Today for chart of the day we thought we would re visit the Long Gilt and see how the market has digested yesterdays rate cut. Well overall after an initial rally yesterday we fell back quite sharply and although we are trying to make a recovery in early trade today, the pressure is on for more losses. We have a Marabuzo line sitting just below us at 109.88 and although this has been breached, it has not happened on a closing basis. If we did close below here then we would be looking at the rollover gap down at 109.34 with the big test our Fibonacci level down at 108.75.
Indicators in Play
Most indicators require confirmation. Sometimes this can just be a close below or above a price regardless of the fact a level has been breached on an intra day basis. This is the case with our Marabuzo line on today’s Long Gilt. Other Candlestick patterns require three Candles to confirm a pattern so it is very important to exercise patience when trading and not try to pre empt a result.
Summary
It is decision time here but we are poised on the sell button. As mentioned in the opening comment we need some conditions to be met before we act and although this can result in missing part of a move, by doing this, the likelihood of success is greatly increased.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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