My Big Trading Log

Back soon

2010-11-09T13:00:00.000Z

Sorry for the lack of posts. I have got a bit run down and not feeling too brilliant. Back soon I hope.

I am tightening up dollar long positions ahead of the G20 meeting this week (I am stopped out of my USDJPY long already) but short EUR vs GBP still looks good.

NFP Friday

2010-11-05T12:27:00.003Z

The last four jobs numbers days have been sell offs and it is Friday. After massive breakout days yesterday I would not be surprised to see a round of profit taking following the jobs report today.

My trades as of last night were:
EURGBP short 8860 stop 8890 PT 0.85 - 1/2 position

EURGBP short addition 0.8785 stop 0.8820

EURCHF short 1.3760 stop 1.3810 PT 1.33
USDJPY long 80.60 stop 80.50 PT 82.50

USDCHF long 0.9570 stop 0.9550 PT 0.98 / 1.03

Today:

EURUSD short 1.4190 stop 1.4250 PT 1.40 / 1.30
USDCHF stopped out - not a smart trade, going to wait on this one. (-1R)
Crude short 86.80 stop 87.20 PT 85

Waiting for the bearded clam

2010-11-03T14:48:00.010Z

Well elections over, economic data is coming in surprisingly good but none of it really matters until we get the announcement later of how much, how quickly and see what the market makes of it.

I am waiting to buy dollars on any spike lower.

My favoured pairs are USDCHF (I like the monthly hammer - see chart) but it has to break back above the previous trendline support around the 1.00 parity level. One to watch.
CHF is weak across the board, the double bottom in GBPCHF and the big bounce in EURCHF make it the best looking for now.
USDJPY is starting to show signs of a reversal but much will depend on what happens in bonds and we will have to wait for the QE2 announcement for that.

Until FOMC I am scalping crude.
Post inventories:
Crude short 85.00 stop 85.35 PT 83.00 / 80.00
Crude short closed 50% @3R 83.95 (+1.5R)
GBPAUD long closed 50% @3R 1.6150 (+1.5R)
USDCHF long stopped out balance 0.9740 (+0.5R)
GBPAUD long stopped out balance 1.6050 (+0.5R)
AUDCAD short stopped out (-1R)
EURSGD stopped out (-1R)

Open trades:

EURGBP short 8860 stop 8890 PT 0.85 - 1/2 position

Crude short 85.00 stop 85.35 PT 83.00 - 1/2 position
-----------------------------------------------------

THURSDAY update:
Crude short balance stopped out (-0.5R)
Silver long 25.10 stop 23.90 PT 26.20
EURGBP short addition 0.8785 stop 0.8820
CRUDE long 85.90 stop 85.60 PT 87.00
EURCHF short 1.3760 stop 1.3810 PT 1.33
Silver long closed 50% @3R 25.70 (+1.5R)
Silver long closed balance @ target 26.20 (+2.75R)
Crude long closed 50% @3R 86.80 (+1.5R)
EURCHF short closed 50% @3R 1.3610 (+1.5R)
Crude long closed 86.60 - EOD pre NFP (+1.3R)
EOD trades:
USDJPY long 80.60 stop 80.50 - pre BoJ PT 82.50
USDCHF long 0.9570 stop 0.9550 PT 0.98 / 1.03

Open positions EOD:
EURGBP short 8860 stop 8890 PT 0.85 - 1/2 position

EURGBP short addition 0.8785 stop 0.8820

EURCHF short 1.3760 stop 1.3810 PT 1.33

USDJPY long 80.60 stop 80.50 PT 82.50

USDCHF long 0.9570 stop 0.9550 PT 0.98 / 1.03

After all these breakouts I am posting long term charts with targets tonight.

US Midterm election day.

2010-11-02T04:24:00.011Z

The market has historically done well on election day (the Tuesday after the first Monday of November) and during election week. Since 1900, the Dow has averaged a gain of 0.28% on election day versus the average change of 0.03% for all trading days since 1900.
With the big FOMC meeting tomorrow I am not expecting any breakouts of these ranges or any that will have any follow through.

Australia unexpectedly raised interest rates tonight after a 5month pause, citing rising inflation concerns medium term, the reduced risk of lower growth in China and the minutes also say “the economy faces large expansionary shock from terms of trade.”

I don't expect to be doing much trading today ahead of tomorrows decision but will be doing some chart study and post setups here.

EURUSD stopped out balance 1.3970 (+0.5R)
New trade (US session):
GBPAUD long 1.60 stop 1.5950 PT 1.62 / 1.66
CRUDE short 83.80 stop 84.20 PT 82.50 / 80.00
AUDCAD re-shorted 1.009 stop 1.12 PT 0.98 / 0.955
CRUDE short stopped out (-1R)

Open trades:

USDCHF long 0.9710 stop 0.9680 PT 1.00 - 1/2 position

EURGBP short 8860 stop 8890 PT 0.85 - 1/2 position

EURSGD short 1.8040 stop 1.8190 PT 1.7650 / 1.70

AUDCAD re-shorted 1.009 stop 1.12 PT 0.98 / 0.955

GBPAUD long 1.60 stop 1.5950 PT 1.62 / 1.66

Monday 01 November

2010-11-01T12:43:00.009Z

I haven't posted any charts this week yet because everything seems to be on hold and range trading until Wednesdays FOMC announcement. Tomorrow's US elections look like a given with Republicans getting more seats.
EUR is weak across the board this morning as the stories of problems in the peripheries won't go away.
US markets might be rattled by news of bond insurer Ambac missing a coupon payment and could be bankrupt within a month. (ABK is down nearly 55% this morning)

I am sticking with my theory that the dollar is making a base for a bounce here, that bonds are due to correct lower and that equities still look bullish and the dollar and stocks could rally together for a couple of weeks. All of this is irrelevant if we get a giant bazooka of QE on Wednesday but so much seems to be expected / priced in for QE that it is hard to see that the news will be anything other than a sell event.

I will post charts Wednesday morning pre FOMC and we will see where we are then.
Note to self - today is a Pomo day (although there have been some signs of pomo fatigue lately, this is also Momo Monday)

New trade:
EURUSD short 1.40 stop 1.4030 - top of wedge - PT 1.3770
EURUSD short closed 50% @3R 1.3910 (+1.5R)
CRUDE short 83.65 stop 83.85 PT 81.00
CRUDE short closed 50% @3R 83.05 (+1.5R)
AUDCAD stopped out balance (-0.5R) post RBA rate hike
CRUDE stopped out balance 83.40 (+0.5R)

Open trades:

USDCHF long 0.9710 stop 0.9680 PT 1.00 - 1/2 position

EURGBP short 8860 stop 8890 PT 0.85 - 1/2 position

EURSGD short 1.8040 stop 1.8190 PT 1.7650 / 1.70

EURUSD short 1.40 stop 1.4030 - 1/2 position

Contrarian signals

2010-11-01T12:39:00.000Z

Barron's had a interesting cover on Saturday:
Yes, all those money managers who thought the S&P was a sell at 1040 now think that stocks are cheap as the S&P kisses 1200.

If you are not a Barron's suscriber then you can read a cached version of the article by clicking HERE
It shows big money surprisingly bullish and anytime that there are that many people on one side of the boat we could get nasty corrections.

Friday

2010-10-29T14:25:00.006+01:00

Well GDP numbers came in OK and now we wait for PMI and consumer sentiment.
While the indices still look bullish but resting it is interesting to see how stocks and the dollar are moving in synch. I think that the dollar can lead at turns and they could move together for several weeks before we see a correction in stocks.

I am watching this diamond top set up in EURUSD (4hr chart):

I am not expecting much follow through on moves today with big news next week (election, FOMC, NFP).
Have great weekends

Crude short 82.00 stop 82.30 PT 80.00
Crude closed 50% @3R 81.10 (+1.5R)
SILVER stopped out (-1R)
AUDCAD closed 50% @3R 0.9910 (+1.5R)

Open trades:

USDCHF long 0.9710 stop 0.9680 PT 1.00 - 1/2 position

EURGBP short 8860 stop 8890 PT 0.85 - 1/2 position

EURSGD short 1.8040 stop 1.8190 PT 1.7650 / 1.70

AUDCAD short 1.0045 stop 1.009, 1st PT 0.985 - 1/2 position

Thursday

2010-10-28T04:58:00.008+01:00

It's a Pomo day and I am watching to see how high the risk bounces go. I am still in sell rally mode.
Probably not doing much for the rest of the week.

Famous last words, sold some crude and watching AUDCAD
Crude balance of yest short stopped out 82.25 (-0.5R)
Crude short 82.40 stop 82.70 PT 81.50
AUDCAD short 1.0045 stop 1.009, 1st PT 0.985
USDCAD stopped out (-1R)
Crude short closed 50% @3R 81.50 (+1.5R)
Crude stopped out balance @1R 82.10 (+0.5R)

Open trades:

USDCHF long 0.9710 stop 0.9680 PT 1.00 - 1/2 position

EURGBP short 8860 stop 8890 PT 0.85 - 1/2 position

EURSGD short 1.8040 stop 1.8190 PT 1.7650 / 1.70

SILVER short 23.95 stop 24.30 target 22.25

AUDCAD

2010-10-27T06:15:00.000+01:00

AUD respects the 88.6 fib ratio number. If you put AUDUSD on a high time frame chart you will see what I mean and it works in all the AUD crosses as well.

On Monday I posted a chart of the monthly AUDCAD chart showing that AUDCAD looked to have broken up above long term resistance that I was watching for a sell signal. Weaker than expected CPI numbers tonight for Australia has sent this pair shanking and it now does look like a neat short setup. A rejection at the 88.6fib (2004 highs to 2008 lows) and the big trendline and two equal corrective swings off the 6 June lows.

Wednesday

2010-10-27T04:30:00.005+01:00

Not around today until later on Wednesday but a few charts and will update later in the day.

I added a trade in USDCAD tonight, long on the breakout of this triangle/wedge with a target of the upper trendline where there will be two symmetrical moves off the lows (AB=CD).

S&P daily chart
Mondays candle was a bearish shooting star, Tuesdays candle was a bearish hanging man and we are now set to retest the lower channel trendline. A break below this suggests a correction back to 1150 initially

There is apparently a big option barrier in EURUSD at 1.38 which China is expected to defend. My EUR shorts might not go so well today, we shall see.
SILVER has made two equal corrective swings higher so I am short again and GOLD looks ready to rollover again also.

USDCAD long 1.0250 stop 1.0220 target 1.05-1.0550
SILVER short 23.95 stop 24.30 target 22.25
CRUDE short 81.95 stop 82.25 PT 80.00
CRUDE closed 50% @3R 81.05 (+1.5R)
USDCAD has stalled 2 pips short of my 3R target ... annoying

Open trades:

USDCHF long 0.9710 stop 0.9680 PT 1.00 - 1/2 position

EURGBP short 8860 stop 8890 PT 0.85 - 1/2 position

EURSGD short 1.8040 stop 1.8190 PT 1.7650 / 1.70

USDJPY & 10YR yield

2010-10-26T14:46:00.000+01:00

Big break of the descending trendline from April. This is what the 30yr yield did just before they sold off. This is positive for USDJPY.

USDJPY 4hr chart, back in the wedge it broke from yesterday, if it keeps support at 81.00 this could be a good countertrend swing. If it stays positive this week then weekly will be a good hammer candle too. Obvious first resistance is at 83.00.

Tuesday 25 October

2010-10-26T05:24:00.007+01:00

The shooting star daily candle in the S&P is interesting, having cleared out stops above the resistance level. I have the bigger resistance, the 1.618 fib extension at at 1198. I am still leaning towards a shallow correction in stocks, a bigger correction in gold and bonds (esp the long bond) and a big bounce for the USD dollar.

Big news today is UK GDP - forecast is for +0.4% q/q vs last quarters +1.2%. I think the trade here is in EURGBP (even though I have had one false start trying to short this).

Weekly chart:
Now at the big 50fib retracement from the December 2008 highs and June 2010 lows it is also at major trendline resistance. I still like this short even though pundits are now talking about parity again for EURGBP, this is a big fib level and big trendline and at the very least we get a bounce here.

Also this morning is the Riksbank rate decision. Sweden has already made two 25bps rate hikes since the crisis and made it clear it will hike again.

EURSEK weekly candle was a bearish shooting star and the 6 week bear flag has broken down setting up a retest of the lows at the downside measured move and fibonacci target is 8.920.
Having said that I think this hike is priced in and this chart is setting up a bullish gartley pattern and so I am watching for the bounce and price action back at 9.22 and a retest of the trendline to see if this is a trade.

Finally EURSGD is an interesting chart.
Daily chart shows two equal swings off the lows and stalled at a 1.27fib extension, the tight trading range of the last two weeks looks like it is about to break down. I was looking for a retest of the SR level at 1.8580 but if this range breaks down then downside targets are 1.7480 and then a retest of the lows.

New trade:
EURGBP short 8860 stop 8890 PT 0.85 - 0.8530
Crude short 82.20 stop 82.50 PT 81.30 - will close at US open - POMO day
Crude closed break even
AUDUSD closed at target 0.9830 just before POMO (+3.3%)
EURSGD short 1.8040 stop 1.8190 PT 1.7650 / 1.70
USDCHF closed 50% @3R 0.9800 (+1.5R)
EURGBP closed 50% @3R 0.8770(+1.5R)

Open trades:
USDCHF long 0.9710 stop 0.9680 PT 1.00 - 1/2 position
EURGBP short 8860 stop 8890 PT 0.85 - 1/2 position

EURSGD short 1.8040 stop 1.8190 PT 1.7650 / 1.70

More charts

2010-10-25T15:43:00.007+01:00

AUDCHF weekly breakout
Upside targets are 1.0480 and 1.0950 this swing

Trades:
Crude short 83.10 stop 83.40 target 81.80
Crude closed 50% @3R 82.20 (+1.5R)
Crude closed balance @81.80 target (+2.1R)
AUDUSD short 9965 stop 1.05 PT 9830 - AB=CD and 88.6fib
USDCHF long 0.9710 stop 0.9680 PT 1.00 - hourly wedge breakout

Monday 25 October 2010

2010-10-25T09:47:00.000+01:00

So we are 10 days from the US mid-term elections and 12 days from the much anticipated FOMC announcement of the next round of QE. The pesky G20 ~~meeting~~ photo-op is out of the way without any firm agreement and if tonights action is anything to go by no one believes Timmy and his strong dollar statements. The run up into elections and QE are typically bullish for risk and so despite reversal patterns in the dollar crosses, bonds and shiny metals there is a good chance we have a risk rally into those events and so I am trading small and taking profits quickly this week.
Data out of Japan was really good ~ despite the strong yen Japan exports are up 14% y/y and exports to the USA are up 10% y/y. USDJPY is under pressure tonight and I think it is unlikely that the MoF will intervene so soon after the G20 and on the back of this strong data.

Saturday was a full moon, often an interim turning point and the week has kicked off with new highs in stock index futures, the dollar getting crushed (again), commodities on a roar with China buying everything - cotton limit up in the first hour and at new all time highs and Gold on its way back up. Sometimes the big rallies in Sunday night Asian session get faded once the week kicks off. I am a bit skeptical this week with all that is going on but it is a possibility.
Goldman Sachs have thrown fuel on the fire by saying they see the possibility for as much as $4 trillion in additional quantitative easing going forward based on more than expected US economic weakness.
Mortgage bank mess has not gone away but you would not know it.

S&P

A big Asian open for the indices, the Dow industrials have broken above the 200dma and the S&P has made a clear break above the resistance zone and 1200 next is just about a certainty (I have fib extension resistance at 1198) and then the big fib level at 1234 which would also be the completion target of this summers diamond reversal pattern.
Last week which should have been a correction swing the index basically went sideways and held its level, very bullish. Interestingly the Dax broke out higher Friday and is leading the way.

Dollar Index
We have a push lower to test the lows and the 3 year trendline support is around 75.80-76.00

EURUSD

Weekly chart has a doji followed by a bearish weekly hanging man at resistance which suggests a reversal. A break of the highs has resistance at 1.4270 and then bigger resistance, the 61.8fib and trendline resistance at 1.4450

On the daily chart I am watching this possible flag forming. While the trend is clearly bullish the two weekly candles warn of correction back to support at 1.3330

The same pattern is clear across all the USD pairs with GBP possibly the weakest. I won't post all the charts, in this market, if one goes they all go. I am watching 0.9980 AUDUSD, 1.0095 USDCAD and

USDJPY has broken support and is at 15 year lows, setup to test the 80.00 level and below that the all-time low at 79.75. Fib target for USDJPY short is 78.50

Yen crosses are all a sell at this point, I am selling GBPJPY

All sterling crosses are weak (as is the CHF)

Here is GBPAUD which has fallen right out of bed after consolidating for the past two weeks. Support / fib targets are 1.57 and 1.5050

GBPUSD - weekly chart
Cable could be a weekly double top forming (needs to break 1.5295 to confirm) and has fallen out of the rising channel with a complete daily candle opening and closing below it. This could be a throwover but the bottom of the channel should now be resistance for a short entry. A break of 1.5295 projects a target low of 1.46 but support at 1.50 and 1.4880

USDCHF weekly chart
Broke long time trendline resistance, should now be support for a long entry back to 0.99 initially and a break above there sets up 1.007 then 1.032

AUDCAD monthly chart.
Broke the big trendline resistance going back to 1995 tonight. It makes sense, Asia is on fire and the US is not. Australia exports to Asia and Canada exports to the USA. I am a buyer on a retest and support at the trendline.

Good luck!

USD flash crash

2010-10-24T19:52:00.000+01:00

The USD index dropped 4% in 10 minutes after stocks closed on Friday night before bouncing back again. The low was 74.60 and apparently all trades below 75.85 are being cancelled. Fortunately the arbitrage bots were off and the stop run didn't extend to major FX pairs but there could be some shock waves at tonights open. You have been warned.

Weekly charts later.

Enjoy your weekend

2010-10-23T03:34:00.001+01:00

Welcome to Pomo Friday

2010-10-22T05:40:00.008+01:00

We apologise for the interruptions, your regularly scheduled bull market will resume later today ...
What a week this is. The stock indexes have gone up, down, up, down and closed last night almost at last Friday's close in the S&P ~ a doji day and a doji week so far for stocks. Gold and silver have rolled over and broken trendline support and most of the FX vs USD pairs are also now making lower highs and lower lows. In fact the only market still making higher highs and higher lows are stock indexes.
Greg Harmon has a really good post showing that the Gold market rolling over is leading this move and pulling the dollar and in turn pulling equities down with it. What is interesting is that (aside from the ridiculous extreme bullish sentiment) what seems to have triggered the sell off in Gold is China tightening earlier this week and if thats the case it looks likely there is more tightening to come, so more gold selling and more dollar rally. Stocks are being dragged down, not leading the charge so are not the best risk-off trade but shiny metals and bonds look like epic shorts.

This week there were/are Pomo days on Monday / Wednesday / Friday. The market went up on those days and sold off on Tuesday and Thursday. While this is not an exact science it is reasonable to exercise caution if you are trading the short side today in the NY session and perhaps take some profits and wait for the weekly candles to close. What else goes up on Pomo days (apart from everything)? Shiny metals like gold always go up on Pomo days ... which is good because I would like a pullback to sell again.
Even Goldman are telling clients to frontrun the Fed and buy Pomo days
And then there is the G20 this weekend where they have currencies on the agenda ...

New positions London open - I may close these before US open:

CRUDE short 81.30 stop 81.60 - 50%fib retrace - addition

AUDUSD short 0.9830 stop 0.9860 - addition
SILVER short 23.20 stop 23.40 PT 22.50

Closing everything for Pomo, even Goldman tells its clients to buy on Pomo days:
Crude closed all positions @81.00 (+1R) (+1.5R) (+1.6R)
AUDUSD closed all positions @ 0.98 (+1R) (+1R) (+0.9R)

USDCAD closed 1.0250 (+1R)

Silver

2010-10-21T20:17:00.003+01:00

Daily chart. Breaks trendline support setting up a retest of $20.00 and the breakout from the big wedge. I won't post a gold chart but Gold will be going the same way

Thursday 21 October

2010-10-21T14:30:00.006+01:00

I am still looking for a risk-off correction today and buying USD but as always, timing is everything.

USDCAD - daily chart
USDCAD has pulled back to the 50% retracement of the big bounce off the lows and is now in its favourite support zone. But the rally off the low stalled at the 50% retracement of the swing from the August high so its a big decision time. I am looking to buy here with an upside target for this swing of 1.05 - 1.0550

S+P 4hr chart
Back at the top of the resistance zone favours shorts today. A breakout above this zone means 1200 next.

New trades (10:20NY):
Crude short 82.20 stop 82.50 PT 80 initially
USDCAD long 1.020 stop 1.0150 PT 1.0350 / 1.05
AUDUSD short 0.9870 stop 0.9905 PT 92.30 - addition
CRUDE short closed 50% @3R 81.00 (+1.5R)
AUDUSD short closed 50% @3R 0.9765 (+1.5R)
I am waiting for an entry to short Silver again - watching daily trendline

Open positions:

Crude short 83.70 stop 84.10 - 1/4 position left
Crude short 82.20 stop 82.50 - 1.2 position left

AUDUSD short 0.9910 stop 0.9940 - 1/4 position left
AUDUSD short 0.9870 stop 0.9905 - 1/2 position
USDCAD long 1.020 stop 1.0150

Wednesday 20 October

2010-10-20T15:19:00.001+01:00

I am cautious today, I tend to give back profit after big days. Such big down days tend to produce back and fill and inside bar days the next day and the twitter stream is already full of PMOO and buy buy buy and the correction is over.
I am going to wait and see how today goes before adding to any positions but I think more downside is possible.

Here is the crude chart. Which pattern is the one?
Daily chart

4hr chart - might be a channel, not a triangle

SPX 4hr chart
Needs to hold below the channel to convince me there is more downside to come.

EURUSD 4hr chart
Sell rallies, I am sticking with my 1.35 / 1.33 / 1.3150 targets

Tuesday 19 October

2010-10-19T08:55:00.004+01:00

The dollar has its heels dug in and I am cautious but think the dollar continues to rally today.

I am still holding my shorts from yesterday and looking to sell some sterling or CAD but I may have to wait. The big news today is the Bank of Canada rate statement. Up until recently the BoC had been indicating they would hike but the signalling of more QE in the US means that is very unlikely so I am expecting the BoC to punt and the CAD to weaken.

NZDUSD weekly
Looks like a possible double top, I like this short with a target of 0.72 initially but watching for support at 0.7380 area

GBPJPY weekly
I want to see a break of 126.70 and then downside targets are 121.50 and 115

Open Trades:
Crude short 83.70 stop 84.10 target 81.00 / 77.20
Silver short 24.40 stop 24.60 target 23.30
AUDUSD short 0.9910 stop 0.9940 target 0.93
New trade:
GBPJPY short 129.10 stop 1.2950 target 127.70 / 1.21.50
Today:
Silver short closed 1/2 @3R 23.80 (+1.5R)
Silver short closed balance @target 23.30 (+2.75R)
Crude closed 1/2 @3R 82.50 (+1.5R)
Crude closed 1/4 @80.00 (+2.3R)
GBPJPY closed 1/2 @3R 127.90 (+1.5R)
GBPJPY closed balance @target 1.2770 (+1.75R)
AUDUSD closed 1/2 @3R 0.9820 (+1.5R)
AUDUSD closed 1/4 @6R 0.9730 (+1.5R)

Open positions:
Crude short 83.70 stop 84.10 - 1/4 position left

AUDUSD short 0.9910 stop 0.9940 - 1/4 position left

Today was a big day, biggest range day in 60 days in the dollar pairs. Tomorrow is a POMO day, we will see if / how high we bounce.

Sunday charts

2010-10-18T07:06:00.005+01:00

I am either going to be a hero for calling this or a complete loser but the US dollar looks set to bounce this week. With the expected announcement of the next round of QE on 03November this is a counter trend high risk trade so if you are short the dollar against everything the safe trade is to take some profit at these resistance levels and wait for the bounce to be over. QE looks to be pretty much priced in so instead of a correction or dollar bounce we could instead see a couple of weeks of ugly chop. There does look to be some good opportunities in non-dollar pairs.

SPX

At resistance but the uptrend is so strong it is hard to see anything more than shallow pullbacks until QE2 is out of the way. The daily candles are bearish and indicate a possible reversal but needs to break below the rising channel and 1162 to confirm. A break below 1162 sets up a retest of 1150 next and then further support at 1125-1130 area. I am still in buy dips mode with an upside target of 1234 longer term.

FTSE

Bearish bat fibonacci pattern and two equal swings off the August lows suggest we get a correction here. And a break below 5630 confirms. First support is around 5520 but the fibonacci pattern targets are 5415 / 5370 and 5250. Longer term still says buy dips.

Dollar Index

Dollar has bounced smartly off the bottom of the wedge and at the very least we should get a dead cat bounce here back to 80.00.

GOLD

Weekly chart bouncing at the 1.27fib extension. There is not enough evidence to short here yet but I am watching it. If I was long I would take some profits here and wait for the next pullback to add.

SILVER

Weekly chart. I like this short. It is a fibonacci bearish butterfly pattern, at the 1.27 fib extension of the 2008 hi/lows and the 1.41 fib extension of the 2008 low - 2009 high. Price has been rejected at 24.90 just shy of the round number 25. A break above 25 sends it to 26.20-27.20 next and the bearish pattern is still valid. I am stalking an entry, a break below 23 confirms we go to 1950 then18.70 next.

CRUDE
Triangle consolidation at the top of a rising channel. Lower time frames show a break of the trendline from 23Sep. Gold is underperforming metals like copper and gold and oversupply is becoming a drag. I am looking for a break lower to test 80.00 and if that breaks back to the bottom of the channel

Will post currencies Monday morning.

Trades:
Crude short 83.70 stop 84.10 - top of the wedge
AUDUSD short 99.10 stop 99.40 (toe in the water)
SILVER short 24.40 stop 24.60
AUDUSD stopped out (-1R)
AUDUSD short (again) 99.30 stop 99.60

EURNZD

2010-10-14T20:19:00.003+01:00

This pair is the most volatile FX pair, you have been warned. However this double bottom is looking really solid and I think this trade has really good risk:reward back to 2.00
I didn't post this yesterday because the daily candle looked a bit bearish but todays big rally looks much better.

Here is the weekly chart:

Here is the 240min chart:
I am looking at a pullback to 1.8470 to buy at the moment but watching the price action and I will update on levels once this ripper pauses.

Breakouts

2010-10-14T06:55:00.001+01:00

After three failed attempts to break 1.40 and what looked like a triple top the surprise tightening by Singapore tonight (widening of the trading band for the SGD ~ allowing it to appreciate vs the USD) has spurred a big jump in risk and EURUSD has made a run on the stops above 1.40. There must have been a bunch of stops because the move is a biggie blasting it out of the rising channel and the triangle consolidation and straight through the 0.618fib retracement. USDCAD also has pierced the parity level and the dollar is being sold across the board.
1.40 should be support now for EURUSD and the top of the triangle breakout.

So where are we at with the dollar?
Well almost at the bottom of the big weekly wedge which looks to be about 76.00 - 76.50 so the price action here will be interesting and once we have tested this trendline and see if it breaks or is support then we can look at the dollar crosses.

Last weeks weekly doji in EURGBP at the 50fib retracement did not hold as a reversal and this has been busted to the upside too. The next level of interest is just short of 0.89 where it meets the 61.8fib and the underside of the big weekly triangle that it broke from in April. One to watch.

I am also watching GBPCHF for a bottom, I think that GBPCHF long may have more potential. The weekly chart shows if we hold here we have a potential double bottom, so I am watching the daily price action. A break below this support and I am watching for a test of 1.50 and the fib extension at 1.4980 to buy for a bounce.

USDCAD has support at 0.9930 and then 0.9710

EURAUD looks to have broken above a trend line going back to Dec 2008 and daily chart confirms it. I am stalking a long entry in this pair.

60 minutes documentary on High Frequency Trading

2010-10-11T15:20:00.002+01:00

LINK

Holiday Monday

2010-10-11T01:17:00.000+01:00

Will post weekly charts Monday because of the holiday in USA and Canada and back to trading on Tuesday.

25 Million Pounds

2010-10-11T00:03:00.000+01:00

25 Million Pounds, 1996 documentary about rogue trader Nick Leeson and the collapse of Barings Bank.
Won the Best Science and Nature Documentary in the 1998 San Francisco International Film Festival. Directed by Adam Curtis

NFP

2010-10-08T12:51:00.000+01:00

So we have some pretty good reversal candles at key levels in the dollar crosses and stock indexes. But today is NFP and the talking heads are forecasting a positive number for the first time in a very long time.
The market anticipation of QE2 means we could be in for some Costanza trading though, as much of the additional QE has been priced in the last couple of weeks. A better than expected jobs number *could* send stocks lower on the basis that more QE could be delayed and a bad print *could* send them higher.
Big reversal candles often produce an inside bar or harami the following day but it will still look good next week.
I won't post all the charts today, will do that on the weekend.

EURUSD
Doji at the big 1.40 level and fib timing from the low supports a change of direction here.
Support zones at 1.35, 1.3330 and 1.3130.

EURUSD

2010-10-06T17:19:00.000+01:00

EURUSD weekly chart
Everyone is looking at the big 61.8fib retracement and the 200weekly SMA but the measured move objective for this is 1.4044 and it is setting up a weekly bearish gartley pattern. I am not in a rush to short this, I want to see a good set up.

More charts USDCAD, EURGBP

2010-10-06T09:05:00.001+01:00

EURGBP weekly chart
EURGBP is at a level where we could see a correction lower. 0.8730 is a big pivot and the 38.2fib from the 2008 highs to 2010 lows, the 50fib from the 2009 high to 2010 low and also the 61.8fib from the 2010 highs to lows. It is also the trendline from the 2009 highs.
I think this is a low risk short back to 84.80 at least

USDCAD has broken the bottom of the big daily wedge and looks set to retest the lows. If crude can hold and close above 83 then it will help this short.
If the dollar gets a bounce then I like EURCAD or maybe AUDCAD better.

Charts

2010-10-06T08:31:00.004+01:00

Let the currency wars begin! At some point Mr Market is going to be done pricing in QE2 and the dollar will take a breather. We might be at one of those points looking at the charts.

A look back to December 08 is helpful. On 1st December 08 Bernanke said he may use less conventional policies, such as buying Treasury securities, to revive the economy and avoid a deflationary spiral. December 15-16 FOMC meeting, they lowered rates to 0% and made it official that they would pursue a policy of treasury purchases or QE. The dollar index bottomed out on December 18 and then rallied until QE2 was actually implemented in March 09. Obviously the drop in stock indexes at that time was a factor but the point I am making is that the while the dollar did drop dramatically for a bit on the news it was soon got a foot hold and didn't drop again until it was actually implemented. If the data still keeps coming in reasonably good, like todays ISM numbers then there doesn't seem to be an urgent need for QE2 and Mr Market might be disappointed at having to wait.

Dollar Index weekly chart
The bottom of this wedge is starting to look inevitable, it is not pretty. If we make two equal measured moves lower from the June high then the target level is 74.93 on the cash dollar index. However we are back at the 61.8fib of the 08low and 09 high and also a level that was resistance in 07 and support during the first big drop following the announcement of QE1 in December 2008 so it would not be a surprise to see the dollar bounce here and retest 80.00 before continuing down. The extreme negative sentiment for the dollar at the moment would support this.

S&P
To be clear, I think we broke from a very big diamond pattern this summer and this market is going much higher, but it might not be in a straight line. We are at the top of a new rising channel and 1158 is two equal measured moves off the lows this summer. While 1150 is a very big pivot level for the S&P 1161 is also a important resistance level. I think we correct lower here and back to the bottom of the channel but ... a close above 1161 this week changes my view and no correction until we take out the April highs.

I made this chart last week showing fibonacci timing from the summer lows which has worked well so far. It shows Tuesday 5th October as the next market turn date, we will see if it plays out.

GOLD
Prices have broke through the top of a rising channel set from mid-September, with the bulls now poised to test the 176.4% Fibonacci extension of the 6/21-7/28 decline at $1348.02. Initial support lines up at $1332.21, the 161.8% Fib

No price action to suggest a correction yet but like the S&P yesterday Tuesday) was a fibonacci timing turn date.

AUDUSD

At the top of the rising channel that has held it all summer and today's candle a bearish hanging man warns of a potential reversal. The 1.27fib at 0.9760 is fib resistance for now but as Gold has shown, rising channels don't always resolve to the downside. On the 4hr chart AUD looks to have broken down and I like this short here for a low risk countertrend swing.

CRUDE

Xiphos Trading has a good chart showing the weekly diamond pattern in Crude. It does look like a breakout but trendlines with only two reference points are a bit dodgy. However if we break close this week above August's swing high at 82.97 and the 78.6 fib retracement then it is a pretty clear breakout to the upside.

Ignore these two, I am just posting some inside bar examples for someone:

FOMC Day

2010-09-21T18:05:00.003+01:00

Here we are at FOMC day again. It seems to me the market is positioning for a rally today and to sell the dollar. Sell the news perhaps?

If you ask anyone why stocks are going up they will say it is because the Fed is backstopping the market, QE forever, etc. Stocks are grinding higher but bonds are bid too and gold and copper look toppy. David Rosenberg calls it "deflationary growth". The prospect of more QE has kept a lid on the dollar so far.

All this means if the Fed do not signal any new easier money policy we are at risk of a drop and the dollar will be bid. Remember that the last market peak was the last FOMC meeting when the Fed announced QE lite and the market was hoping and positioned for much more. The last quad witching option expiration in June was followed by a massive rally to start the following week followed by a couple of weeks of drop and I would not be surprised to see this pattern repeated.

The FTSE, despite its big breakout put in a weekly gravestone doji last week warning of a possible reversal. The high of the doji has been exceeded but it is starting to look tired and a pullback to support might be coming. The rally off the lows of 25 August has been marked by very shallow pullbacks, making it hard for trend traders and those waiting for an entry to get in. The market is at the 78.6 fib retracement of the drop from the April highs and I am looking for a pull back here to test the big SR level at 5450 but I think that a retracement to 5300-5330 more likely.

S&P 500

Diamond patterns work better than head and shoulders (which I don't like) and this one projects an upside target of 1248, we shall see if we get there. For now we are at the 61.8fib retracement of the big drop from April and a *common* level for markets to pullback before continuing. A break of the 1130 previous support level says a bigger correction is underway and 1090 is next. However a measured move target (if this swing is equal to the swing 6Jul-9Aug) gives an upside target of 1158 so I would not be surprised to see a spike up first.

Dollar Index

See August post. There is no doubt this chart looks ugly but the 80.30 level is big previous yearly support. One of those lines in the sand for me that you buy above and sell below. So far it is holding and until it breaks I am buying dollars. A break of this trendline and this level and I think we go back to the bottom of the big weekly wedge just above $75.00 ... QE forever!

Crude

Broke out of the ascending channel last week and back inside the rally is halted at the 61.8fib. I am short looking for 72.

Gold.
Contained in a rising channel and I don't see a trade here unless you are already in. A pullback to support at 1262-1265 and the channel bottom looks next for a long entry but I prefer to wait for a break of the channel to short. As we are at new highs I am using fib extensions for resistance and my levels are 1280 and 1300

Some currencies to follow later ...

Position update:
I am short crude from the double top at 78.00 (1/4 postion left) and added at 75.50 post FOMC.

I also bought USDCAD following FOMC - triple bottom off the 1.0220 level. it isn't quite the bottom of the wedge so we could have one more push down this week but I thought it was a good R:R trade.

I have not abandoned the blog!

2010-08-18T13:59:00.005+01:00

Hello
I am sorry I haven't blogged for ages. I have not abandoned it and I am coming back.
As most of you know I got Lyme disease from a tick bite and it has been a bit of a struggle to get back to full health. Every time I thought I was better I would run out of energy again and I have had a bit of a struggle with headaches and short term memory loss which is not a good thing for a trader (at all).
I am almost there and I intend to get back to trading next week and will be posting trades here again.
I will post some analysis this week.
Hope everyone is surviving the summer chop alright and don't be in a hurry to short risk in this market, the pain trade is higher this week with option expiration.
Thanks for all the messages and good thoughts you sent me :)

SPX 240min:

Crude 240min:

FTSE 240min:

Gold Channel:

FOMC - Correction time?

2010-08-10T03:55:00.002+01:00

The market talk of QE has made it sound like a done deal and if the Fed disappoints tomorrow the US dollar could catch a big bid. It looks like the market realises and the dollar buying looks to have started ahead of the announcement.

As I posted back in July the S&P was rejected at the 61.8fib level in April, retraced back to the 38.2fib and then bounced back 50fib level at 1121.44 which is where we are now.

People who study fibs say price oscillates in a channel at the 50fib area between 52.78% and 47.22%. So for me .... a close above 1146.71 means we go (much) higher and a close below 1096.16 means we go much lower. Simple right? That is what I am watching for and until then we keep oscillating in the 50fib channel.

The dollar index support level in my previous post looks like it has caused a halt to the slide in the dollar for now.
The problem when a market is waiting for a big level to sell or buy is it gets front-run. The whole market is waiting for EURUSD to get to 1.35 to sell again but it looks tonight like it has fallen out of its rising channel and a bigger correction is underway. The Euro is the only currency that has failed to get back above its 200day moving average vs the dollar which is interesting.
All the talk has been about more QE from the Fed in anticipation of tomorrows meeting and a lot has been priced in. If there is no more QE we could see some disappointment and a dollar rally.

EURUSD daily chart
Looks to be breaking down from the rising channel. A retest of 1.30 is underway and a break below 1.2950 support area sets up 1.26 next.

GBPUSD daily chart. the 61.8fib and 1.60 round number resistance is holding and a break below 1.5819 sets up 1.5560 and the trendline/channel bottom support.. A break below there and cable should correct to 1.53 next.

All the dollar crosses look to be rolling over, AUD and NZD particularly. I don't see any good trades in the yen crosses, I am waiting for breakouts and with FOMC it is all about the dollar this week.

USD index and some charts

2010-08-04T05:16:00.004+01:00

Although I am really on holiday it is ADP and NFP employment week so I have an eye on the markets.

The dollar index is bearing down on the 80.30-40 level which was major support in 12/04, 5/95 and 2/ 91 (not shown). These support levels can be funny, just because it passed through it like butter last time, doesn't mean it won't suddenly be kryptonite this time, especially after such a long bearish run for the US dollar and sentiment so poor. So it is definitely a level to watch for a possible dollar bounce. The sentiment for the dollar is very poor but NFP could surprise to the upside.

Some major dollar crosses have a bit further to go before they reach potential turning points (I am looking for 1.35 for EURUSD) but some like sterling are already at big levels vs the dollar.
It is still early August but end of August is often a time when new trends emerge.

Sterling has the bank rate and BoE MPC statement Thursday so I thought I would take a look at some sterling crosses.

Cable has hit the big round number 1.60 level which is also the 61.8fib retracement from the August 09 high to the May 10 low. Having rallied with such momentum (and its best run in a lot of years) this could be a level for a correction but it could involve some chopping around and retests before it turns. One to watch.
A break above 1.60 says 1.6450 next stop.

GBPCHF Weekly chart shows it is back at the 50fib of the rally from the Dec08 lows to the Summer 09 highs and also at trend-line resistance from the July 07 high.

The daily chart shows it has rallied to the 61.8fib retracement and also a big pivot zone. A rejection here could should mean back to the lows at 1.58 or a breakout means back to the highs at 1.71.
Nice size moves either way and I favour the downside and a possible measured move objective of 1.53 if the support at 1.58 does not hold.

If cable has stalled and EURUSD has further to run up it can only mean one thing for EURGBP. EURGBP is hovering at the 50fib retracement of the rally from the lows and Mondays and bullish tail on Monday followed by an inside bar today suggest saving some energy for a move.

GBPJPY daily chart
Has been range bound for some time below the 50fib and 136.40 level, broke out Monday and has fallen back. If cable stalls and USDJPY continues to drop this is going down too.

GBPAUD

This is a tricky one, consolidating. Monthly doji and a weekly doji but in a rising channel and the 50fib retracement is holding so it could be that the AUD is more unloved than the pound. Waiting for a breakout and more information.

GBPCAD

Weekly chart. Broke out above resistance at 1.6230 and then banged its head on the 61.8fib retracement of the Jan high to May low. Needs to either break above the 1.64 resistance or go back and test the 1.6230 support to convince me it is going higher here but there is definitely plenty of room to the upside. One to watch.

Sunday 25 July

2010-07-26T01:27:00.001+01:00

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!

Dow / indices

2010-07-23T16:35:00.001+01:00

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.

Friday

2010-07-23T14:17:00.008+01:00

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

2010-07-23T05:36:00.001+01:00

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

EURGBP

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

GBPCHF

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

GBPAUD

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

GBPJPY

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.

GBPCAD

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

2010-07-22T13:22:00.013+01:00

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

Charts EURUSD

2010-07-21T04:58:00.015+01:00

EURUSD
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 update

2010-07-20T20:54:00.002+01:00

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

2010-07-20T13:52:00.003+01:00

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

USDJPY
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 19 July

2010-07-19T14:56:00.001+01:00

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
New:
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

2010-07-19T03:53:00.000+01:00

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.

SPX
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

2010-07-16T09:26:00.011+01:00

” [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.

SPX
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.

GOLD
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

Update:

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 15 July

2010-07-15T17:27:00.008+01:00

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 14 July

2010-07-14T14:41:00.002+01:00

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 13 July

2010-07-13T12:09:00.012+01:00

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

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

Monday 12 July 2010

2010-07-12T15:14:00.002+01:00

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

2010-07-12T07:18:00.001+01:00

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.

S&P
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.

FTSE
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
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

CRUDE
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

EURUSD
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.

GBPUSD
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

USD CHF
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.

USDCAD
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

AUDUSD
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

NZDUSD
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

USDJPY
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.

EURJPY
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

AUDJPY
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 ...

Dollar Index

2010-07-09T14:40:00.004+01:00

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.

Friday

2010-07-09T12:45:00.004+01:00

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.

CRUDE
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.

USDJPY
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.

Trades:
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

Charts

2010-07-08T15:28:00.002+01:00

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

2010-07-08T14:41:00.000+01:00

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

2010-07-08T12:41:00.004+01:00

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 07 July

2010-07-07T12:55:00.008+01:00

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 06 July

2010-07-06T06:41:00.017+01:00

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

NOTE
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.

NFP - risk bounce?

2010-07-02T03:40:00.011+01:00

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.

Bearish sentiment is at a 52 week high

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.

GOLD

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)

EURUSD

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.

MS are saying there is an elevated chance the BoJ will intervene to sell and weaken the yen.

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.

Trades:

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

Thursday 01 July

2010-07-01T14:36:00.017+01:00

It is Canada Day and I am not doing much today. It is setting up for a risk-on bounce.

CRUDE
4hr chart. At the bottom of the channel and at the 74.50 pivot level. I am waiting for reaction to the data at 10:00 NY time but a break here has a target of 72.00 and the 61.8fib. Risk on would mean a trip back up to the top of the channel potentially.

AUDUSD
Pullecd back to the 61.8fib and price action is now bullish. Break up through the descending channel line has a target of 86 and possibly 87.00
AUDUSD is a bigger bullish butterlfy pattern.
Could be one more swing down for AUDUSD from the top of the channel if the market does not like the numbers.

GOLD wedge break and potential trendline break targetting 1200 and 61.8fib

EURJPY 4hr chart
Upside targets 110.70 - 111.50

The sharp spikes up this morning in cable and EURUSD are tempting shorts if the data is bad ...
I also like EURAUD short at the 61.8fib retracement.

CRUDE short 74.20 stop 74.60 PT 72.00
AUDJPY short 73.60 stop 74.10 PT 71.90
GOLD short 1230 stop 1239 PT 1200
CRUDE closed 50% @73.00 (+1.5R)
CRUDE closed balance 72.20 (+2.5R)
GOLD closed 12.08 - 1.41fib extension (+2.4R)
AUDUSD long 0.8420 stop 0.8395 channel breakout PT 85.90
AUDJPY closed out, not working (-0.8R)
CRUDE long 72.50 stop7190 PT 74.30 - 1hr wedge, 4hr bullish gartley countertrend to re-test channel
EURAUD long 1.4850 stop 1.4970 off 61.8fib PT 1.4530 / 1.4315

Will add another Gold short next rally...

Update:
Very bad US data ... Equities are falling and so is USDJPY because bond yields cannot rise on that data. Collapsing yields do not support USD strength but EUR and Cable setting up good shorts for tomorrow

Wednesday 30 June

2010-06-30T04:27:00.005+01:00

Not around today but back tomorrow, sorry and Thursday is Canada Day.

Today is last day of the month and quarter and can be an odd duck day when currencies that have been beaten down get bought and currencies that have outperformed get sold. On that basis GBP, JPY and CHF may have a bad day and EUR, AUD get bought, etc. Also the last day of the month often sees a jump in EURGBP due to flow in the London session.

Good luck!

Tuesday 29 June

2010-06-29T12:49:00.019+01:00

It's Turnaround Tuesday my (least) favourite day of the week!
Big breakouts, gaps down and moves overnight. It is end of Month / quarter / half year rebalancing so things could get whacky.
Here is what I am looking at to see which way we go ...

EURUSD at 1.2140 is the 50% retracement of the June rally off the lows and also where EURUSD has made two equal swings from the 21 June high and is also a level where buyers have come out before. The equal swings make 1.2140 more likely support than the 61.8fib at 1.21 If EURUSD is going to get a foothold and reverse that is the level I am looking at.
CRUDE 75.50 - 74.75 support area, 50%back, two measured moves and trendline support.
AUDUSD 85.00 round number support, two equal moves and previous resistance becomes support.
Measuring the wedge in the SPX and projecting it from the breakout point suggests 1050 target for SPX

CRUDE short closed 50% @3R 77.75 (+1.5R)

AUDUSD short closed 50% @3R 86.90 (+1.5R)

NZDJPY short closed 50% @3R 62.50 (+1.5R)
AUDUSD short closed balance at 85.50 target (+5R)
NZDJPY short closed balance at 61.60 target (+3.3R)
EURGBP short closed 81.00 (+2.5R) - 1.41 fib ext

EURJPY short 1.08 stop 1.0840 target TBD
CRUDE short closed balance 75.50 (+5.4R)
EURJPY short closed 1.07.75 - not working (+0.5R)
EURUSD long 1.2165 stop 1.2140 PT 1.2340
AUDJPY long 75.35 stop 74.95 PT 77.40
CRUDE long 75.50 stop 75.20 PT 77.00
CRUDE long stopped out (-1R)
CRUDE long 75.25 stop 74.85 PT 77.00
FTSE long 4902 stop 4882 PT 5031
FTSE short stopped out (-1R)
AUDJPY short stopped out (-1R)
EURUSD closed 1.22 - market shanking (+1.4R)
CRUDE closed 75.50 - market shanking (+1R)

Open positions: FLAT

Update:
I am really not sure what today is going to do, I think we could rally and I have closed my shorts from yesterday to protect profits and because they hit targets but if today sets up to be a big fatfinger-dump-continuation day then I will get back in short.

Intern in return for mentoring in FX trading

2010-06-28T23:43:00.002+01:00

A friend of mine and a very good professional FX trader is looking for some help, around 5+ hours a week (time of day not important and you work from home) in return for mentoring as an FX trader and live room trading education.
Click here to see if it is of interest too you
This is a pretty good offer :)

Monday 28 June Indecision

2010-06-28T23:35:00.008+01:00

A sideways choppy day with most markets consolidating in low volume.

S&P is forming either a triangle before a big move to the upside from the bottom of the channel or a bear flag which will break to the downside and see us retest the lows. I am still leaning towards higher but open to both.

EURUSD looks to have broken down out of its channel. It had big falls today vs GBP & CHF. (But dollar buying vs SEK helped support EUR on rumours of a 0.25bps hike later this week & EURSEK is more liquid that USDSEK)

AUD, CAD and NZD traded sideways and AUD did not collapse with the big fall in Gold.
The June 2010 COMEX gold futures contract expired today. The rollover to the next contract likely contributed to this morning's plunge and means Gold could snap back sharply.

The S&P breakout will likely give the direction for risk for the next few days so time to wait and see ...

Open positions:
CRUDE short 78.75 stop 79.05 PT 77.00

AUDUSD short 87.50 stop 87.70 PT 86.60

NZDJPY short 63.25 stop 63.50 PT 62.60 / 61.80

EURGBP short 81.75 stop 82.05 PT 80.25

Sunday 27 June

2010-06-28T07:38:00.009+01:00

I am expecting risk to rally this week after last weeks pullback and the flat Friday into the G20. The slide in equities halted when the financial reform bill became a done deal, 2300 pages of new regulation that doesn't seem to address too big to fail, leverage, supervision, the ratings agencies or Fannie and Freddie.

Rien ne va plus.

Spookily at the request of the Chinese there was no mention of the Yuan in the G20 communique tonight.

"President Hu went so far as to ask that mild praise for Beijing’s recent decision to make the yuan slightly more flexible be removed from the final communiqué. And he made no mention of the issue in his broad-brush speech to fellow G20 leaders." Makes me think there will be no revaluation at all ...

Spreads on Greek bonds were really ugly last week which should have been more bearish for EUR but HSBC say it may have just been due to IBoxx changes

Difficult days will be end of month/quarter/half year on Wednesday where managers rebalancing could favour undervalued currencies over the star performers.

Friday is NFP

S&P

Weekly is a very bearish engulfing bar halted which found support at the 61.8 fib retracement of the rally from the lows and also the 01/02 June swing low. I have two scenarios for the S&P. Bigger picture and using measured moves I expect an upwards move equal to the one off the lows that takes the cash price to the 1158 level. But I can't ignore the weekly candle and that may mean we only rally to 1108 (61.8fib retracement of last weeks down move) and then rolls over and retests the 1040 lows.

We will find out when we hit 1108 but I am leaning towards the more bullish one because I think we may be in a rising channel which is much easier to see on the FTSE.

FTSE

I am bullish FTSE off the bottom of this channel as long as it holds but longer term bearish. The weekly candle is a big bearish engulfing and price appears to be setting up a big weekly bear flag pattern (downside target 4300) but I think we have one more run up before we go down but we may only make 5230 resistance instead of the top of the channel at 5380

Dollar Index

The bearish correction in the dollar index continues and I am looking for it to reach the 0.618fib retracement at 83.35 and the long term descending resistance line. However a measured move equal to the one down from the highs would target 82.50 and previous SR level of the

GOLD

Weekly hanging man doji is a possible bearish reversal for Gold but it is hard to sell against such a strong uptrend when the pullbacks are so shallow. I am looking for the high to be retested or a daily reversal candle before I short based on the weekly candle. More likely is a measured move equal to the rally from 219 April to 15 May which has a target of 1290 area which is also the 1.27 fib extension target. If you are bullish you could look for a pullback to 1240 or 1250 SR level to get long.

CRUDE

Weekly is a perfect hanging man doji after a big rally on Friday on news of a storm in the Gulf of Mexico, now Hurricane Alex, which could be a bearish reversal and it is also the 618fib retracement of the big fall from the April highs. The hurricane and the falling dollar could keep a bid under Crude and makes me cautious and leaning towards bullish.

I like it short to start the week and then I would buy a pullback (77.00-77.50 maybe) with a target of 83

Major currencies

EURUSD daily chart

Weekly is an inside bar pullback and daily is bullish. This looks to be consolidating and not the best looking trade out there. I would buy a retest of 1.2330 or 1.2150 with a long target of 1.2650 initially. A break of the descending trendline sets up 1.30

GBPUSD
Weekly and daily bullish cable has closed above the 61.98fib retracement and above the 1.50 round number level. Still forming a big bearish gartley pattern on the daily cable is set to push higher first I would buy a successful retest of 1.5010 with a target of 1.5250 and possibly 1.5350. If 1.50 does not hold 1.4850 is next support for a long entry.

USDCHF

Bearish correction has stopped at 61.8 fib retracement and Feb swing high levels. I expect a bounce here, and I am looking for price action to sell again at 1.1230 or 1.14 to short.

USDJPY
Weekly and daily bearish but price now stopped at 89.00 and ascending trendline support and a pretty good pivot zone where bids usually appear. Longer term I am bearish USDJPY back to the 09 lows but I like USDJPY long above this trendline to 0.91. A break of 89.00 has an equal measured move target short of 88.10 and a retest of the flash crash low.

AUDUSD
Weekly high wave doji, sideways consolidation. Like the S&P I am not sure of direction and neutral waiting for more information. The daily is a bearish Gartley but if stocks continue to rally the pattern will fail. I am watching for .087 to hold as support and if it breaks then price action at 0.8550 to buy. Below 0.85 and I am looking for a retest of the lows at 0.8070

USDCAD

Weekly bullish engulfing, daily is bearish reversal off the top of a descending channel / weekly bull flag and 618 fib retracement. Daily could be forming an inverse head and shoulders. Like AUD the picture is not clear and we could have some more sideways consolidation but within the channel I favour more downside moves to 1.03 or 1.0220 and will look for price action there. A break of the channel to the upside means a test of 1.05 Until then I am waiting for more information.

NZDUSD

Almost at the top of a clear descending channel I like this short below 0.72, first target 0.6580 support then 0.6260. A break of the channel to the upside has a target of 0.7630 high.

EURGBP

Bearish weekly engulfing candle, daily bearish but testing big weekly SR level at 0.8180
There is the potential for a bounce here with a potential double bottom on the daily and the upside target would be 0.8425 / 0.8550. A break and close below 0.8180 means next stop 80.25

EURJPY

The 108.85 level is two equal measured moves down from the October 09 high and two consecutive daily dojis at the end of last week looks like EURJPY is trying to correct higher and could be a lower high. I like this long and a break of 113.40 and 114.0 then has a target of 116.80 and then 120.00

GBPJPY
After trading sideways for a couple of weeks this one is due for a breakout. I like this long and I would buy a dip to 1.32 or a break of the upper trendline and upside target is 139.25

AUDJPY
Bearish, AUDJPY has made two equal measured moves off the lows and the weekly candle is a bearish engulfing. I like this short initially with a downside target of 75.50 where I will be looking for price action to buy. Possible support at 76.80 and the flash crash low.

EURCHF
Bearish and ugly. There is a bearish bat pattern setting up on the weekly chart and I am looking for a drop from here to 1.32 area where there will be two equal measured moves down from 21 may high and it is the 61.8fib extension of the first swing. My bias is short to 1.32 and a buyer off that level.

GBPCHF weekly chart
I like this short! Triple top, descending trendline resistance from the 07 highs. Short targets 1.6090, 1.58

Monday trades:

CRUDE short 78.75 stop 79.05 PT 77.00
AUDUSD short 87.50 stop 87.70 PT 85.50
USDJPY long 89.40 stop 89.10 PT 90.30
NZDJPY short 63.25 stop 63.50 PT 62.60 / 61.80
USDJPY stopped out (-1R)
EURGBP short 81.75 stop 82.05 PT 80.25

Sunday 27 June

2010-06-27T21:45:00.000+01:00

I am late with analysis but working on it now and will have it up later. Most markets at inflection points and I am looking for a small pull back and a risk rally this week.

Friday 25 June

2010-06-25T11:28:00.005+01:00

I am thinking about exiting my shorts on down swings today and getting flat over the weekend. The G20 is setting up for some disagreements and I am not comfortable gaming central banks.

I am expecting a bounce either in the US session or the start of next week and another swing up .... how far that upswing takes us is anyone's guess.

EURGBP looks to be double bottoming above weekly SR but spreads on Greek bonds are at record wides again and yields on 10 yr Greek paper are over 10%. It makes you wonder how long the EU will keep buying all this stuff. I am still looking for a bounce in EURGBP to 83 initially then 85.50.

CHFJPY stopped out - TL break - (-1R)

GBPAUD stopped out (-1R)

GBPJPY short 134.00 stop 1.3450 PT 132.00 - see chart from yesterday
CRUDE 1st short closed balance @ 76.00 (+1.8R)
CRUDE 2nd short closed balance @76.00 (+1.3R)
AUDJPY closed balance 1st short 77.10 (+2.8R)
AUDJPY closed yest short 77.10 (+2.2R)
CABLE short closed @3R 1.4860 (+3R)
GBPJPY short closed 1.3350 (+1R)

Open positions:

Flat

CABLE has broken and retested the trendline resistance I was looking at (thick line) and now looks set for higher next week.

USDJPY is at the bottom of its channel and finding support. It is a bullish bat fibonacci pattern so I am looking to buy this pair.

Hence I have now also closed GBPJPY shorts. If another drop shapes up today I will re-short because this set up looks best to me.

EURUSD
Possible right shoulder of an inverse head and shoulders forming but holding below 1.2330 SR and broken short term trendline support. A close today between 1.2150 and 1.2465 makes it a weekly inside bar and a pullback in a possible bigger uptrend targeting 1.26

GOLD
Gold is at big SR resistance at 1250 and also the 61.8fib retracement level. For me this is a low risk entry short, even though it is against the bigger up trend.

Thursday 24 June

2010-06-24T13:13:00.026+01:00

As I said last night I am still in sell rally mode. With big moves in the London session the US session could start with a bit of a rally but I am still looking for 1078 then 1065 in the S+P and 73.75 in crude and 1222/1215 next in Gold.
The move down in EURGBP has been relentless and stopped cable falling but below the 1.50 level I still like it short and EURGBP is now on a big weekly SR level from 2008 and could find support here or at 81.00 to help cable shorts.
Target for EURUSD is still 1.21 / 1.2150 for now
Target for AUDUSD 0.8575 / 0.8550
Target for AUDJPY 76.50

CRUDE short 76.00 stop 76.50 PT 73.75
CABLE short 1.4980 stop 1.5020 1st PT 1.4850
GOLD short 1234 stop 1238 PT 1215
GOLD stopped out (-1R)
AUDJPY short 77.35 stop 77.75 PT 76.50/80 addition
CRUDE closed breakeven - trade not working
AUDJPY stopped out (-1R)
GPBAUD short 1.7250 stop 1.7310 PT 1.70
USDCAD closed balance 1.0425 dbl top (+2.25R)
CHFJPY short 81.35 stop 81.50 PT 80 - TL/resistance line touch
AUDJPY short 78.00 stop 78.40 PT 76.50 - addition

Open positions:

AUDJPY short 80.55 stop 80.85 PT 76.80 / 75.60 - 1/4 position
AUDJPY short 78.00 stop 78.40 PT 76.50

CRUDE short 79.60 stop 80.10 PT 74.50 - 1/4 position

CRUDE short 78.60 stop 79.10 PT 74.50 - 1/4 position
GPBAUD short 1.7250 stop 1.7310 PT 1.70
CABLE short 1.4980 stop 1.5020 1st PT 1.4850
CHFJPY short 81.35 stop 81.50 PT 80

PS, thank you for the messages, I am fine. The earthquake was scary, some pictures fell down but it didn't last very long.

Update: USDJPY is at a daily trendline / channel bottom. If it finds support here then the XXXJPY's aren't going to work. I am watching this one. Obviously if it falls out here then we look good.

GBPAUD at interesting S&R level and 50fib to reload shorts. 4hr chart

USDCAD has broken trendline resistance, 4hr chart. This pair is normally a good leading indicator of which way we are going. BUT is at 61.8fib of last swing so ... we watch

EURGBP weekly
Big support level has held ... and a good bounce

GBPJPY 4hr
Watching for a breakdown of this wedge

FOMC day

2010-06-23T09:30:00.011+01:00

Quiet morning, England world cup day, Wimbledon and then this afternoon FOMC!

Another winning day for the bears yesterday and the S&P back below the 200 daily SMA.
Chinese banks apparently bought up the USD vs the Yuan again last night so no big change there. I wonder how much longer we are going to keep watching it.
My view hasn't changed since Monday and I am still selling rallies and expect the down moves to continue for a bit longer. I will post a chart if I see anything interesting.

Sterling is well bid and GBPAUD is on the move this morning. It has bounced off the 61.8fib retracement and should go to the 38.2 fib next at around 1.7250 which is also a good SR level. I have taken a long entry but I might be a bit late for the train.

CRUDE is approaching the bottom of the rising channel. I will add more short looking for a break of the channel at 74.50 / 75.00

EURGBP long 82.70 stop 82.57 PT 85.00

EURGBP stopped out (-1R)

Cable balance stopped out (-0.5R)

CRUDE short addition closed 50% @3R 77.10 (+1.5R)

AUDJPY closed 50% @3R 78.55 (+1.5R)
GBPAUD long 1.7050 stop 1.70 PT 1.7250
CRUDE original short closed 25% @6R 76.60 (+1.5R)
CRUDE short 76.40 stop 70.80 PT 74.50 bearflag break
CRUDE short today closed 50% @3R 75.20 (+1.5R)
AUDJPY short closed 25% @6R 78.75 (+1.5R)
AUDJPY addition closed 50% @3R 78.55 (+1.5R)
USDCAD closed 25% @6R 1.0350 (+1.5R)
CRUDE second short closed 25% @6R (+1.5R)
GBPAUD closed 1.7085 (+0.7R) - Pre Fed Announcement
CRUDE addition today closed 75.60 (+1R) - Pre Fed announcement
AUDJPY addition closed balance 78.20 (+2R) - Pre Fed announcement.

Open positions:

AUDJPY short 80.55 stop 80.85 PT 76.80 / 75.60 - 1/4 position

CRUDE short 79.60 stop 80.10 PT 74.50 - 1/4 position

CRUDE short 78.60 stop 79.10 PT 74.50 - 1/4 position

USDCAD long 1.020 stop 1.0175 PT 1.0460 - 1/4 position

Evening update.
Price spikes post FOMC have stalled at the 50fib retracement. I am still in sell rally mode so will be adding some shorts.

UK Budget day

2010-06-22T12:28:00.017+01:00

The new team Macro-Man thought the Chinese fake-out was one of the best jokes ever and a masterclass in Central Bank currency management. A great read.

We are about to get the UK budget and I am watching my cable position. If it comes out sterling negative I will add some sterling shorts or I will add on a bounce because I think this pull-back week is set to continue.
Structure breaks have occurred and cable has fallen out of its ascending channel (4hr chart) and targets to the downside are 1.450, 1.4350 and a retest of the lows.
GBPJPY is testing trendline support and looks the best choice on a sterling-negative budget. Every approach to 136 in this pair has been sold.
GBPCHF does not look like such a good short but EURGBP looks like a good buy with an upside target of 0.8550 and resistance at 84.20.
GBPAUD, my favourite risk meter still has a big gap to fill on the upside from Sunday's open and I would sell a spike up in that pair to 1.70 or 1.7050.

Gold finally fell off its perch and downside fibonacci targets are 1230, 1196 and 1168.
Apart from cable I expect dollar crosses to trade quietly before tomorrow's FOMC but it is Turnaround Tuesday so we shall see.

CRUDE closed 50% @3R 78.10 (+1.5R)
GBPUSD closed 50% @3R 1.4715 (+1.5R)
AUDJPY closed 50% @ 3R 79.65 (+1.5R)
CRUDE short 78.60 stop 79.10 - 50% retrace of Mon drop
AUDJPY short 79.60 stop 79.95 - addition
EURUSD short 1.2280 stop 1.2310 PT 1.2150
EURUSD stopped out (-1R)
USDCAD long 1.020 stop 1.0175 PT 1.0460
USDCAD closed 50% @3R 1.0275 (+1.5R)

Open positions:
AUDJPY short 80.55 stop 80.85 PT 79 - 1/2 + 79.60 stop 79.95
CRUDE short 79.60 stop 80.10 PT 77.40 - 1/2 + 78.60 stop 79.10
CABLE short 148.35 stop 1.4875 PT 1.47 - 1/2
EURUSD short 1.2280 stop 1.2310 PT 1.2150
USDCAD long 1.020 stop 1.0175 PT 1.0460

Monday 21 June

2010-06-21T06:57:00.006+01:00

The Yuan announcement killed a few of my trades from Friday ...

NZDJPY short stopped out (-1R)

AUDUSD short stopped out (-1R)

AUDCHF balance stopped out 0.9730 (+0.5R)
USDJPY closed break even, trade not working.
EURCAD stopped out 1.26 break of trendline support (+0.55R)

AUDJPY short 80.55 stop 80.85 PT 79 - gap fill
CRUDE short 79.60 stop 80.10 PT 77.40 - gap fill
CABLE short 148.35 stop 1.4875 PT 1.47 - dibs

I have the following positions open:

Update:

If the SPX closes the gap then it will break the channel support and back into the wedge ...

Charts and analysis

2010-06-21T06:50:00.003+01:00

Fake out!! After the announcement that China would allow the Yuan to be more flexible vs the dollar the markets rallied hard at the open Sunday night, dollar down hard, crude, indices, other currencies up big. But they must have forgotten to tell the Chinese Central Bank because when they released the Monday rates the Yuan vs the dollar was unchanged and then to add insult to injury they devalued the Yuan vs the Euro, GBP, yen, etc. Oops. Or maybe they meant to do that ...
I do not get the fuss about revaluing the yuan. Unless the US public saves more and produces more and buys less crap then higher priced imports are just going to act like a tax going to the Chinese. Or am I missing something.

After big moves off the lows and the jump Sunday open a lot of currency markets and crude are at significant SR or fib retracement levels where a pull back is possible. For the past 11 years the week following June options expiration has been negative for stocks. That doesn't mean it will happen again but it is a significant statistic. Last week ended with very very quiet trade for an option expiry week, and no retracement of the big rallies. Indices consolidated sideways for three days instead of pulling back which is bullish and may mean any pullbacks will be shallow.

Interesting statistic - The S&P currently trades at the level of March 1998, when gold was trading at $302. Dennis Gartman gave a good interview on Friday about why Gold is still going up.

SPX - 4hr chart

Price has broken the descending trendline resistance from the flash-crash rally high so the trend is up and the trendline should now become support. After three days trading sideways in a bull flag or equal triangle the Sunday open saw a breakout to the upside. Price then stalled at the 50fib retracement from the April top and the 61.8fib retracement from the flash-crash rally high which is an area of confluence that could cause a wobble. This market is a buy on dips for me, short term and if the top if the wedge does not hold as support then I expect a pullback (if not Monday then Turnaround Tuesday) to retest support at 1090 or 1081.50 and then the rally to continue.

FTSE 4hr chart

Higher highs and higher lows put FTSE back in an uptrend but price has stalled and like the SPX I am looking for a pullback to retest 5100 (50% retracement of the move off the lows) or 5050 (61.8fib retracement) to buy again. The daily has a bearish Gartley pattern which suggests a retest of the lows at 4900 is also possible for the FTSE.

CRUDE

With the big jump at the open Sunday night Crude now has a 200 pip gap and has stalled at the 61.8fib retracement from the May high to low big drop. I expect $80 to be tested and then am looking for a pullback (I expect to 75.00 or 73.00) to buy again.

Dollar Index

Dollar index has dropped hard and the break below the previous swing low at 85.13 confirms the down trend continues. I would not be surprised to see a bounce here but I expect a retest the long term descending trendline (from Feb 02) before the uptrend continues.

GOLD

After the wedge breakout followed by new highs in Gold I now expect Gold to test 1267 and the 1.618 fib extension before pulling back to retest support. Gold futures options expire at the end of this week and Gold often falls into option expiry and rallies afterwards.

Major currencies

EURUSD daily chart

EURUSD is having its best rally in 9 months and is set to test resistance and round number 1.25 also the 78.6fib retracement where I expect a bounce / pullback. I am a buyer of dips looking for 1.2850 and 1.31 before the bigger down trend continues.

GBPUSD
Cable has a bearish Gartley fibonacci pattern on the daily chart and has made two equal measured moves off the lows at 1.4885 but looks likely to test 1.4950 / 1.50 next. I am looking for clear price action to short (target 1.4550) but because of cable's habit of going sideways I may pass. My longer term view of cable remains bearish and I may wait for better levels to sell from.

USDCHF

Bearish correction on track for target of 1.09 where resistance becomes support and 61.8fib retracement. I am waiting for price action there to go long. A break below 1.09 and the rising trendline targets 1.0450

USDJPY
Price broke 90.80 support tonight and the bearish trend continues. I expect 91.70 to hold as resistance and USDJPY to continue lower to the bottom of the rising channel and then retest 88.13. A break above 92.12 changes my view to bullish.

AUDUSD

AUDUSD blasted through my potential reversal level at 87.00 and now sitting at 88.00 SR level. It is not a fib level to tempt me to short and I am looking for price action at 88.85 or 89.50 now for aussie to pullback. The move has left a pretty good size gap for Aussie to fill.

USDCAD

1.015 is support and the point where USDCAD has made two equal measured moves down from the May high. If price closes below here then it will likely continue to test 1.00 and then 0.9820

NZDUSD

Strongly bullish the 70.70 SR level and 61.8 fib failed to stall the NZD advance and the next target is the descending trendline resistance and 88.6fib level.

EURGBP
Has traded sideways the last few days I am looking for the upwards correction to continue to 85.50

More charts to follow ...

Friday 18 June 2010 - Quadruple Witching

2010-06-18T12:09:00.007+01:00

Quadruple Witching option expiry today would normally mean some volatility and unexpected moves although volatility has died a bit, I am not sure if it is the world cup.
We are definately set up for a pull back and risk-off Friday. Strong bonds and strong Gold are not what you usually see together, Gold may have triple topped and bonds should help it as a short but it is hard to sell against such a strong trend.
The breakdown in USDJPY means that Yen crosses should be better shorts than USD crosses.

USDJPY has broken out of wedge support to the downside, with the help of strong bond market and downside target is the bottom of the rising channel around 89.50

AUDUSD has hit the 61.8fib and SR level at 0.87 and I am short looking for a pullback to 0.8550 SR and then 84 as a minimum target. AUDUSD is a bearish gartley pattern.

EURCHF
Breaking big lows ... the SNB are now said to tolerate 1.30 and the market is going to test that ... it means CHF is not an attractive short while this is going on.

CRUDE
Broke trendline support, has fibonacci and structure support at 75 but the 61.8fib and SR level at 73 seem possible too.

I will add more charts in a bit but its all one trade and its all looking like risk off. GBPUSD and GBPJPY are also daily bearish gartley or butterfly patterns and also the FTSE index ...

Weakest currency today is NZD and the strongest is JPY so I am planning to sell NZDJPY which is also a bearish Gartley pattern on the daily chart and 4 hour wedge suggesting some energy is storing up ... target 62.25 & 61.75 and a stop above 64.20

AUDUSD short 0.87 stop 0.873 PT 0.8550 / 0.84
CRUDE short closed 50% @3R 75.70 (+1.5R)
CRUDE balance stopped out @1R 76.50 (+0.5R)
NZDJPY short 64.18 stop 64.38, PT 62.25 - top of wedge

I have the following positions open:

AUDCHF short 0.9780 stop 0.9830 PT 0.955 / 0.9275 - 1/2

EURCAD long 1.2550 stop 1.2460 PT 1.3330

USDJPY short 91.07 stop 91.47 PT 89.50 / 88.50

INTERESTING STATISTIC FOR NEXT WEEK:
For the past 11 years, every year, the week after June Options expiration has been negative for the stock market.

Thursday 17 June

2010-06-17T07:26:00.017+01:00

Yesterday was a day of consolidation in currencies and a daily doji in the S&P where we are at the 50fib retracement from the post flash crash rally high and the low. I expect some pullback here.
Daily bearish gartley patterns are setting up on cable, FTSE and AUDUSD. USDJPY is stuck in a tighter and tighter wedge.

Spanish debt is the big concern and spreads of Spanish bonds over bunds at record wide spreads and yields at 8 year highs. Today Spain has a visit from the IMF, releases its bank stress test results and has a bond auction of 10 and 30 year bonds which will test market confidence and set the tone for the euro. I am not tempted to buy or sell EURUSD here, but EUR crosses look interesting (EURGBP, EURAUD etc).

Cable is heavy with BP news and anticipated flow of $20 bln from UK pensioners to Obama's slush fund (joke) and news that the FSA will be abolished in yet more financial reform. Sterling news is retail sales at 08:30GMT and CBI Industrial trends at 10:00 GMT.

Futures look heavy and as though we will slide but I am expecting one more push higher before I sell .. US news this morning is employment claims at 12:30GMT and CPI m/m.

Update: Cable breaks channel support ... I am selling sterling

GBPJPY short 1.340 stop 1.3450 PT 1.33 / 1.3250
USDCHF short balance closed 1.1310 (+0.64R)
GBPJPY stopped out (-1R)
AUDCHF closed 50% @3R 0.9630 (+1.5R)
CRUDE long 77.00 stop 76.60 PT 78.50
USDJPY short 91.07 stop 91.47 PT 89.50 / 88.50
CRUDE closed 77.20 - not working (+0.5R)
GBPJPY short 134.50 stop 1.3490 PT 132 / 131
CRUDE short 76.90 stop 77.30 PT 75.00
GBPJPY short stopped out again (-1R)

I have the following positions open:
AUDCHF short 0.9780 stop 0.9830 PT 0.955 / 0.9275 - 1/2

EURCAD long 1.2550 stop 1.2460 PT 1.3330

Wednesday 16 June

2010-06-16T13:22:00.011+01:00

FTSE is heading for it's sixth straight day of gains and the S&P yesterday got back above its 200 day moving average for the first time in a month. That *should* encourage more buyers but last night Cramer told viewers to sell into rallies because there was no reason for the market to rally (yeah but what about the last 15 months?).

All sounds great doesn't it so why is the spread of Spanish bonds to bunds at lifetime highs? FtAlphaville thinks we have Eurozone news fatigue

Anyway after the continuous grind up the market is due to take a breather or pull back a bit. If it doesn't happen today it will likely be tomorrow. Like momo-Mondays, Thursdays are usually the weakest day of the week and now it is summer no doubt many take Fridays off.

Crude inventories today 10:30 NY time. Consensus: -1.5m ....

USDJPY continues sideways making the yen crosses less attractive trades than dollar crosses.

CRUDE 4hr chart

Now up 8% from the lows it may have formed an inverse head and shoulders and retesting the neckline for support. If so upside target is 83 which is also the 78.6fib. A projection of the first swing of the wedge from the breakout point gives a target of 85.00 and the 88.6fib. I am buying dips.

GOLD

Is stuck under the 61.8fib of last weeks move and sitting on the 50fib. It *should* go lower from here, target is the ascending trend-line and then 1200 level.

EURUSD 4hr chart

Is in a clear ascending channel and stuck in a range between 1.2350 and 1.2150. I am a buyer of dips to the bottom of the range looking for an upside break with a target of 1.2512

AUDUSD

May have double topped (yesterdays high failed to break Monday's high) and forming a big bearish Gartley on the daily. I am looking for one more push higher to 0.87 0 or 0.8885 to sell but this chart might be the first indication of a risk wobble today.

GBPUSD

Cable is a tough trade and is bouncing below previous support at 1.48 (March lows). I am looking for it to break those levels up. At 1.49 cable will have made two equal measured moves off the lows and hit descending trendline resistance and I will be looking to short there. The daily is also a bearish Gartley pattern, invalidated above 1.4940 which keeps me from buying cable.

New positions:
CRUDE long 76.40 stop 75.90 - addition
AUDUSD closed 50% @3R 0.8655 (+1.5R)
USDCHF closed 50% @ 1st target 1.1250 (+1.07R)
CRUDE addition closed 50% @3R 77.90 (+1.5R)
CRUDE addition closed balance 77.40 (+1R)
CRUDE first long closed 77.40 (+2R)
AUDUSD stopped out balance 86.05 (+0.5R)

I have the following positions open:

USDCHF short 1.14 stop 1.1470 PT 1.09 - 1/2

AUDCHF short 0.978 stop 0.983 PT 0.955 / 0.9275

EURCAD long 1.2550 stop 1.2460 PT 1.3330

Tuesday 15 June

2010-06-15T14:05:00.007+01:00

I still prefer dollar crosses to yen crosses as weak USDJPY is a drag.
EURCHF is banging its head on resistance at 1.40 and might make CHF better buy than EUR so USDCHF short my favourite trade today if indices continue to rally.

SPX
Looks pretty gloomy with a third rejection at 1108 level yesterday on the Greek downgrade but break and successful retest of trend-line resisance now support suggests we go higher today to me. 1108 still the key level to break. 4hr chart

EURUSD
Stuck at the 50fib but a succesful retest of 1.2150 SR level suggests we correct higher today. 1.2330 is the level to break next. 4hr chart

CABLE ~ sideways
EURGBP bouncing and weaker numbers this morning are a drag on cable, up against resistance at 1.48. I still like it higher but today may not be cables day.

USDCHF - daily chart
Potential support at 1.1250 but I like it to 1.09 / 1.0950

AUDUSD as per yesterday I still like this long. SR at 87.00 but 89.00 a second target.
-----------------

CABLE long stopped out (-1R)
USDCHF short 1.14 stop 1.1470 PT 1.1250 / 1.09
AUDUSD long 0.8580 stop 0.8555 PT 0.87
CRUDE long 75.80 stop 75.40 PT 79.50
AUDCHF short 0.978 stop 0.983 PT 0.955 / 0.9275
CRUDE closed 50% @77.00 (+1.5R)

I have the following positions open:
EURCAD long 1.2550 stop 1.2460 PT 1.3330

Charts and analysis

2010-06-14T07:03:00.015+01:00

The Asian session tonight has broken some resistance levels that suggest this bounce has legs.

SPX - 4hr chart

Good rally of the lows from last Tuesday has yet to clear the previous swing high at 1108 and confirm double bottom but tonight the trendline has broken (just) and the rally looks set to continue. Buy on dips still target 1148 / 1160 (where rally will equal the bounce from the flash crash lows and market will have symmetry.

CRUDE

Still bullish correction, buy on dips. Breakout from the wedge consolidation and above the 38fib targets the 61.8 fib at 79.50

GOLD

Sideways consolidation but gold is higher despite rising Euro and risk appetite so it may be back to trading as a speculative trade rather than the fear trade. Price has broken out long from a wedge but failed to hold new highs. A retest of the wedge trendline has held thus far and price now needs to either break out to new highs or down from this wedge.

The article about Gold on the front cover of todays NY Times and the 93% bullish positioning makes me think we could correct down from here.

Major currencies

EURUSD daily chart

CoT positioning shows traders loaded up again short the EURUSD and it is back at 2010 extremes.

Tonight has broken strong resistance at 1.2150 level and set to rally further Buy on dips, target 1.25 1.2850 and 1.31 and the descending trendline resistance.

GBPUSD

The market has tested the 61.8 fib retracement level at 1.47 and bounced but it looks set to try again tonight. I like this long target 1.4850 and then the top of the descending channel and the 1.52 area. Another failure at 1.4760 and I would exit and forget longs.

I am not tempted to short unless it breaks 1.4345 which is not out of the question. It is one of the weakest currencies and weighed down with BP.

USDCHF

Finally a turn after 12 weeks up in succession. I like this short counter-trend a lot and I would sell rallies with a stop above the high at 1.1675 and a target of 1.09

USDJPY

I favour the downside in USDJPY but it is not a trade with rising stocks and other yen crosses pulling it upwards, it is rangebound and I don't see a trade unless it breaks 90.84 to the downside or 92.24 to the upside.

AUDUSD

Speculation that the proposed 40% mining tax will be dumped is helping AUD. It has broken its wedge and confirmed the double bottom by breaking above 85.50 and the upside target is 87.00.

USDCAD

Weekly higher lows have reversed with a big weekly outside bar. Needs to break strong support level at 1.0220 and 1.00 for me to hold short and target is the lows at 0.9930, then 97.00 then 91.00

CAD could be slowed up relative to other currencies with these big support levels and parity level.

NZDUSD

Confirmed I like this long with a target of 70.00 so it is a little late to enter here from a risk reward prospective. At 70.00 it will be a bearish Gartley and an interesting short trade.

Currency crosses to follow shortly ...

EURGBP
Has made a higher high tonight confirming the double bottom at 82.20. I would buy a pullback to 82.80 and my target would be 84.25 and then 85.50

EURJPY
I am not sure the yen crosses are the best EUR buys but I like this long and the target is 116.75 initially.

AUDJPY
Has made a good base at 72.00 and I am a buyer of dips, targeting 80.00 then 82.00/83.00

GBPJPY
I like this long targetting 139.30 and I would cut the trade if it fails again at 137.40. 139.30 is when the swing would be equal distant to the swing starting 25 May.

EURAUD
1.40 is an important level for EURAUD from 1997 and I like it to strengthen here and confirm a higher low at the 78.6fib level but it is countertrend and higher risk so I am waiting for a daily candle reversal which we do not have yet.

EURCAD - monthly chart
EURCAD is at a BIG level. The daily chart shows this could be bottoming. With USDCAD stuck above big support levels and EUR on a bit of a tear this trade might just work ... I like this trade, it has very good risk:reward potential.

GBPAUD
Bearish, this pair moves inversely with stocks normally. I am looking for a pullback to 1.7250 or 1.7550 to sell again.

AUDNZD - weekly chart
Selling rallies looking for a break of the trendline support. A pullback to 1.2670 gets me short, target 1.1650

AUDCAD daily chart
Trend is down but looks set to retest the underside of the long term wedge where it broke out from last month. Counter-trend long target is 0.925 but looking to short again. Downside target for short is 0.80

I have the following positions open:
CRUDE long 74.60 stop 74.30 PT 77.00 / 79.50
AUDJPY long 77.75 stop 77.40 PT 80.00 / 81.70
EURCAD long 1.2550 stop 1.2460 PT 1.3330
AUDJPY closed 50% @3R 78.80 (+1.5R)
CRUDE closed 50% @3R 75.50 (+1.5R)
CRUDE stopped out balance 75.20 (+0.5R)
AUDJPY closed 78.90 (+1.6) - fell short of my target but not liking the JPY crosses as much as the USD
GBPUSD long 1.4740 stop 1.4690 PT 1.49 - 4hr bull flag

Interesting article in the Telegraph today: Investors are betting on a Black Monday-style collapse, BoE warns
There is an Irish proverb: The obvious rarely happens, the unexpected constantly occurs

Friday 11 June 2010

2010-06-11T12:50:00.008+01:00

After some impressive rallying from the lows on Tuesday I would not be surprised to see some pullback or downward correction today before continuing higher. EURUSD has some big levels to get through above for the rally to continue and London is half way through Friday and the first day of the world cup, and I am wondering how many in NY are already in the Hamptons.
Economic data at 08:30 NY time (retail sales then later consumer sentiment) might be a driver.
Ugly manufacturing numbers and the BP problems have hit sterling hard today and price action in EURGBP might be supporting EUR more than any optimism about the EU.

EURUSD (4hr chart)
If the weekly candle closes here it is a bullish piercing line pattern but is underneath the lows of the past two weeks where support becomes resistance so technically momentum still bearish and we need to break up above 1.2150 to get us up the first step safely.

EURJPY 4hr chart
Holding below previous trendline support and in a pretty clear range this chart makes me think we dip lower today before moving higher.

USDJPY is in the middle of a rising channel and stuck around the 91.50 level. I think it is being moved by the JPY crosses at the moment rather than under its own steam and I am passing on this chart.

CRUDE 240 min
Crude has made a good rally off the lows, higher lows and now a higher high and has good support again above 74.50. Profit taking today could send it lower to test 73.00 but my long target for this swing is 78 (1.27 fib extension of the swing off the low and where this swing is equal distance to the first one) and 80.00

SPX
S&P is at the 61.8fib of the June high to low and *should* dip back to the 38.2 fib and previous support at 1067 before moving higher where I expect 1108 and the range high to be tested next. However bullish momentum is quite strong and a bull flag and breakout are possibilities.
1107 needs to be surpassed to confirm the double bottom.

EURGBP 240min chart
Double bottom? This will be very supportive for EUR and this trade has some very good Risk reward potential for a retest of 0.85 at least.

Update:

Continuing yesterdays contrarian indicator theme.
This is the cover story from Business Week. We may have a temporary bottom in stocks.

Contrarian signals

2010-06-10T03:52:00.016+01:00

Bank of Montreal yesterday told their clients to get out of equities and "Go To Cash - In Plain English".

Last week this was the cover of Newsweek:
However my favourite contrarion signal is GS lowering it's target for EURUSD today to 1.15 for clients. (I am pretty sure that it will go there eventually and lower but they got EUR wrong twice and three times is a charm.)

Bearish sentiment is now at an 11 month extreme.

So we could a little uber-bearish and due a risk bounce.
I am not suggesting that we are starting a new bull run or that anyone should buy euro's but there is a possibility of a bounce and a new place to sell more ...

I posted last month about the S&P and I think the 1038 low of 25 May has become one of those key line in the sand levels. Wednesday's candle and close is bearish and if the 1038 low does not hold then supports are at 1000, 981 and 952 and we will likely hit them very sharpish if that 1038 breaks. But while we hold above 1038 with no follow through I am looking for a rally to 1122 or 1150 to sell again but we have to break kryptonite fib retracement levels at 1075 and 1083 to get there.

AUDUSD has bounced off a key SR level and pivot from 1995

Monthly chart

Daily chart:
If the descending trend line breaks I am looking for a rally to 0.86 or 0.873 to short again.

FX options indicate that AUDUSD might be set to rise also and AUDJPY looks to have put in a base around 72.00 and I am looking for a rise back up to 80.00

CABLE / GBPUSD
Cable is in a pretty clear descending channel, three waves down, and has bounced off the bottom put in a lower high and today's daily candle is a bullish engulfing. I like this long to at least 1.49 / 1.50 but 1.52 is a better level to look for shorts again.
Thursday is the Bank of England rate decision ... no change in policy expected for now.

CRUDE: 4hr chart
Crude looks to have put in a bottom and broken trendline resistance. I am looking to buy dips for a counter-trend rally back to 78.00 or 79.50. In the event of a good short squeeze 81.00 is not ridiculous.

Dollar Index. The dollar index broke its double top / bull flag. It has now rallied for 6 straight months and it has never rallied for 7 months in its 39 year history. I am a big time dollar bull but this month may be a month for a correction for the dollar. Check this chart from Bespoke Investments.

PS - I was going to say I think Gold could be putting in a double top but I won't mention it because everyone loves Gold except me.

My positions tonight:
AUDJPY long 75.50 stop 74.90 PT 78.00
GBPAUD short 1.7440 stop 1.7480 PT 1.7250 (break of daily IB and trendline support)
CRUDE long 75.00 stop 74.50 PT 78.00

GBPAUD daily chart.
This pair is inversely correlated with stocks

Dollar Index double/triple top?

2010-05-28T04:16:00.004+01:00

The Dollar index could be putting in a double or triple top (daily chart) and a break down below 85.17 would confirm it.
This breakdown could target a retest of the long term trendline shown in the second (weekly) chart. The previous correction on the dollar index was very shallow and if this one is equally shallow then the support at 85.17 could hold and we could form a wedge or bull flag here.

The dollar Index had been moving up with the Indices this year unlike last year when it moved inversely. Today's move shows the old correlation is back where equities move up and the US dollar is moving down.
EURUSD is 50% of the dollar index and looks to have put in a double bottom but with stocks moving higher I think that the commodity currencies of AUD CAD and NZD are better longs vs the USD.

S+P

2010-05-27T16:45:00.001+01:00

So looks like the pre-holiday rally is underway and everyone is looking at the inverse head and shoulders on the hourly S+P with neckline at around 1090. This would give a target for the bounce in the S&P of 1150.
I like this 1150/1152 target a lot:
1. It is a measured move so would be equal in distance to the bounce off the flash crash low
2. Its the level where the S&P broke the daily trendline from the March 09 lows
3. It's the previous resistance from the January highs.

All in all if the S&P can break 1090 then 1150 is a very reasonable target and pretty nice reward.
This also means that the AUD and CAD long trades (and NZD too) should work very nicely.

I'm Back

2010-05-27T10:38:00.004+01:00

Thanks for all the e-mails and messages, I had some other stuff to take care of.
So where are we in the markets ....

This is a long holiday weekend in the US and the UK (Monday) and normally going into a holiday weekend the market reverses its prior trend and then following the week it should resume it again. The trend of late has been down so I would expect to rally into the holiday but Thursdays are usually the biggest down days of the week and I therefore think we go down today and possibly end the week with a face-ripping rally. Which all makes it pretty dangerous out there!! I might not trade very much until next Tuesday.

So what looks good.

Euro is weak vs everything.
You can draw a pretty good wedge of EURGBP on the daily and a break of yesterdays low is a break of the wedge and says we have much more downside.
EURAUD is a good short on its way to at least 1.45 but I think the breakout level of 1.42 is possible. EURCAD is dropping like a stone also, next key support is at 1.28

Gold fell from the highs, and has bounced up to the 61.8 retracement at around 1218. I think it is a pretty good short here although slightly higher risk. Waiting for a daily reversal candle might be better or a break of this 4hr trendline.

Crude is rallying I think on the hope that the fix in the Gulf will stop the leak. Crude is pretty overbought and I think from here it rallies to test the 75.00 level and the underside of the channel it broke out from but I think a rally has the potential to take us to $80. Any bad news from the Gulf will not help crude longs so I am watching the news closely.

In summary, we look likely to get a big risk reversal into the holiday weekend and EUR is not the best buy right now.

I like long AUDUSD to 87.00

and short USDCAD to target 1.03 - 1.025

Finally ... USD prelim GDP and employment numbers could be a market mover, out at 08:30 NY time

Tuesday 18 May

2010-05-18T21:25:00.005+01:00

I have taken profits and closed my EURUSD and CRUDE shorts for the following reasons.

Crude has fallen over 20% without a bounce and tomorrow is the release of the UN draft sanctions on Iran. Iran has said it is prepared to block oil and "wreck Western economies" if sanctions are imposed.

EURUSD has fallen hard today and bearish sentiment is really extreme. The all-time low is at 0.8228 in October 2000 and the all time high at 1.6040 in July 2008 so that means the 50fib is at 1.2140 … and the 1.618 fib extension of the last swing is around 1.2165.
In fibonacci terms this is a good place for a bounce.

S+P futures have stopped tonight at the 50% retracement of the bounce off the flash crash lows. It makes me think that the indices could rally from here.

Remember .. I am often wrong :)

EURAUD

2010-05-17T16:42:00.000+01:00

On all the higher time frames while the trend is clearly down this pair has so much upside potential if you can get an entry and hang on to it.
4hr chart:

Daily chart: