bottoms means one thing

The trend is up

India Nifty 50 index – daily chart and weekly swing chart

If some of you don’t have access to a 5 year old to help identify the trend, then the next best thing is to look at a weekly swing chart of your chosen market.

The chart right, shows how the Nifty has been making consecutive higher swing bottoms and higher swing tops since this bull run started back in late Dec last year.

HB

For me, if I had a long position in this market, I would be using these swing charts as places to progressively trail my STOPS.

HB HB

In this instance, this would mean the 9340 level, which is currently a tad over 2.0% lower than were the Nifty last traded at.

This would still represent an 18.7% gain from the lows back in Dec 2016, which is an extraordinary gain.

HB

HB

And to think, I was long this index back in January near the 8100 level, only to take profits far too early… Oh, well!

25

One massive bull channel

Is the bull about to buck?

India Nifty index – weekly chart

This long term bull channel in the Nifty which has prevailed since the cyclical low in 2008 continues to remain in tact.

Major resistance

We have the potential for some top side resistance in this bull channel forming, as indicated by the dashed line (chart, right).

A similar line can be constructed using lows as support (see also right).

Whilst I don’t consider these interim trend lines to be major, I do tend to take a look at them during trends to see if the market has a short term reaction to them. Often, they will produce interim resistance or support, so need to be watched.

Minor resistance Major support

Minor support

26

Trading to Time

Moving on to June

India Nifty Index – daily chart

In last month’s report we outlined that we need to turn our attention to the 180 degree moment from the 26 Dec low which takes us to 26 Jun. This is the first key date to watch in the Indian stock market for a potential change in trend.

The next key date to keep an eye on is a repeat of the 191 day time frame to low to high (29 Feb 2016 to 7 Sep 2016), which, if taken off the 26 Dec low would bring us to 5 July.

This 5 July date would be in line with the trading to Time dates occurring on the Indian market around the 7th of each month, so it is a time period to watch.

These are the main reference points to follow for this index for the time being.

Jul 5

191 days

191 days

27

Indian Nifty Index (Indian equities)

Concluding thoughts If I had a long position on the Indian stock market, I would continue to hold it moving my stop loss position below the last weekly swing low (as described earlier).

I think the risk reward equation on this market is beginning to change, and July is a much more important TIME period for the Indian stock market than it is for the United States.

I can very easily see a situation where Indian equities make a significant top in the month of July one or two months ahead of the US stock markets.

For that reason, I would trade this index cautiously now. The days of simply buying and closing your eyes may have passed us this year, so you need to be on your toes.

Indian Nifty summary Positions: Nil. Stop loss: n/a Directional bias: Short-term: NEUTRAL Long-term: NEUTRAL Action: I think the risk reward equation has changed. Trailing stops using weekly swing lows for any long positions.

28

Gold

5

Alternating sequences

Ebbs and Flows

Gold Futures – daily bar chart

The Gold market has been moving in fairly predictable price sequences this year, and has been providing some terrific trading ranges with decent swings both higher and lower.

The chart (right) shows how we had two repeating ranges of $93 and $96 (green) as well as repeating ranges again of $82 and $83 (blue).

In addition, gold has been trading within a bull channel lately, and it looks like it is on its way to test the underside of this trend.

I see price support in this market inn the $1226 to $1230 range, so that’s where I would be looking for the yellow metal to head before thinking about a new long position in this market.

support

30

Double top

In the short term As we had alluded to in last month’s report, gold went for a re-test of the $1300/oz level, reaching double top at $1297.

Gold Futures – daily bar chart 17 Apr $1296

6 June $1297

This move was capped out, but not after the algorithm boxes clipped off the stops for anyone who had gone short off the 17 April high at $1296.

It frustrates me so much to see the professional traders run the stops like this – and it is a big reason why anyone who places stops just above (or below) significant highs (or lows) and leaving them in the system is asking for trouble.

This level at $1300 becomes a crucial point now for gold. If the market goes back to re-test these levels higher, I suspect this market will see another push toward the $1370 level, so it would represent a nice place to get long.

Likewise, if the lows on that bull channel get taken out cleanly on the downside, gold could have further to go.

For me, I am beginning to favour the bullish side on gold once again, so will be looking for long opportunities at better levels to capture a move back toward $1370.

31

Trading to Time

Keep watching the active dates

Gold Futures – daily bar chart

My view hasn’t changed about the middle of the month being an important time period in gold.

The mid June date has not produced anything of significance, so our next focus has to be on 27/28 June which would be 90 degrees from the March high and 120 degrees from the Feb double tops.

We must also be highly cognisant of 16/17 July as a key turning point in gold.

You can see the frequency with which gold has turned around the middle of the month, and we will be 180 degrees from the 17 Jan high and 90 degrees from the April 17 double top when we reach the middle of July.

We also need to start keeping an eye on the 6th of the month, with that 6 June double top – I don’t see this as related to the 9 Nov Trump lows (red dots, right), so it may be the beginning of a new active Trading to Time date in the gold market.

For now, watch the following dates next month: -

27/28 June; and

-

16/17 July

32

The gold miners v gold Simply brilliant

Gold Futures vs the Gold Miners Index

This chart continues to be a great one to keep an eye on.

We have seen quite a heavy sell off in the gold mining stocks, without a correspondingly sharp move in the yellow metal. This to me, suggests that the downside pressure in gold (in the short term) may continue, and we will wait to see if the GDX can find support near its lows for the year.

If we see signs of a turn higher in the GDX, then this would present a good signal to go long gold, as long as our other TIME and PRICE indicators are also there.

Lead lower

33

Predictive price model Bang on track

The Time Factor – predictive price model (gold)

The chart (right) is something which I put together at the beginning of the year and presented as my bullish scenario for gold prices in 2017.

Those of you who have a copy of my Special Edition Gold Report will have this chart on page 24 of that Report.

As you can see, gold prices have tracked very closely to the predictive price model to date.

The predictive model now looks for higher prices to occur, potentially running into November.

predictive price model

actual prices

This is a chart that I will continue to monitor.

34

Gold

Concluding thoughts We conducted a good trade in gold last month, initiating long positions at $1228 and then exiting the last of that position at $1292 within a fraction of the ultimate top.

My bias on gold now remains to the high side.

Gold summary Positions: Nil. Stop loss: n/a Directional bias: Neutral to bullish (short-term).

Neutral to bullish (long-term) Action: Looking for a long signal with the potential to move higher to $1370.

35

AUD.USD

6

The trading range remains

Still up. Then still down.

AUD.USD spot price – weekly chart

This is now a chart on the AUD.USD that you will all be familiar with, and is a good demonstration of how once you set up your charts properly, following them on an ongoing basis is much simpler to do.

The AUD bottomed out almost exactly on our price forecast in April at 73.29 and has since then rallied relatively strongly back above 76 cents.

The top of the trading range remains bound at 78.00. My suspicion is that if 78 cents gets taken out, AUD could be on for a bit of a run higher.

I would favour a long term position in the AUD with stops under that 73.29 low, for a potential move into the 81.00 cent level.

37

In the medium term

Bias to the upside

AUD.USD spot price – weekly chart

If this interim move repeats, then the AUD.USD should reach 79.20 at some point on this run.

I will be looking for price retracements to initiate a long trade with stops below the 73.29 lows.

A clean take out of the 78.00 region would give some impetus for the AUD to move higher against the greenback.

At a bigger level, we have major resistance at 81.65 which is the 50.0% Fibonacci point on the last intermediate weekly range down (see chart, right).

Initial target: 79.20

38

The strength indicator

From last month’s report This is a replication of the chart I posted in last month’s report, and I have left it for a reason to show how the daily swing charts can be our early barometer for a change in trend, particularly in the currency markets.

I have found that when currency markets in particular begin to trend, using the daily swings to trade these markets can be quite profitable.

AUD.USD spot price – daily bar and daily swing chart

61.8% price exceeded

You will notice in the chart (right) that the AUD has now exceeded the price resistance at 61.8%, breaking through 75.89 cents over the last week.

For the AUD bears, this is not a good sign, and indicates to me that this currency pair has some strength behind, supporting my thesis that the AUD should be headed higher.

39

Time and Price angles

Approaching the underside

AUD.USD spot price – daily bar chart

The 1x1 Gann angles (calendar basis) are depicted in the chart, right.

AUD has rallied through the angles marked “1” and now should approach top side resistance, at a minimum on the 1x1 angle off the March the 21 March top (see angle “2”).

2

A clean break through this “2” Angle, and the AUD should be on its way through the previous highs near 78 cents.

1

40

Trading to Time

Watching and waiting

AUD.USD spot price – daily chart

In last month’s report we nominated 23 May as a potential date for a turning point, and that is exactly what we got (see chart, right).

We also nominated 9 Jun and 21 Jun as other key dates to look out for.

The 9 Jun date failed to produce anything of significance, however, I have also highlighted 14 Jun as a potential consideration as it is related to the 14 Dec high (-180 degrees) and the 13 Sep low (-270 degrees) from last year.

This is not a signal for me to initiate a short trade, but it is enough for me to hesitate at going long this market at this point.

The 21st of June is still a very significant date, so if we get solid reversal signal (either up or down), this may be the catalyst for a trade.

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AUD.USD

Concluding thoughts The AUD.USD looks like it wants to go through 78 cents, and so hence, my bias is to look for trades on the long side.

Stops placed below the recent low at 73.29 makes sense to me, so it is now a matter of whether or not I can get a better entry level in this trade to move it in my favour.

AUD summary Positions: Nil. Stop loss: n/a Directional bias: Bullish (short to medium term).

Action: Looking for a long signal with the prospect of AUD trading above 78 cents.

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Portfolio update

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Long swing portfolio

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Trading portfolio

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Until next time‌

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