Today’s a palindrome folks. (If you trade in the U.S.)
It’s binary as well, what a day for number geeks!
Here’s the scoop:
(pic too big, check the blog!)
As you can see above, the Dollar felt a little dirty, so it took a bath once the market opened in Sydney. Pre-retail market open, there was ‘real’ money seen buying Aussie, which saw most of the anti-dollar pairs gap on the open, a rare occasion in The Land of FX.
The picture below shows the current strategy. The entry taken post-NFP is doing quite nicely, pushing into the .9320 high as we speak. Stop is being trailed along the 34EMA (low) on the H6 chart. Top-line target is parity.
I am long again, at .9298. Too bad I missed the big move I was following the action very very casually earlier this week and early yesterday evening was thinking of going long around .9240.
I stepped aside short term to let things unfold with the thinking of going long again if the downward trend line held. And the “true” break of the line seems to have occurred perfectly. At approximately .9170…the region I specified before where an ideal break should occur for a measured move near the old high of .9849. .9170 + .672= .9842.
My old short was stopped at .9300
No stop at this point I’ll just let it ride and monitor today and tomorrow, doubt there’s any significant reversal before Friday and before .9400ish.
Data today brought a lot of see-saw action to the markets. Watching the other Majors had me feeling like a dog watching a tennis match. The Aussie showed much strength today, with rumors of the RBA sitting atop .9330 to “smooth” price action, not slam it. This is exactly the effect it had. Aussie basically sat with a steady hand as the rest of the market showed it’s jitters.
Now entering the Asian session we’re seeing a little Dollar firming. No data on the docket should keep the session ‘behaving.’
No clue Dre. I’ve been noticing that on the ‘iffy’ days (risk aversion) it seems as though traders may be favoring the yen over the dollar for a safe-haven.
I also think the break in the USequities/USD inverse correlation has people a little confused as to where to park cash when uncertain.
It seemed as though it would only be a matter of time before .92 was tested so I erred on the side of caution & closed. Might as well end the week in the black.
I have an entry order @ .9272 just in case the pair finds it’s legs again.
Too bad for us there was a breakdown! Discouraging price action (for me anyways) so far this week. It’s too bad, I saw potential for a completed 5-wave move but didn’t give it the respect it deserved. I chose to believe the break of the downward trend line would drive the action, foolish mistake.
LOL @ dog watching a tennis match, good one. I can see it now. Smart move closing the trade and giving yourself an opportunity to get in should the price resume bullish.
Same tricks for me. Had a pretty good short, went wrong on me, went long, went wrong on me quite soon after…now I am thinking short again. I again see potential for a triangle formation with the current bearish move reaching .8960 to .8940. Wouldn’t be surprised to see some notable short-term resistance at .9010.
Do you see what I see zeke?
Sorry, meant to get back sooner, will have more later.
I’m sidelined til things clear up a bit. I think there are too many possibilities at the moment. Long term-trend continuation? Range bound? Trend change?
One could probably ask themselves those things at almost ANY point. Those questions sound like potential 4th wave “psychology” to me.
Well the careless long I took at .9298 was closed at a loss of 116 pips. And yes while a long executed at .9298 could have been (and technically still could be successful) in this case, I consider the trade careless.
I did, however go short at .9182 and a potential H and S (or triple top?), neckline .9170ish, nicely brings the price to notable resistance @ .9010ish. And I currently still see some nice targets in the 89s similar to what I previously mentioned.
I still sort of wonder about the market, it is going to do whatever regardless. I mean when I hear “traders” did this because of this piece of data…it makes me imagine all the individual traders out there having the exact same idea and thinking exactly the same, oh good data, buy , buy , buy! Is that realistic? Or does traders mean, the very few big traders who can trade in amounts that could possibly truly move the markets?
Interesting point about the break, I have generally held the (correct I think) idea that the USD moves in the opposite direction of the US stock markets.
Just closed my short for 43 pips profit. Saw very strong potential for “cup and handle” pattern taking price to .9200ish (also .618 of move down from .9278 and .50 of move down from .9328).
Long at .9142…Set 'take profit" at .9188, and “sell order” at .9190 (still expecting more downward movement) and stop very tight at .9120 (“rim”? Lol. of cup should already be broken at .9137ish.) If C and H fails there is no point in sticking around.
Monitoring closely for potential failure… 38.2 of move from .9278 is lies at .9150ish.
Added trend line connecting “bottoms” at .9070 and .9100. If that is cleanly broken (in the very very near term) I will probably think the downward move has resumed and the potential corrective action has ended.
I am going short on AUD as my elliot wave sources say we are in for a 3rd of a 3rd of a 3rd wave. I went short at .901 on Friday hoping for a drop to .893
By the way I am an Australian and be wary of the RBA - they are waaaaay out of touch with reality. By what I am seeing on the ground a lot of businesses are in for hard times - can anyone say double-dip?
I don’t think you need my permission to post here.
That’s an interesting point of view. So you think .8733 to .9329 is a wave 2?
Your elliot wave sources? If your source is elliott wave international, I am not going to put much stock into their interpretation. While I believe in elliott wave I don’t trust their interpretation (at least as far as forex is concerned, I think they are much stronger in other areas). EWI brags when they are right but they don’t acknowledge how wrong they are most of the time. I actually subscribed to their service once for a month like 3 or 4 years ago, and they didn’t get a SINGLE read right. And of course I didn’t bother re-subscribing.
3rd of a 3rd of a 3rd suggests a pretty powerful move to me, so why are you only targeting .8930? The first wave of the first wave 3 you mentioned was like 300 pips. So a wave 3 would be significantly longer.
I don’t think I know enough about specific fundamentals to offer much, but assuming YOU are right about your assessment do you think that assessment is widespread enough in the land and amongst traders RIGHT NOW to cause a powerful move downwards. In other words do you think that view has reached a “tipping point” or do you think there is enough room/optimism/euphoria for one last hurrah up to the old high before a powerful move downwards and reality sets in?
The farthest I am willing to think right now is .8860ish, the 78.6 retracement of .8733 to .9329. If my thinking of a 4th wave triangle (or even pennant could be used) is correct I think there room to hit that area to kind of “even out” the pennant (based on a weekly view of the rate).
Welcome, welcome to the party, nice to meet you too!!
To be honest I don’t associate the waves with numbers I leave my newsletter do that for me. Half the time I don’t even notice the numbers – I just focus on the charts and indicators I have and go with what they are telling me. I don’t really care about pip count either since I don’t see the point in counting, I run on profits and when I see a profit and am happy with it – I take it. I am not out to prove a point I am out to make money.
My Elliot wave source is a private investor in my state who writes a newsletter that I have been subscribing to for the past 3 years. He isn’t always right but he sure does have a good track record. 3rd of a 3rd of a 3rd is considered dramatic yes. I am only targeting .8930 because I am a scalper. If the wave looks strong I will extend my take profit further down. I have always been a supported of multiples of small profits compounded instead of 1 or 2 big profits but that’s just my personality – I understand a lot of people don’t agree with that.
Are the fundamentals powerful enough right now? Not sure to be honest, if it isn’t right – right now I can be flexible and patient and wait for it. No biggie… There is a chance for one last hurrah I think most days but then I have a day like today where I go and see my clients and two of them want out of their business because they have no cash-flow and are exhausted beyond belief. They are also running on negative equity. On of my strongest clients debtors are blowing out massively like no-one has cash to spend and my morning client couldn’t make his trade-finance payments scheduled for Wednesday. Also, the Australian Tax Office may as well hang up a bank plaque since many small businesses are using them as a finance facility. Our prudential authorities are fairly solid here so we haven’t experienced the liquidity problems the US have with regards to credit. But let me tell you our so called ‘healthy economy’ has been built on debt this past year and I wonder how far from saturation point we are as a nation.
On another note – do you find Bollinger Bands useful in your strategy? I started working with them about a month ago and they have made a significant difference esp. with bouncing. Got me through a frustrating point in my trading!
I personally don’t use bollinger bands. I have tried using a variety of studies but I found I ended up wasting my time trying to figure them out and how they best applied. In my experiences no indicator is a perfect black and white, there are always intricacies to each that need to be understood. My focus is on what I consider to be the fundamentals of technical analysis, chart patterns and fibo, and the odd trend line. Once I have those mastered then I will focus more on applying other indicators.
Too many things at once I found drove me nuts, lol. So I try to minimize the “noise”. But hey obviously Bollingers helped you so that is great, great for you, whatever works best for you! What do your bollinger bands currently suggest?
Right now I am waiting for, (hoping the) triangle I have delineated breaks downward for a target around .8860. The triangle is about 161 pips high, so a break of the bottom line will bring the price pretty close to .8860.
If it is a 3rd of 3rd of 3rd, the price would move below .8860 in quite a hurry and quite easily I think, so we’ll find out soon enough what we’re dealing with.
Alright, your current tar, or the target you previously indicated makes more sense to me now. Otherwise, in this case someone suggesting to me that a 3rd of a 3rd of 3rd is approaching and only targeting .8930 makes me wonder how much faith they have in their analysis, which I now know is from an outside source.
Alright stopped out, the price is very close to short-term trend line. I f I’m still awake and there is a convincing break, I may go short again.