Market Update 14/05/2021, Established Trend Breakout
Welcome traders to the Market Update for the week. Friday, May 14, 2021, Today we have a topic, which may seem that it has a simple answer the question we’re going to cover today is what establishes a trend? If you’ve been watching our videos, you know that we approach, and break down the markets, from first principles. Today we’re going to cover a simple but powerful principle. And that again is going to be dictated by a question, what establishes a trend? The market very simply is either in an uptrend or a downtrend. Not trend. The market is moving like this. And in the downtrend. the market is moving like this. I think everyone can see that it’s clearly the case. What establishes this uptrend and what establishes this downtrend. At Master, the Markets we have broken down the types of variations that lead to different types of these trends being defined or established a trend is either continuing in that same direction or reverses. So, there are two types of variations, there’s either a trend, defining breakout defines a new trend, or a trend, establishing breakout. So today we’re going to cover the simplest of those variations which establish a trend. So let’s take a look at an uptrend first.
Like I was saying, the market moves from tops to bottoms and bottoms to tops. So in an uptrend. What do we have here we have a high. And then we have a low. And then we have this next top, which is a higher high. And then the next bottom does not take out this level. Instead, forms, higher low. So, thus far, the market is in an uptrend. So what establishes this trend. Which way does the market need to go to establish continue to establish this trend? The market would then need to take out this higher high. That would establish a top higher than the previous top establishing this uptrend.
Let’s do the same for a downtrend, very similar. So we have a down-trending market. So, what does that mean we have a bottom and the top, you have a high and a low, then this low gets taken out. For me, a bottom, which is a lower low this high, then does not get taken out, forming a lower high. What establishes this downtrend now, which direction does the price action need to move to establish this downtrend. It wouldn’t need to take out this lower low to form a bottom, that is below that level. And this downtrend has now been established. It seems very simple, but if you can see this happening in real-time in the markets. It may help to clarify and help you visualize the market more clearly. So, let’s take a look at an example here. See what I mean? So let’s take a look at this uptrend. From this firm bottom to this confirmed top. So we have below your top here, a bottom, so what do we have, we have a higher low, a higher high it goes up again. It takes out that previous higher high forms and new top. This low this bottom does not take out this higher low, higher up the top, your bottom. Your top and your bottom. None of them, taking up the previous low, and all of them taking up the previous high until we get to the top, where there was a top that was confirmed here, which then takes out the previous higher low. And that’s when the top is different, and that would be another variation.
In this case, this would be a trend, defining variation, which we will not cover in this topic for other videos. So in this very simple case, we have highs and lows that are confirmed, along this path, which establish the uptrend. Take a look in the markets when you’re looking at the charts and see if you can see this happening in real-time. Now, let’s move on to the market update for this week.
Okay so here we are starting with the eurodollar. We are still in a bottom-to-top move, no top has been confirmed here. And so we are still waiting for additional information before we decided to go long or short on eurodollar. Moving on to the dollar franc market only recently confirmed a bottom, or which we went long, and as you can see there is a lot of open equity here on the upside. So potentially a good trade for us to belong in. Next, we move on to the pound dollar. Here we are short. We had to confirm top, this week, and we’re going to have a stop loss right above the previous day and going to continue this move down, potentially, with a lot of open equity to the downside. Moving on to the dollar-yen. We are in a confirmed uptrend and potentially some good open equities still left here from the all-time highs from late March.
So, maybe trail tightening to ensure that we do not see any reversal. At this time. Moving on now to the Aussie dollar right a confirmed downtrend. So, still, some open equity left to the downside. So, again, a good. This seems like a good support level so we might want to trail pretty tightly here on this downtrend. Next, the Euro Yen. We are at all-time highs. So, and it’s a confirmed down, confirmed uptrend, excuse me, so unsure of the open equity here so, we’d be very cautious about entering long here, or trying to call the top, or going against the trend, so be cautious here with the Euro Yen. Let’s move on to coffee. Coffee only recently. This week, backed off the all-time highs, and the high was confirmed the top was confirmed here. So, the potential for a trend down with lots of open equity, but the higher timeframe trend has been looking up, has been trending up. So, we’d be cautious to go either way. At this time, with coffee. Until we wait for additional information. Moving on to Brent oil. Here we are in a confirmed downtrend, with potential open equity to the downside. But we would look at looking at the trail this pretty tightly. In case the higher timeframe uptrend continues in that direction. Next, gold. We are in a higher timeframe uptrend here. But on the daily chart, we have a recent firm top. So we’re going to wait for a bottom to be confirmed, we would like to continue to go long on gold, but potentially there is open equity to the downside. If you would like to go short on gold or silver. Similar to gold higher timeframe has been in an uptrend, but we are near the all-time highs for silver. So, it may not be as much open equity left for the upside. So still a precarious situation. So want to close with what one to watch closely, both gold and silver. Over the coming few days and weeks. Now we move on to the indices. We’re going to look at the footsie first. Definitely uptrend. For the last month and a half or so, almost two months, but no top has been confirmed. So, this is going to be one where it’s going to be very interesting what happens over the next few days, whether it continues to reach the pre-pandemic highs, where it is now testing, where it is tested this past week.
So, there is potentially a lot of open equity to that, if it breaks that resistance level. I think I said support and resistance level, the pre-pandemic levels. So very interesting situation with the foot season, and actually very similar to a Dow, as well. This past week there were a lot of fears of inflation, which tempered, the all-time highs, also the psychological level of 35,000. So, going to be interesting to see if the market continues to test that. And maybe set new all-time highs or may try to find more support for you continues in the general uptrend that it has been for the last year or so, since the pandemic. So, overall markets are in flux. At the moment, but many opportunities to be taken. If we know what to look for. Let’s take a look at it. Now the performance for this past week, for the live trading room was a very good week. Indeed, the primary runners, no trades taken for that strategy. Liftoff 3.0 with 20% Open equity we had a 1.81% net gain on the trades taken. Lift up 3.0 3.2 with 70% Open equity 1.45% So both lift-off strategies performed very well this week over 3% cash in 4.0 TSL primary at a slight loss, negative point.09% And the cash in 4.01-day exit at a slightly larger loss negative 1.58%. So overall, we’re looking at a total profit of 1.59%, the live trading. Now for the MTM elite room. Primary runners 20% Open equity. Also, no trades taken this week, no trades closed this week, cash in 4.0 20%, and a small gain of point 5% cash and 4.0 70% open equity, had a negative 1% drawdown cash in 4.0 with 100 pips, small gain as well there with 0.29%, and the two continuation patterns quick exits and slow exits, no trades closed this week so the MTM elite group, total percentage this week was a negative point to 1%. So overall, this week, both trading rooms, performed for a slight gain of 1.38% So, very good this week for a good week this week, we hope to continue that moving forward given the opportunities in the market. Thank you all for tuning in to the market update again for the week of the week ending May 14 2021 We will see you guys next week. Thank you.