The case with the channels

There is no flawless method to markets and charting with channels is not an exception. There are some instruments which can be resolved and traded quite accurately with channels. British pound is one of them. You can make very accurate shots on gbp with tight stop loss control if you practice enough with channels. However, with Aussie dollar or Euro one has to give some flexibility to the channel bands. One example just happened in the last two days. In my last post on Aussie I plotted the channel with the magnet function of the charting tool which draws the lines on the exact highs and lows of the candle sticks I choose. The recent action showed that I should have left some leeway on my channels. Below is how it should have looked like. The blue ellipses show the small violations of the red channel but none closes below or above the channel. Prices are testing the upper band once more today. I'm looking for a close above that band.

British pound on the other hand shows very high accuracy with channels. I can't help but think that if someone ever finds the way to mathematically prove why and how these channels occur, he will be the wealthiest person on the planet. Cable's blue channel was very accurate. The red channel with a smaller slope gave a long entry point in yesterday's post with a sniper accuracy. The red channel will give a good short or long entry chance whichever way it breaks. Don't forget the mighty orange resistance from my post here. 

S&P looks more and more bullish here. It broke the orange declining bull flag. The blue resistance line may be a bit of drag for bulls for a while. Unless the red support is hit once more -one more hit most probably will knock it down- I'm still bullish from here.

Russell 2000, as from my previous post, still looks stronger compared to his big brother. Not only it broke up the blue bull flag but also the orange rectangle both on the fourth golden hit. This can be a good long entry with a stop loss inside these two channels. Hope it helps.