Trading week 5/12/11

Friday 9/12/11 (6am)

Comments from the European Central Bank president unsettled the markets overnight and have sent the USD up in a 'risk off' approach to trading. The USDX spiked up and the EURX down. (see charts). I'm glad I slept through all this mayhem.

This up and down stuff is not for longer term trend traders like moi. I'm kind of glad I'll be away next week as, hopefully, this will give the markets a bit of breathing space and allow for some kind of normal to return.

Even the shorter time frame charts posed problems for trend traders last night. A look at the 30min chart of the E/U (below) shows this clearly.

I'll be back after Hawaii. Cheers! Mary

Thursday 8/12/11 (6pm)

The USDX has traded sideways throughout most of the Asian session. It has just started to break out and down just now though. (see chart).

I would be waiting for a clear breakout on the pairs though before taking any trades. For example, a clear break out from the flag patterns on both the A/U and N/U as shown on the charts from earlier today.

I probably won't be trading tonight as I am out for part of the evening. This is most frustrating but, I believe, the key to success through these difficult periods is 'Patience'. I am away next week in Hawaii and will probably not be posting or trading. I look forward to catching up with my blog on my return.

Thursday 8/12/11 (6am)

Well, we're back to hokey pokey stuff. The broader S7P etc pre-markets were up, then gapped down at market open and the that gap was then filled. They're currently pretty flat. It's impossible to trend trade on 4 hr charts through this chop.

A look at the indices confirms all of this. I have re-drawn the trend line on the USDX slightly but, for both of them, the USDX and EURX, you can see them bouncing around in narrow ranges, (see charts).

I've also included a chart of the A/U and N/U to show the narrow channel that they are bouncing around in as a result of this indecision and chop. The current trading week is highlighted pink.

I am out for most of the day at my son's end of year Speech Day.

Wednesday 7/12/11 (9pm)

The USDX is currently re-testing the trend line from the earlier break out. As a result of this reversal, the TS signals that looked like forming on a number of pairs have not fully developed.

I will not be checking charts again until after the 5 am candle close.

Wednesday 7/12/11 (5.30pm)

The USDX has broken the bottom trend line (see earlier chart) and the ADX is ticking up. The monthly pivot is just below current price though at 78.20. Many of the pairs are lining up for TradeSpotting signals but they're just not quite there. This means I will have to wait for the 9pm candle before assessing again. I will try to contain myself and wait as we have seen price bounce around at these levels throughout the week. Also, the markets around London open are often a bit choppy too. I do expect to see some enthusiasm for a short USD 'risk on' approach to trading then though. The Asian markets were up today and the US futures pre-markets are up as well. All of this aligning with a 'risk-on' approach.

Wednesday 7/12/11 (1pm)

The next candle close here, in 3.5 hrs time, at 5 pm might offer a signal to short the USD. A trend line on the USDX, that has been in place from late October, is being threatened and the ADX looks like it's starting to tick upwards. There is a bit of resistance just below this level with a monthly pivot, strong previous S/R and a psychological number in 78 though. (see charts below). The cautious trader might prefer to wait for a break, close and hold below the 78 level; something I discussed in my indices analysis at the beginning of this week.

I might be late getting to my charts at the 5pm candle close though but will update as soon as I can.

Wednesday 7/12/11/(6am)

FX continues to be very choppy. The indices are still bouncing around in a fairly narrow range and this makes it nigh on impossible for trend trades to develop, at least on a 4 hr time frame. The EURX is bouncing around between 105 and 106. The USDX is bouncing around in an increasingly constricting triangle pattern of between 78.25 and 78.85. (see charts). The ADX and DMI on both charts reveal just how trend-less these two are on the 4 hr time frame. This indicator is great for helping to keep you out of potentially losing trades.

A quick look at the chart of the A/U also reveals how difficult it has been to pick a direction on this pair. The ADX hasn't risen above 20 on this pair yet this week.

This volatility reflects the indecision in the broader markets. I will continue to watch the 4 hr candle updates but would not be surprised if this pattern continues all week.

These choppy markets can present some opportunities to trend-trade but, on much shorter time frames though. The chart below shows the AUD/JPY on a 15 min time frame. There was a trend trade yesterday for part of the Asian session where 60 pips could have been picked up. It all just depends what kind of trading you focus on though, longer term with 4hr or shorter term.

Please remember that I am away for a week as from this Friday 9th Dec.

Tuesday 6/12/11 (9pm)

The indices are just bouncing around. There are no TS signals. No trades thus far.

Tuesday 6/12/11 (5pm)

The trend throughout the Asian session has been 'risk off'.

There are no convincing good TS signals just at the moment. There is a signal to short the A/J but there is a lot of resistance just below the current levels.

Tuesday 6/12/11 (6am)

My pc had some issues this morning so, apologies but, I'm a bit late. I was backing up my pc overnight before my break scheduled for the end of this week and it seems that it didn't like this. Mucking up....just like my son at the moment. Something in the air??

Anyway, it seems that the 'risk on' technical trend started last night of USD down and EUR up has been halted. An S&P downgrade warning for some EU members put paid to that trend. This news item has seen a return to 'risk off' with the USD rallying and the EUR falling. (see chats). It is interesting to see how this reverse, caused by fundamentals, ties in with the trend lines though imposed by technicals. Spooky.

There were TS trades setting up for LONG on the A/U and NZD/USD and SHORT on the SGD/USD. These have paused with this change of trend. I'll keep watching to see if sentiment returns though and post accordingly.

Monday 5/12/11 (9pm)

The USDX and EURX have traded pretty much sideways for most of the Asian session. They are just starting to make some moves now though, at 9pm Sydney time. The USDX is currently edging lower and the EURX higher. (see charts).

I don't have any TS signals just yet but expect, if the current trend continues, that there will be signals develop through the night. The next 4hr candle close is at 1am for me, which I'll miss. I will update after the 5am candle.