Breaking long term support happens all the time...

....Question is, will we be ready? Just because we know things are going to get better, we also know things could get worse before they do. Good traders play both sides in both bull and bear markets. Do I think that the EURO spot goes lower then now? Probably not...but if it does, we would break a 4 year support line. I think much of the bad fundamental news is priced into the EURO.

But remember...it doesn't really matter to the technician. Yes, you have to keep up with the fundamentals, but Jean-Claude Trichet talking doesn't give you entry and exit points!



Here's a sobering headline, but read the little piece afterwards:

Mounting Strains In Global Financial Markets Threaten To Topple Government's Efforts To Revive Sentiment

And, despite the global effort to stabilize markets and revive growth, it is only a matter time before feeble optimism gives way to fear once again. Indications of building strains are visible in economics, market operations and certainly price. Looking at the market’s more traditional asset classes, the sense of risk aversion is unmistakable.

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What I am saying is, did anybody expect the equity markets to be where they are today? Just be ready for a trade. If this thing breaks and shows some confirmation, you can afford to take a longer term short position, because it would be a serious price level that has held for years but is no longer an appetizing price to traders.

Reasons Why The Euro Would Hold

1. The Dollar is extremely overbought and the equities are extremely oversold. (See chart below.)


2. Market Club has issued a daily up Trade Triangle for the EUR/USD.


3. We have up Triangles on both the weekly and daily in the EUR/Yen. The Japanese government needs their currency to be weak because of the type of economy they are.


4. The Euro seems stronger or even with most of the other currencies. In my mind, for the spot to go down, the other currencies would have to have less problems then Europe.

If you look at the Trade Triangle of the DX, you will notice that, in the past few months, the dailys have all been issued within a very tight range. Could their algorithims see what the chart shows above? Dollar may be continuing up, but it sure looks like it'll come down a little first.

Reason Why The Euro Might Not Hold (Technical):

Fibonnacci retraced 50% of its big move and has come all the way back down:

Why, I've always loved history...

You know how you watch a movie for the second time, and maybe even the third, and you still get all tensed up at the big moments, even though you know what happens? That's what this recession reminds me of. I mean, do you honestly think that the DOW and the S+P are going to zero?

Yes, the DOW now has a couple of penny stocks in it...yes, nobody wants to work for the increasingly socialistic Obama's Treasury department, yes, GM is about to declare bankruptcy, yes, we don't know whom to trust (whether in government or on Wall Street,) yes, this is different because we are much more connected with the overall world and their economies, yes, we still don't know what lies ahead for the commercial real estate market.

All hope is lost!

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Of course it isn't. We already know what happens...history has proved that, just like in 1983, 1974, and even 1934...we will be fine, and these markets are not going to stay here. It may be a while before the DOW is at 14,000 again, but how can you not like these valuations? I love trading equities as well as Forex...think what a $2500 investment in the top 50 companies of the S+P 500 would net you (if you sell it) in three years.

We even had recessions in the 19th century...1819, 1833, 1837, 1857, 1873, and 1893 were years of severe recessions, with a few smaller ones thrown in for good measure.

Once we are out of this, can you imagine how it will make Forex trading a lot more predictable?

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Here are my updated profits (and losses) through the end of today.

Nice When All the Indicators Line Up

Dollar seems to be temporarily overbought.
A Down Trade Triangle was issued for the Dollar today (3/5)
An Up Trade Triangle was issued for the Franc today (3/5)
The Dollar/Swissy has now broken below 3 MA's (10 has just broken below the 21, 55, and 100.)
And... A Down Trade Triangle was issued for the Dollar/Swissy today. (3/5)

Should I be a Contrarian and go long the pair...I think not!

A Great Intermediate Trade

I can be better. I have taken $100,000 and turned it into 151K since Jan 2. But, I can be better. I make too many trades that go against me at the outset (after the spread.) The following is a chart of the Ozzie/Yen...and I want to go long. But the pair is trading between two main S/R lines...yet I still want in! What to do?



Both the daily and weekly trade triangles are bullish...This pair is due to rise, given the MA's and how it's trading above a killer support line dating back to Feb 2.

62.21 and 63.60 are the two prices that this pair is trading between (62.90). I am going to try and get more patient but...stay tuned.

(Oh...one more thing. Great part about a trendline like this is, if I am wrong, and the pair breaks down below it, assuming confirmation, it would make a great short, because it's taken such a long time to establish.)

Gold is gold today!

Bought Gold for the second time today...made $250 by selling half of it. I still hold the other half in case this turns out to be one of those patented moves we've seen recently. Here is the update of my Jan 1st to March 5th account.

How Fibonnacci Numbers Can Make You Money (Video)

New video of a successful short term trade...open to close. (2 minutes)

75 Billion Pounds!

Interesting comment on CNBC (inserted between all the shills) on what the BOE said this morning. I was unaware of the details of their quantatative easing...I just knew they were going to start. They announced that they will be buying 75 Billion Pounds of government bonds as part of this policy which is supposidly way more then analysts were expecting AND...

...They were going to be purchasing them all the way out to the 30 year...not just the front end. To me, that means it will be a much longer easing policy then investors were expecting. This can only help the Pound shorts (me)...at least until more official news comes out.

Gold Again

I did a new video on my newest Gold trade (which I just sold at a profit in an hour.) When you are done click on the link below, you will see why I do well over and over again.

Time to short the US/Yen?

Interesting comment on CNBC if you think you may be ready to dip your toe into shorting the Greenback against the Yen. The S+P is down around 14 points right now and the AD line is 1/9 winners to losers BUT the down to up volume is only 1 to 4. This could be consistent with a market that may get better by 4:00.

Another example of using trend to help you...

In an earlier post, I suggested that the Dollar would have to retrace against the Yen a little. BUT, judging by the weakness in the S+P, and these strange socialist things our president is doing, that may have to wait.

However, there are institutions out there that still want to keep making profits...and they have the ability to move markets just by the sheer weight of some of the trades they can make. A few minutes ago I saw some very strange selling action that seemed to go against the grain of what actually was happening in the pair...AND I TOOK ADVANTAGE:




Given that I was expecting a downturn days ago, I would have considered keeping this short...but the trend is still up and the S+P Futures are very down! I covered it at 98.47 for a quick $340 profit.

Learning to make a POTENTIAL big loss much, much SMALLER

I am a technician by nature, but I also know that keeping track of the fundamental stuff will help you mitigate losses...Preserving your trading capital should be your chief concern...not "how much can I make on this trade?"

This morning the BOE lowered interest rates by 50bp, which was expected. Before the announcement, I held 2 Lots (short) on the GBP/CHF and I was down significantly. On the news the pair dropped and my positions got significantly better...so I covered half my position at a small loss.

The trade triangles on both the weekly and daily are still pointing south so I kept some of my position in case we continue down, but it was not worth the risk to hold the whole thing, given that it has been losing since I shorted it....

Here is a good summation for why I maintained some of my short, even though it is still down.

Doji again doing its job

In the video from a few days ago, I never made the trade, but I felt that the Yen was going to retrace. Below and to the left is another example of a Doji star that appeared at the (short term?) high recently. Candlesticks are great technical indicators:

The Psychology of a Losing Trade (but still alive!)

Here's a video of a losing trade that I currently have.

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(Below 1 minute chart looks more bearish then the 15 and hourly, for some reason.)

Another Doji...This time a star!

A Doji on the Sterling/Swiss Franc Weekly...and one of the reasons I am waiting for a breakdown of support. Shorting 1 Lot which is temporarily down.

The Power of a Long-Legged Doji

Sometimes I will place a trade strictly on technical price action, but then lower the size of the trade. This is usually a trade where I expect a pair to strengthen in an overall weak trend. Below is what gave me the trade to buy 1 mini-lot ($10,000) of the Ozzie/US Dollar:

(Experienced traders...this is for the newbies!) Do you see the long skinny bar with a line right through the middle? That is a Long-Legged Doji Candlestick on an hourly chart. It is considered bullish, but obviously would be a much better indicator if it were on a daily or weekly chart. That is why I did a 'scalp' trade...in and out quickly. It was a small profit for $15.00...but it was in 5 minutes.

Unbelievable Results

A lot of you know how incredible I have been doing since starting to use trade triangles with my existing techniques. Well, I have also been trading another account occasionally. In this one I have taken $50,000 to over $57,000 since January 1.

I just updated the statement for the main account.

How a Weekly Trade Triangle Saved Me $10,000

A week and a half ago, I posted a non-blog entry where I thought that after hitting $1000 an ounce, Gold would have to retrace.

The video that Adam did on Barrick Gold convinced me that the Gold spot was going to make that break out. It was very significant, technically. Then, on February 23, Market C issued a weekly red down triangle on Barrick Gold (see below.)



Because of this, I maintained my shorts on Gold from the $970 level (we are trading at $909 today) and sold my long positions. Most of them were profitable. Had I not seen this triangle, I may have been a little slower to decide the ultimate (intermediate) direction of Gold, and those longs would have ultimately closed at a loss.

If you want to know how I do this, click the Market Club.

Here We Go Again!

In an earlier post, I did some analysis on the Sterling/Swiss Franc. I also did a couple of shorts and, combined, I think I finished even. I was very skittish, because I wasn't sure if the Sterling was ready to come down. Now I think it will. Below is the daily (the weekly is down too):



The Bank of England is meeting on Thursday morning...and it's anybody's guess what they will cut interest rates by OR what they will say about the next time they meet. So, it will behoove us to look for a support breakdown...stay tuned for my numbers.

Out until we can analyze the Euro and British monetary policy

I am out of all Euro and Sterling positions (with a sterling profit!) See statement. New research and video coming soon.

Why you have to respect the 'Bear Flag' pattern!

New video that I did last night on my trade of the Sterling/Yen. Trend is down even though I covered with a $1000 profit.

Took some profits...now what?

Took some profits...but left half the positions on the table.
See how the trades went here, along with an account update as of this blog entry.

This video will give you an idea of how I execute my trading plans.

Newsflash: 88 level on the Greenback becomes a crucial area!

The equity markets are at serious 12 year lows. Are we going lower...most probably. So now investors will fly to risk aversion investments. Bonds...Gold...and I think the US Dollar. 88, my friends, 88.

We have a dilemma...the US/YEN pair is due for a technical correction (retracement) but the equity markets are looking pretty evil (as my son would say.) So see the case for both sides on this short video.