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Trend trading with Ichimoku 

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EUR/USD : Ichimoku reading. Kumo resistance

Jan 24, ’12 9:46 AM

EUR has rally against the USD to the point that the Tenkan sen may cut Kijun sen to give a bullish confirmation.

However, at this point, there is still no bullish confirmation signal from the Ichimoku chart.

In fact, we have 3 signs that EUR/USD is poised to drop.

1. Chikou Span resistnace at around 1.305

2. The EUR/USD having rally from the bottom of 1.26 is about to hit the resistance level set by the Chikou Span. We can see how EUR holds at that level before its ultimate drop to 1.26 .

Given the weak economic conditions in Europe itself, the chance of EUR strengthening is very low.

3. Kumo resistance ahead. We can see that a thick kumo is waiting ahead to provide the huge resistance. On top of that, the kumo is still bearish and there is no indication from the leading kumo that the bearish trend has change.

I think this is a fairly good setup and will be looking to establish a bearish position.

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$XLF : Great setup for a short

Jan 18, ’12 2:00 PM

With news of JP Morgan making a loss last quarter and now Morgan Stanley having a cap on immediate cash bonus, XLF is clearly being setup for a great short.

Let’s review the chart.

1. We can see that on the Ichimoku Daily Chart for XLF that it is bumping into the resistance level at $14.

2. While the Daily Chart shows that XLF is in bullish territory, the last 3 candles is not showing great strength. The candles are suggesting that XLF may turn from here.

On the Ichimoku Weekly Chart, the setup is clearer.

1. Like the Daily Chart, we can see that XLF is hitting the resistance at $14

2. The key difference is XLF is still bearish on the Weekly.

3. In the coming 2 weeks, XLF will be slamming into the kumo resistance and the flat kumo top is suggesting that XLF has a higher chance of consolidating below $14.

I will be establish a SHORT CALL spread on XLF.

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$TRAN . Weekly Kumo Resistance

Jan 9, ’12 1:52 PM

On the Daily Chart, $TRAN (Dow Jones Transport) seems to have break above the resistance level. However, the break is not convincing and this is reflected in the last 3-4 candles.

 

On the Ichimoku Weekly Chart, the resistance level ahead is clearer.

Currently, we can see that the price level is hitting against a resistance level from the Chikou Span.

More importantly, we can also see that the kumo resistance is ahead at around 5250. The leading kumo has not twist and confirmation of bullish outlook is not confirmed.

Will we see $TRAN head higher in the weeks ahead? Yes, there is a chance. Option expiration is less than 2 weeks ahead. However, at this moment, there is chance that $TRAN may turn when it hit Feb.

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