Cable's Major Top Close

No change as the market is seen in the process of forming an important top below the long discussed ceiling of the multi-year triangle (see longer term below). But as mentioned in the Jan. 4 email, there remains scope for gains back to the Jan. 2 high at 1.6380 and even slightly above as part of this larger, topping process (see daily chart below. Note that the market is seen forming a large rising wedge over the last few months, a reversal pattern that resolves lower (often sharply) after. This also fits the broader view of further, but likely limited USD lows as part of a larger bottoming. Resistance before the ceiling is seen at 1.6175/90 (earlier high, 50% retracement from 1.6380), while support is seen at 1.6080/90 and the base of the pattern (currently at 1.5985/00).

Strategy/Position
Still long from the Jan. 4 rebuy at 1.6085, and for now, would stop on a close below the base of the potential wedge/bull trendline from Nov. (currently at 1.5985/00). Will want to get more aggressive with trailing stops on nearby gains (to maintain a good overall risk/reward in the position), as the final leg of these patterns will at times come up short of its "ideal" ceiling (failure), and then getting even more aggressive on an approach (and break) of the 1.6380 high.

Long-Term Outlook
Very long held, longer term view of a nearly three year triangle forming, and with gains to the ceiling before completing a more important top, continues to play out. As mentioned above, there remains scope for gains back to the recent high at 1.6380 as part of a larger topping. Note too that the ceiling of the large triangle lies just above (currently at 1.6425/75), while the seasonal chart is pointing sharply lower (see third chart below), and both adding to the view that such near term gains would be limited and part of a longer term topping (see in red on weekly chart/second chart below).

Strategy/Position
Want to have a bearish bias for the base of the multi-year triangle (currently at 1.5550/75), but with scope for more topping nearby, would be a bit more patient before switching the longer term neutral bias to negative.