Indices Review for Week 12/3/2012

I have posted 2 reviews today, Saturday 10/3/12.  My Indices Review and my Trading Week review.  Only one e-mail alert will be sent though most likely.  Please make sure that you read the Trading Week Analysis as well so that you understand what I am looking for in the pairs this week.

I'm missing my son a bit on this trip so, I've posted one of his songs for today, thus, a Gen Z song!   http://www.youtube.com/watch?v=tQbSbcgNDHM

USDX

Monthly: Trend up overall.  The new candle is still forming a bullish engulfing pattern at this stage.

Weekly:  Trend up, overall / sideways. Looking bullish now. Current breakout looks like this could be a bull flag breakout.

Daily:  Trend down overall but turning. A bullish engulfing pattern candle on Friday plus a triangle upwards breakout. 

4hr: Trend turned up.  The 4hr 200 EMA has held price up all week, as have the weekly and monthly pivot.  There has been a triangle breakout up and out but price failed to keep moving up through the key resistance level of 80.

Thoughts:  There still seems to be a tendency to shrug of bad news where possible so, if I get to trade at all which is unlikely whilst I’m travelling, I will be cautious.  There seems to be a pattern of good US data emerging which buoys ‘risk on’, i.e. a falling dollar, but this then gets stamped on by periodic releases of Bad Greek debt news.  It’s kind a like ‘one step forward and then two steps back’.  I’m conscious that there seems to be a desire to move forward with ‘risk on’ trading; the VIX is below 20, a kind of water level, and stocks seem to be creeping back up to a key resistance level in the DOW @12922, just under the key 13000 level.  Having said all of that, the USDX looks bullish after breaking up and out of a symmetrical triangle pattern.

I will look to LONG the USD in pairs on valid TS signals if price breaks, closes and holds above the 80 level.  We have already had a new TS signal to go LONG on this index from Friday’s 4 hr charts.

I will look to SHORT the USD in pairs on valid TS signals if price returns to trade within the symmetrical triangle pattern and moves below the 4hr 200 EMA, monthly and weekly pivot at the 79 level.

As always, Fundamentals, by way of Euro zone dramas and news announcements, continue to be triggers for price movement on the indices.  These events can always have the potential to undermine all Technical analysis.

EURX

Monthly:  Trend down BUT has turned.  Last month’s candle ended up forming a bullish engulfing candle.  The new candle is still a small bearish candle.

Weekly:  Trend still up overall.  Last week’s candle was an indecision spinning top candle though.

Daily: Trend up overall but has turned.  Price is trading within a symmetrical triangle pattern.  Price action was bullish on Wed and Thurs but Friday’s candle was an inside bar candle.  Inside bars represent indecision and a possible trend reversal.

4 hr: Trend sideways.  Price is constrained to trading within the triangle pattern but was supported all week by the trend line and 4hr 200 EMA. Price has held above the monthly pivot @ 104.2 but is still just below the weekly and daily pivot.  It is worth noting that the very bullish action on the USDX on Friday was not fully matched by as much bearish action on the EURX.

Thoughts:  I will look to SHORT the Eur in pairs on valid TS signals if the EURX breaks, closes and holds below the 4hr 200 EMA, monthly pivot and bottom triangle trend line.

I will look to LONG the Eur in pairs on valid TS signals and if the EURX turns to trend upwards, produces a new TS LONG signal breaks above the weekly pivot and up out of the symmetrical triangle pattern.