Cable, bounce from major support but...

Cable near term outlook:

In the March 20th email, again affirmed the view of a rolling over since the Feb 17th high at 1.6825, and the market has indeed continued lower since. With the market still very overbought after the surge from the July low at 1.4820, weak technicals (see sell mode on the daily macd at bottom of chart below), and a large rising wedge/reversal pattern forming since Oct, at least another few months of downside is favored ahead. Nearer term, the market is bouncing from the Mar 24th low at 1.6460 (test of major support at the base of the wedge), and as warned in the March 20th email, may hold for as much as a week or 2 (before resolving lower). Nearby resistance is seen at the bearish trendline from Mar 7th (currently at 1.6575/85) and 1.6635/45.

Strategy/position:

Still short from the Feb 18th sell at 1.6700. For now with potential that the base of the wedge may hold for as much as a few weeks, would continue to use that aggressive stop on a close 15 ticks above that bearish trendline since Mar 7th to maintain a good risk/reward in the position. But with such upside seen part of a much larger topping, would be looking to resell higher if taken out.

Long term outlook:

As discussed above, the market is seen topping for at least another few months and potentially longer. Note that the market also remains within a multi-year period of wide ranging since the Jan 2009 low at 1.3505 and with no signs "pattern-wise" of a breakout, argues further wide consolidating within this multi-year range ahead. Also the market is down from the Feb high at 1.6825, near the upside extreme of this longer term range while longer term technicals are negative (see sell mode on weekly macd at bottom of 2nd chart below). Finally, wedges break down to 5 waves, and with the Feb high at 1.6825 seen as that final wave, adds to the view that a more major top is indeed place (see in red on weekly chart/2nd chart below). Further long term support below the base of the wedge is seen at 1.6050/75 (38% from the July low at 1.4280).

Strategy/position:

Got a bit caught switching the longer term bias to the bearish side on Jan 3rd at 1.6430 as the market continued to grind higher. But with the market finally rolling over and a more major top seen likely in place, would stay with that bias for now.   

Current:
Nearer term : short Feb 18th at 1.6700, stop on close 15 ticks above that bear trendline from Feb 7th.
Last : short Jan 10 at 1.6495, stopped Feb 12 back above broken t-line frm Nov (1.6470, closed 1.6595).

Longer term : bear bias Jan 3 at 1.6430, finally seen rolling over.
Last : bullish bias Nov 27th at 1.6275 to neutral Jan 3rd at 1.6430.