1-31-12

As i suggested the first two days of this week trading has been extremely volatile.  The 797.00 Zone-Trader Yearly Pivot continues to hold resistance but with the market balanced on the year trading conditions should continue to trade in a volatile manner.  Look for V patterns and sideways price action until we get some clarity on direction as being derived from the Quarterly Profile.  TFH12 still has not made a
bullish breakout and it has not failed to make one either currently on the Quarterly Profile, which is adding to the volatility.

Might be a good time to look at some bull call spreads on the VIX.  I will update you as soon as possible on any signs of the volatility decreasing and directional clarity, but for now sideways pattern whipsaw i would expect.  Reduce volume and look for high probability setups.  Try to identify the range and look for sell signals near the top and buy signals near the bottom, and stay out of the middle as this is where the volatility will be the greatest.

Keep you eye out for more post covering the Euro, Gold, and Crude Oil.  

TF 1-29-12

TFH12 has hit the Zone-Trader Pivot on the Yearly Profile at 797.00 just as we had suggested, now this market is balanced on the year and begin attempting to make another breakout.  Keep in mind this price level was plotted almost a year ago and clearly demonstrates the power of Zone-Trader Philosophy.

Now that we have hit the Yearly Pivot and are balanced on the year, we must focus on the Quarterly Profile in order to get a clear picture of which direction TFH12 will attempt to breakout next.  Currently TFH12 is attempting to make a bullish breakout on the Quarterly Profile.  It has not made a bullish breakout yet, nor has it failed, so the next few trading days will be key.

Keep in mind in order for TFH12 to make a bullish breakout according to Zone-Trader Philosophy it will have to make a candle body close above the midpoint between MR1 and MR2 which the price of this level is 800.60.  If TFH12 cannot make a bullish breakout it will revert back to the Zone-Trader Pivot on the Quarterly Profile at 758.60, which will be our first target to the downside.

Currently the Yearly Pivot at 797.00 has held very strong as a key long-term resistance and keep in mind I mentioned in the prior post that this level is also now the midpoint of the Persistence Zone for the 2012 trading year.  This makes this a strong level to breach, so if the Quarterly Profile fails to make bullish breakout i would look to load up heavy on the short side of the market.

I prefer to not form a bias and just let the Zone-Trader Philosophy guide us accordingly but currently the picture being painted is bearish.  But again it will be completely dependent on the Quarterly Profile.

Here is the screenshot.  

TF 1-25-12

Just returned from vacation and wanted to send out an update since i was not able to over the weekend.  TFH12 is still heading for the Zone-Trader Pivot on the Yearly Profile at 797.00 as i suggested in prior post.  Again the Yearly Profile failed to confirm a downtrend by not holding the time filter below MS2 and it is now reverting back to the ZT Pivot.

We continue to buy all pullbacks and take all buy signals that are being generated upon the shorter time frame profiles (Monthly, Weekly, Intra-day).  Today TFH12 setup for a beautiful buy at the 781.40 area, which is the Zone-Trader Pivot on the Weekly Profile, if the market cannot trade below the Pivot we look for reversal back to the upside.  Since we were looking to buy pullbacks we expected this price level to hold support and looked to buy TFH12 as close as possible to 781.40.

Currently TFH12 is trading at 792.70 as i am writing this and it is moving in a very volatile manner at the present time.  However, it is continuing to drive higher and attempt to reach our target at 797.00.  Continue to buy all retrace moves to the downside until TFH12 reaches our target price level.

Once TFH12 hits the Zone-Trader Pivot on the Yearly Profile at 797.00 we will shift our focus to the Quarterly Profile in order to analyze if the market can make a Bullish Breakout on this specific Profile.  The midpoint between MR1 and MR2 is 800.60.  We will need to see a Daily Candle close above this price level in order for this current uptrend to continue.

If TFH12 fails to make a Bullish Breakout on the Quarterly Profile this will suggest that the Yearly ZT Pivot is holding resistance and we will then look for sells and expect a move towards 754.60 initially.  Keep an eye out for updates on this specific analysis as i will attempt to send out blog as quickly as possible while trying to maintain my high level of accuracy.

Keep in mind that the bears are in control of the market in 2012.  This years Persistence Zone is the Neutral Zone from 2011, meaning the top of the PZ is MR1 from 2011 and the bottom of the PZ is MS1 from 2011. Which also means that the midpoint of the Persistence Zone for 2012 is the Yearly Profile Zone-Trader Pivot of 2011, our target at 797.00.  The Bears will attempt to keep prices below this level if possible in order to maintain control of the market and keep TFH12 in the Bearish Half of the Persistence Zone.

In other words be aware of this major resistance price level and slow down take your time and be patient once TFH12 hits 797.00.  Remember sometimes not making a trade is a trade.

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TF 1-18-12

TFH12 hit the identified resistance zone on the Monthly Profile in the overnight market last and generated the short entry at 765.30 it then proceeded lower and bottomed at 760.80 stop was moved to lock in profit at 761.80.  TFH12 then found support inside the Persistence Zone of the inter-day profile which was 762.30 to 759.30 the bulls were in control of the market within this range. The bulls were able to maintain control on the inter-day profile and held support within the Persistence Zone and TFH12 started to reverse and hit our stop on the profitable short, which was good for 3.5 points.  The Emini Russell is $100 a point multiplied by 2 contracts is $700.

The same inter-day PZ provided support at the opening bell and pushed TFH12 back up towards the identified resistance range that was derived on the Monthly Profile.  Once TFH12 hit the resistance range our focus shifted to the Weekly Profile in order to identify a possible re-entry on the short.  The weekly Profile did not generate a sell signal within the Monthly Resistance range and continued higher trading through the top of the range and establishing a Bullish Breakout.  TFH12 also held the time filter above the top of the PZ on the Weekly Profile and the bulls took control of the market.

Again as i have mentioned before the Yearly Profile failed to confirm a downtrend and is now reverting to the Zone-Trader Pivot at 797.00.  I cannot stress this more, Long-term overpowers Short-term and this is another example of that, which was encountered today.  It is best to assess the direction as being depicted by the Long-term profile and then take the signals off the shorter time frame profiles that align with that direction. In this case we should be looking to play all buy signals derived from the Monthly, Weekly, and Inter-day Profiles.

Here is chart of the weekly Profile:

ALERT: Look to buy the 1st retrace on the Weekly Profile look for support at these prices, 771.00, 768.60,  and 766.70.  The signal for entry will generate on the next profile lower, which is the inter-day and it will most likely be derived from a failure to the downside within the Zone-Trader Philosophy.  


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gold GCG12 1-17-12

GCG12 has currently opened inside the persistence zone on both the Yearly, and Quarterly Profiles.  We have no control bias on either of these 2 profiles currently the bulls and the bears are fighting for control of the market.  Expect a spike in volatility until GCG12 is able to breakout of the Yearly and Quarterly PZ's.

The top of the PZ on the Yearly Profile is 1685.40 this will be a key resistance for GCG12 if it is going to be able to re-establish the uptrend that broke in November of 2011.  If GCG12 cannot break above the top of the PZ on the Yearly Profile and the bulls fail to take control of the market on the year, start taking sell signals and look for GCG12 to start reverting to the Zone-Trader Pivot on the Yearly at 1389.

Our focus right now is on the Quarterly Profile, which is currently attempting to make a bullish breakout.
GCG12 traded slightly above MR1 at 1662.90 today and ran into some selling pressure.  GCG12 will have to make a Bullish Breakout by making a candle body close above the midpoint between MR1 and MR2 at 1684.30 in order to continue up-trending.

GCG12 also opened inside the Persistence Zone on the Quarter and the bulls and bears are fighting for control of the market on this profile as well.  Again expect increase in volatility until one of them gains
control.

If GCG12 makes new lows taking out the low of the prior day on the daily candles prior to establishing a Bullish Breakout, take all sell signals and look for a move towards MS1 at 1593.80.  The current move withing the Zone-Trader Philosophy that is occurring right now on the Quarterly Profile is critical to the future direction of this market.

Again GCG12 is attempting to make a Bullish Breakout.  If GCG12 can establish a Bullish Breakout then the Bulls will have a great chance of taking control of the market on the year and re-establishing the uptrend that was broken in November 2011.  If GCG12 fails to make a Bullish Breakout on the Quarter then the Bears will have a good chance of taking control of the market on both the Quarterly and Yearly Profiles and GCG12 should continue the current sell-off with prices attempting to reverse to the Zone-Trader Pivot on the Yearly Profile at 1389.00.

ALERT; We will keep a close watch on the Monthly and Weekly Profiles analyzing the Zone-Trader Philosophy upon them in attempt to get a jump on the entry and get positioned for the future move that will be derived from the Quarterly Profile.  The Monthly will tip us off on whether or not the Quarterly will be able to make a Bullish Breakout.  I will try to notify via blog as quickly as live trading permits.  You can take day-trades on GCG12 if that is your style of trade, but patience normally pays off in trading auction based markets and if you wait for the Quarterly to tell us whether to buy or to sell, you will have a much higher probability of winning and catching a much larger move.  

TF 1-17-12

Since my last post upon this market on the 12th the Emini Russell (TFH12) has continued to trade higher as i suggested it would and our retrace buy Bullish Breakout Signal on the Monthly Profile provided a nice winning upside move with the bottom starting at 755.20 and the top at 775.00 a 19.80 point move at $100 a point.

This specific upside leg is referred to as the Bullish Confirmation Wave on the Monthly Profile since TF had already made a bullish breakout and retraced it now has to confirm an uptrend by trading above MR2 775.30 and holding the time filter.

 The top of this Bullish Confirmation Wave again was 775.00 which is 3 ticks below the price of MR2.  TFH12 encountered selling pressure at this price level and started declining in price towards the open of the overnight market.  This selling pressure at the MR2 price level 775.30 suggested that TFH12 was possibly failing to confirm an uptrend, which generates a sell signal within the Zone-Trader Philosophy as we look for TFH12 to revert back to the Zone-Trader Pivot or the Point of Control.

A candle body close that is lower then the low of the prior candle on the Monthly Profile would then confirm that TFH12 failed to establish an uptrend on the Month and that rule was achieved today during the day session.

ALERT: Look to sell upside retrace looking for key resistance at 765.30, 767.30, and 769.30 price areas.  Zone-Trader Philosophy suggests TFH12 downside target will be 747.60 to 745.80 (Monthly ZT-Pivot) price area.  

If and when TFH12 reaches the suggested target expect support at those prices and keep an eye out for possible reversals back to the upside.  TFH12 is still attempting to revert to the Zone-Trader Pivot on the Yearly Profile at 797.00 and the Quarterly Profile has made a Bullish Breakout suggesting that TFH12 will take at least one more leg to the upside.

The low of the prior week was 742.60, which is lower then the proposed target. If TFH12 stays above this price level, it will maintain the current uptrend and continue to revert towards the Zone-Trader Pivot on Yearly Profile 797.00.

TF 1-12-12

The Emini Russell March contract has now made a bullish breakout on the Monthly Profile we got the candle body close above the midpoint between MR1 and MR2 at 767.20, this suggest that TF will take at least one more leg to the upside.  Look to buy retrace and continue to play the market towards the Zone-Trader Pivot on the yearly profile at 797.00.  

TFH12 1-11-12

The Emini Russell March contract (TFH12) has continued to trend higher as i suggested in my last post upon this market.  Again the Yearly Profile on the Zone-Trader Philosophy failed to confirm a downtrend and is now reversing to the Zone-Trader Pivot also called the Point of Control the midpoint of the Neutral Zone.  Our focus is now on the Monthly Profile that will dictate the current and short-term direction of the market as well as alert us to any possible reversals.  TF has broken above the top of the persistence zone on the monthly and held the time filter the bulls have taken control of the market on the month.  The top of the PZ on the monthly is 749.20.  TF is also attempting to make a bullish breakout trading at 764.70 very close to the midpoint between MR1 and MR2 which is 767.20.  We need to focus on the monthly to assess if TF will make a bullish breakout on the month and take another leg to the upside or if TF will fail to make a bullish breakout and reverse to the Zone-Trader Pivot on the monthly profile at 745.80.  We assess this by looking for a candle body close above the midpoint between MR1 and MR2 767.20 if this occurs look to buy retrace and expect TF to take another leg to the upside and continue towards the 797.00 target.  If we see a close lower then the low of the prior candle on the monthly profile prior to it making a bullish breakout then we assess this as being a failed bullish breakout and we will then begin selling and taking all sell signals on the intraday profile, and expect TF to revert back to the Zone-Trader Pivot on the monthly at 745.80.  If this occurs expect support at the monthly pivot as the bulls are now in control of the market on the month.  

cotton 1-10-12

Cotton Futures March contract (CTH12) have failed to make a bearish breakout on the yearly profile did not make a candle body close below the midpoint between MS1 and MS2 look to buy retrace to the downside for position trade entry.  Long-term target 129.38 the Zone-Trader Pivot on the Yearly Profile.  Remember whenever the underlying instrument being analyzed fails to achieve a specific rule on the Zone-Trader model we then expect or look for that market to revert back to the Zone-Trader Pivot also known as the point of control.  Attached is a screenshot of the Yearly Profile.

ATTENTION:  We have now connected our live forex trading room to twitter and will begin sending out signals on the forex market.  If anyone has a request for analysis to be performed on a specific market please send me email at derivativeconceptsinc@gmail.com

TF 1-9-12

The Emini Russell (TFH12) opened inside the Persistence Zone on the Quarterly Profile this suggest that there is no control bias on the Quarter and the Bulls and Bears are fighting for control of TF.  This normally leads to v patterns and consolidated ranges around the midpoint of the pz as that is the where the fight is the greatest between the bulls and the bears.  Tonight's overnight market opened above the midpoint of the Quarterly PZ and has since traded higher simultaneously breaking above the Zone-Trader Pivot on the Weekly Profile at 752.90.  Suggesting TF is attempting to make a bullish breakout on the week.  The Yearly Profile on TF had failed to confirm a downtrend by not holding the time filter below ms2 on the first week of December, suggesting to us to buy retrace moves to the downside and keep playing the market higher towards the Zone-Trader Pivot on the Yearly Profile at 797.00.  The current move on the overnight breaking above the midpoint of the PZ on the Quarterly Profile and into the bullish half of the zone suggest more upside movement.  Key resistance ahead 759.00, 763.70, 768.60, 772.40, 787.10

EURUSD 1-9-12

EURUSD opened below the Persistence Zone on the Quarterly Profile and has made a bearish breakout.  This suggest that EURUSD will take 1 more leg to the downside.  We look to sell the first retracement letting EURUSD move to the upside then we look for a close lower then the low of the prior candle to generate the short signal entry.  We want to pay close attention to the Yearly Profile while waiting for the position trade to setup off the Quarterly Profile.  The Yearly Profile is analyzed utilizing Weekly Candles, the Quarterly Profile is analyzed utilizing Daily Candles.  Make sure that the current weekly candle does not take out the high of the prior candle before the short signal position trade is triggered on the Quarterly Profile if it does take out the high of the prior candle on the weekly then hold off on the short and wait of the current weekly candle to close to assess whether it is closing above the high of the prior candle.  If it does this would signal a failed bearish breakout on the Yearly and we would then look to buy the retrace on the Quarterly Profile looking for it to fail to confirm a downtrend.  

EURO 1-4-12

EURUSD failed to make a bullish breakout in May of 2011 then reversed to the Zone-Trader Pivot as was expected.  Whenever a market fails in either direction it reverts back to the Point of Control or the Zone-Trader Pivot.  Then in the beginning of November 2011 EURUSD signaled that it would begin to make an attempt at a bearish breakout and continue selling off towards MS1 at 1.28733.  In the last trading week of the 2011 year EURUSD touched MS1 at the 1.28733 price level and initially found some support.  The first week 2012 the weekly candle tested the high of the prior week at 1.30826 and was not able to make new highs and has now begun to sell off back towards the the low of the prior week and the 1.28733 MS1 price level.  The next couple of weeks including this one are important for the future direction of the EURUSD. If EURUSD takes out the low of the prior week and breaks the key support of MS1 on the Yearly Profile continue to take shorts and look for this market to attempt to test the midpoint between MS1 and MS2 on the Yearly at 1.22350, EURUSD will need to get a candle body close below the midpoint on a weekly candle in order to make a bearish breakout and continue the downtrend.  If EURUSD is able to make a bearish breakout look to sell retracements as this suggest that EURUSD will take another leg to the downside.  Now that EURUSD has touched MS1 1.28733 if we see a close on the weekly candle higher then the high of the prior candle then this signals a failed bearish breakout and we then look for buys and for EURUSD to reverse back to the Zone-Trader Pivot or Point of Control at 1.39070.  This is the current analysis for the Yearly Profile which is the long-term perspective.  Don't make the mistake that most short-term and day-traders make and ignore the big picture.  Long-term overpowers short-term and it is crucial to understand where the market is in the big picture then look for short-term trades to align with the direction being suggested by the short-term.  

Gold 1-3-12

Gold has become of highly active trading vehicle since the financial crisis and the current issues throughout the ECB Union.  The Zone-Trader Philosophy generated a sell signal at 1742.10 on the February 2012 Gold Futures contract, on the 18th of November 2011.  Since that sell triggered Gold has sold off into the end of the 2011 trading year, reaching a low of 1523.90.  GCG12 failed to hold the time filter which is 4 consecutive weeks above MR4 and that is what triggered our sell at 1742.10.  We then expected GCG12 to trade back towards MR2 where it established the uptrend.  The price of MR2 is 1507.90 which is just slightly below where GCG12 made its current low at 1524.90.  Going forward it is crucial that GCG12 stays above the MR2 level where the uptrend gets established within the Zone-Trader philosophy if it going to have any chance of making a resurgence back to the 1800 level.  If GCG12 falls below the MR2 price level at 1507.90 then we expect GCG12 to continue lower as it will then revert back to the Zone-Trader Pivot at 1377.45.  The Zone-Trader Pivot is the midpoint of the Neutral Zone and is also referred to as being the Point of Control.  Now we currently have a blue candle plotting on the Yearly profile which is a strong bullish color candle within our paint bar study.  If GCG12 can take out the high of the prior week and make a retrace to the upside from the latest sell off the key level for traders to pay attention to will be the midpoint between MR3 and MR4.  The Zone from MR3 to MR4 is called the trend extension zone and we look for a candle body close above the midpoint to determine if the underlying instrument is extending the trend or not.  This tells us whether or not GCG12 will make another wave to the upside.  The price of the midpoint between MR3 and MR4 is 1682.95.  Now i am aware that GCG12 trades in .10 increments so don't let the .95 throw you off just pay attention to the close of the weekly candles and see if it closes above or below that price.  If GCG12 closes above 1682.95 it can continue higher back to the 1800 level.  If GCG12 cannot close above 1682.95 on a weekly chart then look for a continuation of the current sell off back to the Zone-Trader Pivot at 1377.45.  This is the current picture being painted on the yearly profile hope this helps bring some clarity to the picture.