#SP500 #Japan Eurasia rather neatly illustrated why timeframes are difficult. No-one realistically expected a 223% rise through ALL our targets (link) in just 3 days but #Eurasia managed. Today, assisting a chum with a pre-demolition survey gave a sharp reminder why care is needed, when things go volatile.
We were at a mid 1800’s villa, a completely overgrown structure destined for landfill. My “job”, ensuring my chum didn’t find himself trapped in a remote location in Argyll, such was the dodgy nature of the building. More importantly, it was an excuse to bring a big chainsaw to create access to the property. Ivy had grown quite energetically with the result we simply could not see the roofline of the derelict house. Worse, Larch and Hawthorne trees had claimed ownership of the gardens, some of the hawthorns growing against the outer walls of the building. A particular tree gave concern, vanishing into the mass of Ivy with the result an initial chainsaw cut ended in blissful silence, using a handsaw. If things are going to go wrong, generally alarming sounds will come from a tree. If using a chainsaw, the noise of the machine plus ear protection can catch the unwary.
In this instance, the tree trunk suddenly shattered, along with interesting groans from overhead. We’d already planned escape routes and fled. The tree had been holding an immense mass of ivy, all of which discovered gravity. This was the start of a lively process, the roof collapsing inward and the exterior wall following. Essentially, the building was held up by vegetation alone and our pre-demo survey turned into an accidental demolition, one we’d thankfully prepped for.
To be honest, it was all great fun and a sharp reminder things which go up can also come down, fast! Which finally brings us to Eurasia for the 2nd time this week.
To give a perspective against this, we’re showing two charts. The upper chart shows minute by minute movements since the market opened on Monday morning, following our report on Sunday evening. It’s always interesting and useful to see how a price reacts when a target level is achieved.
Often, we will say something like, “if exceeded, our secondary calculates at …” but sometimes we remember to write; “if exceeded on the initial surge, secondary calculates at…”. Showing Eurasia in detail mode tends highlight the logic behind this. When the price hit Target 1, it exceeded it. When the price hit Target 2, it exceeded it. When the price hit Target 3, it exceeded it.
And when the price hit Target 4, yes, it did exceed target but as the ZigZag shows, the share was manipulated upward at the open. So, even though the target level we’d mooted on Sunday evening was actually dramatically exceeded by 0.5p, the price had been gapped up by 0.4p to ensure this happened. The ensuing reversal thereafter to 2p wasn’t exactly a surprise. As the chart shows, the price attempted further breaks above 3.5 but eventually it failed and the inevitable occurred.
So what now. Is the price about to disappear into a hole in the Ural Mountains, faster than Spanish riot policemen chasing tourists in Barcelona?
Certainly, we’ll be quite concerned if it trades (as opposed to forced down in the opening second) below 2p. Such a movement risks quite nasty reversal with 1.7 calculating as possible and secondary, if broken, comes along at 1.10p. We’d certainly hope for a bounce around the 1.10p mark but thanks to that gap, the price risks 0.9 before a rebound.
However, we’ve a sneaking suspicion the share will probably mess around a while, ideally with 2p as the bottom of a trading range. We’re not ignoring the salient detail of our 3.56p ambition being exceeded, even when we factor in the 0.4p gap. As a result, anything now above 4.03p should prove capable of a lift to 5.25 with secondary, if exceeded on the initial surge, calculating at 7.25p.
Visually, it appears the 10p level is the longer term thing to watch. Only if this lot find an excuse to trade above such a level shall we anticipate further fireworks, rather than a horror story.
|
Time Issued |
Market |
Price At Issue |
Short Entry |
Fast Exit |
Slow Exit |
Stop |
Long Entry |
Fast Exit |
Slow Exit |
Stop |
Prior |
|
10:40:04PM |
BRENT |
60.24 |
‘cess | ||||||||
|
10:45:10PM |
GOLD |
1495.42 |
Shambles | ||||||||
|
10:47:30PM |
FTSE |
7336.33 |
‘cess | ||||||||
|
10:49:20PM |
FRANCE |
5774.7 |
Success | ||||||||
|
10:58:26PM |
GERMANY |
12937 |
‘cess | ||||||||
|
10:59:44PM |
US500 |
3050.72 |
3024 |
3010.5 |
2995 |
3045 |
3054 |
3060 |
3072 |
3026 | |
|
11:02:35PM |
DOW |
27217.4 |
Shambles | ||||||||
|
11:04:22PM |
NASDAQ |
8113.25 |
‘cess | ||||||||
|
11:06:20PM |
JAPAN |
22934 |
22792 |
22752 |
22675 |
22918 |
22956 |
22967 |
23035 |
22838 |
Success |
