Interesitng situation on higher TFs – will last quarter be on fire?

education - technical analysis

September 15, 2018 at 5:43 pm by simon

I like to check yearly Pivot points – sometimes every month, sometimes every couple of months. Now we have a few months left of 2018 so this is a good time to have a look at pivots. Especially because the situation on many charts is very interesting with a price near to the important levels.

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What is on charts? Yearly pivot points and set of my favorite basic moving averages (50, 100, 200, 300, 400, 500).

What decisions can you make based on yearly pivot points? Usually, you make decisions based on strategy applied on lower time frames like 1h, 4h and so on. I use there other pivots (mostly daily, weekly or monthly). So why yearly pivot points? They give me a better picture of the current market situation and sentiment. For example, if the price is approaching the yearly pivot point and it worked before as support/resistance than I expect that something can (can but doesn’t have to) happen.

OK, with that introduction lets check some charts.

USD/JPY

Last year was clearly a range year with price oscillating around pivot line. Now it is almost back at this level and we can expect a retest of a recent high (the one that ended at yearly pivot line).

usdjpy yearly pivot points

DAX

The situation on DAX is very interesting. We can see that in 2015 yearly Pivot line was a support, next year it was a resistance. Later we saw a strong uptrend in 2017, correction in the first few months of 2018 with some range around the Pivot line.

Later yearly Pivot line acted twice as support but recently price managed to break below. Now it is back almost exactly at yearly Pivot line. Question is based on the chart below – will it work as resistance or are bulls strong enough to go higher?

Take a look at the weekly timeframe of DAX:

dax weekly chart

But…

Let’s check monthly time frame. Of course, September is not over yet, remember that! Still, as for now, it looks like DAX tries to protect that yearly pivot line as support. So a little bit different reading of situation than on weekly chart. If it succeeds to stay above yearly pivot, we may say a stronger move up in the last quarter of the year.

monthly dax chart

 

SPX

We have here a strong uptrend for a long time now. When we check yearly Pivot Points we can see that pivot line worked as support. Since then there is a strong move up. It looks possible for SPX to try to go to R2 resistance or above it. This will also give us information about the strength of a trend. If it goes above R2 then the trend is strong, if R2 will stop the move up then correction is possible.

 

spx yearly pivot points

GBPJPY

In 2018 price founded support and resistance at M lines (marked on the chart). M lines are simply lines in the middle between most important pivot lines, but they also can work as support/resistance.

The move down stopped at S1 support. Now price is back at yearly pivot line, also right below 50 and 100 averages.

2018-09-15_gbpjpy1

Also, check how price reacts around yearly pivot line. On the weekly timeframe (above) it is not that clear but when we switch to monthly it is.

2018-09-15_gbpjpy2 yearly pivot points

USDCAD

I made comments on the chart. You can see how nicely USDCAD works with yearly pivot points. Looks like that important resistance is at M line but with dollar getting stronger price may move towards R1 line.

2018-09-15_usdcad-monthly

 

EURUSD

Clear situation here. Price stopped at a yearly pivot point which worked as a support. Also, check that we are on the top of range move from last few years.

2018-09-15_eurusd chart

 

GOLD

Stopped for a moment at S1 support. If this support will not hold it then we may see a move down to the M1 line.

2018-09-15_gold chart

2 comments

  • Sam September 15, 2018

    Hi Simon, aside from pivots what would your go-to indicators be? I’ve always found them a little hard to follow and rely on personally

    • simon September 15, 2018

      Hi Sam. Pivot points plus some basic averages (200, 50) and that’s it. Thanks to that it is easier to see price action.

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