Market Update 16/07/2021, Market Compression Variations
All right, ladies and gentlemen, welcome back. This is the market update video for the week ending July 16 2021 an interesting week in the markets. We have some markets which are in an accumulation phase, others that are testing all-time highs, and some which are ready to break out one way or the other. Before we dive into that. The topic of today’s video is covering the final two variations of trend-defining breakouts. If you guys have been listening or watching my previous videos we have been covering the topic. What is a trend? And so today we are going to cover. Last two variations of trend defining breakouts. The two categories of breakouts are a trend defining breakout and a trend, establishing break up. Because remember a trend establishing breakout establishes the current trend. Whereas a trend defining breakout. We have a trend reversal. So the two variations that we’re going to cover today are variation 2 single market compression and variation three extended market compression, no market compression, and extended market compression, these two go hand in hand. So, let’s take a look and see if I can make sense to you guys about how this works. So let’s take a look at an uptrend. So, What defines an uptrend? We have a low. We have a high. And since we are in an uptrend, and we are in a trend-defining breakout that means we’re waiting for the market to commit to going to the downside. So again, you have a low, we have a high, and then now we have a higher low and then we have a lower high and what is the market doing, the market is compressing at this point after this lower high market would move and break out to the downside defining a potential downtrend. If there’s a strategy we would, for which we would look to enter short. This could be a potential entry whenever the market, whenever the price breaks this higher low.
So again this is a single market compression because we have a low, we have a high, we have a higher low, it does not break this low. We have a lower high it does not break this high. And then, as soon as this higher low is broken we have a potential downtrend. Let’s take a look at this for an uptrend which is now a downtrend, which breaks into an uptrend. So, just doing it in reverse now. So now what do we have, we have a high then we have a low. And then we have a lower high and then we have a higher low and then at this point as soon as the market breaks this lower high level. We have the potential, move to the upside. And again, this is a compression because we have a lower high and a higher low. These two levels do not get broken. And then once the compression phases, finished, we have a breakout to the opposite side. So this is again a single market compression. Now, that makes extended market compression. All we’re doing is extending that for two more tops and bottoms. So let’s do that now, for an uptrend.
So, we have a low. We have a high then we have a higher low. And then we have a lower high. This continues now. We have a higher, higher low. We have another, lower, lower high. And at this point, whenever the market breaks this previous swing low. This is where we have the breakout to the downside. So all we’re doing compared to the single market compression is we have multiple points, multiple swing highs, and swing lows, which continue to compress before a breakout to the opposite side in the opposite direction from which we started. So let’s do this for a down-trending market, which would define a breakout to the upside.
So we have a high, we have a low then we have a lower high, a higher low, one more compression a lower high. And now, we break to the upside, breaking out of this compression phase, and defining a breakout to the upside. So let’s take a look at how this plays out in the markets in real-time, shall we? So, this is. let’s take a look at a single market compression first. So this is the Euro USD from last summer.
Here we have a swing high confirmed, and then from here swing low, so we have the high. Then we have a low and then we have a lower high and we have a higher low. The market is compressing this level was not taken out by this level and this level did not break this though. And then, after a single market compression, we have a move a breakout to the upside, breaking out of this downtrend into a new uptrend.
So, you are in a downtrend compression. Now we break out to the upside. Let’s take a look at an extended market compression. I’m going to go back to March of last year, where this happened, the dollar franc. And actually, it happened for a few different instruments. So, let’s take a look here. So here we are currently in an uptrend. So we have a low and a high.
We have a higher low, lower high, not drawing it as such. And then another lower high. I’m sorry, and another higher low, lower high. Actually compresses one more time. Another higher low. Another lower high. Finally, you break out to the downside. So see if you can watch this happening in the markets where there’s a compression, and it’s very important to watch this level, the previous swing low, whenever that gets broken, there is a likelihood of a breakout to the downside, with high open equity. So that’s something to watch out for when you’re looking at the markets. So that’s it for the variations of the defining and establishing breakouts.
So let’s move on to the market update. So, starting with the Euro USD. We entered a short trade. And there’s diminishing OE to the downside. And so we had to exit that trade prematurely. But still, like we said open equity to the downside. So we’re going to be looking out for another great opportunity next week on the Euro USD. Next, moving to the dollar franc. We are in an accumulation phase, and potential OE to either side, so no trade as of yet, waiting for further signals to enter on the dollar franc. Next, we move to the pound dollar. This also isn’t an accumulation phase, waiting for the market to play its cards so that we can make the right move. Currently, we had earlier in the month earlier in July we had a bottom that was confirmed. And there’s definitely OE to the upside, waiting for confirmation before we enter or take any trades. Next, dollar-yen. We had a confirmed top. Early in July and there is open equity to the downside. There’s still no trade as of yet.
For the dollar-yen. Next, we move to the Aussie dollar, the Aussie dollar had a confirmed top and there’s also open equity to the downside, no trade as of yet, waiting for the right signals. Signals that we have back-tested over many years, to be able to take a trade. So a no-trade as of yet for that next to the Euro Yen. Euro Yen is definitely more open equity to the downside as well. And we’re still in a top to bottom move. Again, no trade as of yet, just being patient. Next, moving to the footsie. We are definitely in an accumulation phase, very clearly you can see that. And just waiting for the right signals and potentially a breakout for us to enter and catch large trade attention.
Next, moving to the Dow Jones US index. This is earnings week actually earnings season coming up a few financial companies have already reported, and there’s going to be many more coming up in the tech sector and the energies in healthcare. All of those are coming up. And so, very interesting times ahead to see how the US stock market index will perform nearing all-time highs. Moving on to oil. It’s definitely gotten a lot choppier in this move-up. So it can be interesting to see if we have a breakout to the downside, definitely open equity to the downside, but no trade as of yet, for oil.
Next, let’s move on to coffee. We actually went long on this trade. Earlier this week, after the bottom, was confirmed. And there’s definitely open equity to the upside. So take a look at coffee, to see if there’s any trade that you can also enter like we did this week, hopefully, you weren’t able to take advantage of this trade. Next, we move on to the last two commodities, gold and silver, gold found really good support here at around the 1750 level, and a bottom was also confirmed. But there’s good open equity on either side and so we’re waiting for confirmation before we take any trade. Similarly for silver found some good support and we are holding steady and the accumulation phase. So that’s it, ladies and gentlemen for the market update for the week ending July 16, 2021.
Keep an eye out for trade opportunities coming up. We are going to be patient with our trades. Let’s move on to the trade performance, our trading room performance for our live trading room. No trades for the liftoff or cash in 4.0 TSL, but the cache in the 4.01-day exit. We had a slight loss of negative 1.82%, where the MTM elite room. No trades for many of our strategies, except for continuation patterns slow exits, had a solid winner up 3.03%. So overall, our performance for our two trading rooms, slightly above 1.21%. So, as we say in most of the markets, follow your trading plan, stay disciplined, and keep trading like a master.
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