Cable: Bearish Over The Long Termm

The market remains choppy/firm near the June 17th high at 1.5750 and as with the US$ versus most other currencies, is seen in process of a bottoming (cable topping) for at least a few weeks (and potentially much more, see longer term below). Note that the market is overbought after the surge from the May 29th low at 1.5010, upside momentum is slowing (possible rising wedge/topping pattern forming), and within longer term resistance in the whole 1.5750/1.5850 area (see longer term below). However, there is still no confirmation of even a shorter term top "pattern-wise" (at least so far), leaving open scope for a more ranging and even further (but likely limited) highs, before the final top is seen (see "ideal" scenario in red on daily chart below). Nearby support is seen at the bullish trendline from late May (currently at 1.5595/05) and the base of the possible wedge (currently at 1.5565/75).

Strategy/position:
With a top for at least a few weeks (and potentially much more) seen want to be short. But with scope for more ranging, would wait for slight highs toward 1.5760/70 to short, and then stopping on a close above 1.5875 (to allow for more topping). Note too would also sell on a close below that bullish trendline from May (currently at 1.5595/05) if that occurs first, as it would increase the likelihood that a top is in place. In that case, would initially stop on a close 25 ticks back above that trendline, but switching to a more aggressive, trailing stop on further downside (don't like the idea of a stop that moves away from the market. Note was stopped on the Jun 10th sell at 1.5580 on Jun 13th above the ceiling of the channel from March (then at 1.5700, closed at 1.5720).

Long term outlook:
Still very bearish over the very long term (next 9-12 months or more) as the downside resolution of the large, 3 1/2 year triangle last Feb continues to target eventual declines all the way back to the January 2009 low at 1.3505 (start of the pattern), and even below (see weekly chart/2nd chart below). Note that the market is currently chopping near important resistance at the broken base of the triangle pattern (currently at 1.5750/1.5850), a common occurrence before resuming the larger trend (down in this case), also the 50% retracement from the April 2011 high at 1.6745, and is an "ideal" area to form a more major top. Finally, don't forget the seasonal chart that firms through the end of July (see 3rd chart below), raising scope for another month of consolidating/wide chopping (or at least somewhat limited, big picture downside), before resuming the long term tumble.

Strategy/position:
With the long term negative outlook still firmly in place, would stay with the longer term bearish bias that was put on May 8th at 1.5580 (got a bit caught on the rapid snapback over the last few weeks).

Nearer term: seen potentially important topping, see above for approach to entry.

Last: sold Jun 10 at 1.5580, stopped Jun 13 above top of channel from Mar (1.5700, closed 1.5720).

Longer term: bearish bias May 8th at 1.5580, reversed from bullish on Mar 18 at 1.5090.

Last: bear bias Jan 24th at 1.5785 to neutral Feb 26th at 1.5160 (625 ticks).
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