Hi Journal.
Got some time.
I got to go over all what happened this past week. Changes are occurring. I’m talking trend changes. Not just for the USD either.
But let me start from the top. I’ll go through 'em all.
The USD.
Nothing is more clearer, simpler, and even accurate than this chart. The USD has broken out of the down trend that began back at the first of April. We’ll just have to see how this uptrend will turn out. It can be anything from a longer term, drawn out, higher and higher highs to something as a quick and short lived, false break out that eventually continues that down trend. We just don’t know yet. Will it take out that previous high established on April 1st? We don’t know. But we do know one thing. The last 3 days of the week was nothing but USD buying. That kind of tells me that the bias has changed. Therefore making the USD trending high now.
The EUR.
The bias is up. The uptrend is still intact. Nothing is indicating that the EUR will change it’s trend. Therefore, there should be more buying than selling for them.
The GBP.
Same thing here. It’s uptrend is still intact. Slowly but surely grinding upwards. The bulls have their way more than the bears. That’s all.
The CHF.
Now, technically, it’s tricky. We definitely need more time, say another weeks worth, to get more of a feel of where this wants to go. Surely it can turn and burn back on up. No doubt. But given their movement dynamics, that I showed you on that last post, plus the fundamental characteristics that the SNB wants, I’m gonna call this prematurely a trend change for down. Look. I could be wrong. And if that’s the case, then it’ll only be for one week. That’s all. Remember, we play the market one week at a time.
The JPY.
Well, same thing here. What can I say? It’s premature to be calling a trend change. We really need another week for a much better determination. Cause that’ll tell me if the money has really switched, or not. Did the bears give up? Do the bulls want more? Like enough more for a longer lasting trend change? See. I don’t have enough information to be answering those questions. But…concerning my trading…I have to decide on something. Right? For one week, I must use my discretion one way or the other. And for me, I’m going north. Cause I believe the JPY will follow the USD on up. That’s such a typical market moving dynamic. Believe me, the market has been through such a divergence this entire year between those two. The USD and the JPY are supposed to trade in lock and step. They move together. See. What happened on Thursday and Friday was completely normal. Trust me, I know. I have all the past historical data to confirm that. At least the market remembers what’s normal. Cause I surely do also.
Moving on.
The AUD.
Now. I need to show this progression. This week was a tough one for me. Let me explain how I went with them.
This was what I was looking at last weekend.
What am I supposed to think. It’s sitting exactly right on top of the dividing line. This was a down trend. And I believe that if it goes above that gridline there (-500) then I think it should be considered an up trend. But below it, back to the down trend. Makes sense, right? Well, I needed one more day. I need Monday’s EOD to tell me. That’s what I’m waiting for. And this is the result.
So, what do we have? A bounce up.
Geeez.
Now what?
Well, I stick with my thinking. I go long the AUD. And remember, it won’t change, nothing will, for the rest of the week. That’s precisely how I run my back testing. There’s rules I must abide by. So…what can I do? I have to count them as long for this week.
Let me just get to the final outcome, for the week. This is what happened.
Well, that didn’t feel good. Know what I mean? But, what can I do…nothing. Nothing at all. It’s ok. It’s not the only thing I have going on.
Needless to say…this AUD trend is back to the trending low state. If it wanted to, or even could, change to an up trend, this was it’s chance. But no. And look. It only makes sense. When the USD goes up, the AUD goes down. I showed you that last weekend. It’s called a convergence trade. It’s the normal market moving dynamics. That’s all.
The NZD.
Well, thankfully, I never had this problem with these guys. There is nothing remotely close to giving me any kind of doubt about the direction here. I’ve been trending low these guys. For quite a long time also. And up to date, it’s been a nice ride. Nothing but down. And it continues. But look up there at the -1500 gridline line. That was the latest support line. It got tested a total of 3 times. Then, on the 4th time, drops out lower. If it wanted a trend change for higher, then that’s the place it could have done it at. But nope. It dropped like it’s hot. No brainer here.
The CAD.
Now this is a surprise to me. I have to change their trend from high to low. Surely I thought they would have followed the USD. Higher. But nope. It’s all downhill. What can I say? Frankly, I don’t understand. I mean, fundamentally speaking, what about Mr. Oil? Don’t they like to follow that market? And the last time I checked, it was heading higher. Like, it’s around the $72 a barrel mark. Which is relatively high. Not low. I honestly don’t know what is driving the CAD lower. In any case, that’s where it’s heading. And I’m forced to call it trending low now. shrug
So, moving forward, this is what I got.
You can see everything in here.
The top table shows what the market produced. And if you compare that to what the existing currency trends are, the results are shown, just under that table. Look at what this week resulted in. On Monday the market trended. Only 2.06%. But technically aggregately trended. Tuesday the market trended. Only .92%. Barely. On Wed the market counter trended. 2.18% counter trended. On Thurs it counter trended alright. 11.73% as much. So then, just look at that day. Who’s the top currency? The JPY. Right? Well, I have them technically trending low. So that’ll make their 7.74% EOD result a minus (bad news). The USD is trending high, so that 4.54% is positive, which will bring the aggregate total down to -3.20%. Then the GBP is trending high, which adds their .59% onto the total (-2.61%). The EUR is trending high, but they ended that day being -2.53%. Well, that brings the total to -5.14%. The CHF is trending high, but their result was -4.55%. Not good. That’ll bring the total lower to -9.69%. Right? And so on. Ending with -11.73%. Pretty bad. Basically it was not going along with what the prevailing trend was. And actually, the entire week turns out to be -14.33%. Not good for a trend trader. But the first 2 weeks of the month turned out much better, as you can see.
Anyway. You should be able to see what trades I’m gonna go in with at the start of the week. 3 currencies going up, and 5 currencies going down. 15 pairs.
Alright Journal.
I gotta get going.
Thanks for listening.
Mike