 Okay, traders, welcome to this week's live analysis session with me, Patrick Munley. If you can see a Tick Mill welcome screen and you can hear me, if you could type a Y in the chat box just to let me know that the audio and the visuals are working. Very much. Okay, let's go here. Before we do obviously, as always, it's incredibly important that we adhere to the risk disclaimer and that you're aware of the inherent risk in trading any financial instruments and also that any of the views expressed by me here today are expressly my own. They are not those of Tick Mill. For those who are joining us for the first time, a quick introduction with respect to who I am. My name is Patrick Munley. I've been involved in the markets now for 15 years. I wasn't always in the financial markets after I graduated. I went into the world of consulting. I then did a consulting startup that experienced some pretty rapid growth and I cashed in my shares in that business in 2004 and then started to explore my passion for markets. Really, in 2004, what I was ostensibly doing was gambling. I had a bunch of time on my hands and I had some capital to play with. I started trading, loosely described as trading, the S&P 500 day trading markets would not be trending north and I caught some lucky early breaks and started to make some decent and then some quite significant gains. However, as is often the case, my beginner's luck ran out. I'm not just gained back the gains I made. I further to that, I would actually experience a six-figure loss. It was at that point that I decided I either stop gambling or I get serious about trading in the markets and go about this as a commercial endeavor. I sought out a mentor, worked exclusively with him for 18 months, two years, really learning not just the technical skills but also the mental skills that are required to be successful in the markets. During that period, I developed and back tested, extensively back tested my trading plan, forward tested it and actually came back into the markets in 2008 in conditions similar to, not quite the same as we're currently experiencing, and since 2008 on an annual basis, I've been profitable. The performance you can see on the screen at the moment references from 2013. That's when I actually started and managed the account service initially for friends and family and that's grown organically. Again, on an annual basis, the accounts have been profitable and that's really how I look at performance. I'm not concerned about the outcomes of individual trades or even a string of trades. For me, what I'm focused on is the next 100 trades because I know that if I adhere to my process and my plan and I execute that to the best of my ability, then that's where I'll see the returns. I'm perfectly comfortable with the idea that I could easily go through a period of 10 or more losing trades but because I've got a laser focus on risk reward with respect to my trading, I know that over the next 100 trades I should see positive returns based on the strategy's efficiency. Predominantly now, my trading is end of day. It's an end of day strategy and there's some interesting stuff but mainly it's end of day and it's an automated trade management setup that I have now. I've got a quite a bit of time in my hands and I have some additional projects that I work on. I'm one of the resident market experts at Tickmill providing a daily market outlook and a chart setup that's of interest. You can subscribe to get those updates in your inbox through the Tickmill blog site. Also the head of trading and trader education at a leading FX trading education firm called FX CareerSwap whereby we offer emerging retail trading talents the opportunity to enhance their developments and ultimately trade a larger capital base through our funded account offering which really helps retail traders to overcome the major issue that tends to hinder their development and that's capitalisation because you can have an excellent plan and strategy and if you adhere to professional risk management so keeping your risk low, ultimately if you experience 30 to 50% returns in a year which are fantastic, if you're trading a thousand dollar account or less then that isn't going to add up to a financial return that's going to move the needle for anyone and so what tends to happen with retail traders is that they risk more than they should do and end up blowing up accounts when they experience a small drawdown and so what we do at FX CareerSwap is we help with your development as a trader, we have a team of over 80 traders now that we're working with at various stages of development and through our courses and our education modules and our weekly webinars we develop you to the point that you can then go on to manage and grow an account with a significant capital base and so for anyone who wants to learn more about that you can contact me through LinkedIn or through the site FXcareerswap.com. Okay so that gives you a flavour of where I'm coming from and what I want to do now is start to think about some of the markets that I'm tracking and some of the opportunities I see that potentially develop. As a general note with respect to the market at the moment certainly in the majors we've seen this grinding action over the past week or so and predominantly driven by some big options flows that we've seen that are pinning the market so to speak. By the end of today we'll have had 10 billion dollars worth of euro USD options expiring between this 108 and 109 level and that's kind of been pinning the market and creating this grinding heavy rotation action that we're seeing that's frustrating but those are predominantly rolling off like I say today and so that should actually allow us to see some more decent flow action in the markets. We've seen the implied volatility curves come off since we experienced the height of the crisis that initial panic phase and you can see they're starting to tick up again notably in the Australian dollar so this means that we should start to be starting to see more trading opportunities developing. These are those options that are rolling off today we've got 1.2 billion down at 10750 and the euro I think that's close to where we see the lows today. You can see the cluster of about 10 billion here between 10750 and 10950 and that's really been been pinning the market. With respect to where I've seen decent opportunities developing and we'll talk about it when I move into the charts in a minute but this is a study of the Canadian dollar from a seasonality perspective and what this shows is that the second quarter over the past 20 years has had a tendency to see or we've had a tendency to witness Canadian dollar strength and you can see that in terms of the last 20 years 13 times so about 65 percent of the time we've seen a decline in the Canadian dollar and on average you can see that we get you know somewhere between 300 and anywhere up to 1100 pips to the downside but when we've seen upside it's been between 100 and so 450 pips so you can see from a set up perspective here just using the seasonality that the declines that we see 65 percent of the time are more than two to one the advances we see in the other 35 percent of the time. So if you're thinking just about obviously it's a relatively small sample but from a statistical perspective that gives us a bit of an edge there in terms of a set up with respect to the the seasonality and if we then think about that in terms of what we've seen with oil we're moving to take a look at the oil chart now let's just bring this that so I posted I did a chart of the day earlier in the week with respect to oil and what we've seen with oil basically is obviously that we've seen this historic decline we saw the the May contract trades at negative levels you know historic historic reprints in terms of the your contract but in the continuous contract here what I've highlighted to the guys in the trade team is that we've seen a pretty nice from a cycle perspective we've seen some nice symmetry in terms of this ending pattern here if we think about this as an impulsive decline and if we you know just from an Elliott Wave perspective for those who are who are Elliott Wave enthusiasts you can see that we've got the one two then we've had our three four then we've had an equality leg five complete here and I talked to the guys in the room about this 12 to $12.50 area as potentially being significant for oil certainly for a tradeable low and it looks like potentially tonight for my strategy anyway we could get a long signal here if we get a green clothes on oil somewhere around well somewhere above the $14 level and what could we reasonably expect in terms of upside here well what I use again is is these symmetry swings so if we look back to the last advance we saw prior to the decline and we overlay that versus our current low then that would give us a target about the $25 level so if we think about risk reward here for the trades if we're going to get long let's you know choose at or current levels so you know probably looking at that $15 level you've got a stop at the lows here everywhere you could use to stop the low today's low to enhance the risk reward but given the volatility you probably want to use the low so we can even if we just if we replicated the price actually we saw prior to the down draft then we could see that we could drift higher here you know this I'm not expecting this to happen in in any short order so it's certainly with the you know the current economic environment but that said we could drift higher here over the next couple of months and you get a three to one nearly risk reward on the trade there and if we do get a first leg of recovery here then then there's a chance or or technically certainly we could see a three-way bounce at a minimum and and if we think in terms of some type of move like this where we test let's just bring in the fibrotrosons so if we fit the entire decline you know we he's certainly into even the 38.2 here let's actually let's see where that comes in so yeah I mean even if we just thought in terms of making a 38.2 percent retracement which you know technically could well be on the cars then we'd be up at $30 a barrel and you know if we get a if we get a signal or in terms of a setup to add to add to a long trade here well then you're looking at you know a risk reward scenario of closer to to 4.5 to 1 so again always thinking you know all the analysis in the world is fantastic but at the end of the day what we're looking at is returns in our account so we need to think about risk reward so that this the risk reward of this trade stacks up certainly if we if we can see a corrected move play out here so I'll be watching the crude oil on the clothes tonight now if we think about crude oil if this is the view in terms of crude oil well then if we think back if we think again about the Canadian dollar obviously it trades as a proxy for crude oil well then if we go to the the Canadian dollar we'll see if we've got a setup developing there and we have what we've done here with the Canadian dollar basically is we've we have this spike high during the crisis and we've drifted low made another leg lower and so we've run into some symmetry swing resistance now in in the Canadian dollar we tested the level we haven't been able to close above this 142 level for two days so we've got a clear area where we're seeing some supply in the market between 142 and this 142 80 area so there's the supply we've got those you can see there's two tails there we're testing the volatility resistance bands and what I've been looking for now is a breakthrough this 141 area to open up a deeper correction again notes I'm using the term correction here a lot you know I'm not suggesting at this stage that we've seen the absolute high here but certainly what we could think to ourselves if we just look just these settings bringing the 61.8 so again in terms of targets here what we have is we have a symmetry swing objective that comes in an equality level at 136 we've got the 61.8 percent retracement of this advance at at 36 level so if we can get if I certainly what I've been looking at tonight if we get a close that closes below the near-term VWAP so somewhere below 141 let's see where it is somewhere below 141.30 let's say that's going to flip this daily chart bearish we'll have a bearish inside candle these tails at the 142 is giving us our resistance level so what we could be again if we think in terms of risk reward what we'll be looking at is you know selling the area here we're looking at stop above this 142 area but we've seen the resistance and then we've got a downside target well initially what we'd look at is for a move certainly to test the the 50 percent retracement we came close we didn't do it so we're seeing more complex correction develop here but if we can get this bearish close we could certainly look for a move down initially to retest these prior lows where you'd have 2.5 to 1 your risk reward then into the 50 percent retracement obviously in the volatility sport bands we'd have to watch how we trade there but you know then you're looking at three times the risk reward and if the equality move plays out and we trade into that 61.8 percent retracement well then you're looking at a potential five to one risk reward so again you'd have to be thinking about that in terms of the the potential for a move in crude oil but again thinking about the seasonality we know that statistically there's a 65 percent chance that that the canadian dollar can can see some strength in this second quarter so that's just how I'm you know thinking in terms of my trade thesis for getting long crude and I'm short this canadian dollar I posted today the cad yen also could give a bullish signal if we got a close above the near-term VWAP here we've tested the volatility support bands and that will then set up a move to certainly to test this 7847 in terms of the first resistance area these prior highs as well but through there what I've been looking for is actually the equality move and the 50 percent retracement of the decline which will bring us into that 80 level so again let's just look at how we could position this from a trade perspective so looking long have to get the close at the the VWAP to go bullish but again what we've got there in terms of risk reward on that trade we probably need to widen stop here to account for intraday volatility but again you get a three to one risk reward on that trade in the cad yen the other one that's broken out here I've noticed this morning as well as the cad swiss so again similar story you can see what I'm getting at here we're seeing this cad strength premised on the fact that we're seeing a little an uptick in crude oil we've broken out of a channel here or a potential bull flag and then the objective here is again the equality move for obviously we'd watch how we trade at this initial equality level at the 70 handle the 50 percent retracement again so but by this stage you know you'd have the trade running as a risk-free position if we get up here and then the next target is going to be the bigger equality objective and the 161 extension of this structure so you know there's move there with the potential to trade up to towards the 72 handle so that's one of the core opportunities that I'm looking at at the moment let's let's take a look through some of the major markets now looking at the dollar index dollar well I'll just take a sip of water so the dollar index could be grinding higher and what we're looking at at the moment is the potential now for the dollar index to test this equality objective and what I've been looking for is by the time we get up there that my my momentum indicator here the site indicator would actually be testing this descending trend line that's potentially in place now so as prices grind up into this 101 40 to 102 area I'll be watching for bearish reversal patterns on the daily chart obviously that's my time frame to actually set short positions especially if we're at or near testing this this descending trend line resistance so what we've been looking for there would be then obviously prices to decline and then we should see a pullback in terms of the psychic indicator as well obviously further confirmation would be the RSI stochastic trading above the 80 level and rolling over so I'm watching this dollar index very carefully as you'll know from previous weeks I see the potential for for a dollar decline to develop obviously potential is the is the keyword focused on there you know any we can't talk in definitive in terms of the market we're always dealing in probabilities here but I see a higher probability opportunity so I'm going to be watching how we trade when we test this area if we break higher then we could see the potential for a big double top here that's the one six one extension of this structure but for now my area of focus is going to be on this 78.6% 102 to 101 40 area I certainly want to see how we're trading in terms of the psychic indicator when we get up there into that that's sending trend line resistance the other major markets the S&P 500 so we spiked up into the the resistance area this is the equality objective versus this initial reaction high and initial reaction low here and we got bearish reversal and a short signal since then we haven't really made too much headway in terms of the downside and what we could be potentially setting up for here is is another yeah another leg higher as we know the Federal Reserve and the US government have are throwing everything they've got at these markets in terms of stimulus stimulus both monetary policy and fiscal stimulus packages and so what we could be looking at here certainly whilst we trade above the 2690 area is another leg higher now obviously if we if we do push higher here I'll be watching for the potential of a double top to develop here but more likely than not what I think we'll see is another leg higher into the the 161 extension of our initial reaction high and reaction low here and the 78.6% of the tracement of the entire decline now from there I would anticipate or I certainly I'll be watching for the potential to set short positions with bearish reversal patterns the you could easily see or the the technical target for that trade would actually be the equality move which could take us back down to this 1900 area and again as I've talked about in prior sessions do I anticipate that that's going to happen with the same force that we saw in terms of the initial decline now I would expect more grinding trade but certainly that's where I see the potential but again watching for a retest of the highest double top potential if we break through there then we've got a target to watch very carefully for short setups so that's what I'm looking at in terms of this 500 gold so gold looks like it's about to retest these prior highs which are again is an equality objective versus this structure so what we're seeing is the equality move played out we tested held it to the tick now we're seeing the pullback and in terms of the support area we are looking at this symmetry swing support so we're seeing an equality unit again equality in the markets as a recurring theme so we've held there now what I look for is the potential that we retest these highs and we've got one two seven two extension of this last leg here watching for bearish reversal patterns here to set short positions but again we'll be looking at symmetry swing support as the initial area of concern for any short positions because we could be setting up then if we hold the symmetry swing for yet another spike higher up towards 1850 would be the equality objective before we see a more significant decline but if we do get a short signal here there is the potential again we're just thinking in terms of equality that that we don't find symmetry swing support and and we see actually a deeper decline let's remove that before again thinking about the next leg higher in terms of gold so really what I'm watching is the retest here of 1750 to 1770 looking for potential reversal patterns to set short positions is the plan for me in gold crude we've just talked about let's see where we get if we get the clothes tonight to do something on the long side there in crude the euro similar to the idea that I've just talked about in terms of the dollar index we'll have to see where where we close today we'd be cognizant of the fact we've got this ECB meeting we've got these huge options pinning pinning in the the market at the moment there's work with I'm seeing on the wires talk about two trillion euro stimulus package which which is pretty much the bare minimum for what they need and we'll see how that's delivered to the market but for now I think whilst we're holding these 10990 highs then I'm looking for a retest of this 10630 area and then the potential for a you know a significant double bottom to develop as we complete the equality move and then maybe the opportunity to trade higher in the euro so really watching price action as we test into this area looking for bullish reversal patterns to do something on the long side in the euro and obviously that that's versus the idea that that the dollar index would trade up in and hold this resistance area because obviously they trade inversely sterling sterling is pulled back into symmetry swing support and if we hold here and we get get a bullish reversal then I think long long positions should work at least for a test of this 127 area and again that we bring in our retracement tools so if we look at the climb so that brings us broadly into that 78.6 percent area I think from there we would probably then see a more sustained pullback probably looking into the 50 percent retracement area of this move if it plays out before we can potentially then build for another leg higher in terms of cable. Dolly Yen going nowhere sideways in the market at the moment technically what we're what we're looking at is whilst we hold this resistance at 109 then we can see the downside target here at 104.50 but we're going nowhere fast at the moment in terms of the Yen. Suisse's broken out of its triangle and now looked poised again to test the equality objective and potential here for a significant double top and that again broadly coincides with the idea of the euro putting in a double bottom here so you can see the synchronicity in these some of these dollar pairs so got some key levels we'll be watching so I'll be watching for a retest of this 98.90 area again bearish reversal patterns to potentially do something on the short side looking to see if we got watching this this resistance area trend line in terms of the psych indicator as well it's keeping an eye on that the loony you know what I'm looking to do there so we'll see if we get back to the close to confirm the trade tonight the Aussie it's held its symmetry swing support and and if we get a bullish close here then it looks set for the Aussie to to trade up and test this this is the equality objective version versus this structure and it's the 78.60% retracement and we've got these prior lows over here so this will be a very interesting area if it plays out in terms of the Aussie testing up here from here I would expect a more sustainable back in terms of the Aussie so the level that I'm going to be you know from get a bullish close and I think we've got the potential for a breakout but ultimately what I'm looking for is a test of this 67 area where I'd be looking to set short positions with the price confirmation a similar story in the Kiwi whilst we hold the symmetry swing support we can see we can see this grind higher let's just bring in this here so if we can get a bullish close there that initially would target move up to 62 but ultimately as with most of these pairs and if you think in terms of the S&P 500 I'm really focused on these 78.6% retracement areas that you can see across these major markets that they're all looking to sync up and I've talked about Caddy M and Caddy Swiss already Euro yen watching this test of this big double bottom in the Euro yen and we've got this contracting price pattern here obviously what we would need to see if this thing is going to reverse is that you know there would have to be some very positive news out of this this Eurozone area but I've been looking for a bullish reversal if that news does come out later today or tomorrow back through the 117 area could could see us trade up and and test retest this 119 range high but we have seen no price confirmation as of yet so with respect to the markets and the opportunities I see at the moment I'm really focused on the Canadian dollar and again thinking in terms of the seasonality aspect of that as well so that's that's it from me for for this week guys does anyone have any questions or any chart you'd like we take a look at that I haven't covered and I can give you give you a view yeah I mean at this stage wait it's it's really just it's a positioning squeeze a short squeeze where you know we've been heavily oversold and what would really drive like you say what would actually drive a significant recovery would be would be a vaccine certainly but it would appear at the moment well we've got UK in the UK we've got human trials starting with the Oxford's research lab so I don't you know nobody knows at this stage but at the moment what we're just seeing is a repositioning and actually allow a correction to take place and that's all we're thinking in terms of at the moment I'm not looking to pick bottoms here but you know we kept technically we've been very oversold and could witness a correction but in the long term from an economic perspective then you know it really is all about a vaccine at this stage to to really deliver some positivity to the markets on an extended basis any other questions okay if there aren't any other questions I'll wrap this one up here you can follow me through the through TradingView at fxcareerswap and you can reach through the site fxcareerswap.com or you can contact me personally on LinkedIn and I can point you in the right direction for those who want information on that and if there aren't any other questions we'll wrap this up here for this week and I'll see you all again at the same time next week safe trading guys