Monday, May 14, 2012

Trading Week 14/5/12

Friday 18/5 (10.15 pm)
The USDX has failed to break up through the 81.7 resistance level, for now at least.

There isn't much scheduled data due out overnight so it may end up being rather quiet. I'll find out when I wake!

Friday 18/5 (5.30 pm)
The USDX is still struggling to get over the 81.7 level.

I'll check in later if I can. We're having some Gen Y family over tonight for dinner so I may not get much time. 

Friday 18/5 (4 pm)
The USDX is having another attempt at breaking up through the resistance level of 81.7 whilst the EURX struggles to remain above the 100.5/6 area.


The E/U is approaching a key level in 1.262. This is a major support level going back many years.
I will be looking for a trade around this level if the USDX continues upwards.



I missed a TS signal to short the A/U after the 12 noon candle. I'm not chasing this trade on a Friday especially when the USDX is at a critical level.

The A/U trade I was stopped out of earlier this week has now moved up to 120 pips. The Loonie trade that I was stopped out of has now moved 160  pips!

The two trend line break trades that I pointed out earlier this week have rocketed. The USD/SGD has moved 230 pips and the Swissie has moved 160 pips!


Friday 18/5 (11 am)


I just watched this this video on flag patterns. Quite timely as I'm watching few right at this moment. Worth watching if you are not familiar with them:


Friday 18/5 (6am)
Poor data and continued Euro woes sent the broader stock markets tumbling overnight. It seems that the 'double top' out weighed that 'reversal candle' noted yesterday. My FX charts show how there was a great short trend to catch on the 30 min Dow charts:

The gloom across stocks wasn't reflected as much in 'risk off' trading across the currencies. In fact, the indices just continued their sideways shuffle overnight with neither able to break through their key S/R levels:


Gold continued with its reversal after yesterday's trend line break and I now also have a trend signal to long here:

This up move in Gold would make me wary of shorting the A/U.

All the Yen pairs have fallen. BoJ stuff there for sure but it seems to be in reverse this time.

The Loonie trade I was stopped out of, albeit for a little profit, has now continued on to give over 120 pips. I actually think that I AM THE LOONIE here! Yet again, I tightened my stop too soon and this got me out of this low risk:high reward trade!

I don't have any new TS signals just yet.

The Cable signal that I missed catching during my over night this week has now gone on for 220 pips:


Thursday 17/5 (5.30 pm)
Not much has changed. Indices still shifting sideways.

The last candle on the daily chart of the Dow might be a reversal candle ....maybe...perhaps? Time will tell. A further fall though would confirm a double top and then possibly a bear rally.

Thursday 17/5 (2.30 pm)
The USDX might just be starting to roll over in a topping formation and the EURX might be bouncing off the major support level of 100.5/6. Continuation of these moves would see areturn to 'risk on' trading.


Gold has also reversed a bit as well today and has broken above its bear trend line, apparently in the wake of some big buying from the Koreans today. This kind of action will also help the Aussie pairs:

I'm on the look out for new TS signals even if any reversal is only short lived.

Thursday 17/5 (10am)
The indices aren't committing themselves to the next move just yet. Both are trading at rather extreme levels; the USDX is just under key resistance of 81.7 and the EURX is just above major support of 100.5/6.

PS: Umm...these could be flag patterns forming....bull flag (USDX) and bear flag (EURX)! Both flag poles are around 260 pips or so. Such a move could propel the USDX to around 84 and the EURX to around 98. Just something to keep tucked away in the back of your head!


After so many 'risk off' days of trading I get the sense that the markets would jump at any slightly positive Euro news and reverse to 'risk on', even if just for a few sessions. Positive Euro news seems so unlikely though at the moment.

Gold is trying to put in a bottom or bounce here and this, if it continues, will help to boost the Aussie pairs:

There is no clear new trend at the moment, just a lull in the current 'risk off' trend, so, I'm waiting.
  
Thursday 17/5 (6am)
Better than expected US data overnight was not enough to counter the weight of further negative Greek crisis woes. All of this contributed to quite volatile trading in both the currency and broader stock markets. US stocks have all closed lower and the VIX, or fear gauge, rose to above 22. 

The USDX bounced around under the next level of major resistance which is at the 81.7 level. The EURX tottered above its major support level of 100.5/6.


I have been stopped out of the two remaining trades at b/e. These trades are still trending though and I am out because I tightened my stop. Too soon? Maybe BUT, with the current extreme levels  on the indices, high volatility and even some new talk of further easing from certain Fed members, I am quite happy to lock in profit and reduce risk ASAP at the moment.

I don't have any new TS signals at the moment. Gold has stalled in its slide given that the USDX is back to bouncing sideways.

Wednesday 16/5 (6.20 pm)
I'm thinking we could be in for a bit of a bounce at these extreme levels on the USDX and EURX. Thus, I've closed half of my A/U (40 pips) and Loonie (50 pips) trade and all of my U/J (10 pips) trade.

We are seeing a bit of a reversal now and this may be due to the following news item:


Talk of emergency ECB meeting today

Written by 

May 16, 2012 at 08:26 GMT 
Take it for what you will.  I know there’s an ECB monetary policy conference in Franfurt later today.
Wednesday 16/5 (5 pm)
The USDX is approaching a huge resistance level at around the 81.6/7 area.. A break through here could possibly lead the way to an easy romp up to the 87 level. 



Wednesday 16/5 (4.30 pm)
My 3 trades are moving along nicely now that Europe has opened up: Long U/J and USD/CAD and Short A/U. These are all 'risk off' trades.

The EURX is pushing down again towards the key support level area of 100.5. Price action could be quite unpredictable around this level so I have moved stops to b/e on my open trades. I see no fundamental reason why the EURX should rally from this point on but Forex isn't a rational being.

Wednesday 16/5 (2.30 pm)
The USDX on the daily chart has moved past the previous double top possibility but is moving up to form another similar formation beside the highs from back in Jan 2011. It might struggle a bit at this level so will be worth keeping an eye on.

Wednesday 16/5 (1.30 pm)
The USDX is still climbing and the EURX is struggling to hold its place.

I missed signals through my night on the E/U and G/U. Both of these trades are now up about 60+ pips.

The 2 trend line break trades I flagged this week are each up about 130 pips, the USD/SGD and USD/CHF. sadly, for me, these breakouts did not come with a new TS trend signal so I didn't take them. I'm like that...it's the Scientist in me guys..... I'm methodical to the hilt!


I've taken 3 trades today. These trades all 'risk on' and thus are highly correlated:

  • Short A/U: on a TS signal and a break of the monthly trend line:


  • Long U/J: on a new TS signal and a trend line break on the trend channel:


  • Long on the Loonie: on a new TS signal and a trend line break of the symmetrical triangle:


Wednesday 16/5 (6.30am)
The USDX has spiked higher amid further Greek political concern and news that new elections are likely in the troubled zone. The EURX has fallen and is hovering just above a major low in the 100.5 area.



The broader markets and commodities have all fallen along with the rising dollar.The chart of Gold below shows this.

I have had a some TS signals kick in overnight and some more are brewing.  I have missed signals on the E/U and G/U. Signals are brewing on the A/U, U/J and Loonie but I need the next candle to close to confirm. I am cautious though as the EURX is approaching a major support level and this could hinder further 'risk off' a bit.

The trend line breaks on the the USD/SGD and Swissie have continued but without new trend signals. The USD/SGD is now up 90 pips and the Swissie is up 130 pips!  Charts below:


Tuesday 15/5 (7 pm)
The USDX is still trading within the bearish ascending wedge. There has been mixed EUR data but not a lot of movement. It might take US data due out later tonight to shift things.

Tuesday 15/5 (3.30 pm)
Not a whole lot of movement today. The indices haven't done much at all. 

You might recall we've had a lot of 'wedge' patterns appearing on the charts of late and these have followed through in text book fashion. Well, to me, it looks like an ascending wedge pattern is forming on the USDX. These are bearish patterns and I'm hoping this one evolves as well as it will give us a pullback and generate new trends and, thus, new signals.



The A/U has bounced, in text book fashion as well, off the bottom monthly triangle trend line. It remains to be seen how long this will hold for as Gold seems to be continuing with its slide.

Tuesday 15/5 (9 am)
Not a whole lot happening. I suspect it might take a Greek announcement to move things. There is AUD data out at 11.30 am which might shift the Aussie pairs. The A/U is still sitting on top of the monthly triangle trend line and just under parity. I'm wondering how, and why, I missed these straight forward TS trades on the A/U over the last 2 weeks????? I'll mull this over whilst I'm out today.



The Swissie trend line break moved 40 or so pips:

So too did the USD/SGD:
Unfortunately these did not come with new TS signals.

Tuesday 15/5 (6.30 am)
The indices didn't move too much overnight, nor did many of the currency pairs. The USDX still looks like it has the potential of forming a double top on the daily chart.



Whilst uncertainty with the Greek situation seems to have stalled the currency markets this, and concerns over a slow down in China, though the broader markets lower and caused a spike in the VIX to over 21 for the first time in 3 months.

I still don't have any new TS trend signals on my pairs as many pre-existing trends are still in play. I would love for this continued uncertainty to remain for a bit, or even a burst of some temporary optimism, to enable some new signals to develop.

Monday 14/5 (7.50pm)
I've just noticed a new, possible pattern on the USDX. It has rallied a bit today to be back up just under the 81 level. This brings it up near in line with the high from March last year. At this level though it could possibly be approaching/forming a double top??? One to watch for sure.


Monday 14/5 (7.40pm)
The 'risk off' slide has stalled a bit as news has come through of further meetings concerning the Greek political crisis. 

The USD/SGD really moved though:

I'd be loathe to trade any signal at the moment on 4 hr charts though as the slightest bit of good news concerning the Greek saga could send the markets into a reversal 'risk on' rally out of sheer relief. 

Monday 14/5 (5.30pm)
Risk off has gathered momentum now that Europe is waking up. The USDX is back on its march.


I don't have any new TS signals BUT the trend line breaks I suggested to watch for have started to come through.  See below:

The USD/SGD triangle trend line break:

The Swissie ascending triangle trend line break:

The triangle break on the Loonie is brewing too:

The long awaited triangle break out on Silver seems to be developing as well:

Monday 14/5 (1pm)
I have just had the first candle close on my indices platform. The USDX had a gap up to open the markets today and the EURX had a similar gap down. There was some hope that positive news out of China might boost optimism but this does not seem to have flowed through to the currencies just yet.


'Risk off' sentiment seems likely to persist given the continued uncertainty about the Greek political situation.

I don't have any new TS signals to trade 'risk off' at the moment though. 

Some reflections: I was stopped out last week from my E/U short because I changed my usual stop size down wards. Had I used my usual stop size I would still be in this trade and, now, up almost 100 pips! The same situation occurred to me the week before when I was stopped out of my G/U short. If I had kept to my usual stop size this trade would now be in profit by up to 130 pips!

As if that is not enough to annoy myself I have had a look back at just a few of my main favoured pairs; the E/U, E/J, A/U and A/J.  I've looked to see where initial trend trade entries should have been taken on these pairs with new TS signals. If I had just followed my very simple TS trade entry rules and current trading strategy on just these pairs, then I would be in considerable profit for the last 2 weeks: the E/U up 260 pips, E/J up 380, A/U up 330 and the A/J up 310 pips. 




I closed my demo trade on A/U long for about 10 pips. I want to start the week a fresh.


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