Monday, April 23, 2012

Trading Week 23/4/2012

Saturday 28/4 (6am)
There was a swing back to 'risk on' before the US markets opened last night with the dollar falling quite sharply. This was not matched by similar moves on the EURX though. There was some positive Eurozone data and this was then followed by improved US consumer sentiment data. The broader markets have all closed up with the DOW above 13,000 and the S&P above 1,4000 and the VIX has fallen now to 16. The Spain downgrade seems a life time ago now!


I eventually jumped in late to the A/U TS Long on the break of the 4hr 200 EMA and jumped in early to an E/U Long on the break of the trend line. The latter looks to be forming a TS signal on the current candle which is yet to close. Both trades are up and I'm leaving them open over the w/e. I might regret this.

Living and Learning: I'm doing my best to manage the former BUT I'm not sure I'll ever master the latter!  This is a 'self flagellation' section coming here so, if you're not interested, stop reading now!  I'm admonishing myself for my wasted efforts this week, and last week on the G/U:


The A/U this week:
I have my TS system. I watch the A/U and love this pair as I do well on it. I had been watching for this pair to bounce off the bottom triangle trend line on the daily chart. I spotted the LONG TS signal on the A/U this week after said bounce. Yet, I said I'd wait until it cleared the 4hr 200 EMA. It has cleared this resistance and I am now up about 6p pips BUT, if I had have just taken the initial signal I'd be up around 130 pips! That is: one trade, low risk; good pip haul! I have said before that this pair seems to march to a slightly different drum of late and, even knowing this, I procrastinated. Resolution: I'm going to TRY and just follow my initial signals on this pair in the future.


Last week the G/U: It was much the same with the GBP/USD Long that I passed on last week. This was a TS signal AND had the confluence of a trend line break as well. I had been pointing out this trade for weeks before hand and waiting and waiting for the trend line break! The trade is now up 260 pips!

This is yet another case of 'good horse dud jockey'. TS is a good system but I just need to learn how to manage it better.

PS: It is my son's birthday today and we have a busy day scheduled so I won't be completing any Indices or trade analysis until tomorrow.

Friday 27/4 (4.20 pm)
There is a return to 'risk off' as European markets come on line. This is no doubt prompted by the Spain downgrade but also to news just in of reduced German consumer confidence. The USDX is rallying and the EURX is falling.


It seems that I might need to be on the look out for new 'risk off' signals now. I'm getting somewhat dizzy with all the to and fro action! I'd be happy for any trend to come in and, then, for it to stay..... for even just a little while!

Note to self: trend trading 15 min charts, with small stops, in the face of big news items is rather stupid! 'News trading' requires its own strategy and.... that's not me.... at all!

Friday 27/4 (1.50 pm)
That will teach me to gamble! The A/J long has been stopped out. Poor discipline here...I took a 15 min trade hoping for it to get carriage from the BoJ...it got carriage alright...just the wrong way and taken out by a spike. Small stop so not too bad but I'm annoyed with myself for not sticking to my trade plan....TS signals on 4 hr charts!  And, of course, price has bounced straight back up!


Friday 27/4 (10.30 am)
The Spain downgrade news has thrown the slight 'risk on' sentiment off guard. The USDX rallied after the news but has bounced back down off the previous bull triangle trend line. The EURX has bounced back too.  


This failure to follow through with renewed 'risk off' momentum is seeing some bullish sentiment return, for the time being at least. The E/U has bounced off the 4hr 200 EMA and is currently holding above this support level.

The A/J, also known as the 'risk on' bellwether FX pair, is currently pushing a bit higher as well. 

I have taken a LONG trade on the A/J with a small stop based on a TS signal from the 15 min charts. I'm kind of hoping that the BoJ news later today may help this pair along though too. The E/J is moving too and has a little less resistance in its path. Time will tell if either of these follow through.

If 'risk on' sentiment remains then there will be a few more pairs setting up for trades shortly as well. A return to 'risk off' may take a while for trades to develop though. 

Friday 27/4 (7.20 am)
USDX rising now as Spain downgraded by S&P.


Friday 27/4 (7am)
The USDX failed to break back above the 79 level and the EURX is still moving sideways. The broader markets have rallied again, possibly on the hope of further stimulus. The DOW is above 13,000 and the S&P500 is now back above 1,400 with the VIX back down near 16. Most FX forum and web sites I watch are bearish BUT....it just doesn't seem to want to evolve that way.

The E/U is back above the trend line break out and, if it can break and hold above the monthly pivot, I think it might keep heading north. I remind you of the print this pair is forming on the monthly chart. see below. It still looks like it could be forming a bullish inverse Head and Shoulder.

The A/U TS signal to LONG did keep going overnight although I am going to wait to see if it can break and hold above the 4hr 200 EMA. Likewise with the A/J.

The USD/SGD trade I passed on is now up 65+ pips and has just broken through another significant level of support.


So. for me, it is still a waiting game. I don't make predictions about which way the market will move, ever. I don't have that gift. I simply watch the charts and hope that they will 'tell me' once a momentum move has started. To date, we haven't had any real momentum moves with much conviction and that is why I haven't had many signals. Even last night the trade volumes were quoted as being quite thin. This keeps me out of losing, or drifting, trades and there's nothing wrong with that. We are still at critical levels across the broader markets where there is an almighty tussle going on between the bulls and the bears. So far, there isn't a winner.

Thursday 26/4/ (10.30 pm)
The USDX has pulled back to the 79 level and the EURX has failed to break up through the 4hr 200 EMA.


The earlier A/U signal to LONG only gave 50 pips before price turned although, for now at least, the signal is still holding. 

'Sell in May and Go Away' may still yet evolve. I just wish a trend would develop, long or short I don't care...just develop.


Thursday 26/4/ (4.30 pm)
The USDX is currently trying to push down from the 79 support level. The EURX is still ranging though. I'd like to see a close and hold below the 79 to be encouraged that this move has 'legs'. We are at critical break out levels on a number of pairs. These levels need to be watched to see if they can be cleared or, whether, price simply bounces back down from them.


I had a TS signal to LONG the A/U but I'm waiting until it can clear the 4hr 200 EMA.

The E/U is reaching a critical level at the upper trend line and monthly pivot. A close and hold above this level would see me jumping in LONG. It could well bounce back down though before then.

The Swissie is looking interesting too.

I'm still watching the A/J too for a break above the 4 hr 200 EMA.

I'm out tonight and won't check in until around 11 pm, if at all.

Thursday 26/4/ (11.30 am)
The USDX has found some support at the whole number 79 level. The EURX continues to drift sideways.


I still don't have any new 4hr TS signals.

Now, this is what I call a REAL lack of trend...check out the ADX!


Thursday 26/4/ (6am)
Risk on sentiment continued overnight and was given a boost by FOMC news. The FED has increased its economic outlook for the US which boosted optimism and has seen the broader markets close higher and the VIX fall back to 17. The USDX is still below the triangle trend line but the EURX has yet to break above the 4hr 200 EMA.

These positive Fed comments though may be interpreted by the markets to mean that there won't be any further easing by way of a QE3. This may end up boosting the US dollar and, thus, work against the current 'risk on' trend that sees a falling USD and rise in EUR, AUD etc. Hmmm.

The signal on the Loonie from yesterday has actually conformed:
The trend line break on the USD/SGD also kept going although it didn't ever really give up a clear and convincing TS signal.

There are still no stand out new TS signals BUT they are close to forming. The conundrum with the the way the USD should move is, no doubt. causing this continued state of flux.

The A/U is close but I'd wait for a break above resistance in either of the daily or 4hr 200 EMAs;
The A/J is close too.
The E/U is getting close to its triangle trend line:
The E/J is holding above key support and has lots of room to move up.
The Swissie is close to a bottom trend line as well:
So, it looks like it could be back to having 'lolly shop' problems again, which would be nice for a change. That is, if trends do kick back in, which one or ones do I take? The one with least resistance and that still, at the moment, looks like the E/J.

Anzac Day Wed 25/4 (8.30 pm)
The indices are moving with a slight 'risk on' trend for the moment. The USDX is down and the EURX is butting up against resistance in the 4 hr 200 EMA.


I STILL don't have any 4 hr TS signals yet though. I suspect some may develop shortly if this current 'risk on' sentiment continues.


Anzac Day Wed 25/4 (6.30 pm)
GBP GDP data was poor so I closed my premature-entry E/J LONG trade. This news will probably impact the current market 'risk on' sentiment. I'll check in again later after the next candle close at 8pm.

Anzac Day Wed 25/4 (5 pm)
I've jumped in early into an E/J LONG. Having trading withdrawls me thinks!

Anzac Day Wed 25/4 (4 pm)
The indices are still just bouncing sideways. No trend signals received due to lack of a trend.

Anzac Day Wed 25/4 (12 noon)
The indices are still bouncing sideways. This could last until after tomorrow's FOMC news is out.


FX Live is reporting anxiety amongst EUR bears ahead of the FOMC:

EUR/USD shorts nervous ahead of FOMC


Written by 

April 25, 2012 at 00:37 GMT 
Just reading a short note from one of the bigger banks who say that they sense a significant degree of nervousness ahead of the FOMC from EUR/USD bears in particular. This is somewhat strange given that the market does not expect any surprises or changes in focus from Mr Bernanke. Stop-loss buy orders are said to be quite large above 1.3250 and again above 1.3325.
I still don't have any new 4hr TS signals but, given the choppy markets, this is hardly surprising. One looks close to be forming on the E/J though to go LONG. There are quite a few 'shooting star' and indecision Doji candles on the charts too reflecting this turbulence.


PS: just watched this.Worth a look if you have time and trade the cable. Important GDP data out for the GBP later on at 6.30 pm. http://www.compassfx.com/video/ip/42412/42412.html


Anzac Day Wed 25/4 (10 am)
The USDX looks like it is trying to avoid breaking down but, struggling to do so. 
The EURX continues to have an upward march.

I'm close to getting 'risk on' signals on a number of pairs. 

I do have a TS signal to SHORT the Loonie already though. This pair has also just had a break below a daily trend line. I've taken this in simulation only though as I'm wary with this aptly named pair!

Anzac Day Wed 25/4 (6.30am)
The indices are still bouncing sideways. The USDX keeps flirting with the bottom triangle trend line and the EURX also looks like a bottom feeder sliding along just above its 103 bottom trend line. It has closed above the weekly pivot now so it could continue upwards. There is some bullish 'risk on' sentiment kicking in just now though I think due to Apples earnings news which was most impressive.

The broader markets were mostly up with the DOW just scraping back in above the 13,000 level.

I still don't have any 4hr TS signals given this choppy action.

The E/U is starting to look bullish though and is above significant support now and rising to near the bear triangle trend line.
The USD/SGD is looking bearish too with a triangle break but, as yet, no TS signal. So, I'm watching this pair carefully too!

The E/J has closed above some key support levels now too.

The A/U looks like it needs help deciding what to do.

The A/J may have formed a triple bottom.  I'm liking it once it gets past some of the resistance hurdles in its path!

It is a public holiday here today but I'll check in now and then.

Tuesday 24/4 (9.30 pm)
The indices are still just bouncing sideways. No new 4 hr TS trends anywhere.


Tuesday 24/4 (4.30 pm)
The USDX is pushing down again, towards the bottom trend line. It seems like more waiting might be in store!

There are no new 4hr TS signals on any of the pairs. This is not surprising.

Tuesday 24/4 (12 noon)
Still no new 4 hr TS trends, even with the poor AUD news just out recently.

Tuesday 24/4 (9am)
The indices have moved little since my 6 am post. We are back to choppy, range bound markets again where it is difficult to find lasting trends on the 4hr charts. The shorter time frames continue to offer some opportunities for trend trades though as the E/U 30 min chart below reveals. Whilst few good trends develop during the Asian time frame, there have been pips to harvest on the shorter term charts during the European/US markets.

Tuesday 24/4 (6am)
I had woken expecting to find that I had missed all of the new 'risk off' trends that would have started with the rallying USD.  Wrong! It seems that we are back to sideways choppy action.... again! The USDX failed to break up and hold through the resistance of the 79.5 and 4hr 200 EMA level. The EURX also failed to break down through the 103 support level, instead, just giving it a slight flick! The USDX now has very little wiggle room: it seems range bound between the 79.50 level and the bottom triangle trend line. Not much room there at all. Hopefully, we will get a break out, one way or the other, soon!

I had flirted with an A/U short based on a trend line break but the lack of a fully formed TS signal put me off. This continuing choppy action means that I STILL don't have any TS signals on the 4 hr charts.

PS: I'm a bit scared of trading Silver BUT I took a short on this yesterday in my simulated account based on a TS SHORT signal that it gave. It gave up to 100 pips! Hmmmm.  This is 'slash wrists' stuff here!

Monday 23/4 (9 pm)
The USDX has made more of an up move so I have taken a short on the A/U. This is based more on the trend line break than on any TS signal though and my stop is small and just on the other side of the trend line.
PS: I took a whole 5 pips and bailed out of the A/U short. I didn't like the continuing struggle on the USDX. 

Monday 23/4 (8.30 pm)
The USDX is currently struggling to rise above resistance in the 79.50 level, monthly and weekly pivots and the 4 hr 200 EMA. It still could do anything from this position.
Movement on many of the pairs has slowed due to this recent resistance struggle. The A/U has had a trend line break and given the weakest of TS short signals.

I am not prepared to take a trade just yet though when the USD direction is not 100 % clear to me. No doubt this will probably evolve overnight whilst I am asleep!

Monday 23/4 (5 pm)
I've just had a 4 hr candle close on my indices charts. It's looking like the USD may well indeed be bouncing back up from this bottom trend line.

I find this a little annoying as it will now take some time for the currency pairs to reverse and catch up with the new 'risk off' trend, given if it lasts. The A/U is approaching a bottom trend line but I'm not too keen to trade it before tomorrows CPI news. The U/J is falling whilst the USD is rising....weird..as per usual though. Silver is breaking down too as expected with a higher USD.

I'm out at b/e on my E/U trade. 

Monday 23/4 (4 pm)
The USDX is sitting on the trend line fence, not sure of which way to move from here. It is forming an indecision Doji candle, barely visible on the chart!

I'm still waiting to see which way it moves from here; up to give 'risk off' or down to give 'risk on'. I'll trade either way BUT I want to know the direction first! I've tightened my stop on the E/U LONG to b/e in case 'risk off' sentiment takes control.

Monday 23/4 (12.45 pm)
The Chinese data was a bit better than expected so that seems to have stemmed the 'risk off' sentiment from earlier. Even the Aussie pairs are bouncing back up, for now at least, on this news. The USDX is still trading under the trend line break out level. 


I'm still LONG on the E/U and will wait for TS signals to develop. No new TS signals on the 4 hr charts at the moment.

Monday 23/4 (11.30 am)
The AUD data was very poor and, as a result, the Aussie pairs have taken a fall. There is red flag news in one hour out of China as well. This might give the USDX a nudge, one way or the other. I'm still waiting to see which way the USD moves and, thus, whether the markets tend to 'risk on' or 'risk off' before considering further trades. 

Monday 23/4 (11 am)
I have updated my Stocks: April page with some charts. These stocks have my interest if we do get a continued fall in the USD. If not, I'll wait for another set up.

Monday 23/4 (10.30 am)
The USDX has pulled back a bit which is not unusual. Often, when instruments break out from a trend line, they will retrace to test out the trend line break before falling further away. I'll be keeping an eye on this index though to see whether this is a simple retest of the trend line or whether it is a bounce back up from this low point.

I am still LONG on the E/U. I'm waiting to see the results of red flag AUD news at 11.30 am before considering whether to LONG one of the Aussie pairs. 

Monday 23/4 (6am)
There seems to be continued positive 'risk on' sentiment continuing after recent IMF meetings. The pre-market data from the US markets currently show these instruments to be trading up as well.

I am currently LONG on the E/U but price is moving up into strong resistance levels. I remind you though of the monthly chart for the E/U showing a potential, bullish inverse Head and Shoulder pattern that may be developing. I have posted this chart over recent weeks. I will be watching the bear trend line that is just above current price with great interest; should this trend line be broken then the this pair could be in for a big up move. 

I'll be back later after a rather long drive to drop some boys off at a soccer gala day!.

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