All the man events, what reactions they affect and their trajectories, with detailed trading strategies. Good for experienced traders as well as for novices, who want to actually learn, as they trade.

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Pinchas Cohen is a consultant to companies, offering research analysis, trading
signals, live event coverage and market education. Cohen is Financial Markets
Analysts/Contributing Author to Investing.com - where he writes The Week
Ahead, Opening Bell and Chart of the Day – as well as for The Marker. He is the
Founding Chairman of the Israeli Chamber of Technical Analysts.
Ai1 Objectives
1. Capture the Market Understand the various, often conflicting, market forces.
2. Market Sequence See how these forces form a Cause-Reaction-Trajectory sequence.
3. Market Accessibility Grasp complex topics in simple terms, broadening trade-choices
4. Straightforward Analysis What, why, how to trade
5. Natural Education Increase knowledge while trading, seamlessly.
cohen@ForcastIron.com I linkedin.com/in/pinchas-cohen I +972-54-2559095

2. 16/10/2017
2
Stocks in Asia Rise After US Inflation – Will Europe and US follow?
1.
2.
4.
3.
Market Sequences: Cause -> Effect -> Trajectory
Trajectory 1:
Global stocks expected
to continue global equity
rally, in the short-term
Trajectory 2:
A close above 95.00
would signal a bottom,
followed by a minimum
3-percent rally.
Trajectory 4:
Price of shares broke
out of two continuation
patterns, resuming
uptrend
Trajectory 1:
Price for iron ore likely to
continue to rise within
rising trend in long-term
Trajectory 2:
AUD expected to
continue rising in short-
term
Reaction 1:
Today’s Asian stocks and
bonds follow US stocks
and bonds rise on Friday
Reaction 2:
Dollar Rises, on
expectation of higher
interest rates to control
rising inflation
Reaction 4:
Goldman Sachs says to
buy
Reaction 1:
Iron Ore jumped on
expectation of the
world’s biggest importer
increasing demand
Reaction 2:
AUD jumps on expected
higher exports to its
biggest trading partner
Event 1:
A jump in US inflation
adds to evidence of
global growth
Event 2:
Federal Chair Janet
Yellen said that
her “best guess” is
consumer prices will
soon accelerate
Event 4:
Netflix Earnings
Released After-Market
Event 3:
China’s producer
prices hits 6-month
high in boost of global
inflation

3. 16/10/2017
3
The consumer price index rose 0.5% in September, a second straight and largest jump in
8 months. Rising prices paint a picture of a growing economy. When business make more
money, they can expand, hiring more employees and give more and higher raises to existing
employees. The new and old employees pay more taxes and can spend more money on the
economy. This creates a positive cycle upwards for everyone involved in the economy.
While, on the face of it, this is bullish news, I have been warning you all that there will be
higher inflation on the rebuilding after Hurricane Harvey. Furthermore, the hurricane’s inflation
boost fell short of expectation, adding a sixth month to core prices (which exclude prices
subject to high volatility, such as food and energy) missing estimates. However, I have also
been warnings you that data will be volatile and confusing and hard to read.
Therefore, I’m relying on the fact that equity traders have been keen to rely on bullish news
and conveniently disregarded bearish news since the Brexit vote on June 24 2016. Therefore, I
am analyzing this set of data only for the short-term.
Dow Jones Industrial Average, 60-Minute Chart
Market Sequences breakdown: Cause -> Effect -> Trajectory
1.
Trajectory 1:
Global stocks expected
to continue global equity
rally, in the short-term
Reaction 1:
Today’s Asian stocks and
bonds follow US stocks
and bonds rise on Friday
Event 1:
A jump in US inflation
adds to evidence of
global growth

4. 16/10/2017
4
Analysis
The price has been trading within a rising channel, in which both buyers and sellers agree that
prices should go higher (as both are willing to buy and sell at rising prices). The inflation data
may provoke different institutions differently for the long-term, but for the short-term, the
price is ranging between an extreme low of 22,858 and an extreme high of 22,905, allowing
for range-trading, buying at the lower end and selling at a higher end, as well as buying or
shorting on a breakout, depending on its direction
Trading Strategies
Rising-Channel
What is it? A rising-channel is confines in which an asset was trading in an uptrend.
How is it formed? The lower line marking the channel-bottom is plotted along the lows
and the upper line marking the channel-top is plotted along the highs.
What the lines mean? The lower line tracks where buyers’ demand overcame supply,
and the upper line tracks where sellers’ supply overcame demand.
Bottom Line: In a rising channel both buyers and sellers agree that prices should
rise, as both are willing to buy and sell at rising prices, when buyers’
eagerness overcomes that of sellers at those pressure points.
Conservative traders don’t
trade against the trend. They
would therefore only buy on
the dips. An ideal entry point
would be at the 22,858 level
where both the range-bottom
and channel-bottom meet,
providing a double-support.
Conservative traders can
also buy with a breakout over
22,910.
Moderate traders may buy
sooner, at 22,867, assuming
a higher risk in which the
price can dip lower to
22,858, the lowest of the
range. Depending on their
risk aversion, they may sell
against the long-term trend,
relying on the range’s pattern,
but preferably at its 22,906
highest level.
Aggressive traders
may buy on dips and sell
on rallies and they don’t
necessarily wait for
the price to reach the
extreme ends, though
they would calculate to
ensure their account
can withstand stop-
losses to include the
extreme ends plus.

5. 16/10/2017
5
Yesterday, Federal Reserve Chair Janet Yellen that her “best guess” is consumer prices –
data that measures inflation - will soon accelerate after a period in which both economists
and traders have been continuously surprised by its lack of growth. Furthermore, Yellen’s
assessment was backed-up by European Central Bank President Mario Draghi and Bank of
England Governor Mark Carney.
A higher inflation will require the Fed to increase the interest rate, as to control the rising
inflation. Otherwise, inflation will grow too fast, leading the economy up too fast, which
would cause a bubble and crash.
DXY Daily Chart
Higher interest rates mean that dollar holders will have a higher payout for holding the dollar.
Therefore, the dollar rose, and should it remain on course, it will complete a bottom, with
a minimum 3-percent rally. A breakout above the 95.00 level would complete a head-and-
shoulder bottom pattern, which shows how the downtrend turned around into an uptrend.
Market Sequences breakdown: Cause -> Effect -> Trajectory
2.
Trajectory 2:
A close above 95.00
would signal a bottom,
followed by a minimum
3-percent rally.
Reaction 2:
Dollar Rises, on
expectation of higher
interest rates to control
rising inflation
Event 2:
Federal Chair Janet
Yellen said that
her “best guess” is
consumer prices will
soon accelerate

6. 16/10/2017
6
Trading Strategies
Conservative
traders would
wait on a long
position for
a decisive
breakout and
employ a filter,
to avoid bull
traps.
Moderate traders depending on their risk-
aversion, may wait for a breakout with a close
above the neckline, or they can rely and trade
up on the short-term uptrend-line, starting on
September 8, between the head and the potential
right-shoulder. They can go long now or wait for a
dip toward the short-term uptrend line, provided
they can withstand the stop-loss to include the
extreme low or the risk of losing the position.
Aggressive
traders may go
long now.
Risk-Reward - How to Get on the Good Side of Statistics
A common trader mistake is to cut wins (on fear of exiting on a loss) and run with
their losses – deluding themselves into believing that the price will turn around,
thereby digging an ever-deeper hole. Traders must do the opposite: cut losses (to
avoid losses...duh) and run with their wins to milk the trend, cover losses and cost of
trading and allow themselves the chance to incur a profit.
A classic risk-reward ratio is 1:3. In this way, a loss won’t take your account to the point
of no return, and a win will make up for several small losses. That means when traders
select a stop-loss, they should factor in the target profit, consider its viability, then
stick to it. Otherwise, they fall back into a negative risk-reward ratio, by increasing risk
and limiting reward probabilities. These catch up with you.

7. 16/10/2017
7
China is the world’s biggest importer of iron ore, and its economy is expanding it’s expected to
continue to build infrastructure, which means buying even more iron ore.
Iron Ore Weekly Charts
The price has been rising since early 2016. Last week the price neared its former, June trough
and bottom of rising channel but closed much higher, potentially forming a hammer on a
weekly basis.
Trading Strategies
3.
Market Sequences breakdown: Cause -> Effect -> Trajectory
Trajectory 1:
Price for iron ore likely to
continue to rise within
rising trend in long-term
Reaction 1:
Iron Ore jumped on
expectation of the
world’s biggest importer
increasing demand
Event 3:
China’s producer
prices hits 6-month
high in boost of global
inflation
Conservative
traders may go long
after confirming
the hammer with a
higher close.
Moderate traders may wait for a
return toward the $406 June trough,
before entering a long position.
Aggressive traders
may go long now,
providing they can
afford a long stop-loss
or risking a loss.

8. 16/10/2017
8
China is Australia’s biggest two-way trading partner and Australia is the world’s primary iron
ore exporter and the biggest seller of iron ore to China. An expanding China suggests even
higher demand for iron ore. That means that China will have to buy the AUD to pay for the
Australian iron ore, increasing demand for the currency.
AUDUSD 60-Minute Chart
After a sharp rise, the pair consolidated in a continuation pattern. The breakout suggests
another leg in the rally. However, it may very well be interrupted with a return-move to retest
the support of the pattern. Therefore, lowest price of the pattern, 0.7868, would provide an
ideal entry for a long position.
Trading Strategies
Market Sequences breakdown: Cause -> Effect -> Trajectory
3.
Trajectory 2:
AUD expected to
continue rising in short-
term
Reaction 2:
AUD jumps on expected
higher exports to its
biggest trading partner
Event 3:
China’s producer
prices hits 6-month
high in boost of global
inflation
Conservative traders
would wait for a return
move to retest the
consolidation’s support,
with a higher close,
before entering a long
position.
Moderate
traders may go
long upon the
return move.
Aggressive traders would go now, with
a stop-loss beneath at least the pattern’s
0.7868 low.
Minimum Price Target as measured by the
preceding sharp move is 71 pips from point
of breakout at 0.7875, making the minimum
target at 0.7946.

9. 16/10/2017
9
Goldman Sachs Says Buy Netflix – I Agree
Netflix reports earnings after market close, with a consensus forecast of $0.32 EPS vs a $0.12
EPS YoY, a 266 percent expected growth. Goldman Sachs reaffirms its buy rating and raises its
price target to $235 from $200, predicting a better-than-expected subscriber growth.
Netflix Daily Chart
In July, the stock price gapped up 8.75 percent, most of which was filled, during late August,
retesting the gap’s bottom support. It held.
The return-move was also part of a larger dynamic, the forming of a continuing triangle. The
bullish pattern was completed with an upside breakout on October 5. The pattern height
suggests the next rally will take it $26 up to $215.
The breakout was part of a sharp move, a $22.46, 12.5 percent move in just 5 sessions. The
consolidation in the following 4 sessions and the Friday’s record close suggest a breakout of a
continuing pennant formation, in support of the previous continuing triangle.
Market Sequences breakdown: Cause -> Effect -> Trajectory
4.
Trajectory 4:
Price of shares broke
out of two continuation
patterns, resuming
uptrend
Reaction 4:
Goldman Sachs says to
buy
Event 4:
Netflix Earnings
Released After-Market

10. 16/10/2017
10
Trading Strategies
Conservative traders may
wait with a long position for
a potential return-move to
the triangle, after a more
than 5-percent breakout
more than filtered out a bull
trap.
Moderate traders may
filter out the reliable
smaller, pennant pattern,
but not waiting for a
return-move to the
larger, triangle pattern,
before going long.
Aggressive traders may
go long now.
Terms & Disclaimer
The sale of this document is to its buyer’s company alone. No part of this document is to be
reproduced, emailed or shared outside of the client’s company, without written permission.
This market brief was written by Pinchas Cohen, who does not hold an investment advice
license and is therefore not written for retail investors. All investments have many risks
and can lose principal in the short and long term. The information contained herein is not
guaranteed, does not purport to be comprehensive and is strictly for information purposes
only. Anyone reading this agrees, understands and accepts that they take upon themselves all
responsibility for all their investment decisions and to do their own due diligence, and not to
hold Pinchas Cohen responsible. Pinchas Cohen does not assume any liability for any direct,
indirect or consequential loss that may result from the reliance by any person upon any such
information or opinions. Any expressions of opinions are subject to change without notice.
This document does not constitute an offer or an invitation to trade or invest. No party should
treat any of the contents herein as advice.