* Cable has already provided over 1000 points in the last 3 months repeating the price action from 2011
* That price action has been ‘Nasty’ but is about to get even Nastier.
* We remain short from 1.6260 and 1.6180 looking to reduce below 1.60 in order to resell what will appear to be a resumption of the uptrend!
We remain bearish Cable for an acceleration of the reversal. The question is when. The answer as ever is provided mainly from the price action of last year today still being the equivalent of May 13th 2011.
The decline from 1.63 to 1.6070 should be the first leg of the reversal. The rally to the 1.6180 50% c=a target area was clearly corrective and therefore from a simple wave perspective maintains a window for acceleration through 1.5995 pivot.
But neither Cable nor the Nasty Trade Analogy are simple. So although minor 1.6120 should cap for a downward ratchet down into 1.5995 and eventually breaking down to a 1.5950 equality target, if history is our guide then this should prove to be a bear trap for a Nasty albeit corrective rally through 1.6120 to 1.6180 and possibly the same 74% correction from 2011 to 1.6205.
How do we trade this…we are staying short looking to cover a good amount on this spike down to 1.5950 to resell the rally. It is tempting to lower short term stops to 1.6120 but our structural stops stay 1.63.
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