Monday, July 26, 2010

Sunday 25 July

I think I will take this week off.  It's summer and in Canada Summer doesn't last very long (at all).
Many markets at key resistance or close to it last week suggest we could pull back this week and I would be a buyer of dips in risk.  Breaks above and this meat grinder market will keep on going.
Good Luck!

Friday, July 23, 2010

Dow / indices

Dow has a bearish gartley on the hourly  and has made two equal swings off  Tuesdays low which is 70% reliable.  It is invalid above 10400 and first target is 10214 and pattern completion is that magic 10000 level.  If this pattern works to completion and not just a pullback then it is very hard to hold on to a bullish view.
The target 1, 50fib retrace would be a good buying point.


Gold has hit the 61.8 fib retrace of the drop from last week and I am adding to my short here.  It is also the round 1200 number and a bearish gartley pattern which means we should retest the lows.

I am waiting for the post-stress-test-euphoria-rally to buy EUR!!

Gold short 1201 stop 1206 PT 1175 - addition
EURAUD short 1.4460 stop 1.4510 PT 1.4260 (50fib retrace)
CABLE long 1.5355 stop 1.5320 PT 1.5630 (off 50fib retrace)
EURAUD closed 1.4410 post stress tests (+1R)
CABLE closed 1.425 (+2R) don't want to hold on weekend.

Open Positions:
GOLD short 1203 stop 1209 - 1/2
GOLD short 1201 stop 1206

Friday - UK GDP and sterling

I am looking at sterling because UK prelim GDP is at 08:30GMT
Hard to call this one either way but its summer and Friday.  Could be monster chop followed by a euphoria rally after the EU bank stress test results later today.

Sterling index has formed a big head and shoulders on the daily.  I hate the pattern but it does show key support.

Cable is bullish, broke the descending trendline from the 09 highs, is in a rising channel and bouncing under the 200 day moving average.  If the GDP number is bad key support is at 1.51 and a break below that targets a deeper correction to 1.48.  If the bottom of the channel holds as support I am a buyer of dips targeting 1.56 & 1.61

I am bullish, looking for this break of trendline resistance to hold and targeting 0.86 then 0.8730-50

Weekly charts shows sitting on key support at 1.5800 and a break of this support and there is no real support until 1.5100.  However the daily chart looks to have double bottomed and good news makes this a buy with a fib target of 1.66

This pair moves inversely with risk.  I sold it because it broke trendline support today when the S&P broke trendline resistance.  Trend here looks to be down but I am cautious because the weekly chart still shows an uptrend.  A summer rally in stocks could send this back to the lows at 1.62

Daily chart is choppy and sideways, rangebound between 131 and 1.36.  I am short and looking for a break of 1.31 but I am watching USDJPY for direction.  I favour the downside but its hard to reconcile with a summer rally in stock so more range trading perhaps.

Rangebound and sideways, possible double top needs to break 1.5450 to confirm and if it does sets up 1.48 and another test of the lows.  A lower high and support here, followed by a break above 1.62 has a fibonacci target of 1.7050

Thursday, July 22, 2010


Isn't summer trading great? :(
Good European data boosted risk this morning (UK retail sales, EU PMI and Hungary sold debt successfully) but lots of European data up shortly including CAD retail sales, US employment claims and then US existing home sales a bit later.  We will see what the mood of the market is.

GBPJPY short 1.3250 stop 1.3280 - addition
CRUDE short 77.00 stop 77.40 - addition
EURGBP long 0.84 stop 0.8370 PT 0.8730
CRUDE addition stopped out (-1R)
CRUDE short balance stopped out 77.50 (+0.5R)
GBPJPY short addition stopped out (-1R)
GBPJPY original short balance closed 1.3270 (+1R)
GBPAUD short 1.7180 stop 1.7280 PT 1.6700, break of yest low and TL
AUDUSD short 0.8940 stop 0.8965 PT  0.8860/0.8632 bearish butterfly
AUDUSD stopped out overnight (-1R)
EURGBP closed (+0.2R), will wait until after stress tests

Open Positions:
GOLD short 1203 stop 1209 - 1/2

Wednesday, July 21, 2010


I have to admit it I was expecting higher (1.3190 would be projection of inverse head and shoulders, even though I hate the pattern) but EURUSD has put in a bearish engulfing candle or key outside reversal day off the 1.30 round number (also strong resistance summer 2006, early 2003) and it is also the 61.8fib retracement from the April high to lows. 
It is also a bearish butterfly pattern
Therefore I am looking for short entries targeting the 38.2 fib / 1.2570 area initially.

USDCHF has bullish long tails on the daily candles off the 1.05 support area and is an interesting buy back to 1.07 then 1.12.

AUDCAD might be an interesting short or at least an indication that AUD is a better short than CAD.
It is at the 50% retracement from the Nov 09 highs and also the breakout point where it broke from the long term wedge.  I am watching this one, I want to see a daily reversal candle because there is a danger we keep going higher to the 61.8fib at 0.94


EURGBP long stopped out (-1R)
EURUSD short 1.2885 stop 1.2910 PT 1.2550
USDCAD balance stopped out 1.0410 (+0.5R)
EURUSD short stopped out (-1R)
EURUSD short (again) 1.2880 stop 1.2910 PT 1.2550
AUDCAD short 0.9175 stop 0.9205 PT 0.8850 - TL break
AUDUSD short 0.8830 stop 0.8860 PT 0.8550
CRUDE short 78.00 stop 78.50 PT 76.00
USDCAD long 1.0405 stop 1.0380 PT 1.074
AUDCAD stopped out (-1R)
EURUSD short closed 50% @3R 1.2790 (+1.5R)
USDCAD long closed 50% @3R 1.0480 (+1.5R)
CRUDE short closed 50% @3R 76.50 (+1.5R)
AUDUSD short closed 50% @3R 0.8740 (+1.5R)
AUDUSD balance 50% stopped out 0.88 (+0.5R)
USDCAD balance 50% stopped out 1.0430 (+0.5R)
EURUSD balance 50% stopped out 1.2850 (+0.5R)

Open Positions:
GBPJPY short 133.90 stop 1.3450 - 1/2
GOLD short 1203 stop 1209 - 1/2
CRUDE short 78.00 stop 78.50 PT 76.00 - 1/2

Tuesday, July 20, 2010

Tuesday update

The S&P has bounced pretty sharply off the 50fib retracement of the last swing.  If that holds as a low it is very bullish and we will make new highs in pretty short order. 
Corrections can be two swings and I would not rule out one more dip down, just because the market can :)  A dip back to the 61.8fib and the much fabled 1040 area from here means the measured move target lines up with the fib target too but just like when I try to play golf, the ball doesn't always get there as prettily as you would wish.

Tuesday July 20

Firstly apologies for not posting so much, I am fighting my way back but its a slog.  Hopefully next week I will be on all cyclinders and more charts.

Bank of Canada rate decision is due in 10 minutes.  96% of analysts say the BoC will hike and market has priced in a 25bps increase.  I am not so sure and if they do not hike then USDCAD will take off.  Yesterdays daily candle was a bearish hanging man so technically we are set for lower but I would buy any dips back to 1.04 area.  Tom (Trader Dante) pointed out the similarity in the chart to Sep/Oct 2008 and the same levels.
CADJPY is perched on 82.00 support.  A break below this level and trendline support has a fib target of 78.25 and a measured move target of 77.40
EURCAD is a very interesting chart, a break of the long term weekly trendline resistance.  I would be looking to buy dips and looking for price action at the 1.3330-50 area

The break of the 87.00 level is a biggie, 4hr chart is a bearish wedge at that level and we look set for lower.  I am bearish unless it gets back above 88.00

AUDUSD balance stopped out (-0.5R)

Open Positions:
USDCAD long 1.0380 stop 1.0350 - 1/2
GBPJPY short 133.90 stop 1.3450 - 1/2
GOLD short 1203 stop 1209 - 1/2
EURGBP long 0.8470 stop 0.8440 PT 0.8730

EURUSD daily chart
Trendline resistance from the Nov highs is broken and suggests higher prices but we are bouncing at a good 61.8fib.  I am looking to buy a pullback to 1.27 or 1.2550 looking for a target of 1.3190 and 1.35

Monday, July 19, 2010

Monday 19 July

I will post currency charts later but I am not sure the risk-off correction is over.

Crude short stopped out (-1R)
GOLD short closed 50% @3R 1285
EURGBP long 0.8470 stop 0.8440 PT 0.8730 - TL break

Open Positions:
USDCAD long 1.0380 stop 1.0350 - 1/2
AUDUSD short 0.8785 stop 0.8810 - 1/2
GBPJPY short 133.90 stop 1.3450 - 1/2
GOLD short 1203 stop 1209 
EURGBP long 0.8470 stop 0.8440 PT 0.8730 

Weekly charts Indices Gold and Crude

Talks have broken down between the IMF, EU and Hungary and Hungary has been cut off from access to the rest of the IMF funds which is a risk-off tone for the start of the week and a weak HUF could drag down EUR and give a boost to the USD.  
China has pledged support for the EUR, no surprise.

USDJPY has broken major support at 87.00 and it will be interesting to see what will happen when it is retested, It is a Japanese holiday tonight (Sunday/Monday) so we may have to wait.

Rolled over after a tussle at the trend line from the April highs and weekly candle will close as a bearish doji without hitting the 50fib retracement from the highs.  Because it didn't make the 50fib it is either very bearish trend continuation and we will make new lows and the 890 area or we have more upside to come and will make the 50fib and 1120 area.  We are for sure heading lower as the week starts but because its summer and we are still in earnings I am leaning towards support holding and we go higher before lower.  Support at 1060 (flash crash low) or more likely 1040 should hold.  If it doesn't then we go to 950 next.

FTSE 4hr chart
Similar to the SPX, the break above the descending resistance trendline from the April highs makes FTSE a  more bullish chart than the SPX and a sign of things to come perhaps.

GOLD daily chart
Gold has stalled at the 50fib retracement from the March low.  Stronger support at the 61.8fib is around the 1164 level.  However if you trust measured moves and if Gold makes a second equal measured drop here then the target is around 1136.  A drop to the 61.8fib or the 78.6 fib at 1136 would be very interesting because it would mean a break of the long term weekly trendline from the October 2009 lows.
A break of this weekly trendline would be very interesting and would have a target between 973.9-905.2

CRUDE daily chart
Crude is in a rising channel which is bearish after being rejected at the 61.8fib from the April highs and then found support at the 23.6fib we are now back at the 50fib. Higher lows and higher highs suggest we are climbing our way back up.
Weekly chart could be construed as one big bear flag or rising wedge and a lower high here and a break back below 70.00 would be interesting as it is a break of the weekly trendline from the lows and projects a target of 60.17 - 53.80

Currency charts to follow Monday morning.

Friday, July 16, 2010


 ” [Michael Marcus - another top trader] taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money. ” 
- Bruce Kovner
Thanks for the reminder 50Pips

Well I picked good levels yesterday but they didn't hold.  Its Friday and option expiry in equities, a good day to trade quietly and wait to see how the week ends.   

Commodity currencies (AUD, CAD, NZD) are weaker than the continentals (EUR, CHF, GBP) and better shorts at the moment IMO.
I still like yesterdays low to hold in the dollar index for a bounce but EURUSD and GBPUSD look like they could have a bit more room to the upside. 

The 50fib didn't hold in EURUSD so eyes now on1.30 round number and then the 61.8fib and the 1.3090 level which was pretty good resistance at the end of 2008 and early 2009.  (weekly chart)

AUDUSD 4hr chart - possible double top. 

USDJPY is again testing the yearly low at 86.96.  A weekly close below 87.00 is very bearish and means the yen crosses could be interesting trades coming up. 

Is clinging to the descending trendline from 26 April high. Yesterdays hanging man doji suggests a pullback could happen but might be a shallow summer correction.  Because of the chop I would like to see the purple trendline support broken to signal a pullback to 1055 area (50%) and risk-off.

I was looking for a pullback to 1224-1235 area  to short but this bear flag seems to be quite shallow.  For the first time in two weeks price has penetrated the previous days low ... one to watch

EURGBP daily, break of this trendline targets 0.8730-50 then 0.89.  Buy on dips.

New trade:
AUDUSD short 0.8785 stop 0.8810 PT 0.8590
CRUDE  balance long from 75.20 closed 76.50 (+1.3R)
USDJPY stopped out balance (-0.5R)
GBPJPY short 133.90 stop 1.3450 PT 1.32
GOLD short 1203 stop 1209 PT 1164 - will cut if does not break 1200
CRUDE long balance closed 76.00 (+1.85R)
CRUDE short 76.00 stop 76.50 PT 74.50 - trendline break
USDCAD closed 50% @3R 1.0470 (+1.5R)
AUDUSD short closed 50% @3R 87.10 (+1.5R)
GBPJPY short closed 50% @3R 132.10 (+1.5R)

Open Positions:
USDCAD long 1.0380 stop 1.0350 - 1/2
AUDUSD short 0.8785 stop 0.8810 - 1/2
GBPJPY short 133.90 stop 1.3450 - 1/2
GOLD short 1203 stop 1209 
CRUDE short 76.00 stop 76.50 

Thursday, July 15, 2010

Thursday 15 July

Dollar index has hit my interim target of 82.70 and I think we bounce here.  The trend is still down as the DX has broken trendline support but we have a risk-off correction and some  back and fill due.
GBP looks like a better short than EUR or CHF.
CAD and AUD are better shorts than NZD (breaking wedge support in AUDNZD and AUDCAD about to hit 0.9250 reversal area)
If USDJPY breaks support at 87 then XXXJPY crosses are good shorts.
USDSEK is an interesting buy at this 7.3 level, good SR level and two equal swings down from June highs.
Gold is a good daily bear-flag forming.  I am looking to short between 1225-1235

New trades (half risk per trade as all very correlated):
EURUSD short 1.2895 stop 1.2920 PT 1.2515 - see chart weekly level
USDCAD long 1.04 stop 1.0380 PT 1.0490 / 1.0740
CABLE short 1.5350 stop 1.5410 PT 1.4870
CABLE stopped out (-1R)
USDCAD stopped out (-1R)
EURUSD stopped out (-1R)
USDCAD long 1.0380 stop 1.0350 P1.05 / 1.0340 - trying again 1/2 size

Open Positions:

CRUDE LONG 72.30 stop 71.70 PT 75.00 - 1/4 position
CRUDE long 75.20 stop 74.70 PT 79.50 - 1/2 position
USDJPY long 87.30 stop 86.90 PT 89.20 - 1/2 position
USDCAD long 1.0380 stop 1.0350 P1.05 / 1.0340

EURUSD weekly chart

CABLE daily chart - 1.5350 big level too

I will be back full time next week ... Be interesting to see where the weekly candles close.

Wednesday, July 14, 2010

Wednesday 14 July

I'm taking a little time off to feel better.
I am watching the long term descending trendlines in GBPUSD, EURUSD and the US indices and will post some charts tonight.  Today looks like a back and fill day.

USDJPY addition stopped out (-0.5R)

Open Positions:
CRUDE LONG 72.30 stop 71.70 PT 75.00 - 1/4 position
CRUDE long 75.20 stop 74.70 PT 79.50 - 1/2 position
USDJPY long 87.30 stop 86.90 PT 89.20 - 1/2 position

Tuesday, July 13, 2010

Tuesday 13 July

It appears risk is going to drift slowly upwards for a bit this week into option expiry.  The Greek bond auction has gone OK which is offsetting the negatives of Moody's downgrading Portugal and has helped EUR off the lows.
 The US has treasury auctions this week and it is one to watch.   The 10year yield is again back over 3% and this is weighing on USDJPY but should be higher ...  Watch the 10yr auction today and the 30yr tomorrow for more direction.  On the NYSE yesterday was the lowest volume of 2010 so far, so the summer doldrums are officially here.

EURGBP looks to be correcting down and has broken trendline support.  I still like EURGBP long on a pullback (target 0.8750-0.89).  I would look to buy at the 0.82-0.8240 area  or a good entry would be the break of the descending trendline resistance from the March highs.

Will post charts for the crosses later today, there look to be some good trades setting up slowly.
I apologise I am not around much, I am not feeling too good this week.

CRUDE long 75.20 stop 74.70 PT 79.50 - addition
EURAUD short 1.4340 stop 1.4410 target 1.40 / 1.3540 ~ sold break of yesterdays low
EURAUD stopped out (-1R)  nice squeeze in EUR
CRUDE closed 50% @3R 76.70 (+1.5R)
USDJPY long 88.10 stop 87.80 PT 89.70 then 91.00

Open Positions:
CRUDE LONG 72.30 stop 71.70 PT 75.00 - 1/4 position
USDJPY long 87.30 stop 86.90 PT 89.20 - 1/2 position

Breakouts in cable and EURUSD mean a re-test of the highs and possibly new highs ... beware summer chop.

Monday, July 12, 2010

Monday 12 July 2010

Cable has broken down through 1.50 at the open.  I skipped shorting the break and I am waiting to see how the daily candles close across all the markets as we are at key inflection points closes.

GBPCAD balance closed 1.55 (+2.4R)
USDCAD balance closed 1.0350 (+2R)
New trade:
GBPAUD SHORT 1.7150 stop 1.7210 PT 1.69
GBPAUD stopped out (-1R)

Open Positions:
CRUDE LONG 72.30 stop 71.70 PT 75.00 - 1/4 position
USDJPY long 87.30 stop 86.90 PT 89.20 - 1/2 position

Weekly charts and analysis

Risk Rally looks set to continue but we could be due for some back and fill first ( AKA chop) ...
I am finding it hard to see trades jump out at me as we start the week, I am going to be watching for direction before jumping in to anything.

Today China announced a much bigger trade balance than expected at $20bln vs just under $14bln expected.  This is good for the risk trade although obviously not for global imbalances.
Breakouts in "risk" commodity currencies and really good employment numbers for Australia and Canada are helping.
Sterling is the weakest of the bunch but watch the BP news, sterling sold off on bad news from the Gulf of Mexico so news that BP have re-capped the spill and interest from PetroChina in BP and that BP is shedding US assets might give it a boost.
We are coming into earnings season and lets say that expectations are not too high.  Bearish sentiment among stock market investors remains at the highest level since March 2009,.  Last June Alcoa surprised with earnings 30% better than expected and this June could again surprise the market to the upside.

Weekly bullish piercing line reversal pattern.  I think this run has a little further to go before we hit the descending weekly trend line from the April highs.  I would expect a pullback there (perhaps to the flash crash low SR level) and then another push higher.  My upside target still 1120-1140.

Weekly bullish engulfing candle has FTSE back in its ascending channel. and has also broken trendline resistance from 26 April.
Buy dips (perhaps back to 5100) and upside target is 5450

Gold has rolled over but fall is halted and the weekly candle is a good looking bullish long legged doji.  I think there is more downside to come for Gold and better prices to buy.  The upside target for this swing is 1227-1234 but I am waiting for price action to sell there with a downside target of 1150-1160

Weekly bullish piercing line.  Crude is now retesting the ascending channel it fell out of and could find resistance here.  I am looking for a pullback to the 74.50 area to buy again with upside targets of 79.50 and then 81.50
Watch the news this week, BP recapping and sealing the leak in the Gulf of Mexico could be bullish for crude (and if it fails bearish).  Monday 19 July  is the rollover of the front month (August) contract and that means Friday could be quite volatile.

Currencies - Majors

Not a big bullish week for the Euro, constrained at the top of a rising channel this could be be setting up an interesting short. EURUSD has fallen just short of two equal measured moves off the lows and short of the 50fib retracement which makes me think we could have one more push higher before we correct down. I am not usually a fan of head and shoulders patterns but on some markets they work better than others and the one on EURUSD could mean much higher levels than people are anticipating.  One to watch because opportunities could be setting up here: one more push higher and a breakout to 1.2880 and then 1.31, or a dip back to the bottom of the channel before a move higher.

Cable is at triple top resistance and looks to have rolled over but trapped between support at 1.50 and resistance at 1.5250.  It is interesting that it hasn't touched the long term descending trendline which makes me think the 1.50 level could hold and we get one more push up from here before rolling over.  I am watching this one closely because if the market pulls back cable (risk off)  is a good short but to get me in it has to retest the descending trend line and hold, or break 1.50.  A break of 1.50 sets up 1.48 next

USDCHF is sitting on a big pivot level at 1.05 / 1.0450 and also the 61.8fib retracement of the move off the Nov09 lows and May 10 highs.  I am looking for this support to hold here and a move back up to 1.09 / 1.102  No price action to get long yet but one I am watching for it.

Sitting on strong support and the big 2008 pivot level at 1.03  I am looking for this support to hold and a correction here but no price action to buy yet.  Stronger support could lie at 1.0220 so one to watch.  A bounce back to 1.0450-1.0490 would be a good spot to add some shorts with a downside target of 0.9950

Higher low is in place, and Aussie has broken trendline resistance.  I am looking to buy pullbacks (perhaps to 0.87 or 0.8550-80) with an upside target of 0.8880 and then 0.9100

Not the best looking trade out there, consolidating sideways in what could be a big flag pattern.  Pass, wait for more information.

Currencies - Yen crosses

No change.  A bullish bounce off the 0.87 SR level, USDJPY has resistance at 89.25 and the daily 20 EMA but I am still a buyer of dips (88.20?) with an upside target of 89.90 initially and the descending trendline resistance.  A break of the trendline means that 91.00 and then the big 91.80 level is next.

Two equal swings off the low at 107.30 could mean EURJPY is set to pull back here and pull back to 110.50 or 109.35 where I would be looking for price action to buy.  I really want to see a higher low and then a break above 112.70 gets me long with a target of 117.60 then 119.50, watch out for strong resistance at 1.14

A big bullish move off the lows failed to break the previous weeks high and stopped at the 61.8 fib retracement of the drop from the June highs.  I expect a pullback here to  76.20 or 75.70 area and then a move higher to 81.90


More charts - the crosses to follow ...

Friday, July 9, 2010

Dollar Index

The big question is when is this swing going to be over for the US dollar and when do we buy it again.  I am not ready to buy dollars quite yet looking at the dollar index.

I am looking for two equal corrective swings down (shown as turquoise lines), which gives me a target of 82.71 which is also just above the April swing high for the dollar index, the May swing low and the 61.8 fib retracement.
When the we get there I will be ready to buy the dollar again and I think we see the next swing.  Until then I am holding off.

When Fortune and CNN start saying Central banks start to abandon the U.S. dollar then you know a reversal is not far away.


It's Friday and it is summer.  If I didn't have any trades open I would probably take today off.
Canadian employment numbers have come in this morning adding 93,200 jobs which is huge and helped my CAD trades reach their fib targets.
There are flags or equal triangles on a lot of markets.  Cable consolidating below resistance, EURUSD at the top of the channel.
It is one of those days when they could break either way.  We could roll over and do some back and filling with jitters pre-earnings or we could roll over and restart the down trend.  I personally think we could see higher prices and better levels to sell from so I am in the back and fill before another leg up camp.

S+P has stopped at the 50% back of the last swing (June high to lows).  A reversal here would not be good for the bulls and means a retest of the lows and possibly new lows.  I would prefer to see the down-trending resistance line and the 61.8fib tested first.

Because AUDUSD has broken above the descending trendline and the flash crash 87.00 level and found  support off it.   I think it is likely we see higher prices and some breakouts.  AUD and CAD are good risk indicators usually and I intend to buy a breakout of this consolidation or a retest of the 0.8700 level.

I am holding on for 76.50-77.00 before we roll over and do some back and fill rolling over and rejecting off the previous trend-line support would be bearish and get me out and likely short next week .   I am holding on the the last 1/4 of my long trade but open to a reversal at this point.

A good bounce off the weekly SR level at 87.00.  I am holding for a second swing up to 89.20, the 61.8fib retracement of this swing and the 50% retracement of the bigger swing and the descending trendline.

My Gold short is taking its time. The weekly looks set to close as a doji so it could go either way.

USDCAD closed 25% @ 6R 1.0420 (+1.5R)
GBPCAD closed 25% @6R 1.5695 (+1.5R)
GOLD stopped out  (-1R)

Open Positions:
USDCAD short 1.0600 stop 1.0630 PT 1.0410 - 1/4 position
CRUDE LONG 72.30 stop 71.70 PT 75.00 - 1/4 position
GBPCAD short 1.5995 stop 1.6045 PT 1.5610 - 1/4 position
USDJPY long 87.30 stop 86.90 PT 89.20 - 1/2 position

Thursday, July 8, 2010


EURUSD is very close to the top of its ascending channel and about to hit descending trendline resistance from the December 09 highs.  It is coming close to levels where I would not be surprised to see it pullback and do some back and filling before a move higher.
At 1.27411 EURUSD would have made two equal swings up from the lows and markets love symmetry ...

EURGBP is at that level too.  daily chart.
If we get a 50% retrace of the up move here we have a pretty good looking inverse head and shoulders (perhaps).  It is not my favourite pattern but on some currencies like sterling it works well.  If the 0.8380 high gets taken out then EURUSD is going to break out as well and the next resistance for EURGBP is 0.8425 and the 113 fib which is also close to the 50% retracement from the May high.  I still like EURGBP higher and I would buy the pullback.

Radio Interview

Euodoo Trading - a great website for traders and especially new traders did an interview with me this week.
I think I sound awful but you might enjoy some of the other interviews and stuff there ;)

My interview

Thanks Euodoo - I am very flattered.

Thursday 08 July

No change for sterling this morning but the ECB press conference is coming up in short order.  Cable and EURUSD have been trading sideways while the commodity currencies put in a big rally while we wait for this news and a no-change might trigger them to play catch-up.
As Macro-Man pointed out yesterday, there is the potential for a "tape bomb" from Mr Trichet.  After an impressive rally from the lows EURUSD is coming up on trend line resistance from the Dec09 highs.  
Cable has traded sideways this week after a six week rally off the lows and a sharp dip here would not be a surprise but with the risk rally looking set to continue I would buy any dip back to 1.48, Cable is also close to descending trendline resistance from Oct09 highs and a break of the trendline sets up 1.5550 next resistance.  Cable is also a bearish Gartley fibonacci pattern (invalid above 1.5350) a pattern that has a 70% success rate so I am holding onto my other sterling shorts into the news.
EURGBP is approaching previous resistance at 0.8382 which is also fib resistance, but I expect it to take out that swing high and I would be a buyer of dips looking for 0.8420

AUD added 46,000 jobs last night vs 15,000 expected and has broken it's descending trendline resistance and my upside target.
All in all this risk rally looks set to continue.  The 87.00 level in USDJPY that I mentioned last week has held and JPY crosses look like good buys again.  EURJPY inverse head and shoulders projects a target back at the top of the range at 114.00 and I am looking for a buy entry on a pullback to the 110.85 area.

Gold has retested the breakout level at 1207 and shorts look good to continue.

US unemployment this morning might take the shine off the rally.  How this weeks candle closes is very important for the indices, failed patterns (like head and shoulders) can be powerful trades.

GBPCAD closed 50% @3R 1.5845 (+1.5R)
AUDUSD closed 0.8740 past target and 78fib (+2.2R)
GBPAUD closed balance 1.73 target (+2.5R)
CRUDE closed 25% @6R 75.30 (+1.5R)
USDJPY closed 50% @3R 88.20 (+1.5R)

Open Positions:
USDCAD short 1.0600 stop 1.0630 PT 1.0410 - 1/2
GOLD short 1199 stop 1209 PT 1166
CRUDE LONG 72.30 stop 71.70 PT 75.00 - 1/4 position
GBPCAD short 1.5995 stop 1.6045 PT 1.5610 - 1/2 position
USDJPY long 87.30 stop 86.90 PT 89.20 - 1/2

Wednesday, July 7, 2010

Wednesday 07 July

Is the tumble in the indices going to keep tumbling here or bounce, is the big question.  If we collapse it will one of the most anticipated crashes ever which makes me think we are less likely to.
The charts are bearish, the trend is down and the S&P has broken the neckline of the big head and shoulders that everyone is looking at.  For the bullish bounce to have any power the S&P has to close back above the 1040 level and until then we bounce around. A close below 1000 would mean the 50fib at 943 is next.
Possible double bottom in AUDJPY at 72.70 suggests we could bounce still.  I like AUDUSD long better.  Yesterdays candle was a bullish engulfing and we retraced 50% and look all set to head higher.

EURGBP in a stair climb north headed for 0.8430 makes EUR a better long and GBP a better short trade.
GBPAUD has broken trendline support and forming a bear flag, I like this as a short if the market decides it is risk-on.   
EURCHF looks like it is about to roll over and retest the lows which makes GBPCHF an attractive short and a break of the weekly wedge sets up 1.58 and 1.5485.  I like the GBPCHF and GBPAUD trades a lot.  Will post some charts later.
Horrible day with crude yesterday, I will be watching my risk today.

AUDUSD long 0.8475 stop 0.8445 PT 0.8700
CRUDE LONG 72.30 stop 71.70 PT 75.00 /
GBPCAD short 1.5995 stop 1.6045 PT 1.55
GBPAUD short closed 50% @3R 1.7720 (+1.5R)
AUDUSD long closed 50% @3R 0.8565 (+1.5R)
USDCAD short closed 50% @3R 1.0510 (+1.5R)
CRUDE long closed 50% @ 3R 73.80 (+1.5R)
USDJPY long 87.30 stop 86.90 PT 89.20 SR level
AUDUSD closed 25% @6R 0.8655 (+1.5R)
GBPAUD closed 25% @6R 1.7540 (+1.5R)

Open Positions:
GBPAUD short 1.7900 stop 1.7960 PT 1.7450 / 1.73 - 1/4 position
USDCAD short 1.0600 stop 1.0630 PT 1.0475 / 1.04 - 1/2
GOLD short 1199 stop 1209 PT 1166
AUDUSD long 0.8475 stop 0.8445 PT 0.8700 - 1/4 position
CRUDE LONG 72.30 stop 71.70 PT 75.00 - 1/2
GBPCAD short 1.5995 stop 1.6045 PT 1.55 
USDJPY long 87.30 stop 86.90 PT 89.20

Tuesday, July 6, 2010

Tuesday 06 July

Big face ripper risk rally this morning in London session, I wonder if it will continue in the US session after grim predictions of a double dip over the weekend.
My view on the pairs has not changed since last week and will post full run down here later.
I like AUD and CAD best of all and as USDJPY is rallying too all the yen crosses look like good buys on dips while this risk bounce continues.

AUDUSD long balance stopped out - from last week (-0.5R)
New trades:
GBPAUD short 1.7900 stop 1.7960 PT 1.7450 / 1.73
CRUDE long 72.80 stop 72.40 PT 75.20 / 76.15
USDCAD short 1.0600 stop 1.0630 PT 1.0475 / 1.04
GOLD short 1199 stop 1209 PT 1166
CRUDE stopped out (-1R)
CRUDE long 72.10 stop 71.80 PT 75.20 / 76.15
CRUDE stopped out again (-1R)

I am looking to sell USDCAD / buy AUDUSD / AUDJPY / CADJPY on pullbacks if I see and entry.
Gold is a very good looking short - 4hr / daily chart is a bear flag below the previous trendline support.

S&P has broken trendline resistance and out of its channel so it looks like the risk rally is set to continue.  Upside fib target 1070 and 1085

For some reason comments are not working unless you post as anonymous so I have disabled the log in.  Post as anonymous with your name or it won't work for now.

Friday, July 2, 2010

NFP - risk bounce?

My favourite fibonacci trade is to enter at a pullback to the 61.8fib and the first target for the trade is the 38.2 fib and then I expect a pullback to the 50fib where you add.
This is where we are on the S+P.  Here is a chart from the excellent blog "Afraid to Trade" which I am using because other peoples charts always manage to look cleaner than mine:
We have bounced off the 61.8fib retracement and hit target 1 at 38.2fib and now we *should/could* retrace back to the 50fib.  This chart does look really bearish but markets never move in a straight line and I would not be surprised to see a pull back to the 50fib level at 1121 and then see what happens when we get there.
It has been an extreme bearish week:
There are currently more stocks in the S&P trading below their 50 day moving averages (97%) than there were in the March 09 lows.
29th June was the worst single day for advance / decline readings in the S+P at -498 (1 advance, 499 declining stocks).  Since 1990 this has only happened on one  other day ~ 29 September 08.
Statistically highs or lows for the month are four or five times more likely to occur on the first of second of the month than any other day.
Oscar's three-day-holiday-reversal-rule says that after a three day holiday the market moves in a reverse direction to the trend of the week prior to the holiday.

I could be completely wrong (I often am) but at some point the market will test the breakout of the "head and shoulders" at 1040 to see if it is now resistance and if it doesn't hold then we could be set for 1121.

The big news today was the Spanish bond auction went well.  That is a big deal because in Europe Greece is affordable and Spain is not.  If much of the rally in Gold was over sovereign debt fears and the Euro then those have been (temporarily) alleviated by Spain being able to sell it's debt so it is logical for Gold to retrace.  This might explain why gold was falling along with the dollar and TIP's today.
The trendline break says that an interim top is in and I am waiting to short again 1220 (50% daily retrace) or 1227 (50% swing retrace) 

The close above 1.25 is bullish for EURUSD and the long daily marabuzo gives good levels to look for pullbacks for long entries.  If you are bearish you could short EURUSD here at 1.25                                                   I am looking for price action at 1.2380 and 123.30 to get long again and if I am wrong it will just keep going down :) to 1.2150 where I am definitely a buyer.
My upside targets are 1.2670 and the descending trendline resistance and then 1.3090

USDJPY weekly chart
USDJPY is correlated with 10 yr treasury yields.  If yields go down, so does USDJPY. 10yr yields are at big lows but also technical resistance today (2.883 is the 1.27fib extension and 2.79 is the 61.8fib retracement from Dec08 to June 09) so it is likely to bounce here and therefore along with it the yen crosses.  USDJPY is also at 87 - a level where it found good support in  Dec08 and Jan09.

Finally EURGBP is at 61.8fib retrace of last swing and should dip back to 81.80 here which will help cable up and EURUSD to pullback.

AUDUSD closed 50% @3R 0.8495 (+1.5R)
EURAUD stopped out (-1R)
CRUDE short stopped out (-1R)

Open positions:
AUDUSD long 0.8420 stop 0.8395 PT 85.90 - 1/2