The Bullish Butterfly!

From what I just read, the following is a Bullish Butterfly of the Euro/Ozzie...I have always been a support/resistance trader, but since I started this Forex account in December, I am learning about patterns (setups) just like the way Candlesticks work...which I have been using for over 25 years.

I recreated the chart that I found of the pair so that I could understand it better, as I like the concept behind this analysts strategy (I love Fibonacci.) So I will make the trade if I can get confirmation from any other indicator:



Here is what he says:

141.4% Fibonacci extension of XA.

161.8% Fibonacci extension of BC.

AB=CD.

Double bottom on 8hr Chart.

If RSI falls below 30.

We will look to buy the EUR/AUD at 1.9087 with our stop placed at 1.9013. Our initial profit targets are 1.9207 (38.2% of CD) and 1.9297 (61.8% of CD). Trade will be cancelled if there is a gap down to open the market on Sunday night.

The following trade triangle chart is still showing a down arrow. But, judging by the support line dating back to the first part of January, we could get an up triangle issued, which would make the above technical analyst correct. (It must be noted that the Euro spot does not look good at all. If the RSI breaks below 50 (on the Euro spot,) I won't go long any Euro any pair anyway.)

If the Dollar does go down again...

...it will have to travel with the equities. Maybe they can get separate rooms...

All kidding aside, the Greenback may get some profit takers come in, but I think the markets are coming down. On March 16 I wrote that there was no way the markets were not going to test the new lows they made, when the world was coming to an end a few weeks ago. Actually, that would be a good study if someone has any info on that...has there ever been a bear market where a new low was not tested?

I drew this chart with my trade triangle program and I would be surprised if a new down triangle is not issued soon. I am a big believer in Fibonacci numbers. This particular retracement just got to 23%...and we are showing some signs of, if not exhaustion, then consolidation. (Clicking on the charts give you clearer views):

We have to remember that this is still a bear market...if you have any doubts, here is a starkly different look:

Will the Dollar take a breather before it continues up?

..and it will continue (he says humbly.) Actually, the intermediate charts show it quite clearly. I wrote this post last Tuesday. The Euro spot just looks weak and the Greenback spot doesn't. Logic suggests that when you pair the two together you will have a down Euro/Greenback...that was the reason for the good week we had, albeit late.

The great part about the trade triangles is that they provide me a weekly and daily trend...extremely important. However, there is always going to be trading against the trend. Which is why you might check out what Todd Gordon of Forex.com wrote and charted below. Todd is one of the few technicians I listen to, because if I am going to be wrong, I want me to be the problem:

The 240 min EURUSD chart paints the same picture. The move lower from 1.3737 in favor of the dollar does not look impulsive either. It looks more like a 4th wave correction that could find support at the 38.2% retracement level of 1.3247. If 1.3250 holds the market, I believe we have a final push higher in EURUSD into 1.3900 before the real dollar buying begins in wave III. Should this play out, we have higher equities, higher EURUSD, and a higher USDJPY for the next few weeks before the next round of disaster economic data emerges, sending us back toward the equity lows.

Now, I drew my own chart, and I don't think we have hit 38% retracement yet. I am also not convinced that Todd is right here (yet) because I feel that we have big news coming soon and that will drive this pair down sooner then later...guess we will see:

HOWEVER...1.3250 is a Fibonnacci level...which means that other traders will also be using that level to make trading decisions. So whether Todd is right or wrong, you should always have other indicators to confirm or reject. I have very expensive software that determines, short term (15 minutes to 8 hours,) what the big money is doing and I will make trades accordingly at this price.

Equities notes first

Some small equities notes first--

• If you use equities' action as one of your Forex indicators, volume was over 500 million less shares traded in yesterday's down DOW than the day before.
  
  
• The VIX is trading just above major support (40.) Why is this important? The higher it is, the less liquidity in the markets. The less liquidity, the less buying and the more fear. We break 40...we are in store for a much bigger rise...problem is, I doubt it will right now.
  
  
  
  
• Volume, in general, is very high this month...more then it has been for a while.
  

Another up week for the account

Before we get to my first interesting pair for us to trade next week, Here and here are the final statements that put the combined accounts up for the week (with ONLY ONE DOWN WEEK since I opened them in December/January.)

--------------

"First rule of business is never get emotional about stock (Forex), clouds the judgment."
Gordon Gekko in Wall St.

I could get emotional about sticking with my guns when the Dollar was being pounded at the beginning of the week. The press sure did...when Geithner blabbed about China's independent currency idea being a good one (which actually was well thought out), the Dollar wouldn't be good enough to be wallpaper, according to a lot of them. (One of my favorite sayings comes from Larry Levin who always says "trade well and follow the trend, not the so-called experts.")

Anyway, the trade triangles are still very bearish for this pair, but I will be looking for confirmation of this through the weekend...so stay tuned. Other pairs that look interesting are:

• Euro/Swiss Franc
• Greenback/Yen
• Canadian Dollar pairs
  
  AND because the equity markets are really tied into Forex lately:
  
  
• The stock of the week
  

Trade and video completed

Completed the trade...see short video here. Looks like this new indicator I have will work well with the trade triangles and my other indicators. (Warning: video is silent for a minute or so while trade occurs.)

NEW VIDEO

I did a video on a trade that looks like it is going to hit, so you can watch it.

Big meeting goin' on

Much of what we do as Forex traders depends a lot on what these guys do:

"White Hse has released list of bank CEOs meeting with Pres Obama today. "At this meeting, the President will reiterate his belief that getting the economy back on track will require an understanding that each of us must look beyond our own short-term interests to the wider set of obligations we have to each other in order for America to succeed."

Here is list: Jamie Dimon, JP Morgan Chase;Ken Chenault, American Express; John Koskinen, Freddie Mac; Ronald Logue, State Street; Robert Kelly, BONY-Mellon; Rick Waddell, Northern Trust; James Rohr, PNC; Lloyd Blankfein, Goldman; John Mack, Morgan Stanley; Vikram Pandit, Citi; John Stumpf, Wells Fargo; Cam Fine, Independent Community Bankers; Edward Yingling, ABA; Richard Davis, US Bank; Ken Lewis, Bank of America."

Remember this account's new call to action is "technical first"...NEVERTHELESS, it is important to keep up with news that can affect the Greenback and it's crosses.

It's Spring...get outside

This from the trenches:

11:53 03/27 US TSYS: Market has had a small, "sneaky bid" in the long end since the Fed's coupon pass concluded earlier (coupon pass in '11-12 area). It is unclear why that is occurring but it could be stocks have been holding lower all session and there also might be shortcovering ahead of weekend. In general, however, several market sources say it has been dead, dead, dead all day and that attribute it to a rough week of supply, coupon passes, rhetoric out of DC (esp Geithner), key month end next week followed by the all important monthly jobs report. Of course, it is also a beautiful spring day in NY and maybe people want to leave early for a headstart on the weekend.

OIL!

Oil has definitely confirmed the bottom I talked about a little while ago. One of the reasons I wrote the post was because of my trusty trade triangles and Adam Hewison. In fact, and I will continue to say this for ever, they are one of the big reasons this account is doing so well.

Here is his new video on Oil...and what he sees prices doing. He's been right on so far!

58% profits since December/Jan (and holding gold)

Many of the original readers know that I have another account as well which serves as more of an intermediate trading account. It is here that I made an additional $2200.00 on my EUR/USD analysis.

This account was opened a little earlier then my big account and here is the overall account balance since December.

So, since December, when I started with $150,000...my Forex profits are $8,509.75 and 50, 256.87 (for a combined= $58,767.00)

I have also made a couple of equity trades, one which I closed for a couple of thousand Dollars.

Trendlines work for a reason

There is a reason that trendlines work...mainly...they represent what is REALLY HAPPENING. They represent prices where people are willing to buy and sell. Below is a continuation of the same chart that I posted the other day...trend lines work, and the longer the period of time, the better they work.

It doesn't matter what the news sites are saying i.e. "the dollar is dead." or "there is a good chance that the ECB may not have to do any quantitative easing"....Trade Triangles are perfect for establishing trend, and then using Trendlines, Fibonnacci, and MACD's complete the arsenal!

Big time profits...

Completely out of EUR/USD before the govenment income numbers come out this morning. Total profit was about $3700, which helped make up for those silly Sterling trades I talked about yesterday. So, here is the statement update (As I said, Gold will be held, because of the way it trades.)

Two people I have talked to this morning are still trying to get a grasp on this Euro slide last night. That is important...but I had my trusty trade triangles tell me this would happen DAYS ago!...You guys should try this for free.

Geithner's Goof

Now that I have taken some of my Euro/US off the table with a significant profit, I wanted to address what Geithner did the other day. The best person to do that is (angry) Larry Levin, who knows more about our country's problems then anybody. My explanation was rushed, so take a minute and read this:

New Currency Standard?

I haven't read this in the mainstream media, so I am writing about it tonight to bring it to your attention. No surprise there right; after all there is so much we need to know about "OCTOmom." Sickening, but true. Anyhow, the world is serious about using a currency other than the US dollar as the international reserve currency, which is a very dangerous proposition for the USA, and the mainstream media is ignoring it.

Earlier this week China's central bank said it is nervous about the massive increase in US deficit spending. Whether we believe the heightened spending is needed or not is irrelevant; the Chinese hold approximately $2 trillion of foreign exchange reserves in US dollars and that makes their opinion important. Printing new money out of thin air by the Federal Reserve will decrease the value of all dollars currently in existence, which gives China 2 trillion reasons to be upset. Moreover, if they sell their current holdings or just slow their current buying of US debt, we are in worse shape.

Zhou Xiaochuan, head of the People's Bank of China, proposed the creation a new international reserve currency in an essay published on the central bank's Web site last Monday. Zhou is expected to attend the Group of 20 meeting in London on April 2 where reform of the global financial system is on the table.

According to its English translation on the central bank's Web site Zhou said, "The desirable goal of reforming the international monetary system, therefore, is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies." He went on to say that a super-sovereign reserve currency managed by a global institution could be used to both create and control the global liquidity. Zhou suggested that the International Monetary Fund's Special Drawing Right (SDR) should be given a greater role. The SDR is an international reserve asset, created by the IMF in 1969. Its value is based on a basket of key international currencies.

"Today, the SDR has only limited use as a reserve asset, and its main function is to serve as the unit of account of the IMF and some other international organizations," says an IMF fact sheet. "The SDR is neither a currency, nor a claim on the IMF." China disagrees. Its central bank says "the SDR has the features and potential to act as a super-sovereign reserve currency."

So what does the US think about this? Certainly policy makers are against this, however, Tax-Cheatin' Timmy slipped up recently. Speaking at a conference in New York, Timmah (think South Park) was asked his thoughts about comments from Zhou Xiaochuan cited above. "I haven't read the entire proposal," said Timmah. "But the governor is a sensible man [and] anything he says deserves consideration." As for "increasing the IMF special drawing reserves, we are favorable to that." What an idiot! With that remark the US dollar plunged over 1% in just minutes, forcing Timmah to quickly reverse his statement.

A monumental move of this proportion where the entire world moves from US dollars as the world's reserve currency to something new will not happen overnight. However, the repeated call for it by major countries such as; China, Russia, oil-rich Gulf States, and several Latin American countries is disturbing. If it happens (five years from now perhaps?) the America-gets-whatever-it-wants lifestyle propagated by Congress for decades will be over.

But what if it were to happen faster? Let's skip the Armageddon scenario for now and contemplate how China could make it happen on their timetable - not ours. First, China could not DUMP all of their current holdings without massacring the balance of their holds - right? Sort of. China could dump some of its Treasuries after purchasing CDS contracts on US sovereign debt. The values of these contracts have already gone up quite a bit recently, so I wonder if China already has bought them! Once China owns these CDS contracts (credit default swaps) and it's known that China is fleeing the dollar, it can recoup losses on its remaining dollar holdings via the increase in its CDS values. It's a simple hedge that allows China or any other country to get out of the US without much harm - as long as it's not all at once. If it were all at once, it would be doubtful that the one who sold the CDS would be able to make good on the bet.

Acting on your ideas is more important then having them

One of the challenging parts of trading is keeping up with all the good ideas that you develop (in the low volume hours,) and then prioritizing them. This is something that I have been getting better and better at...but not there yet.

The other day I discovered a classical negative divergence on the Ozzie/USD that just looked really bearish...and I just didn't act on it.

As traders, we all know not to beat ourselves up when we miss opportunities, but if I'm going to preach for days that the Dollar is done falling (which I did,) and then find something that showed the strength in the Ozzie (against the Greenback) was suspect...it would have been nice if I had acted on it, rather then shorting it against the Sterling...which just issued a DOWN arrow today!

As of this entry, the Oz is down significantly to the Greeny from when I issued the last post.

Sprint is sprinting

In the last post I vowed that technical analysis was going to win over fundamental. Seven or eight bankers sitting in a stuffy, cigar smoke-filled room talking about the economic policy of their respective countries is no longer my idea of a good market entry signal.

On March 13, long before this nice rise in equities, I bought 2000 shares of Sprint Nextel, thanks to technical analysis.

I used my trusty trade triangles (which have helped my account to +49%) to help me enter the trade. On March 12, we were issued a monthly UP triangle. Soon after, a weekly UP triangle, and today...a daily UP triangle! (Clicking on the chart gives you a clearer view):

Re-learned a lesson...and an expensive one at that

Just closed out my GBP/AUD trades for a significant loss...my Forex account is now only up 49% since Jan 8...BUT watch carefully, because we will be at 55% before we know it. The lesson? Never be in a trade when something is occurring in the real world and related to that trade i.e. NON-CHART RELATED.

That is the reason for this latest loss. Even the best traders in the world say 65% winning to losing trades is EXTREMELY acceptable...in other words, you're always going to have losing trades. But this trade was just dumb...and done on a hunch...and totally against everything I've learned in 25 years of trading.

So watch carefully...starting today...everything is chart-related. I will talk fundamentally, but ONLY as a tertiary indicator.

Here is my statement...still holding Gold and the EURO/US trades, the latter being left over from yesterday's fundamental days...however, the charts show a big retracement here.

Now I understand

I couldn't understand why the Greenback flew down against the Euro...why it sunk 1% in seconds the other day...now I know...G-E-I-T-H-N-E-R.

How I missed it, I don't know. But on CNBC this morning, Boris Schlossberg talked about Geithner's interview yesterday (Council on Foreign Relations.) In one part of it,
he seemed to suggest an alternate reserve currency...not the Greenback...OUCH!

Even though he corrected himself, it was enough to drop the Dollar 1% to the Euro...but it is now stabilized slightly, though higher then where I shorted it.

Trade Update

Euro showing more strength then I think it should be. (Don't all traders say that when they are on the wrong side of a position?)

All my signals are still showing a major selloff for the EUR/USD pair...however, because of today's strength we may test 1.40 before we do come down. The charts do not lie, so I will be shorting more if we do get there. Greenback fell a little today. Also the equity markets acted a little weird today.

Look out for another swing trade like last night's.

Are we close?

Closed out my EURO/JPY trade with a $750 profit...all automatic using preset Fibonnacci numbers (while I slept.) Both the entry and exit were picked ahead of time because of how Fibonnacci numbers work in the markets...Classic swing trade that was determined by an hourly bar with a long wick (bearish.)

My account is at an all time high...see the trades here. 53% up since Jan 8.

Big positions in Euro/US and Gold still open (down,) but the Euro is looking very weak, and I'm estimating it will be another few hours. Gold can move $40 in an hour. As long as we maintain 892, all will be well. I might consider buying more.

Durable Goods

DURABLE GOODS:

08:30 03/25 US DATA: Feb durable goods orders +3.4%, their first gain in 7 mos, and were +1.7% ex defense and +3.9% ex transportation. This is far better than expectations for a drop. Boeing Corp reported 4 new orders vs 18 in Jan, one reason nondefense aircraft posted -28.9%. There were also pockets of weakness in primary metals at -0.6%, communications eqpt -5.9%, and motor vehicles -0.6%. But machinery +13.5%, electronics +1.6%, and overall computers +5.6% supported the total; defense cap goods orders were +35.3% in a rebound from -40.6% in Jan. So the bottom line is that this was a mixed report that shows signs of bottoming.Shipments were -0.5% and inventories -0.9%. NDCG shipments were -2.5% in a second drop, suggesting Q1 business investment will be lower.

A True Swing Trade

I had a sell limit order in place to sell 1 lot EUR/JPY at 133.16. The trade just hit about 20 minutes ago and I am using a 50 pip trailing stop at 133.58 and a target of 131.35.

Reward: 181 pips/Risk: 42 pips/R/R ratio 4.30 : 1

The reason for the different kind of trade is that this is a swing trade with pre-defined Fibonnacci points, so it can be allowed to run.

So has the autopsy on the Dollar been done yet?

I did a Fibonnacci on the Dollar, now that the bulls are involved again (for now.) So, this should help with any pairs that I put on:

Bollinger Bands and the present trade

I love using Bollinger Bands. They are still partly a mystery to me, but the part that I do understand about them adds a huge bullet to my trading arsenal. Putting on and taking off positions based on retracement is great...and the 'Bands' help me quite well. In the case of the present Eur/Greenback trade, they don't because this thing is in a big downtrend (I hope!) and it has hugged the bottom band all the way down:

How the Sterling should fare against the Euro

Now that it looks like the Sterling's currency has at least leveled off. This chart will give you a very good indicator of what the Euro will do to the Sterling in the next couple of months or so.

Notice that 38% retracement happens to coincide with the trend line that I drew. So, if we break through 38% towards 50%, you obviously have a significant break of a trend line that started in November.



Great trade for you to give your broker and have him watch for a few weeks.

Confirmation after the fact.

I keep talking about my trade triangle indicators...and today, I didn't even use them! (Not good, if you are going to rule-base trade effectively.)

Had I decided to take a look before I made my Sterling/Ozzie trade, I would have seen this (clicking on the chart gives you a clearer view):

Confirmation?

I just received the following email from one of the technical indicators I use (along with 5 or 6 others.) Seems that they might be agreeing with me about the Euro:

MarketClub Smart Scan Alert for EC.Y$$ Daily Trade Triangles EURO FX Cash (CME_EC.Y$$) is trading at 1.3516 -0.0111 (-0.81%) and has triggered a new LOW for a Red Daily Trade Triangle

EC.Y$$ Streaming Chart

EC.Y$$ Chart Analysis Details


AND HERE IS THE CHART THAT IT TOOK ME TOO:



You guys should try this...it's free for 30 days. I did...and then I became a paying client, thankfully.

An example of POSITIVE divergence

Here is an interesting chart of the Sterling/Ozzie. You will see there is more of a dip in this pair then the MACD suggests there should be. The 15 minute chart looks very bullish and I am looking at 2.1114 as a good price to watch to go long...even though the below chart is much longer term.

Out and waiting

Entire position was covered for a great profit. This is going lower...so I will look to get in again.

Why did I get out? Because of this item:

15:40 03/24 EURO-DOLLAR: Stops targeted and flushed as euro-dollar lurches to $1.3445 in "zero liquidity, " according to one trader. Stops flushed sub $1.3470/75. MNI Techs suggest support at $1.3420 50% retrace of post-Fed rally, Congestion area.

Trade update

I covered half of my 2 lot position and will look to short more on the rebound. Once we hit that 1.3483 area I talked about, all hell broke loose.

Below, is one of the most invaluable tools I use to trade...and it's free for 30 days.

Euro/Greenback Trade

I just shorted 2 lots of the Euro/Greenback, even though I probably could have shorted it higher. 1.3478 is a significant price to watch...I'm a little early. If you see 15 min bars closing below this price, it will be time to get in.

Here is my statement update. Holding Gold, unless we get significant breakage of support at 892. This particular account, I have grown 51% since Jan 8.

Cracks appearing hourly

Wish I could say I saw this first (because I know this pair is coming down)...but I can't! This is an hourly of the Euro/US that I recreated from another trader's blog (clicking on the charts give you clearer views):



See the diverging trendlines? Not very bullish. Don't forget the ECB is meeting tomorrow. Obviously, if they come out and say everything is rosy, that there is no unemployment, and all their member countries are doing fabulous...then the Greenback will crack...I'm sure of it.

I just don't think that will happen...and judging by the significant divergence above, a few others don't either.

EXTORTION!

CNBC does take it on the chin too much.

I myself am always joking about the shills that they line up day after day to tell us how everything will be alright...Everybody has an opinion one way or another of CNBC (and on, for that matter!)

BUT...there is way more good stuff from CNBC, then bad. And about 40 minutes ago, they broke a story that basically said that AIG bonus receivers were 'gently' threatened in an email to either give back their bonuses, or their security (privacy) could not be assured by the Attorney General.

Just great...really great. I think Stalin is supposed to be visiting Albany later.

A Good "sleep well at night" trade

Hate to keep talking about the same thing here...but it will be worth it.

• The Ozzie has broken down a little against the Dollar


• The Canadian Dollar has also come down some.


• The Yen still seems very weak to the Dollar (are we going to test 1oo again?)


• and the ECB is meeting tomorrow.


• The chart I gave the other day seems to be holding...

...which leads to the next trade. It is something I will only do in my intermediate/long term accounts only because it may take a little while to work.

There are options (calls) listed on the PHLX exchange that you can sell as protection on the downside if there is a break. Best part about options (depending on the month you choose) is you can do it over and over again.

The worst part?...There are no options that reflect the Dollar on its own i.e. without the cross. That is the tricky part. Do you go with the 'cable' or the more risky Ozzie.

Dollar looking great

With regards to what I wrote in the Karen Finerman entry, here is an interesting quote that just came in a few minutes ago:

Carl Weinberg of High Frequency Economics has doubts about the euro rising substantially further in coming sessions. "The prospectthat the ECB will eventually cut its minimum repo by 100 more basis points to 0.5" will "wipe out any interest rate premium paid on euro paper," he says. And with the Fed "of course" finished with easing, "theeuro should resume its slide against the greenback, Weinberg says.Eurozone data is expected to disappoint in coming sessions. He looks forMarch German IFO, due out Wednesday, to fall to 81.3 (vs 82.6 in Feb)"nearly a new record low." MNI's median estimate for March IFO business sentiment is 82.5.

Hmm....very interesting...

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Dollar looking good so far today.

Karen Finerman

I like Karen Finerman on Fast Money. She is sort of an old fashioned, fundamental investor and is very low key. Today, she said something very interesting that stuck with me: that the market moved up too fast, and it's behavior suggested fear (of not being in the market.) As traders, we know this is not good.

If she is right...and the market is too expensive, we may see the Dollar make the move up that I have been calling for for the past few days.

It will be interesting to see if the Eur/US starts to sell off tonight, ahead of the ECB get together this week. We must remember that Europe (like New Zealand) has not started quantitative easing yet, even though many think it will occur.

Another negative divergence

The other day I felt that the Ozzie was showing a negative divergence. So what happens...the pair went up to the 70 cent area, first time since the end of the year. The Ozzie (which is a risk currency) is still trading there.

I couldn't believe I was wrong! Then I went to take another look and I found another negative divergence.

I guess I just haven't had enough!..Anyway, the market is bound to take some profits soon, and when that happens, the Ozz will travel with it...(and the Greenback will probably go the opposite way.)

Well, wadd'ya know?

Back on March 8, I strongly felt that the Greenback was going to drop. And then a couple of days later, it it looked a little 'injured', so I wrote this post.

This last weekend I wrote that the Dollar was released from the hospital, even though I didn't exactly expect Geithner's plan to be so market-moving.

Today, the Dow was up almost 500 points...the Greenback?...it finished almost unchanged. Now take a look at this chart dating back to last July:



If this breaks, we are looking at $72. There's a lot of talk about how the Dollar is no longer being considered the 'rock', the currency that everybody wanted but is now shunned, blah, blah...

I JUST DON'T SEE IT, and will plan my trades accordingly. Name one other currency that anybody would buy long term versus the Greenback?



p.s. These are the technical numbers that came out on Ino.com around the time of the initial drop: As discussed before, a short term top is in place at 89.62 after the dollar index completed a five wave impulsive sequence (81.62, 79.63, 88.24, 85.64, 89.62) and the index is now correcting the whole rise from 77.69. We's expecting some strong support from 86.81 cluster support (23.6% retracement of 77.69 to 89.62 at 86.80) but after all, the key level is 83.58 cluster support (50% retracement of 77.69 to 89.62 at 86.65).

Dollar toughing it out

Dollar is doing pretty well considering the Dow is up 300 points. Resistance is 84.61

Look out for some great pivot point trades (which are great when you have the kind of pullbacks we have today.)

Still holding Gold.

EUR/YEN profit and ready to reshort

Looking for a pullback in Euro/Yen so I can reshort it. But I want to see what the US/Yen is doing first. Also looking for the Euro/US to pull back.

New EUR/US update

Just closed my first EUR/US short trade with a decent profit and now we need to see what the equities do. As predicted, Gold has come down to 948ish...I have no interest in selling it anywhere above 892...as that is support.

Pound/Yen is getting very toppy and could take some profits which may create new trades.

Equities

Equities Futures are up. If they close above the 50 Day with conviction, then it's going further. The problem is the Dollar. It is still very oversold and is due! Shorted the EUR/US last night.

My profits in the Sterling/Yen and the NZD/CHF are a product of the link under this.

UPDATE!

Good morning! Here is my updated statement. Great start to the week, even though gold has not retraced yet. New Geither plan is very detailed...stay tuned.

Quick Profit

• I just bought (and sold for a quick $100+ profit) 1 Lot Sterling/Yen.
• Also sold the second half of my NZD/CHF trade and made $168
• Shorted the Euro/US...which is currently down

I will try to buy the GBP/YEN again cheaper as a longer term trade here (because of the email I got in below's post.) I am looking for at least a 30 pip move because the charts are showing strength. M Club just issued an up daily triangle and the weekly was issued February 6.

Also, I have been talking about this for a while...the Japanese want to keep their currency from being so strong. To do this they will be buying foreign currencies or shorting their own. To what extent that will help this pair...it doesn't matter unless we hold it long term.

The Sterling is not, all of a sudden this powerful currency...it's just that traders are taking positions along side the Japanese government. Monopoly money would rise in those circumstances.

A new trade that I wasn't even looking for...

Here's the email I got a couple of minutes ago:

MarketClub Smart Scan Alert for GBPJPY Daily Trade Triangles British Pound/Japanese Yen (FOREX_GBPJPY) is trading at 138.89 +0.53 (+0.38%) and has triggered a new HIGH for a Green Daily Trade Triangle

GBPJPY Streaming Chart
http://www.ino.com/info/191/CD3603/&
GBPJPY Chart Analysis Details
http://www.ino.com/info/191/CD3603/&

British Pound/Japanese Yen (FOREX_GBPJPY)
Last 138.89 Net Change +0.53 (+0.38%) Score +70
Open 138.36
Day High 139.07
Day Low 138.06
Prev Close 138.36

To set or adjust your MarketClub Smart Scan Alerts, please visit:

Now...I just looked at this and it seems we may have a trade here. This is one of the indicators I use...and you can try it free for 30 days, like I did.

I'm going to check some charts and we'll see on this.

Updated Statement

I sold half of my NZD/CHF position and opened up a longer term trade for this pair in another account...I think it has a ways to go. But this account is more of a trading account.

Waiting on one trade, made another

EUR/USD has broken through resistance and is now heading towards 1.3697 which is it's R1 level. It is here I will check my other indicators before deciding if it goes higher or it's a short. The Dollar is down again and is near $83.20 support. Could that coincide with the first resistance I just talked about? Let's wait...

• Bought a 2 Lots of the NZD/CHF at different times.
• Gold is up $3 and has not retraced yet.

I found a good negative divergence

Price action is always important. But I also like to look at volume, at least with regards to confirming a trend. As traders, we should all want to be able to see 'others' start to feel the way we do (not everybody, because then we have a contrarian play.)

So check out the negative divergence in the daily Ozzie/USD chart below. The relative strength in the pair was just as much as the relative strength in the previous rise in early January (clicking on the chart gives you a clearer view):

Trade Entry Point?

Look for 1.3607 pivot point on the EURO/USD. That's not too far off. If we go through there, I will have to wait before I short.

Also...don't forget that I think the NZD/Swissy is a good long here.

Dollar ain't goin' nowhere!

In the last post I said that I would try to find charts, do some reading, and basically look for opinions that went against what I think will happen starting tonight.

Well, I just took a look at the S+P with the 10, 21, and 50 day MA's. If we relive history, the Dollar will probably benefit. It's almost too perfect: this last rise in equities coincided exactly with the drop in the Greenback. (clicking on the chart gives you a clearer view):



As I said before, the Sterling is trading higher then it was before they announced ther quant. easing plan and there's no reason to think that the same scenario could not exist for the Greenback.