Trading the Trend with Strong Weak Analysis

AUDJPY is now my top SW trade, but is it a good trade with price this close to the 200 dma , this is not a pair I normally trade and I see no reason to make an exception to that rule here

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Looking at the S&P 500, we are getting a little move up following last Thursday’s little pin bar reversal. what this means for our currencies is US dollar and Yen will likely remain weak and commodity currencies strong

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Good day for US stocks, this is putting pressure on US dollar and Yen, on the upside look for commodity based currencies like AUD, CAD and NZD to continue to do good

Breakout move today in Russell 2000, this index has been a lager, if it can get going then we might see some new highs soon in the stronger indexes.

Note; there are a lot of doom sayers out there calling for a market crash, these people are wrong 9 out of 10 times, put they know sooner or later they will be right, then they will write books telling you how they called the crash, but not mentioning how many years it took them to be right.

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and look at New Zealand all the way up to #2, as I said before, as long as US stocks push higher look for AUD, NZD and CAD to lead currencies

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Now here is a market in sync, we have all our European currencies leading the way, then all three of the commodity currencies, and bringing up the rear is USD and JPY

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No change in rank order from yesterday,

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Here is my weekly market review video, we have some good trends to trade

note, audio a little weak, I will try to fix it for next week

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Good morning :slight_smile:

Excellent video analysis.

Thank you so much for your time and for sharing.

Padraic

Dennis, thanks for sharing. Where can we find the indicator for strong/weak currencies? Thanks!

This is my own indicator, I simply use the 7 major yen pairs, and measure the distance price is above or below the 200 moving average on the 4hr chart, Yen is my common denominator so it will always be zero. Formula is Price -moving average/ price= % above or below moving average. Example; If the USD is 1% above the JPY and the CAD is 1% blow the JPY then I know the USD is 2% above the CAD. I keep all this on an excel spread sheet so I can track if something is getting stronger or weaker with time, If you are good with charts you could enter these formulas and get a bar graft like you see in charting software, for myself, I like the rank order on a excel sheet

Hope this helps

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Here I am looking at USDJPY daily chart, we have been in this trading range for two months and are once again testing the lower range, last three time we have gotten down to or near 111.00 price has reversed. One could go long at 111.00 and if we don’t get the reversal you would exit the trade with a small loss. If we get a daily close below 111.00 that would not be good for the US dollar

looks like we have a new sheriff in town as CHF and EUR take over the top spot, put don’t count the Aussie out just yet. Weakness remains with Pound and Dollar

I missed this one, Last week AUDJPY in a counter trend move rejected the 200 ma and is now heading lower. See how it did the same thing back in early December, that move was good for 1000+ pips, will this one give us the same?

If I could only trade one type of entry this would be it, My second favorite entry is price crossing the 200 ma. Both are powerful entry signals that can lead to 1000’s of pips.

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Here is another example of a counter trend rejection of the 200 ma. this time in the USDJPY. This was good for 1000 pips in just 9 trading days.

Note; even with JPY sitting #6 on my SW rankings, YTD Yen is still top currency this year, so sudden yen strength should not be totally unexpected

US Stocks pull back for second day and that has the yen on a rally, USD and Pound very weak here. A long EURUSD entry is looking pretty good here, Long EURGBP would be a good one to own as well

Just 7 trading days after hitting #8 the Yen has climb all the way back to #1, An odd thing about today’s action is the Yen made it’s move today during a strong stock market rally, that is not normal but what is normal in this Fed controlled market

the one thing we can count on right now is a weak dollar and pound

Stocks pulled back today making an already strong Yen even stronger

Here is daily chart of my top strong weak trade, GBPJPY, had you shorted this at yesterdays close you would had made 300+ pips today, there is a reason they call this pair the Dragon

On Monday I noted that USDJPY was nearing strong support at 111.00 and a daily close below this number would be bad for the dollar and it has. Now this pair has been down 7 of the last 8 trading days and today was the strongest down move of the 7, I have observed over the years that strong moves up or down will often have their biggest candle on the final day of the move and we may have just seen that today. For that reason I would not be rushing in to short this already extended move.

what I would like to see is a slow moving pull back, maybe taking three days to retrace today’s move, or a full retracement of the last 3 days stopping at 111.00 taking over a week to get there. That would make for a sweet short setup

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Here is my weekly market review video