Trading Week 2/4/2012

Good Friday 6/4 (8 pm)

It won't come as much surprise to see that the indices have basically traded sideways for today. I'll review more over the w/e, after NFP Friday.

Good Friday 6/4 (7.30am)
It seems that things went a bit quiet after my last post last night.  The indices have slowed their movement a bit.

My A/U trade has been stopped out at b/e.  It seems the support for the AUD, which I thought would be around last week, is coming into play now. FXLive reported demand for the AUD given the plight of the EUR.  The AUD has held up quite strongly in both the A/U and A/J whilst the EUR has had big falls in the E/U and E/J:

AUD/USD: Stop-loss orders reported above 1.0300 and again above 1.0320

Written by Sean Lee
April 5, 2012 at 03:05 GMT 

The rather poor Spanish auction has made asset managers have a bit of a re-think it seems, and real money demand is being reported for Asian currencies like JPY, SGD and AUD.

I'll wait until next week for more trading.  It's a holiday here today, the sun is out and it is about 18 degrees already this early at 7.30am.  The beach is already busy with a rather big surf and we're heading back down there again now with friends to let the boys surf and to have breakfast at our favourite beach front cafe.

All in all, it has been a GREAT week for TS but less than that for me.  Like I say, great horse....dud jockey.  Once the trends and TS signals kicked in on the pairs there were literally hundreds of pips to haul, so long as you chose them!  The Silver long was thwarted by the Fed announcement but Gold delivered buckets of pips!  

I have to remind myself that 12 months ago, before I had dredged my TS system back up from its initial development form, I was losing all the time as I struggled to follow other FX trading systems. I was as sick as a dog too!  Now, I'm in much better health and my main trading problem is finding the best trades to take. So really, whilst frustrating at missed opportunities this week, the outlook is all rather very good!

Thursday 5/4 (8.30 pm)

I've had a really lousy fortnight with doctors, tests, more cancer scares and procedures and this seems to have flowed into my trading.  I really backed the wrong horse this week!  I took the first TS signal, a short on the A/U, and it has only yielded around 60 pips!.  I've had signals since then on the E/U and E/J.  The E/U is  130 pips and still going and the E/J is 200 and still going. BTW: so much for my thinking things would be quiet!

PS: I'm distracting myself with this old gem...they are playing in Sydney tonight!  http://www.youtube.com/watch?v=nfLEc09tTjI

A/U: a lousy yield!

E/J: so much for my anxiety about shorting Yen pairs!

E/U: I had even said this afternoon that I would look out for the second trend line break.  I missed it due to son's Cadet Camp!  You know what my mother would say to me here...'be thankful you have a son...there is always another trade but not another son'!  I'll try and focus on this!

Thursday 5/4 (5pm)

Not much has happened during the Asian session.  There could be bull and bear flags forming on the USDX and EURX respectively though perhaps?  I don't expect much more to happen though given the holiday tomorrow and the wait for NFP data.

The bull and bear flag patterns evolved.

Thursday 5/4 (12 noon)
Indices still going sideways through the Asian session.  Nothing else to report.

Thursday 5/4 (10am) : Looking back at Gold from this week: A 300 pip move!

I had posted charts of Gold in my Trading Week Analysis for this week, 2/4/2012 which you can check back to.  I had shown how it was trading within a symmetrical triangle.  It has had a breakout over the last two days and there was a corresponding TS signal to go along with this. This was a  fairly easy trade to 'spot' with the TS signal coming in aligned with the daily chart trend line break. See the charts below:

I have to admit that I missed all of this and did not even check in on Gold this week. I have been a bit distracted as I was in hospital on Tuesday and tied up with Doctors and tests for much of the last 2 weeks since returning from OS. BUT There is another potential triangle break looming with this pair as well which is most visible on the weekly chart (above). 

I'm still just holding on to my A/U short for now and the 'sideways' stuff seems to have returned on many pairs, as it often does, leading up to long weekends and NFP Friday.

The broader markets have pulled back with the DOW hanging in there above 13,000 but the S&P500 closing just below it's psychological level of 1.400. I would actually like a pull back here!

Thursday 5/4 (6am)

The 'risk off' rally paused a bit overnight.  The USDX got sight of the resistance level of 80, just in front of it, and has stalled.  The EURX hit the weekly pivot S3 level, which was also a previous S/R level and also stalled and has reversed a bit.

Not surprisingly, I received a few more TS signals yesterday.  I am still just in the short A/U which has not moved as much as some of the other pairs ended up moving.  It is up about 65 pips or so.  Such is life.

E/U: this TS signal from yesterday has already given over 100 pips so far.  I will be looking to see if it breaks down from the daily triangle pattern with a continued TS signal.

E/J: my anxiety about shorting the E/J was unjustified. It has given over 100 pips on a TS signal and trend line break.

The G/U also gave over 100 pips on a TS signal before stalling at the monthly pivot.

I'm not sure how much more movement we will get on the pairs as it is a shortened trading week but there is NFP data out on Friday.  I do not intend to enter any new trades now until next week. I am risk free on my A/U short and will leave it at this for this week.  

These trades on my radar though if we get continued 'risk off', that is, USD strength:

• E/U: Break of daily bull trend line (chart above).

• USD/SGD: Break out and up of daily triangle trend line which is also just above the daily and 4hr 200 EMA and near the weekly R1 pivot.

• U/J: Break out and up from flag pattern on a new TS signal.

Wednesday 4/4 (4 pm)

The USDX is currently trying to push up and break out above the 79.5 resistance level.  The EURX has broken below its key support in the trend line and 4 hr 200 EMA.

I have locked in 50 pips on half of my A/U short and the rest has the stop at b/e.  I'm not sure if this will follow through as little has for some time now. Price could re-trace to test the trend line and then keep falling or it could reverse.

The E/U and E/J are trying to form short signals too but they're quite weak.  The lack of signals on other pairs make me more suspect about this whole 'risk off' move.  It may just be the pause before the big move and fall though.

Stocks still held above their key psychological levels though over night. I would like to see a pull back on this front though too.  

Wednesday 4/4 (10 am)

I have finally had 2 TS signals form on the pairs I trade; Short on G/U and A/U.  Yeh! 

There is red flag AUD news at my 11.30.  I will be out so will tighten my stop around this.  The A/U trade is looking healthy for the time being at least.

Whilst it isn't much fun sitting and watching ranging markets, at least it is better than being whipped around in losing trades.  My TS system has kept me out of losing trades on the currencies.  The sim trade on Silver was knocked out by news.  I have closed this now.

I've ended up moving my stop to entry:

Wednesday 4/4 (8 am)

The indices haven't changed much. (see charts below).

I only have TS signals to short on the A/U and G/U. I have taken the A/U. The G/U short has a few road blocks in its path.

The news from last night have sent the simulated silver trade into the red.

I find this all uncertain though.  The US news was essentially based on the fact that there are enough recovery signs in the economy so that further stimulus isn't deemed to be needed at the moment.  This is surely positive news.  Yet, the USD obviously rises but causes 'risk off' reactions in falling stocks etc.  I'm not confident the 'risk off' move will continue but I am going to trade what I see.

Wednesday 4/4 (5.30 am)

Well we finally got some movement.  The USD has rocketed higher on news that the Fed don't seem keen for further quantitative easing at this stage. This has sent the USD up and sent the USDX up to the resistance level of 79.5, the monthly pivot and 4 hr 200 EMA area where it is currently gathering breathe before it decides whether to keep going on or not. The EURX has fallen to break out of its triangle pattern and is paused at the 4hr 200 EMA.  All of this action happened within the previous 1 hour candle.

My 4 hr candle doesn't close for a couple of hours.  I'm going to try to wait until then to see before trading.  Rapid moves like this over a relatively short time frame prove difficult for trend signals to catch up as quickly so, often TS signals lag a bit with these fast moves. They can also often be a bit of a trap.

The YEN pairs have held up through all this but, for the E/J and A/J, this seems more out of YEN weakening or BoJ fiddling.

On my currency charts at the moment: 

• E/U has broken down and out of triangle but still no TS signal on 4hr.
• E/J has held up in triangle and has hardly moved.
• A/U has broken down from triangle but 4hr candle yet to close on this.  price could pull back to close within it yet. A TS signal to short though.
• A/J: has hardly moved.
• G/U: has fallen from the 1.6 area.  A TS short almost but 4 hr candle has yet to close.
• USD/SGD: bounced up. No TS signal.
• Swissie: bounced up. No TS signal.
• U/J: has bounced up. No TS signal yet either.
• Metals: both down.

Tuesday 3/4 (8 pm)

Although my indices have another hour until the 4 hr candle close, my currency charts have just had their candle close.  I still don't have a full TS signal on any of the pairs that I trade yet.  The E/J signal didn't ever evolve.  The A/J and A/U are very close to forming TS shorts though; this would need another look at the midnight candle! I won't be checking that!

The indices are still bouncing around essentially sideways.

There is US red flag news at my 4am which I will miss.  

Tuesday 3/4 (5.45 pm)

The USDX has stalled a bit in its down move.  I've drawn an extra horizontal support line in at 78.7 because this seems to be offering some support over recent sessions.  We've had a triangle break down of sorts but I'll watch this horizontal level for a break too to be convinced of further down move. 

The EURX has bounced back up and I've re-drawn the bottom support line of this triangle to reflect that support. 

The E/J ended up pulling back and has essentially closed back within the ascending wedge pattern.

I've almost got a signal to SHORT the USD/SGD on the 4 hr chart.  I'll wait for a trend line break to develop though as well though too. I also want to see the USDX break down fully.

Tuesday 3/4 (10.30 am)

At this stage of the Asian session, it looks like the USDX is trying to break down. The EURX is putting in a bit of a recovery.

My TS signal on Silver has recovered with this USD weakness and this trade is ticking along nicely for now.  I still don't have any full TS signals on any other pairs that I trade though.  The E/J is trying to form one to SHORT and this has had a trend line break BUT this is counter to the current EURX up move so, I won't be trading it; maybe at my peril but time will tell. (see chart below).  

I am at the hospital for the rest of the day now so I won't get to see the AUD data come out and any resultant moves there.

Tuesday 3/4 (8.30 am)  A Silver update

I'm waiting around this morning before I have to go into hospital for the afternoon.  That mention of a TS signal on Silver got me looking more at this metal; whilst I'm waiting.  It looks like there could be a bullish inverse head and shoulder pattern that MIGHT be evolving on this metal.  Price is currently at the neck line and has a big road block in its upward path in the daily 200 EMA.  My initial TS signal on the 4 hr chart has weakened a bit too but, in the interest of exploring this TS signal and combined chart pattern, I've put a simulated trade to LONG on the metal.

PS: I'm not the only one seeing ranging markets!  http://www.compassfx.com/video/ip/40212/40212.html

BTW: Still no TS signals apart from on the Loonie which I won't and don't  trade.

Tuesday 3/4 (7am)

We've had an interesting night indeed.  We did see a positive first trading day to the month.  That brokerage firm I mentioned in the w/e post, trading on this phenomenon, will no doubt be pleased.  I was out walking when I heard the 'market close' details and expected to come home to find the charts showing a higher EURX and a lower USDX.  Not so and, not so in spades!  The USDX did move a bit lower, it essentially bounced sideways though, but the EURX has actually broken down and out of its triangle. BTW: I moved the USDX trend line to show this developing support.

The currencies, though, don't seem to have been at the same party as the indices.  Most pairs essentially just bounced around mostly sideways except for the YEN pairs, which have all fallen.  I suspect this is BoJ fiddling though as there was mention yesterday of some type of intervention being initiated.  The Loonie had a big fall too but it is off my trading radar for just that reason...its loonie.  This fall must have been related to the BoC Governor Carney speech. The metals rose a bit too. The main point to note for me though is that I don't have a full TS signal yet on any of the pairs I trade.  One looks close on the E/J but, whereas I thought I might be game to try a SHORT on this yen pair, after last night, I'm now, again, not so sure given the meddling here.  I do have one on Silver though but I'm not trading this.

There was a suggestion on CNBC this morning about a de-coupling of the US from Europe. This has been something that I have been thinking as well and have mentioned before, especially in light of the strength of the emerging economies.  More on that later though.

Monday 2/4 (8 pm)
The indices are still bouncing around sideways.

I don't have a TS signal on any of the currency pairs at the moment.  The one on the U/J was out of sync with the index anyway but it has petered out a bit, for now at least. 

So, no trends = no trend trading.

Monday 2/4 (4 pm)

Little has changed since midday.  The indices have started trading sideways as have all of the currency pairs. There is red flag news for the CHF at 5.15pm and then for the GBP at 6.30pm.  These may trigger some movement. There is more red flag USD news at midnight plus lots of scheduled speeches.  A bit of a minefield actually.

Monday 2/4 (12.20 pm)

NB: My currency charts now update at 4am, 8am,12 noon, 4pm, 8pm and 12 midnight Sydney time.

The indices are showing a bit of 'risk off' with the USDX having quite a bounce this morning.  I relaxed the bottom trend line of the USDX to show recent support.  We are not seeing a corresponding fall in the EURX though.

E/U: I also adjusted the upper trend line here to show recent resistance.  I don't have any TS signal and it is just nudging up against resistance in the triangle bear trend line.

E/J: I have noticed that this may be coming up to a triple top situation.  I'll be watching this.  I may even consider a short if it reverses, breaks the trend line and gives a TS short signal.  I still have a TS signal to LONG this though at the moment and this has so far given 90 pips.  I'm not taking this trade though given the USDX is up and rallying at the moment.

A/U: We've had some bad data out this am which has hit the A/U.  I'll be watching for a break of the daily bull trend line.  I don't have a TS signal at all yet though.

A/J: Gapped up on open but we've had bad AUD data. No TS signal yet.

G/U: This is struggling at the 1.6 level and daily bear trend line.  The TS signal I had delivered 90 pips already but this signal has now weakened.  The rising USDX will put pressure on this pair.

USD/SGD: nothing much here yet. No TS signal yet.

Swissie: Still bouncing. No TS signal.

UJ: I didn't discuss this in my w/e review but, if the USDX does go for a rally, this may be a pair to trade.  It currently looks like a bit of a bull flag pattern.  I'll be watching this pair for a further up move.  I already have a TS signal to LONG this pair.