Weekly analysis

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

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

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

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

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

Indices.

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

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

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

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

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

Currencies - Majors

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

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

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

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

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

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

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

Crosses:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Friday March 19, Quadruple Witching

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

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

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

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

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

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

Thursday March 18

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

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

Thursday morning thoughts.

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

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

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

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

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

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

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

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

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

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

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


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

Wednesday March 17

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

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

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

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

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

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

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

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

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

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

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

Cable daily

GBPJPY daily



Happy St Patrick's Day.

Tuesday 16th March

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

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

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

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

Overall a down day.

Open trades:
EURUSD short 13765 stop 138.05 

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

Monday 15 March 2010

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

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

Chart analysis

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


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

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


Indices.

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

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

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

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

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

Currencies - Majors

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Friday 12 March 2010

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

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

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

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

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

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

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

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

CRUDE daily

Thursday 11 March 11th PM

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

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

Thursday 11 March

Funny price action yesterday in commodities that disconnected with the dollar. 
This story did not help gold either: http://blogs.wsj.com/source/2010/03/10/gold-doesnt-shine-for-china/
London session seems to have lost a lot of its momentum lately.
SnB on the bid in EURCHF again.
When the US pit closes if my crude trade has not gone anywhere I will close it, there is no momentum and leaving a countertrend position on is just asking for my stop to be eaten.

USDCHF short 1.0699 stop 1.0719 target 1.0550/1.0506
GBPJPY long 135.70 stop 135.30 target 137.30 countertrend
USDCHF stopped out (-1R)
GOLD short closed 50% @3R 1102 (+1.5R)
CRUDE short 81.80 stop 82.30 target 80, 1hr bearish engulfing
EURGBP stopped out (-1R)
CRUDE closed 80.00 (-0.4R)

Open trades:
GOLD short 1117 stop 1122
GBPJPY long 135.70 stop 135.30

GBPJPY 4HR
The only thing wrong with this is 136 is one of my big fat lines in the sand and if we don't hold above it then this is a false break.

Wednesday March 10

Everyone is talking about the Euro and Greece but real money is busy selling sterling too.  It looks more like the weekly hammers on cable and GBPCHF will not work this week and likewise for the shooting star on EURGBP.
I like gold short off this level but I won't trade against the daily candle, will wait. 

GBPAUD short 1.6360 stop 1.6410 target 1.6210 addition triggered on break of yesterdays low.
GBPJPY short 134.60 stop 1.3490 target 1.32 (will cut if does not break 134)
EURJPY short 122.20 stop 122.60 addition
CRUDE short 81.25 stop 81.65 target 80 (again!)
EURJPY addition stopped out (-1R)
GBPJPY closed break even, could not hold below 134
USDJPY stopped out 90.20 (+1R)
EURGBP long 0.9105 stop 0.9085 hrly inside bar target 92
CABLE short 1.4932 stop 1.4962, break and retest of yesterdays low
CRUDE short stopped out (-1R)
CABLE short stopped out (-1R)
CRUDE long 82.00 stop 81.75 TP 83/85
CRUDE closed 50% target 83.00 (+2)
CRUDE balance stopped out (-0.5R)
GOLD short 1117 stop 1122 4hr LL doji, target daily low and 1100
GBPAUD addition closed 1.6335 (+0.5R) hourly HL & TL reversal
GBPAUD balance closed 1.6335 (+1.55R)

Open trades:
EURGBP long 0.9105 stop 0.9085
GOLD short 1117 stop 1122

JPY crosses have broken up through major levels (CADJPY AUDJPY USDJPY) or big trendline resistance (EURJPY) and I missed the boat a bit because of my bias.  I will look to buy on re-tests.
Not my best day but not to fear:

USDCHF

Here is one I am watching.  I am watching USDCHF for a break up through the red trendline from the November highs on this weekly chart.  The way we are hugging up to this trendline makes it look very likely to break.  A break there puts 1.15 and the monthly trendline firmly in the target.
I was waiting for a pullback to 1.05 or 1.0550 to buy as it is tempting to buy here and go into the trendline with a cushion for the inevitable bumps, but a pullback is not looking too likely today.

USDCHF weekly chart

USDCHF monthly chart



Anyway if this happens there is no need to guess where EURUSD is going, is there?

Tuesday 10 March 2010

Cable broke through the 1.50 and weekly 50fib level so Sterling seems set for lower and I won't be a buyer after all. Nothing does head fakes like cable though.
EURGBP worried me because of the gap between the tail of the weekly shooting star and the trendline.  A suckers gap is what it will be if we get above 0.9146 and it goes to touch the trendline.
Other currencies are mixed with stronger dollar and yen the theme, the continentals the weakest and the commodity currencies the strongest for now ... ;)
I am selling GBPAUD (weakest vs strongest) on a break of the lows.

Crude
Trendline break means if 80 goes then 78 is next target. 
Gold and silver have just broken similar trendlines which give me confidence holding short for now.


EURJPY closed 50% @3xR 122.30 (+1.5R)
EURGBP balance stopped out (-0.5R)
CRUDE short addition 81.40 stop 81.70 target 80.50 countertrend
GBPJPY short 134.70 stop 135.10 break of support and hourly bearish engulfing
GBPAUD short 1.6490 stop 1.6540 target 1.6340 / 1.6180
CRUDE short addition, closed 50% @3R 80.50 (+1.5R)
CRUDE short again @81.00 stop 81.40 target 80
EURUSD closed 1.3545 target (+3R)
CRUDE short again stopped out (-1R)
CRUDE addition balance stopped out BE
CRUDE original short balance closed 81.40 (+0.85R)
USDCAD stopped out (-1R)
GBPAUD closed 50% @3R 1.6340 (+1.5R)

Open trades:
USDJPY short 90.50 stop 90.80
EURJPY short 123.50 stop 1.2390 - 1/2
GBPAUD short 1.6490 stop 1.6540- 1/2

EURGBP WEEKLY

Monday 08 March 2010

If cable gets to 1.50 and holds then I am a buyer there (the 50% retrace of the weekly hammer).  However I am not convinced it will hold so I am watching price carefully.
The other thing I am waiting to do is buy USDCAD ... weekly triple bottom.  This trade might not work but I think the R:R is worth it.
My GBPJPY trade is a retrace to 50% of the weekly hammer.  I might consider a buy then or long on a break of the weekly hammer.

EURJPY short 123.50 stop 1.2390 target 122.30 / 119
EURUSD short 1.3660 stop 1.3680 target 1.3475
CRUDE short 82 stop 82.35 target 80 counter-trend
EURUSD stopped out (-1R)
EURGBP addition stopped out 90.30 BE
EURUSD short 1.3650 stop 1.3685 trying again
GBPJPY short 136.45 break of of support, stop 1.3685 target 134.70
USDCAD long 1.0275 stop 1.0245, hourly hammer off support
CRUDE short closed 50% @3xR 80.95 (+1.5R)
GBPJPY closed 50% @ 135.00 (+2.14R)
GBPJPY balance closed 134.70 target (+2.5R)
EURJPY missed my target by 1.5 pips and bounced ....

Open trades:
USDJPY short 90.50 stop 90.80
EURJPY short 123.50 stop 1.2390
EURGBP short 90.70 stop 90.85 - 1/2
CRUDE short 82 stop 82.35 - 1/2
USDCAD long 1.0275 stop 1.0245
EURUSD short 1.3650 stop 1.3685

USDCAD -
Three is a charm ...

Sunday 7 March 2010

I don't usually trade the Sunday night after NFP so I may regret this.

USDJPY short 90.50 stop 90.80 target 84
CRUDE balance stopped out BE

Open positions:
EURGBP short 90.70 stop 90.85 - 1/2 & 0.9030 stop 0.9050

Chart analysis

A week of huge gains for the indices, the biggest since last Autumn and bond yields get crushed ahead of a next week’s big US debt auctions. Funny how that happens. Dollar index is correcting but holding its own. The risk on / risk off trade seems to be a single switch, either on or off. The market rallied hugely on Friday after only 36,000 lost jobs when bigger losses were forecast due to snow storms. The US 3month Libor rate climbed higher than the JPY one for the first time since August 09 which does not look good for the USD as a carry currency and likely the reason for the sharp rally in the JPY crosses although a news report that the BoJ may extend easing (while the market expects the Fed to start tightening) added fuel to the fire.


Dollar Index – Another weekly doji, an inverse of the pattern on EURUSD. A shallow down-trending channel is forming, a possible bull flag. I am looking for the shallow downtrend to continue and retest the trend-line from the lows.

Indices.
S&P Weekly and daily bullish, past the 84.5 retrace of the last swing and all set to test the highs. A successful test of the January highs puts 1179 in target range.

FTSE An 18-month high for the FTSE and not all of it is down to the weak pound. Buy on dips target 5650, support at 5558, but I would be looking to buy again at 5467.60

CRUDE OIL (WTI)
Bullish ascending channel has held, a test of the highs at 84 is lined up and $85 looks like a certainty and $90 not out of the question. I am a buyer on a successful re-test of $80.

Gold. Uptrend, not clear if it is impulsive or corrective. Either way price looks set to test the January highs at 1161.88 and it will be clearer then. Break of the daily inside bar is a good long trade entry for me or buy with price action 1125-1128.

Silver. Uptrend, similar to Gold except the uptrend looks corrective not impulsive. Price has closed on the 61.8fib of the last swing hi-lo and if I were tempted long (I am thinking about it) my buy order would be at 16.75

Currencies - Majors

AUDUSD Weekly small bullish continuation bar, daily bullish in congestion zone.
I see the AUDUSD as having topped out and the rally from the low of 4 weeks ago is corrective. Although it has broken through the 61.8 retrace of the last swing, The AUD prefers the 78.6 fib level which comes in around 0.9160 and just short of resistance at 0.9175, if that does not hold I am looking at 0.92 and the descending trend-line from the highs as potential sell areas.

NZDUSD – Almost the weakest of all the major currencies last week the NZD only just beaten out by the dollar. A second weekly doji in a row. I like this short but there is significant event risk this week with the RBNZ rate announcement this Wednesday.  I expect it to break this consolidation range at 0.68 to the downside with a target of 0.6640/0.6580. Resistance at 70.80.

USDCAD – The best performing currency of last week has not changed my view and I am still longer term bullish USDCAD and am looking for price action to buy. A retest of the lows and a triple bottom would get me excited (I still remember the USDCAD triple top). Until then I am going to be patient and wait for the signs! A break below 1.02 will change my view and I will have to concede that we are going back to parity or better.

GBPUSD – Weekly hammer, daily bullish, consolidating after strong downtrend. … I prefer to sell rallies and I am looking at 1.5170/80 for a first opportunity if this is a 5wave pattern. For a countertrend long a retest of 1.50 is interesting but as always with cable, a sideways choppy range is a big possibility.

EURUSD – Four weekly doji’s in a row, it does look like it is trying to put in an attractive rounded bottom. I am in two minds about this pair. Either it has spent what should have been its corrective upswing going sideways and is about to continue down again or this past month was what was required to stop the massive downward momentum and we could see a meaningful upswing from here. (Linda Bradford Raschke says that the longer a pair consolidates sideways the less likely a trend is to continue but in the big picture this is not a long consolidation.) Therefore I prefer to play the ranges short term or wait for a break of the range to show the way. I would buy a breakout to the upside but 1.3860 or 1.40 would have my sell finger twitching.

USDJPY – Weekly and daily bullish in downtrend and downtrending channel. If this had closed on the highs it would be a bullish piercing line reversal but it has instead bounced on the 90.60 level, 61.8fib retrace and the weekly 20ema. It’s really tempting to sell here and I am going to be looking for a short entry or sell a retest of 90.60.

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


Crosses:

AUDJPY – I am bearish all the yen crosses but this is the strongest of them. My bearish view is very long term and only a break above the January highs changes it. The weekly inside bar shows a stall in the downtrend and I would buy or sell a break of this candle either way.

NZDJPY – Weekly bullish hammer, daily bullish marabuzo, possible double bottom. This looks good for a counter-trend long if it can clear heavy resistance at 63. Bigger picture the downtrend is still valid. I might be a buyer if a retrace to 62 held with a target of 64.50. Only a break above 64.50 changes my bearish view for now.

CADJPY – I am bearish and 88.50 is the level where I change my view so I am watching to see what happens here. Weekly bullish inside bar after a storming rally last week, I will trade a break above 88.50 or short that level with price action

AUDNZD – Uptrend, this pair has broken from a long time consolidation range and I would buy dips or a retest of 1.2935

EURNZD – Weekly doji indecision in strong downtrend. Daily looks like the downtrend is continuing again with a big bearish marabuzo. I would sell a pullback to 1.9670

GBPAUD – strong downtrend. Weekly bearish, daily showing sideways consolidation after big drop. This pair is in no hurry to retrace and let anyone back in. This is not a place to sell and I am not tempted to buy this either so will wait, looking to sell possible at 1.6970 or 1.7130

AUDCHF – Big weekly bullish marabuzo, daily doji after massive rise, this pair has made new highs and I would be a buyer of dips or a retrace to 94.40 or 94

AUDCAD – Downtrend, weekly bearish engulfing, I am a seller of rallies (I like 9389 level) or clean break of support at 92.   I like this one a lot.

EURAUD - making significant new lows, no end to the downtrend, I am a seller of rallies and like a pullback to 1.5040 to short. A move above 1.5330 would mean the downtrend is over for now and a bigger correction is underway.

EURNZD – Weekly doji at the end of strong downtrend, the rally stalled for this pair at strong resistance level. It made a false break of the descending channel and then bounced back down again hard. There is a possibility of a double bottom here but price has to break above 2.0077 to confirm it which it has not been able to do so far. Pass for now.

GPBJPY – Strong downtrend, small weekly bullish bar, a consolidation after a very big drop. I am a seller of rallies, I have this in a descending channel and I am waiting for a correction rally to sell. Price might bounce at trendlinme resistance at 137.50 but I prefer a retest of 1.40 and the channel resistance line. 
GBPCHF – The opposite of EURGBP but not quite as good looking I think a countertrend long on this pair should go to 1.65 and possibly 1.6585

EURGBP Weekly shooting star, daily bearish, I am short will add on a retrace to 90.50 or a break of the support at 89.70

EURJPY – strong downtrend – I did not expect this pair to break the 120 support. I am a seller of rallies although I might consider a countertrend long on this pair on a pullback to 122 with a target as high as 126.50 Otherwise I will wait to sell as it is hard to get short at these levels. Longer term target 112

EURCHF – Downtrend but No, thank you

USDNOK Three weeks of dojis after an uptrend confirming an intermediate bottom in place. There daily triangle is well formed for a breakout trade. I prefer to wait for more information or a breakout here.

Friday 05 March 2010 - NFP

A bit late posting today. 
There were a few things I wanted to see yesterday to keep my bearish positions.  Gold below 1130, crude below 80 and the indices to not make new highs.  None of that happened so I am tidying up (tightening up) some positions.  The bullish price action in USDJPY was apparently caused by all the news reports yesterday of how the BoJ will "support the economy" (supporting your economy means weakening your currency apparently in the race to the bottom). 

FTSE made new highs for the year today although CAC and DAX did not join in.  SnP is at a key 1130-35 level. If it doesn't turn down around here then it looks set to make new highs as well.

AUDCAD addition stopped out (-1R)
AUDCAD short balance closed 0.9290 (+1.87R)
NZDJPY short balance closed (daily hammer reversal) (+0.3R)
EURGBP short 0.9030 stop 0.9050 - addition
CRUDE balance stopped out BE
GBPAUD short 1.6630 stop 1.6680 Target 1.65
GBPUSD closed 1.5028 (+0.5R) weekly hammer forming and unable to break 1.5
EURUSD closed 1.3585 hammer reversal.  (+1.5R)
NZDUSD balance stopped out 69.15 (+0.6R)
GBPAUD stopped out (-1R)
CRUDE short 81.95 stop 82.10 target 81.20
CRUDE closed 50% @3xR 81.50 (+1.5R)

Open positions:
EURGBP short 90.70 stop 90.85 - 1/2 & 0.9030 stop 0.9050
CRUDE short 81.95 stop 82.10 - 1/2

Crude daily. 
Big daily level in crude, hence the counter-trend short.  I won't hold this.

EURGBP weekly. 
This is why I am holding short for now, target 89.

Thank You

I seemed to have got some publicity and now I have more than 3 readers I am going to have to do a bit better with my charting.
To save time I am going to answer a lot of the questions I have had here.

Mr Big is a real person, his name is James.  He doesn't have a webpage or site or blog because he doesn't mentor for a living, he has a real trading job in a very big hedge fund and has been trading for 10 years.  I wasn't the first person he helped, and he is since helping others.   I am profitable now because he taught me to develop my own trading style, create rules and stick to them and he is a pretty strict disciplinarian who despises emotion in trading.   He helped me a lot, every day and still does. 

I didn't make this blog to educate but I will try and post more charts to explain what I am doing or how I see things because I think it will help me too. 

I trade mainly price action at support and resistance.  I use candles and I also put a 20ema, a 50sma and a 200 daily moving average on my chart.  I don't trade off them but I use them as guides because the market seems to respect them.  I could probably do very well without them now but they are a bit of a comfort blanket to me.  I also use trendlines and fib levels and fib extensions.

For the most part I try to take setups off the daily and weekly charts and then look for entries on the 4hr and 1hr charts for better risk:reward.

I sometimes trade against the daily trend and those are the ones I day trade and cut quickly.  I will put orders underneath levels waiting for a break and occasionally I will leave limit orders at levels without waiting for price action if it has a lot of other supporting factors (fib levels, trendline, etc).

I am very bad at discretionary profit taking, and so I have a scaling out method of taking profit.  A trade has to get to 3X my risk where I take half off.  If it gets to 6X my risk without me adding to it then I take another 1/4 off.  The last part is discretionary.  This stops me staying in trades too long and giving it all back.  I don't think that its greed that makes me hang on, it is more that once I have a position I tend to become a little biased.  Its something I am working on!  If a trade does not make 3xR then it usually goes for a full loss.  I am happy to wait for a few days for a trade to work.  Sometimes I will cut a trade for a small profit or breakeven if it is not doing what I expected or if it is clear that the market wants to go the other way but it is rare.

I trade very low risk also.  My trades are usually 1% or less of my account.  That is 1% of my cash sitting on margin, not 1% of my leveraged notional account.  This helps me confidence wise to crack trades I might otherwise pass on and I am still able to make money this way (surprise!!).
I will try and post more about what I am looking at and why and some more charts now I know that I have more than 3 readers. 
I don't mind because I have found that having a blog and posting my trades in real time has helped me with my focus and kept me out of some bad trades.  There is nothing like a bit of public scrutiny to sharpen your wits.

Thanks again for the e-mails.
Nicola

PS - I am learning "point and figure" charting.  There may be some funny looking charts in future.  I think they are great for breakouts.

PPS I often post trades on FF as "elitejets"

Thursday 04 March 2010

What a night, and I didn't stay up (unusually!).
Shanghai index down 2.4% overnight on news that China PBOC may raise the banks reserve ratio again.  Biggest drop in 5 weeks and index futures crater and dollar gets a nice risk bid and yen even more so.  I got burned in EURUSD yesterday, but EURJPY looks better today and Gold & Silver have bounced off good daily SR levels too.
UK MPC rate statement later this morning will be a market mover for Sterling, I like GBPJPY here as the 1hr TL support has broken.  EUR min bid rate too.

Update:  It seems quite a sell off is underway.  Perhaps the market knows the NFP number is ugly and is selling the rumour and buying the news.

New trades:
NZDJPY closed 50% @3xR 60.70 (+1.5R)
NZDUSD closed 50% @3xR 68.70 (+1.5R)
AUDCAD closed 50% @3xR 92.05 (+1.5R) - finally
GBPJPY short 132.85 stop 1.3315 target 1.32
CABLE short 1.5025 stop 1.5050 TL break, anticipating break of 1.50 (or I will cut it)
CABLE stopped out (-1R)
GBPJPY stopped out (-1R) - I was too quick this morning :(
EURGBP short 90.70 stop 90.85 target 90.25
NZDUSD short 0.6900 stop 0.6920 target 0.6840 addition
EURUSD short 1.3630 stop 1.3660 4hr IB, target lows -will post chart
USDJPY balance stopped out (-0.5R)
AUDCAD short 92.80 stop 93.05 target 90 - see chart below
CABLE short 1.5048 stop 1.5088, see chart target lows.
CRUDE short closed 50% @3R 79.62 (+1.5R)
EURGBP closed 50% @3xR 90.25 (+1.5R)

Open trades:
AUDCAD short 0.9365 stop 0.9385 - 1/2 &  92.80 stop 93.05
NZDJPY short 61.60 stop 61.90 - 1/2
NZDUSD short 69.45 stop 69.70 - 1/2
CRUDE short 80.82 stop 81.22 - 1/2
CABLE short 1.5048 stop 1.5088
EURUSD short 1.3630 stop 1.3660
EURGBP short 90.70 stop 90.85 - 1/2


EURGBP 1hr ...
one way or another ...

EURUSD 4hr chart
EURUSD is a range trade to me, and it failed to hold above the top of the range.  I took the 4hr IB, but on the 1hr its a lower high and a bearish engulfing bar, so both are valid entries for me.  They both show rejection of the level.

AUDCAD daily chart

I added to this trade on a 1hr IB anticipating a breakout of this triangle.  If it fails to break I will close both trades.

CABLE 4hr
Break of pin bar and trendline.  Trying again on this one.

Wednesday 03 March 2010

Indices look a little toppy today (or the Russell2000 and Dow do) and commodity currencies are weaker than the continentals (NZD weakest).  I tried a cheeky short in EUR which failed and reminds me not to trade against the daily.  Its going to be one of those funny weeks leading into NFP and time to trade carefully.

New trades:
EURUSD short 1.3625 stop 1.3655 target 1.3550 - range trade
EURJPY short 120.98 stop 121.28 target 120
NZDJPY short 61.60 stop 61.90 target 60.50
EURUSD stopped out (-1R)
EURJPY closed BE - not doing what I expected.
EURAUD closed 1.5090 (-0.5R) - not doing what I expected
NZDUSD short 69.45 stop 69.70 target 68
CRUDE short 80.82 stop 81.22 target 79.90

Open trades:
AUDCAD short 0.9365 stop 0.9385
USDJPY short 88.80 stop 89.15
NZDJPY short 61.60 stop 61.90
NZDUSD short 69.45 stop 69.70
CRUDE short 80.82 stop 81.22

One to watch:
EURNZD triple bottom and trendline break

Tuesday 02 March

The major USD crosses aren't clear to me.  Commodity currencies are bullish, sterling can't get above 1.50 and EURUSD looks like some sideways or range trading 1.34-1.38 coming up. I like the XXXJPY's to sell on rallies and commodity currencies over the continentals, and CAD over AUD over NZD.

Update PM: I closed the rest of my sterling shorts tonight. The talk (see FT) about how the Prudential/AIG deal might be off because Pru share price fell so hard (20%) and if tso they will have to unwind their hedges and big market short positions makes me think sterling could recover some or all of its big Monday drop.  I am going to protect some profit and wait for another opportunity to sell.

New trades:
AUDCAD short 0.9365 stop 0.9385, see chart, target 92.50
EURJPY short 1.2045 stop 1.2095 target break of 1.1965
CRUDE short 78.50 stop 79.00 addition, daily TL break, target 75
CRUDE short addition stopped out (-1R)
CRUDE short (yesterday) balance stopped out 79.60 (-0.5R)
EURJPY stopped out (-1R)
USDJPY short 88.80 stop 89.15, break of daily IB, target 88.05 but needs to break 88.54
GBPCHF balance closed 1.6120 (+1.4R)
GBPAUD addition closed 1.6595 (+0.8R)
GBPAUD short closed (+5.48R)

Open trades:
EURAUD short 1.5065 stop 1.5115
AUDCAD short 0.9365 stop 0.9385
USDJPY short 88.80 stop 89.15

AUDCAD - I am sorry I didnt take this sooner.  I sold break of daily bearish outside bar of a trendline .  Target bottom of the triangle.

CRUDE ... break of 78 says we go to 75  and the weekly hanging man is playing out ...




UH - OH
Looks like the White House already has Friday's NFP numbers and is trying to put a spin on it: http://www.reuters.com/article/idUSN0111549320100301

Monday 01 March

Happy Birthday Mr Big ...

I didn't write a long analysis this weekend although I stared at the charts for a very long time.
Weekly hanging man candles on gold, crude, indices AUDUSD etc suggest a sell off coming but its hard to see that in some markets like EURUSD. We could instead be in for another week of sideways indecision leading into NFP on Friday.
Best trending markets seem to be GBPAUD, EURAUD and GBPCHF&EURGBP now they have broken out.

New trades:
USDCAD short 1.05 stop 1.20 break of SR, target 1.0440
GBPCHF short 1.6260 stop 1.6310 target 1.6110
CABLE short 1.5160 stop 1.5210 target 1.50 then lower
GBPAUD short 1.6815 stop 1.6865 - addition
CABLE closed 50% @3R 1.5010 (+1.5R)
GBPCHF closed 50% @3R 1.6110 target (+1.5R)
GBPAUD addition closed @3R 1.6765 (+3R)
CRUDE short 79.90 stop 80.40 target 78.50
USDCAD stopped out (-1R)
CRUDE short stopped out (-1R)
CRUDE short 80.20 stop 80.50 target 78
EURUSD long  balance stopped out (-0.5R)
GOLD short 1115 stop 1120 target 1100
CABLE balance closed 1.4850 - target, 61.8fib and weekly TL (+3.1R)
GBPAUD 1.6635 stop 1.6685 DIBS addition
GOLD short stopped out (-1R)
CRUDE closed 50% @3R 78.50 (+1.5R)
EURAUD short 1.5065 stop 1.5115 target 1.49 break of yearly lows

I closed cable at target, 61.8fib and weekly trendline support.  Im not tempted to buy here but will wait to sell later anticipating a break of the support.

Open trades:
GBPAUD short 1.71430 - 1/2 & 1.6635 stop 1.6685
GBPCHF short 1.6260 stop 1.6310 - 1/2
CRUDE short 80.20 stop 80.50 - 1/2
EURAUD short 1.5065 stop 1.5115