Wednesday, March 31, 2010

Wednesday 31 March

Some volatility yesterday but not much clear direction or trend.  My trades didn't really fail but didn't go anywhere either and its probably because of the shortened holiday week.
Much worse than expected retail sales numbers and MOM home building approvals have taken the shine off AUD.

Last day of the month is not a day you want to be short EUR.  There is big flow in EURGBP and it usually does well.  Chatter is that end of month rebalancing might be negative for USD today also as dollar profits get reallocated to underperforming currencies.
US ADP jobs numbers today might be a bigger mover than usual as markets are closed for Friday's numbers.

CABLE stopped out (-1R)
EURCAD closed 1.3650 (+1R)
EURUSD closed balance 1.3430 (+1.5R)
AUDCAD closed 50% @3R 0.9305 (+1.5R)
AUDCAD short 0.9300 stop 0.9315 DIBS addition
AUDUSD short 0.9150 stop 0.9170 DIBS target 0.9085 / 0.85
GBPJPY short 141.50 stop 141.80 target 140 / 138
AUDJPY short 85.40 stop 85.70 target 83.70
AUDCAD addition stopped out (-1R)
AUDUSD stopped out (-1R)
GBPJPY closed 50% @3R 140.60 (+1.5%)
AUDJPY stopped out (-1R)
GBPJPY stopped out balance BE
AUDUSD short 91.75 stop 92.20 trying again :)
S+P futs short closed 50% @3R 1162.5 (+1.5R)

Open trades:
AUDCAD short 0.9365 stop 0.9385 - 1/2
S+P futs short 1173 stop 1176.5 - 1/2
NZDUSD short 0.7095 stop 0.7120
AUDUSD short 91.75 stop 92.20

Tuesday, March 30, 2010

Tuesday 30 March

Sterling well up this morning on good UK numbers.
I am watching Cable, 1.5150 is trendline resistance and 61.8fib of last swing. It is possible cable has put in a daily double bottom (only 14ticks difference) but only a break above 1.5380 confirms the pattern.
The break above 0.92 this morning means the downside correction for AUDUSD is over and we could see a three line drive and new highs.

ECB countries lining up this morning to lower GDP growth forecasts are a big lag on euro.

It's Turnaround Tuesday - if it moves my way I am loading up.

EURJPY stopped out (-1R)
GBPJPY stopped out (-1R)
EURUSD short 1.3490 stop 1.3510 target 1.3385 / 1.30
S+P futures short 1170.50 stop 1172.50
AUDCAD short 0.9365 stop 0.9385 target 9280 and lower
S+P futs stopped out (-1R)
EURAUD closed 50% @3R 1.46 (+1.5R)
EURAUD closed  balance @3R 1.46 (+1.5R)
EURCAD short 1.37 stop 1.3750 target 1.3550
CRUDE short 82.50 stop 82.80 target 80
S+P futs short 1173 stop 1176.50 target 1162.5 / 1157
CABLE short 1.51 stop 1.5150 target 1.4850 - off 50fib level
EURUSD short closed 50% @3R 1.3430 (+1.5R)
NZDUSD short 0.7095 stop 0.7120 target 0.7015 / 0.69
CRUDE stopped out BE - API inventories

Open trades:
EURUSD short 1.3490 stop 1.3510
AUDCAD short 0.9365 stop 0.9385
EURCAD short 1.37 stop 1.3750
S+P futs short 1173 stop 1176.5
CABLE short 1.51 stop 1.5150
NZDUSD short 0.7095 stop 0.7120

S+P futs is a range trade - equal channel:

Monday, March 29, 2010

Monday 29 March

EURUSD short 1.35 stop 1.3525 target 1.30
CRUDE short 80.75 stop 81.05 target 80 / 78.00
EURAUD short 1.4750 stop 1.4800 target 1.46
CRUDE stopped out (-1R)
CRUDE long 81.45 stop 80.95 target 83.00 - flag breakout
AUDCAD short 93.35 stop 93.65 target 92.55 off top of flag
EURJPY short 124.80 stop 125.10 target 123.80 / 121.00
CRUDE closed 82.45 (+2R)
AUDCAD stopped out (-1R)
EURUSD closed 1.3480 (+0.8R) - two bullish 4hr hammers, decided to wait it out.
GBPJPY short 138.60 stop 1.3890 target 136.50 / 132.00

Open trades:
EURAUD short 1.4750 stop 1.4800
EURJPY short 124.80 stop 125.10
GBPJPY short 138.60 stop 1.3890

Weekly analysis

More charts later ...

Dollar Index (June):
Uptrend – weekly has resumed and price is contained in an ascending channel. A pullback on Friday looks more like profit taking and a bounce on Greece news rather than a trend reversal and I am looking for dollar strength to continue this week. Price should continue up and test the top of the channel just above 84.00, and only a drop below 81.30 means the uptrend has stalled for me.

S+P futures -
Weekly bullish continuation, daily neutral, another groundhog week in the indices with new highs followed by a pullback or sideways trading. The strong uptrend is still intact and I am looking for a pullback to test support at 1150 before a move higher to 1200. A break below 1150 sets up 1130. A drop and close below 1119 would mean a stall of the current uptrend and a test of 1100.

FTSE 100 futures - Weekly bullish engulfing, daily, daily inside bar following bearish shooting star. Like the S&P the uptrend is strong and intact after making new highs last week. Short term trend is bearish but I would be looking for support to buy at 5610 and 5558.

Another weekly doji, daily high roller doji. Bears are in charge as the dollar is rallying but aren’t able to hold a close below $80 yet. Market looks toppy and choppy but the longer term uptrend is still intact and should not be ignored. Crude is a good intraday sell on dollar strength and a buy on strong up days in the indices. Support is at $78 but the chart suggests a retest of $75 possible, I will keep trading this as a shorter term range trade (with dollar strength I prefer the short side) and would consider a buy for a longer swing at 75.

Gold is mid range in an equal triangle / flag pattern and too hard to call at this point. The long term trend is bullish but I still prefer this on the short side shorter term. It has tried four or five times unsuccessfully to break the 1100 level but continued dollar strength should see this break eventually and I am still looking for a retest of 1000 from above. I am a seller of rallies.

SILVER. Similar to gold, my shorter term bias is short and I am a seller of rallies and would sell off the 17.00 level looking for a break of 16.75 with a target of 15.70

Currencies - Majors
Weekly & daily bearish continuation. I have been bearish this pair for a couple of weeks, my first target of 90 was hit on Friday and price bounced there. I still like this lower with continued dollar strength and would sell rallies (I am looking at 90.90) looking for 90 support to break and a second target of 88 this coming week. A close above 92.50 negates my view.

NZDUSD – Small weekly doji inside bar held below 61.8fib retracement of the last swing, daily bearish doji in consolidation. I still like this lower and my downside target is 0.6640/0.6580 and expect some resistance at 69.70

USDCAD – Small weekly bullish bar off new lows, daily bullish doji. If you think USDCAD is going to parity then this 1.0260 previous support (and triple bottom) is a good level to sell off but I like this higher and I would wait for the 1.0450 area. I am going to pass on this one for now.

GBPUSD – Bear flag broke down last week and I am still a seller of rallies. Despite a good bounce Friday this pair has further down to go. Cable tends to spend some time consolidating after big moves and this could be one of those weeks but I am a seller off 1.4950 / 1.50 levels and expect some back and fill before moving lower. My downside target is around 1.4140.

EURUSD – Weekly bullish hammer and daily bullish marabuzo in a strong downtrend. I am not buying these setups and I am a seller of rallies! Weekly bear flag broke down taking many by surprise, prior to that the bearish sentiment was extreme and this could return very quickly and means some short squeezes is likely and Fridays bounce on the Greece resolution looks just like that. Sentiment and fundamentals are not good for EURUSD. I am selling rallies – I like the 1.35 level and my first downside target is 1.30 (then 1.28) and I expect some support at 1.32. Only a break above 1.3570 changes my bearish view.

USDJPY – Weekly bullish marabuzo, daily small doji inside bar Friday after a big breakout week for USDJPY from an 18month descending channel. I want to see 93.75 broken to the upside to confirm the trend change and then I am a buyer of dips with upside targets of 1.04 / 1.09

USDCHF – Reverse of EURUSD. I am bullish but unless the SNB step in EUR might be a better trade. Only a drop below 1.05 changes my bullish longer term view. First long target 1.09, second target 1.15


AUDJPY – Long term trend down, medium trend up. Weekly bullish engulfing candle, daily bearish consolidation after making new highs last week. This broke my 83.84 level and I change my view to bullish, buy on dips target 85.30 / 86.00

NZDJPY – Weekly bullish engulfing, daily inside bar pause after making new highs this week. This pair broke my cut off level of 65.41 (61.8fib retracement of last swing), buy on dips, target 67.00

CADJPY – Weekly bullish engulfing, this pair broke its 2009 (and dbl top) high at 90.65, I am looking for it to close above it for a target of 95.60, support at 89.60

AUDNZD – long uptrend – This pair has broken daily trendline support. I prefer to buy dips than short this, I am watching for price action at 1.590 / 1.25 – pass

EURNZD – Strong downtrend, this pair has broken out of its January / February range and is a sell on rallies or off 1.91 level, target 1.82
GBPAUD – Strong downtrend, in a bear flag at the top of the flag range I like this short off 1.65 with a target of 1.6250/ 1.60
AUDCAD – Downtrend, weekly inside bar, and in a very tight triangle. I am a seller of rallies or the break of daily trend-line support. I see this as a US/China trade, I still like this one a lot …

EURAUD – Weekly countertrend bullish hammer after euro bounced Friday on Greece resolution news. I would not buy this counter trend but wait for a better price to sell from. Pass for this week.

GPBJPY – Weekly bullish, daily inside bar, this looks like a shorter term uptrend / bear flag. If 138.50 resistance does not hold then looks set to rally to 140.60

GBPCHF – Strong downtrend, weekly doji pause, daily bullish correction, this one is a pass for now, I would wait for price action at 1.62 / 1.63 to short again.

EURGBP - Because this pair failed to touch the top of the wedge I am not clear if the upswing is over. If it is then I like it short first target 88.40

EURJPY – Bearish / bear flag. A countertrend rally underway, I am looking for price action to short at 126.90 / 128.90

EURCHF – Weekly bullish hammer countertrend after falling out of bed. A countertrend long on Greek euphoria is tempting or will wait for price action to short at 1.4438

USDNOK – Weekly bullish continuation, this pair has broken out of a bull flag and made new swing high. I like this long, I am looking to buy dip to 5.870 / 6.00

USDSGD - Weekly bullish doji continuation, daily bearish engulfing after dollar weakness Friday. I like this long and I would buy a retest of 1.40 if dollar strength continues.


Wednesday, March 24, 2010


 At long term descending trendline resistance and 92 level.
Weekly chart

AUDUSD daily
has pierced rising trendline support and a close below it might encourage some profit taking later ... one to watch.


Weekly chart

Daily chart

Longer term I see gold as a large bull flag.
Near term I see it as bearish combined with dollar strength and a general risk appetite, money seems to be seeking yield not safety.

From March 08-August 09 gold formed a large wedge and broke to the upside without a retest of the break.  Technically I would expect at some point price would come back and test that level (around 1030 and possibly retest 1000) before continuing higher.
What is interesting about the head and shoulders pattern on gold is that a measured move projection from the head to the neckline predicts a drop to almost 1030, where gold broke out from, so it all "fits" together technically.
The dollar index, in my view, has broken out from its bull flag and is set for a next leg up, EURUSD has broken down its bear flag tonight, I see a possible v large head and shoulders on AUDJPY and a  bearish gartley pattern on AUDUSD (+ 240min H&S), all of which support a move down in gold.
I think the surprise rate hike in India last week was also supportive of a drop, India is the worlds largest consumer of gold.

Tuesday, March 23, 2010

Tuesday 23 March

Rumours of a Portugal downgrade and the SNB possibly cutting rates to save the Franc with EURCHF at all time lows today.  Markets love rumours but the SNB love to surprise.

Crude 240min
Fakeout or breakout?

S&P futures 240min:
Trendline resistance now support.

EURUSD 240min
Zzzzz  Merkel says there will be no resolution this summit according to Reuters.

USDJPY 240min
Starting to look more bearish.  The massive Dai Ichi IPO flow is expected to put continued downward pressure on this pair through next week even as the repatriation winds down.  Needs a clear break below 90.00

EURCHF monthly
Off the chart:

Sterling, choose your poison, Budget tomorrow

All the attention is on Euro and Greece, I thought I would look at sterling and the budget tomorrow.  After last year I would not want to be long sterling going into tomorrow.

Cable, weekly and 4 hourly charts:
I count 7 unsuccessful attempts to break the 1.50 level and the fib confluence below.

Sterling Yen
looks even more bearish, daily chart, the trend-line re-test has held:

Bear flag and no buyers

GBPCHF:  1.60 level support is now resistance and a measured move projection from the flag puts it at the Dec08 lows at 1.51 (800 pips).  Whenever I think it can't get there I remember selling this pair off the 1.80 level last year and getting an e-mail telling me it would never reach my target of 1.66, (if only I hung in).


Weekly chart, broke 90 level and support becomes resistance. Break of 8.80 lines up the bottom of the channel.

On its way to test support at 1.50

Support becomes resistance?

Monday, March 22, 2010

No trades

No trades for me this week because I am moving brokers.
Plus it is March and there are not many skiing days left, and Mr Big is in the Alps and I am a tad jealous.

As Mr Market is my significant other you can be sure I will be checking in at least EOD and I will post anything I see that looks interesting.
After three weeks of trying to short Gold and failing at 1100 level I am sure this is the week that the support will go ;)

Hope you all have a great week.

Weekly analysis

New highs in the indices as they ground higher last week and profit taking on Friday saw a pullback to find support off the old highs. When we made new highs there was no squeeze of shorts covering but neither was there a rush of new buyers so sentiment does not appear to be extreme enough to make a significant market top at this point, however candle patterns suggest more correction could be in store at least for the first half of the coming week.

The US dollar roused itself and ended the week with a good old rally, it’s not out of the weeds yet but looking good for the week ahead. It has kept its appeal as a safe haven in risk-off moments but it gaining appeal as a speculative yield trade, a win-win. News of the rate hike in India helped this week. The yen repatriation flow has thus far failed to push down USDJPY much against supportive indices and yields. It will be interesting to see what happens there when that downward pressure to buy yens is removed.

I know the Vix is at very low levels, credit spreads are tight, corporate bond issuances seem to be trouble free but yet FX and commodities aren’t exactly brimming with risk appetite, in fact the opposite.

My favourite trades are shorting sterling and euros and the best trending pairs are the continentals vs. the commodity currencies again …(GBPAUD, EURAUD, GBPCAD, EURNZD etc).

Dollar Index (June):
A bull flag and a big rally Friday suggests the uptrend could have resumed and descending resistance line broken. We need to break above the end of Feb swing high but we look set to at least retest that from here. Looking very strong.


S&P -
Weekly long legged doji after making new highs, daily high wave doji found support off previous highs. A correction is underway off a small flat top and looks to continue at least for the first part of the week, support at 1140, 1127, 1112 and 1102. The indices could pullback to the daily trend-line from the lows, which lines up 1102, and still keeps the uptrend intact from a technical view.  I would sell a pull up to 1164 and the underside of the Friday's broken support.

FTSE - Weekly bearish long-legged doji, daily bearish engulfing both sitting on support at 5580 after taking out the August 08 highs. Candles suggest a correction or pull back here. Whilst the uptrend is in place I would buy a retest of 5500, below that says a greater correction is underway to 5385/5400. A break below 5240 says the bulls’ party is over.

Weekly long legged doji, daily bearish marabuzo. I am short term bearish after crude spent another week battling to get above $83 and failing despite a falling dollar and rising equities. Once equities pulled back it translated into the biggest drop in crude in a month after the narrowest range day for month. Support at 80 held but the ascending channel has broken and a break back below $80 looks likely before prices go higher. Support is at $78 but the chart suggests a retest of $75 possible.

Gold is mid range in an equal triangle / flag pattern and too hard to call at this point. It has tried four or five times unsuccessfully to break the 1100 level. The weekly and daily chart patterns are bearish and gold suffered its biggest daily drop in a while on Friday when India (the world’s biggest consumer of gold) announced a rate hike in an effort to control inflation, something that will not help Indian discretionary spending.

SILVER. Similar to gold, sitting on a pivot. Weekly and daily candles are bearish off a daily double top but price is held above 16.75 support. My bias is short and I would sell a break (or break and retest) of 16.75 with a target of 15.70

Currencies - Majors

Weekly small bearish high roller, daily bearish marabuzo off the 78.6 fib. The levels for last weeks bearish Gartley have not been breached and I still like this short. A close above 92.35 negates this bearish pattern and changes my view so for now I’m still bearish off this level.

NZDUSD – Weekly shooting star type doji off the 61.8fib retracement of the last swing has closed below 20ema, the daily bearish engulfing. Price is supported by a rising daily trendline and I would short a break of it at 70.50 or sell a break-retest of it, with a downside with a target of 0.6640/0.6580 and expect some resistance at 69.70

USDCAD – Still the best performing commodity currency for the third week downside momentum has stalled. Weekly candle is a long legged doji after price made new lows, daily is a bullish engulfing hammer below previous support becomes resistance at 1.02. If the dollar rallies this week this isn’t the best looking trade as a countertrend long (although I like it much higher). I would wait and sell rallies with a target of 98

Weekly bearish reversal off descending trendline and mid Feb swing low, daily is a big bearish marabuzo halted at 1.50 support. Remember last month when everyone was talking about the Euro and Greece whilst Sterling was being taken to the woodshed – it looks all set to happen again. Daily and weekly charts show big bear flag. Key round number support is 1.50 but rising trendline support is 1.4950 and a break of that sets up another big drop for cable. My downside target is around 1.4140. UK budget on Wednesday could be a big market mover.

EURUSD – This did look like a clear rounding bottom (Pring) but this pattern is hard to trade with no clear break points and no clear levels at which it is negated for stops. However the symmetry has been lost and it is hard to call between carving out a meaningful bottom or bearish consolidation before the next leg down. The news for EUR is not good and I tend towards the latter and sticking with the down trend. I am bearish below 13740, I would sell off 1.3650 or 1.37 and downside targets would be 1.34 (the 61.8fib retrace of 08/09 highs/lows) and 1.30

USDJPY – Second weekly doji inside bar, daily sideways in congestion. Flat.
Price is held at the upper boundary of a descending channel and should be a short here but there is no price action to short. Yen repatriation flow stops this being a buy for another week. I am staying out.

USDCHF – Reverse of EURUSD. I am bullish but I believe EURUSD is a better short than this is a long trade as EUR is declining so badly vs. CHF. Only a drop below 1.05 changes my bullish longer term view. First target 1.10, second target 1.15


AUDJPY – Long term trend down, medium trend up. Weekly inside bar pause, daily sideways consolidation. I am a seller of rallies and only a break above the January highs changes it. The 78.6 fib retracement is at 83.85 and we are held below that level. I like this short below 82 with a target of 79

NZDJPY – Weekly doji indecision, daily is a bearish and has broken an ascending trendline. I would sell a retest of 64 area with a downside target of 62.50 / 60.50. Only a break above 65.00 changes my bearish view for now.

CADJPY – The strongest currency this is at the top of a big weekly wedge and this week looks like a range trade short. Weekly is a doji pause, daily bearish shooting star type doji. As a short I think there are much better opportunities to buy the yen and I will pass

AUDNZD – Weekly bearish engulfing, daily spinning top. Monthly looks to be forming a shooting star with a close back below resistance which would indicate a counter-trend short or trend change. The NZD made a strong recovery this week and it shows in the charts but I will pass on this one and await more information.

EURNZD – Strong downtrend price made new lows again this week. Weekly big bearish marabuzo, daily inside bar. I am a seller of rallies in this pair and would look for price action to short at 1.9350 – 1.94 target 1.8181 (08 lows).

GBPAUD – Strong downtrend, weekly bearish inside bar, daily bearish marabuzo, I am a seller of rallies. I thought price could make it up to 1.7150 to sell again but it appears to be forming a bearish flag. I would sell a break of the daily candle at 1.6360 target 1.6245 and lower

Downtrend, weekly inside bar, and in a very tight triangle. I am a seller of rallies or the break of daily trend-line support at 92.50. I see this as a US/China trade, I like this one a lot …

EURAUD – Weekly bearish marabuzo engulfed last weeks counter-trend hammer and made new lows for this cross. I would sell a 50% retrace of this candle at around 1.4890. Although this pair is due a bigger correction I don’t see that happening unless the indices fall off this week and more risk aversion returns.

GPBJPY – The most bearish chart! Weekly bearish engulfing, daily bearish marabuzo this pair has broken trend-line support and is all set for more declines. I would sell a retest of 137.00 if it gets there or sell rallies in this pair, downside target would be 134 / 132.50 / 1.32 and below.

GBPCHF – Huge rally in CHF this week after clumsy remarks by the SNB has pulled this pair down. Weekly bearish engulfing, daily bearish marabuzo. This pair is a sell on rallies or retest of 1.60 from the underside with a target of 1.5650 / 151.00 retest of the lows.

EURGBP Weekly high roller doji, daily bullish engulfing, I like this long and I would buy dips off 90.00 or a break of descending trendline resistance, target 92.40 / 93 & 94 .

Weekly bearish inside bar, daily bearish, price has bounced off 125 SR level and broken down an ascending daily trendline. I am bearish, would sell 123 123.15 area or a break of Fridays low, targets 120.70 and 119.63 and lower

EURCHF – This chart has fallen off the planet and I missed it. The market appears to have over-reacted to SnB member comments regarding rate hikes but I am not tempted to buy here and would prefer to wait and sell a pullback.

USDNOK – Weekly bullish engulfing, daily bullish marabuzo, the uptrend appears to have resumed after pullback to 5.8000 level, I would buy a pullback to 5.870 with a target of 6.077 / 6.250

Weekly bullish piercing line – completion of which makes a higher swing low in an uptrend. Daily bullish marabuzo. I would be a buyer here for a long term swing and a target above 1.43. This looks a good long opportunity at this level.  Beware ugly spread in this pair.


Friday, March 19, 2010

Friday March 19, Quadruple Witching

Third Friday in March is expiration day of stock options, index futures, index option and single stock options and could make for some interesting volatility today.  One of the reasons I am not rushing to add to my positions, it's often one of those "expect the unexpected" days.
I am hoping for a down day in the indices to help my long dollar, long yen positions but the FTSE has taken off this morning, and if the others follow it could be time to tighten up.  A lot of correlations seem to be less potent lately so I am not bailing yet.   Update:  FTSE has decided to behave.
EUR weakness seems set to continue and a test of the recent lows in EURUSD likely, and the trend in EURJPY is broken back to down again. 

I am looking for a long entry in USDCAD.  I know thats a bit contrarian but the short trade to parity has become very crowded, its big news here in Canada. Ultimately I think a strong CAD will follow a strong dollar but short term I might give this a go. A lot of businesses, mine included, keep USD and CAD accounts and can convert funds between the two at a click of a mouse.  Last time the COT interest was this lopsided USDCAD corrected 10% Rosie reminded yesterday.

USDCHF balance stopped out 1.0550 (+0.5R)
USDCAD long 1.0165 stop 1.0150 PT1.0230 / 1.0380
GBPJPY short 137 stop 137.35 - addition
EURJPY short 123 stop 123.30 - addition
USDCAD long stopped out (-1R) - CAD CPI v good #'s
CRUDE short closed 50% @3R 81.80 (+1.5R)
EURCAD short closed 50% @3R 1.3765 (+1.5R)
EURCAD short closed 25% @6R 1.3675 (+1.5R)
CABLE short closed 25% @6R 1.5130 (+1.5R)
EURUSD short closed 50% @3R 1.3570 (+1.5R)
GBPJPY short addition stopped out (-1R)
NZDUSD short 0.7100 stop 0.7120 4hr bear flag
EURUSD short closed 25% @6R 134.80 (+1.5R)
GBPJPY closed 25% @6R 136.60 (+1.5R)
EURCAD final 1.4 closed 1.3700 (+1.29R)
EURJPY addition closed 50% @3R 122.10 (+1.5R)
CRUDE closed 25% @6R 80.60 (+1.5R)
CABLE closed last 25% 1.5015  (+2.21R)
GBPJPY closed last 25% 135.50 (+2.18R)
EURJPY closed last 50% 122.50 (+4.2R)
CRUDE closed last 25% 80.60 (+1.5R)
EURUSD closed last 25% 135.25 (+1.12R)
NZDUSD closed 70.82 (+0.95R)

Open Positions:
None.  My best week ever!!
I'm flat because I am moving brokers next week.

One to watch is CHF.  EURCHF is dropping like a stone to test the lows and dragging all the crosses with it.  Prev all time low is 1.4299 and we are less than 100 away.  Nothing moves in a straight line and mean reversion rules.  The remarks yesterday that precipitated the drop don't seem that dramatic to me and the market may have over-reacted.

Yesterday was an NR7 day (Crabel).  I am looking for a pullback to 81 but some volatility could push a retest of 80 and then the lows.  Contract has rolled to May and often starts with a dip.

Thursday, March 18, 2010

Thursday March 18

EURUSD short 1.3660 stop 1.3690 PT 1.3550 1hr inside bar
USDJPY short 90.10 stop 90.35 PT 88.00
EURCAD short 1.3855 stop 1.3885 break of daily low PT 1.37 / 1.33
GBPJPY closed 50% @3R 137.80 (+1.5R)
CABLE closed 50% @3R 152.50 (+1.5R)
EURJPY short 123.20 stop 123.50 addition
EURUSD stopped out (-1R)
EURJPY addition stopped out (-1R)
USDJPY stopped out BE
EURUSD short 1.3660 stop 1.3690 - trying again!
GOLD stopped out break even and happy to be out.
USDCHF long 1.0540 stop 1.0530 - catching a knife
USDCHF closed 50% @3R 1.0570 (+1.5R)

Open trades:
CABLE short 1.5370 stop 1.5410 - 1/2
GBPJPY short 139.00 stop 139.40 - 1/2
EURJPY short 124.60 stop 124.85 - 1/2
CRUDE short 83.00 stop 83.40
EURCAD short 1.3855 stop 1.3885
EURUSD short 1.3660 stop 1.3690

Thursday morning thoughts.

Some people reading this blog are going to wonder what the heck I am doing somedays, like yesterday.  I have a bias towards a stronger dollar and weaker indices and so somedays, like yesterday, I am riding the ripples and not the waves.  One day those ripples will become the big wave but it wasn't yesterday.  That's trading.

EURUSD is still a range trade with a top at 138 and a base around 135.50.  If it breaks below 135 this time I think the rounded bottom is negated and I might try and hold it short for a re-test of the lows.
Sterling on the other hand looks set to rally and correct further.  EURGBP has broken down support and this will help.  Although I am short some sterling I think it will break up through the daily trendline and we will see a test of 157.30 before cable falls off again. 

Daily chart, weekly looks set to be a bearish engulfing. 
A good short entry would be a re-test of 90.00 if it gets back up there with a target of 88.50 / 88.30

Commodity currencies are all strong, CAD & NOK strongest, AUD weakest.  They are all grinding their way higher and pretty safe buys on pullbacks.

Of the continental currencies CHF is strongest against the dollar.  The only thing that makes me hesitate about trading it is looking at where EURCHF is.  I can't believe the SnB are happy about this and if they intervene then they don't always just buy EUR vs CHF, they buy USD vs CHF to leg into EUR also.  This inevitably gets you spiked out of your trade before it all goes back to where it was which is annoying.  Anyway I might be brave and take USDCHF if the dollar continues to rally.

Here is EURCHF monthly chart, right down there in the weeds heading for 143:

S&P is finally having a breather to let some more get on the northbound train.  Resistance becomes support at 1155 & 1147 and if it gets below that 1139 and 1124.50.  This is an hourly chart (because thats how hard you have to look for a pullback).

USDJPY is set to breakout of this wedge.  It is March when yens are repatriated so I would not buy this until end of next week but if it breaks short I like it.  4hrly chart:

The GBP/EUR/CHF JPY's all look bearish and set to breakdown too.  Here is EURJPY,  a break here lines up a retest of the lows (500 pips away).

GOLD and SILVER are mid range in a tightening triangle and too hard to call either way tonight.  Despite my holding a short (countertrend) it looks bullish and I expect a test of the upper line before the lower one.

CRUDE.  Crude is bullish but at strong resistance and should really pullback before you can buy it.  My efforts to short it have not been very succesful lately.

I also like AUDNZD short, GBPAUD long, AUDCHF is a nice counter-trend short from the top of the range (I guess I don't like AUD).  Also USDNOK short (if USD continues to fall off).

Wednesday, March 17, 2010

Wednesday March 17

D-day.  Dollar index at trendline support and a failure here means we likely do not get another measured move up and a deeper correction more likely.  This fits with the bullish setups on the majors but all still held at big SR levels.  I know I have a bearish bias and I am bullish the USD, but I do try and look at charts objectively, we still could go either way.

S&P has blown through measured move, SR levels and fib targets without any pullbacks and so I am out of upside targets and only have fib extensions left. A runaway train.  A break down of the uptrend now sets up a retest of 1152 from above.  Ftse has held the upper boundary of the measured move and has not broken out, likewise for other European indices.  Update:  FTSE now broken out too .... hmm.  Bearish gartley patterns may be setting up on the Russel and the CAC, will post charts if they work out.

Gold breakout long produced a long marabuzo and like the S&P has continued with no pullback thru the 61.8fib looks set for 1135 SR level & 78.6 fib.  If I was inclined to buy (I am not) then I would buy a retest of 1118.  The upside target would be the trendline and SR level at 1140. 

The most reliable pattern I can see is the bearish gartley on AUDUSD.  Whilst all the other commodity currencies have rallied hard Aussie has held this level, giving me confidence that this pattern may work, the dollar index may get support here and the SR levels hold in the other currencies.  I would not be a buyer of the breakouts in NZD or CAD into strong SR levels. 

EURUSD has to break and close above 138 and Cable above the 50fib level at 15275 before retracing to get me interested in buying a pullback.  Until then they remain range trades and we are at the top of the range.  I got stopped out of EURUSD short this morning, I thought the much vaunted option barrier resistance would hold and it serves me right  for having my stop in the same place as everyone else.

Market moving news today, UK employment, US core PPI and PPI, Crude inventories, OPEC meeting and Bernanke testifies.

PS - Check EURCHF.  Someone is really testing to see if its a newer softer SNB (they are braver than me).

I haven't had a limit down day this year yet, yesterday was a squeaker, I am keeping some powder dry today.

EURUSD stopped out (-1R)
CRUDE short 82.75 stop 83.15 PT 81.30
CABLE short 1.5370 stop 1.5410 PT 1.5270 / 1.5130
GBPJPY short 139.00 stop 139.40 - 61.8fib and big SR
GOLD short 1128 stop 1133  PT 1118 /1111.5
EURJPY short 124.60 stop 124.85 PT 123.30
CRUDE stopped out 82.75 BE
EURJPY closed 50% @3R 123.85 (+1.5R)
CRUDE short 83.00 stop 83.40 PT 81.20 trying again

Open trades:
CABLE short 1.5370 stop 1.5410
GBPJPY short 139.00 stop 139.40
GOLD short 1128 stop 1133
EURJPY short 124.60 stop 124.85 - 1/2
CRUDE short 83.00 stop 83.40

I am not on the front month but trading May contract since Monday.  I am looking for a countertrend short entry here and watching for inventories and Opec news.

Cable daily

GBPJPY daily

Happy St Patrick's Day.

Tuesday, March 16, 2010

Tuesday 16th March

A literally last minute ramp up on the S&P gives a Hanging Man daily candle below last week's high.  The measured move could still hold.  Today is FOMC later so a day to stay sharp (and Turnaround Tuesday, not always my favourite day).

The majors like EURUSD and CABLE are back to being range trades for now.  EURUSD has to break above 138 to continue the rounded bottom and below 135.5 negates it and suggests that the three drives pattern down is more likely.  The V shape bounces off the lows are not encouraging for bears.
USDCAD tested 1.02 from the underside and bounced but the daily does not leave me convinced we are about to power down from here.  More information required.  CAD still the strongest of the majors and NOK is at my level so if its a cut and reverse day I like it.

No love for me in Gold but the upmove is corrective so I am staying short.  I can take some comfort from the fact my metals trading is going a little better than these guys - February Report

GBPJPY closed 25% @ 6xR 135.54 (+1.5R)
CRUDE addition stopped out (-1R)
EURUSD balance stopped out (-0.5R)
GBPJPY short 137.20 stop 137.50 addition
GOLD addition balance stopped out (-0.5R)
GOLD balance stopped out (-0.5R)
EURJPY short 124.10 stop 124.50 PT 121.50
NZDUSD balance stopped out (-0.5R)
CRUDE short balance closed 81.40 (+1R)
EURJPY stopped out (-1R)
GBPJPY balance & addition stopped out (-0.75R)
CABLE balance stopped out BE pre FOMC
AUDUSD balance stopped out BE pre FOMC
EURUSD closed 1.3732 pre FOMC (+0.8R)
USDJPY stopped BE pre FOMC
USDJPY short 90.45 stop 90.65 - re-entry
EURUSD short 13765 stop 138.05 re-entry
AUDCAD stopped out (-1R)
USDJPY closed 90.15 double bottom post BoJ (+1.5R)

Overall a down day.

Open trades:
EURUSD short 13765 stop 138.05 

Has had a little breakout. I was expecting it to get to the daily trendline, I should have had a better short entry but I hesitated at 1140.  Lesson learned.

Monday, March 15, 2010

Monday 15 March 2010

New trades:
NZDUSD short 70.50 stop 70.65 PT 69.50
CABLE short 1.5190 stop 1.5220 PT 1.48
GBPJPY long addition stopped out (-1R)
GBPJPY long closed balance 137.40 (+2.12R)
USDCHF short closed balance 1.0585 (+1.06R)
CHFJPY long closed 85.61 (+1.2R)
AUDCAD short 0.9316 stop 0.9336
AUDUSD short 91.50 stop 91.65 PT 90.82
GBPJPY short 137.22 stop 137.50
NZDUSD closed 50% @3R 70.05 (+1.5R)
CABLE closed 50% @3R 1.51 (+1.5R)
EURUSD short 1.3699 stop 1.3719 PT 1.36
GBPJPY closed 50% @3R 1.3638 (+1.5R)
CRUDE short 79.99 stop 80.39 break of 80 level - addition
USDJPY short 90.50 stop 90.75 PT 89.00
AUDUSD closed 50% @3R 91.05 (+1.5R)
EURUSD closed 50% @3R 1.3639 (+1.5R)
USDJPY short 90.50 stop 90.75

Open trades:
GOLD short 1117 stop 1122 - 1/2 & short 1117 stop 1120 -1/2
CRUDE short 82.00 stop 82.30 - 1/2 & short 79.99 stop 80.39
NZDUSD short 70.50 stop 70.65 - 1/2
CABLE short 1.5190 stop 1.5220 - 1/2
AUDCAD short 0.9316 stop 0.9336
AUDUSD short 91.50 stop 91.65 - 1/2
GBPJPY short 137.22 stop 137.50 - 1/2
EURUSD short 1.3699 stop 1.3719 - 1/2

Chart analysis

A difficult week for bears as the S&P continued its slow grind higher, made new highs but closed just below the previous high. The price action was not good for a top, no sign of an exhaustion spike, or race up to the level and bounce. Instead the grinding stair climb makes 1160 look inevitable and a squeeze even higher not out of the question. The dollar index fell but not significantly and not across the board. Commodities were not able to move higher, which is interesting given the dollar weakness and sentiment. The Baltic Index is not a pretty picture for commodities either. For once FX was not all one trade (risk on/off) and not all driven by the dollar. Although it looks doom and gloom for the dollar, only select currencies moved against it and the others were flat and choppy.

Before I started my analysis tonight I was expecting that the charts would be more bullish than they are, across the board most markets have stopped at or failed to break key levels and this week could go either way.  The stars could be aligning for a big risk-off week. If the dollar rallies from here then my favourite trades tonight are short Aussie (particularly AUDCAD and AUDUSD) & NZD (EURNZD long, NZDUSD short). Continued dollar weakness and I like EUR & GBP long and USDCAD, USDCHF short.

Dollar index:
Continues to correct off the key 81 level and is tipping over trendline support.  Bear flag could be forming. Looks set fall further and test support and 61.8fib at 78.40 which I expect to hold, so more dollar weakness in the short term is possible. Uptrend still intact and if the pattern of the previous upswing is repeated then the pullback should not fall below 78.


- Weekly bullish continuation, daily spinning top, a weak reversal sign. The price action is not a signal to short here and the slow grinding move upwards looks set to continue. A pullback to 1130 is a good long entry if this is to make a three drives pattern.  The first two legs up are almost identical size at this point which suggests a pullback here.  If the pullback is symetrical to the first move the downside target is 1128-30.  If the 3 drives pattern plays out from there the upside target is 1199-1201.  Ugh.

Weekly high roller doji after a huge climb the week before with almost no pullback is huge and it can’t all be the weak pound. Daily rising wedge is bearish and looks set to pullback. Whilst the uptrend is in place I would buy a retest of 5500, below that says a greater correction is underway. A break below 5240 says the bulls’ party is over. If 5500 holds as support we could see a 3 drives pattern measure move. On the futures the first swing higher off 4973 was 401 ticks and the swing from 25 Feb gives 402 ticks. This not only gives weight to this being a swing high but a 3rd drive could project a target of 5900 (obviously subject to where we pullback to and launch from).

Weekly spinning top pause, daily is bearish outside bar. The ascending channel has held but price looks set to pullback before moving higher. Daily trendline has been broken and a test of 80 looks likely, if that fails next major support is $78 and then $76.50 Waiting for more confirmation of a bearish reversal, and until them $85 looks more likely than $75.

Weekly bearish engulfing, daily bearish engulfing this looks all set to shank right? Hmm … except two attempts to break 1100 have failed. I am holding my short but want to see it broken to keep me in to trend-line support around 1080. A break of 1070 puts 1025 in the target next. Above 1125 and the uptrend is on again.

SILVER. Weekly bearish pause, daily is sideways above 16.75 support. The close back below 61.8fib is encouraging. The upswing looks laboured and corrective and my bias is short. I would short a break of 16.75 with a target of 15.60

Currencies - Majors

Weekly small bullish continuation bar, daily bearish at the 78.6 fib (AUD favourite fib). The pattern off the high of 94 has formed a perfect bearish Gartley pattern (reliable). Price has bounced off descending trendline resistance at 92, above 92.35 negates this bearish pattern but it looks like a very interesting low risk short here. I’m bearish off this level.

NZDUSD – Weekly spinning top following two weeks of doji’s, all held below the weekly 20ema. The daily slow rising wedge pattern is bearish. This 70.50 area is a great area to sell from, downside with a target of 0.6640/0.6580. Resistance just below 71.00

USDCAD – The best performing commodity currency for the second week it smashed through 1.02 support on good employment numbers and parity looks like a reality. A sell on a retest of 1.02 from the underside is a good entry. If the dollar rallies this week then this would not be my best choice long. USDCAD loves to fake you out, and the balance of longs to shorts last week was 5:1 which maybe why this failed. Back above 1.03 I am in long with a target of 1.15 but I may have to wait a while for this trade.

Second weekly hammer, daily bullish continuation this does look tempting long. Price has bounced hard off a big daily trendline from the lows of Jan 09. Cable were to make a third drive south in a measured move then this is where it would be from and the downside target would be around 1.4140. A break above resistance at 1.5250 lines up 155.30 and then possibly 157.30 / 158 and the descending resistance line. The UK news stories this weekend were not good.

EURUSD – After four weekly doji’s in a row EURUSD broke for the top of the range before banging its head at 1.38. We really could go either way here,however the rounded shape of the bottom it has formed here makes a continued upmove look more convincing. CoT reports show that after 4 weeks of extreme bearish sentiment it has eased slightly which usually indicates a bottom. If the market continues to correct higher then 1.40 or 1.44 are likely upside targets and a good old short squeeze is not out of the question. But another leg down from this 1.38 level is just as possible.  This one will be interesting to watch.

USDJPY – Weekly doji inside bar, daily sideways in congestion. Flat.
I have been very bearish this pair for a very long time and in this descending channel I am still a seller of rallies however … USDJPY has held its gains of two weeks ago, blew through the 50%fib retracement from the decline from 92.17 and we sit at 61.8fib retracement. We may move up from here to test the upper channel line which is now at 91.  A break up through 92.30 means we have a higher low in place and above 93.80 we should rally pretty smartly to test 101.43. What will pull USDJPY down is the crosses and another risk aversion leg down, then I stick with my prediction of 77.60

USDCHF – Reverse of EURUSD. I am not sure this pair is the driver but is pulled by the others. I am short countertrend to 1.0550 and only a drop below 1.05 changes my bullish longer term view. First target 1.10, second target 1.15

AUDJPY – I am a seller of rallies and only a break above the January highs changes it. The weekly is a bullish continuation and the daily is a bearish doji. The 78.6 fib retracement is at 83.85 and if we do not close above that then we have the same bearish pattern as AUDUSD. Like AUDUSD this is a good short entry if we have a risk-off week or bad news from China.

NZDJPY – Weekly doji indecision, daily is a bearish long legged doji. I like this short and I like the fundamentals behind a short and this is a good level to sell from. Only a break above 64.50 changes my bearish view for now.

CADJPY – The strongest currency this is at the top of a big weekly wedge and threatening a breakout. Given the other charts I think this is unlikely but not out of the question. If we have a risk on week this is a great trade long on the break of the weekly wedge or buy a retest of 88.50. As a short I think there are much better opportunities vs. the yen and I will pass

AUDNZD – Uptrend, weekly doji inside bar, daily bullish consolidation. This pair has broken from a long time consolidation range and I would buy dips or a retest of 1.2935 Fundamentals support this continuing higher.

EURNZD – Weekly bullish doji, a month of sideways indecision following a strong downtrend. Daily is bullish but still countertrend at the moment. If the indices fall and this pair can get back above 2.00 and confirm a bottom in place then this would interest me long. Until then I am passing.

GBPAUD – weekly bullish hammer at the end of strong downtrend. Daily bullish continuation. If this pair can get above 1.6755 then one could buy dips countertrend with a target of 1.7150 where I would look to sell again. The safer trade is to wait to sell.

AUDCHF – Big weekly bullish marabuzo, daily high roller doji after massive rise and new highs, this pair has stalled at the top of its ascending channel and I would wait for a pullback to 94.15 to get long.   A trend reversal back to the downside if we have another bout of risk aversion.

Downtrend, weekly inside bar, and in a very tight triangle.  I am a seller of rallies (I like 9389 level) or a break of the weekly inside bar at 92.50 which would also be a break of daily trend-line support. I see this as a US/China trade, I like this one a lot …

EURAUD – Weekly bullish hammer off significant new lows, daily uptrend looks corrective not impulsive. Not enough information or a good enough level to tempt me long. I would look to sell a pullback to 1.54

GPBJPY – Weekly bullish hammer-like continuation, daily bullish continuation after a very big drop. I am a seller of rallies, but I am counter-trend long this pair, target 139 / 141 where I am looking for price action to sell again. If we revert to risk off this week then the symmetrical move would be from the 50fib retracement level at 137.80 here and the downside target would be around 127.20 where there is minor support.  Thats another big drop ...

GBPCHF – Attempting to carve out a bottom above 1.60 after a big drop in a strong downtrend. If it can manage it then this has potential to get to 1.66 but I am not convinced of a bullish reversal yet. A retest of the lows at 1.51 looks more likely at this time.

EURGBP Two weekly shooting stars, daily bearish, this is still in an uptrend and has not quite reached the upper trend-line resistance. I have been burned once shorting this, I will wait for a break of 90.40 or a break of the support at 89.70

interesting chart. It is at important resistance at 125 and could go either way. A break south has a measured move target of 117 (from 124) but a further correction up to 127 or 129.70 is also possible if 125.22 resistance does not hold. My longer term target is 112

EURCHF – A good friend told me he thought the SnB were softening and would accept 145 and I ignored him. I won’t next time.

Very similar to USDCAD, broke support, in this case also down out of an equal triangle on the weekly and I am waiting for a retest from the underside.  This could be a fakey move if the dollar rallies this week. If it holds and US dollar weakness continues then this has a short target of around 5.7 and weekly rising trendline support.  As a long the dollar trade this isn't my favourite.

USDSGD – Weekly bearish continuation, daily bearish marabuzo pushed down to touch rising trendline support (from the Nov lows) and support level at 1.39. This pair has formed a base and an uptrend is underway. This looks a good long opportunity at this level.

Friday, March 12, 2010

Friday 12 March 2010

Well I don't know about anyone else but I have had a pretty crappy week.  Most of it not trading but the markets haven't helped.  Anyway in the words of the song its just an ordinary day and its just my state of mind.

I have a daily hammer against my Gold short but I am holding on to it because we are below the daily trendline and I believe the resistance level at 1117 will hold. Closing half to pay for my stop helps.
Continentals (GBP EUR CHF) are moving this morning, and if EURJPY clears the potential resistance at 124.37 then it looks good for at least 127  All the XXXJPY's need to clear highs of two weeks ago but the price action looks promising. 
I still see best potential in EURUSD, USDCHF and Cable.

US Crude had its narrowest range day this year I think.  Saving up some energy for breakout hopefully.  I will trade it either way but $85 still looks inevitable.

The key to what happens later will be the indices in the US session.  The S&P futures shot up to new yearly highs after the close so it looks inevitable the cash price will rally.   But if price fails to either get above or hold above there then everything could stall and we will have inside bars everywhere and another week of indecision.

New trades:
 USDCHF short 1.0670 stop 1.0710PT 1.0550 / 1.05
USDJPY short 0.9050 stop 0.9075 PT 89.50 - 4hr IB countertrend
CRUDE long 82.40 stop 81.90 break of daily IB
USDCHF closed 50% @3R 1.0580 (+1.5R)
GBPJPY closed 50% @3R 136.90 (+1.5R)
CHFJPY long 85.25 stop 85.10 PT 86 - 4hr teenie bar
USDJPY short stopped out (-1R)
GOLD short 1117 stop 1120 addition
CRUDE stopped out (-1R)
GBPJPY long 137.80 stop 137.40 addition, 4hr inside bar
CRUDE short 82.00 stop 82.30 PT 81.00
GBPJPY addition stopped out (-1R)
CRUDE short closed 50% @3R 81.10 (+1.5R)

Open trades:
GOLD short 1117 stop 1122 - 1/2 & short 1117 stop 1120
GBPJPY long 135.70 stop 135.30 - 1/2 & long 137.80 stop 137.40
USDCHF short 1.0670 stop 1.0710
CHFJPY long 85.25 stop 85.10
CRUDE short 82.00 stop 82.30

EURUSD daily breakout
I took USDCHF instead, but will take this one too next entry or a break / retest of 138.

I am still bearish.  I know this isn't popular with anyone else but I am OK being wrong :)  Until we break out of the big daily descending channel I am selling rallies.

CRUDE daily

Thursday 11 March 11th PM

What an ugly day for FX.  No movement and inside bars everywhere.  US indices rocketed to new highs at the close, an ominous sign for bears.
There are however lots of rumours of more China tightening which is bearish for stocks and commodities.
Here are my best candidates for tomorrow;

EURUSD & EURJPY long.  Daily inside bars after bullish engulfing candles.  Look all set to go to me, target EURUSD 140, EURJPY 127
And therefore I also like USDCHF short and CHFJPY long.  Sterling looks good but the other two look better.
For the commodity currencies a lot is going to depend on the indices.  If we rally tomorrow they will be perform better than a flat day when we just hug the new high.
Here is a chart of what moved and what didn't today from finvis.  I am looking forward to doing more commodities.