SaigonFX's Daily Short-term Momentum Strength Scores

Trading Systems
41

Here are the short-term momentum strength scores as of the opening of trading on Sunday, August 12 at 21:00 GMT:

EUR – 6
CHF – 6
NZD - 4
AUD – 4
GBP – 2
USD – 1
JPY – 1
CAD – 0

Today’s results suggest that the CAD is approaching a period of extended weakness. Elliott wave structure leads me to think that the CAD has a few more days of limited gains to make before the shift occurs, however, so rather than short the CAD today, I have pairs like USDCAD, GBPCAD, and CADCHF under close watch. As mentioned late last week, if CADCHF can reach parity, I will be very interested in taking a short position in this pair.

42

I am long AUdusd at this time. I still see more extension, perhaps over extension into 1.0750. That’s where I hope to be short from. But for trend, it’s either here or near to the downside! I would broadly agree with you there.
Best of luck this week Saigonfx!!

43

Here are the short-term momentum strength scores for August 13, 2012 taken at 22:00

EUR – 6
CHF – 4
AUD – 3
USD – 3
GBP – 2
NZD – 2
CAD – 0
JPY – 0

It looks like the EUR still has some room to move in extending yesterday’s rally. It should be particularly strong against CAD and JPY. The longer-timeframe momentum and Elliott Wave analysis, however, does not allow me to enter a trade today.

I have been watching CADCHF to see if this pair would offer a shorting opportunity near parity, but so far the answer is no.

44

Here are the short-term momentum strength scores for August 15, 2012 taken at 00:15 GMT:

NZD – 6
AUD – 5
CAD – 3
JPY – 2
GBP – 2
USD – 1
EUR – 0
CHF – 0

I’m surprised that the NZD hasn’t rallied yet, but this just shows how overbought it had become a couple of weeks ago. Nonetheless, the short-term momentum figures for the last couple of days suggest that NZD will see a substantial rally – probably by the end of this week, though we may not see it until Monday’s trading next. I am personally still short NZDUSD, targeting .7700, so if the kiwi wants to continue to track lower it’s all fine with me. NZDUSD just broke key support at .8065 so it’s entirely possible we will see an acceleration of the downtrend soon.

My short trade in GBPNZD is in danger of getting stopped out due to the NZD’s recent weakness. I am now short at a net price of 1.9386 in this pair, now targeting 1.9287 based on having redrawn fibs as price has risen.

EUR and CHF should remain weak for the next few days. I see a new low in EURUSD below 1.2240 before it can head higher to 1.25. I suspect USDCHF is entering a triangle on the daily chart and the next level I’d target is .9900. When this pair finally breaks upward out of the triangle (if we get one) this autumn, it will provide an unusually good shorting opportunity.

45

Just to quantify the move I’m expecting in NZDUSD, for those following this pair, I see price reaching .8129-.8151 over the next week before resuming the downtrend.

46

Here are the short-term momentum strength scores for August 16, 2012 taken at 10:30 GMT:

JPY – 6
CHF – 5
EUR – 4
AUD – 2
USD – 1
GBP – 1
NZD – 1
CAD – 0

Today’s most polarized pair is CADJPY. Because the higher timeframes also indicate a bearish stance, I have entered a short trade in this pair today at the current price of 80.11. My stop is at 81.47 and I am prepared to add leverage at 80.57 and 81.02 if price gets that high. My limit is 78.90.

Today’s results reinforce what yesterday’s said in terms of upcoming CAD weakness. I expect CAD to be the worst performer of the 8 major currencies over the next 2 weeks. CHFCAD, which I’ve been monitoring closely, is near the .9900 level and should it approach parity, I would like to consider shorting this pair too since the CHF is looking close to a period of sustained strength.

47

Here are the short-term momentum strength scores for August 17, 2012 taken at 1:30 GMT:

EUR – 6
CHF – 4
JPY – 4
USD – 3
GBP – 3
AUD – 2
NZD – 1
CAD – 0

Today’s readings reinforce what they they have been saying for the past couple of days – that CAD is about to take a tumble. Friday’s Canadian CPI figures may well be the trigger that is needed to get the bear trend started.

The EUR stands out today as a currency that is ready to show some strength, and it’s polarized enough with CAD to justify me taking a long trade in this pair today. I purchased EURCAD at 1.2192, with a stop at 1.1985 and my limit at 1.2425. I will be adding leverage at 1.2123 and 1.2053 if price reaches those levels.

The rally in NZD is reaching maturity in my analysis. While it may continue higher for 30 pips or so (price is .8111 at this writing), I’m confident that my short position in this pair will see further gains next week.

48

Here are the short-term momentum strength scores as of the opening of trading on Sunday, August 19, 2012:

JPY – 7
AUD- 5
GBP – 4
USD – 3
NZD – 2
CAD – 0
CHF – 0
EUR – 0

The weekend results are a bit complex owing to the unusual circumstance of having three currencies with a score of zero.

I neglect the CAD score for the time being because when I look at the momentum weakness scores which I calculate alongside the strength scores every day, the CAD has a weakness score of 4 where as the EUR and CHF are both scoring 5 this weekend.

Therefore, the two most polarized pairs are:

CHFJPY (bearish bias)
EURJPY (bearish bias)

Back on August 5, I wrote in this thread: “Today’s most polarized pair, CHFJPY, is not one I’d like to take a short trade on, as I think it has begun a long-term uptrend. Should this pair pull back to the 80.00 handle, I’d consider it for a buy.” At that time, price was hovering around 81.07 and price did, indeed, pull back to 80.00. My trading system did not, however, signal a buy at that point and therefore I didn’t take a long position.

With price now at 81.63 and momentum out through the 4H chart looking bearish, I am willing to take a short position in this pair. I set my limit at 80.25, the 50% retracement point measuring from the July 25 low. In reality I think a more likely stopping point for the decline I anticipate is around 79.72, which represents the next swing low and is also the 61.8% retracement point. However, I like to set my limits conservatively, especially in a pair like this which is looking long-term bullish (especially on the daily and monthly charts).

Here are my trade specs on CHFJPY:

Shorting from 81.63
Limit: 80.25
Stop: 83.02

I will be adding leverage at 82.09 and 82.56 if price reaches those levels.

EURJPY looks very similar to CHFJPY and I also consider this pair a good short-term short. Here are my trade specs on EURJPY:

Shorting from 98.08
Limit: 96.87
Stop: 99.75

I will be adding leverage at 98.64 and 99.20 if price reaches those levels.

49

Here are the short-term momentum strength scores for August 21, 2012 taken at 10:35 GMT:

AUD – 5
CHF – 2
JPY – 2
GBP – 1
EUR – 1
USD – 1
NZD – 1
CAD – 0

Today’s results are some of the most muddled I’ve seen in the past few years, largely owing to the low volatility of the last few days. Still, the main conclusion I take from today is the idea of CAD weakness. I’m currently long EURCAD and short CADJPY, expecting to take advantage of this weakness. I think U.S. equities have one little last burst of energy in them before declining at least 5%, so I also expect to see the USD rally broadly after one or two more days of continued weakness.

50

Here are the short-term momentum strength scores for August 22, 2012 taken at 1:51 GMT:

CAD – 7
AUD – 5
USD – 4
NZD – 4
JPY – 2
GBP – 2
EUR – 0
CHF – 0

Today’s most polarized pair is CADCHF. This is a pair that, a couple of weeks ago, I had hoped would reach near parity for a shorting opportunity. It’s fallen sharply since .9900, but I never got the price I wanted. Today’s readings suggest this pair will be spiking higher, though it may be a stretch to reach parity. Because the higher timeframes are signalling further downside, I will not be going long this pair, however, and will continue to monitor.

The reading of CAD weakness we got yesterday was fulfilled with the past day’s broad decline in the CAD; today, however, the readings suggest CAD will rebound before depreciating further. My EURCAD long and CADJPY short have performed well over the past day; and while the CAD rebound will hurt these positions a little, the longer-term momentum and Elliott Wave counts suggest these trades have quite a lot of room left to go.

51

Here are the short-term momentum strength scores for August 23, 2012 taken at 10:00 GMT:

CAD – 6
USD – 5
AUD – 5
NZD – 4
JPY – 3
GBP – 1
EUR – 0
CHF – 0

Today’s results are not very much different from yesterday’s, particularly in the call for a stronger CADCHF and a lower EURCAD. Both my EURCAD long and my CADJPY short closed successfully over the past day for gains of 183 pips (EURCAD) and 118 pips (CADJPY), and I now think these pairs will be heading in the opposite direction.

The higher-timeframe momentum in CADCHF and EURCAD (today’s most polarized pairs), however, is not consistent with today’s short-term readings and therefore I will not take an opportunity to go long CAD at this time.

52

Here are the short-term momentum strength scores for August 24, 2012 taken at 00:05 GMT:

CAD – 6
AUD – 5
USD – 5
NZD – 4
GBP – 3
JPY – 1
CHF – 0
EUR – 0

Once again, today’s most polarized pairs are CADCHF and EURCAD. And once again, I am unable to enter a trade based on today’s results because at the higher timeframes (4H and 8H, and to a lesser extent, 2H), these pairs look ready to continue traveling in the direction of EUR and CAD. Should CADCHF fall and EURCAD continue to rise another 50-100 pips, then most likely the 2H momentum will tip in CAD’s favor and this would allow a couple of conservative trades. So as usual, I am in wait and see mode, patiently looking for those golden opportunities…

53

Here are the short-term momentum strength scores for August 27, 2012 taken at 10:10 GMT:

GBP – 6
AUD – 6
NZD – 4
CHF – 2
USD – 1
EUR – 1
CAD – 0
JPY – 0

Today’s most polarized pairs are GBPJPY and AUDJPY, with a bullish bias on both pairs. However, the higher timeframes are looking quite bearish and therefore I don’t see a viable trade in either of these pairs. Medium-term, I am still bearish on AUD and NZD and bullish on JPY. I am expecting this to be a stormy and difficult week for these positions as the major currencies make counter-trend moves; however, I am keeping my positions open since the USD and JPY are liable to break out at any time.

54

Here are the short-term momentum strength scores for August 28, 2012 taken at 3:40 GMT:

AUD – 7
NZD – 5
JPY – 4
EUR – 2
CHF – 2
GBP – 2
USD – 1
CAD – 0

Today I’m looking for strength in the AUD and NZD as well as resumed weakness from CAD. Today’s most polarized pair, AUDCAD, looks ready for a nice pop higher and because this bullishness is confirmed out through the 2H chart, I have just entered a long trade in AUDCAD with the following specs:

Long at current price of 1.0266
Stop: 1.0091
Limit: 1.0313

I will be adding leverage at 1.0207 and 1.0149 if price reaches those levels. The limit is based on the 38.2% retracement point on the decline from 1.0434 (Aug. 23).

Because I’m expecting the AUD to be quite bullish – and possibly making a new high in AUDUSD - I’ve also made the following modifications to existing trades:

  • I closed my long trade in EURAUD, opened Aug. 12 at 1.1636, for a gain of 425 pips.
  • I have reduced my short exposure in AUDCHF by half. I expect this pair to rally to around 1.0100 before resuming the down trend and I’ll be adding back leverage when/if the rally starts to fade.
  • I have reduced my short exposure in AUDUSD by half. I expect price to rally to around 1.0430 before resuming the down trend and I’ll be adding back leverage when/if the rally starts to fade.
55

Thanks for these posts [B]saigonfx[/B] please keep it up

Did you every make the PDF with the instructions,it would be good to have in case you disappear one day with your millions
Thanks

56

Here are the short-term momentum strength scores for August 29, 2012 taken at 1:00 GMT:

NZD – 7
AUD – 6
GBP – 4
USD – 4
JPY – 2
EUR – 1
CAD – 0
CHF – 0

The AUD seems to have kicked off its rally ahead of NZD. I expect the kiwi to slightly outperform the aussie today as the AUDNZD rate turns lower toward 1.2850. However, for the remainder of the week the AUD should rally higher than the NZD. I can certainly see a new high above 1.0612 in the AUDUSD more easily than a new high in NZDUSD, which I doubt will close above .8186 in this rally. Nonetheless, my overall outlook for the next 2 months is decidedly bearish in both the NZD and AUD and therefore I’d view any major rallies as opportunities to improve my short position rather than as reasons to abandon the short side.

The AUDCAD trade I entered yesterday just slightly missed my second entry level at 1.0208, and now stands at -26 pips.

Today’s most polarized pairs are NZDCAD and NZDCHF, with a bullish bias in both cases. The 2H and 4H charts for these pairs are still quite bearish in my interpretation, however, and so I won’t be entering a new trade today.

57

Thanks, James, for the reminder on the PDF file. Indeed I haven’t forgotten so much as just gotten bogged down in the day job :eek: It should be here in the next couple of days.

I also plan to add a couple other pieces of information to these daily posts which I hope will make them more useful:

  1. A running summary of open positions and where they are in terms of profit or loss; and
  2. A running summary of how closed positions entered based on the trading signals in this thread have fared.

I’m also planning to sit down and do some number crunching on the trading signals generated here, to see how I can improve entry timing and exit timing. I have found, for example, that while price normally turns in the direction I predict before the stop is reached, price nonetheless first travels against me an average of 0.6% on a nominal basis. Therefore I might place my first entry at 0.4% or 0.5% away from the price level at the time the signal was generated. That should result in fewer stopped-out trades and also earn me more pips on successful trades. Of course it would also mean that I won’t earn anything on trades that proceed toward the limit right from the time the signal is generated.

Luckily in Vietnam, where the USDVND exchange rate is 21,000, everyone is a millionaire!

58

Here are the short-term momentum strength scores for August 30, 2012 taken at 11:00 GMT:

NZD – 7
USD – 5
AUD – 4
CAD – 4
JPY – 3
GBP – 1
EUR – 0
CHF – 0

Today’s results reiterate yesterday’s call for a rally in the NZD and, to a lesser extent, the AUD. In fact, the NZD really seems to be screaming at the market that it is ready to go on a tear, though it is sure taking its sweet time to do so. Because this looks like a big rally and momentum out through the 2H chart has turned bullish in AUDUSD and NZDUSD, I have closed my short trades in these pairs for profits of 116 pips and 138 pips, respectively.

Today’s most polarized pair is NZDCHF. While momentum is saying this pair is primed for a move higher, the Elliott Wave count I’m following suggests at least another 50 pips of downside. Therefore, I am placing this pair under observation alongside GBPNZD, which I got stopped out of last week and which is looking like it may present a tradeable top in the coming days.

Currently I have 3 open positions:

Short EURJPY from a net level of 98.37, currently at -25 pips
Short CHFJPY from a net level of 81.97, currently at -15 pips
Long AUDCAD from 1.0265, currently at -26 pips

I expect the yen crosses to take another couple of weeks before completion, while I expect the AUDCAD trade to reach my limit in the next couple of days. But the market is full of surprises so the outcome could be much different from my expectations!

59

Here are the short-term momentum strength scores for August 31, 2012 taken at 7:30 GMT:

AUD – 6
NZD – 6
CAD – 3
CHF – 2
EUR – 2
USD – 1
GBP – 0
JPY – 0

Today’s results again call for a rally in AUD and NZD. This is a signal my indicators started to flash a couple of days ago and nonetheless these pairs have continued to fall. This type of repeated but failed signal is what we say in the EUR around July 15-24 when that currency was preparing to make a major rally. I expect both AUD and NZD to rally at least 2% in terms of nominal price in most pairings once the rally kicks off.

Today’s most polarized pairs are GBPAUD and AUDJPY. I think GBPAUD will offer an excellent shorting opportunity in the coming days or weeks, but right now it is in between the .382 and .500 retracement levels measured off the May 23 high. I’d like to see it make the .500 retracement level at 1.5448 (still about 140 pips away) before taking a short position in this pair.

I still have GBPNZD under observation but so far, no clear basis for a trade.

AUDJPY, on the other hand, looks a lot more attractive as the move down from August 21 seems about spent on all the charts from 15M out to 4H. I am looking for a retracement of at least 38.2%, which allows me to set a limit on a long trade at 81.65. So here are my specs on the AUDJPY long I have just entered:

Initial long entry at 80.85
Limit: 81.65
Stop: 79.48
A second long entry will be made at 80.39 if price gets that low.
A third long entry will be made at 79.93 if price gets that low.

As always, my maximum loss even if the third entry is triggered will be 2% of equity.

Here is an update on the other positions I currently have open:

Short EURJPY from a net level of 98.37, currently at +16 pips
Short CHFJPY from a net level of 81.97, currently at +20 pips
Long AUDCAD from a net level of 1.0237 currently at -12 pips

My AUDJPY long may act as a hedge on my shorts in EURJPY and CHFJPY. Then again, a look at the 4H charts of these pairs shows that the kiwi and aussie have been acting very differently towards the yen than have EUR and CHF. Therefore I think it’s completely possible that all 3 of these trades will complete successfully. We shall see…

60

Here are the short-term momentum strength scores for September 3, 2012 taken at 10:30 GMT:

AUD – 6
USD – 4
NZD – 4
EUR – 2
CHF – 2
JPY – 1
GBP – 1
CAD – 0

Today’s most polarized pair is AUDCAD (with bullish bias). I entered a long trade in this pair at 1.0265 and, by adding leverage as price has dropped, my net long position is at 1.0193. I’ve been surprised that the decline has accelerated over the past couple of sessions and I now think price could be headed towards support in the .9907 to .9950 range. Price dipped to within 2 pips of my stop at 1.0091 today so most probably, so most likely I’ll get stopped out of this trade and may have a chance to set it up again with price around 150 pips lower. Based on today’s data alone, there is no reason to enter this pair today on the long side.

Here is a summary of my current open positions:

Short EURJPY from a net level of 98.37, currently at -8 pips
Short CHFJPY from a net level of 81.97, currently at -2 pips
Long AUDCAD from a net level of 1.0193, currently at -136 pips
Long AUDJPY from a net level of 80.66, currently at -44 pips