In this email I am going to give you my view on the market for today,
Sunday the 24th of January 2010 and the week.
What a week it was as volatility increased in several markets with
several fakeouts to keep participants busy and on pins and needles
for several position traders. As expected there was dollar strength
this last week leading to sell offs in many stock and currency
markets. Going forward we expect some choppy trading with fits of
volatility for the early part of the week and the continuation of the
intermediate term trends for USD denominator pairs, that being down.
So we do expect the dollar to strengthen, albeit somewhat modestly
compared to last weeks action, in the latter half of the week. This
should provide some short and intermediate term opportunities going
forward and weakness to many pairs by the end of the week, so the
bias will still be on the sell side for most of the pairs we will
trade. In addition, we might be looking to scalp some reversal moves
in these pairs in the London Market opens as last week most of the
dominant moves occurred in the US markets last week. Again this week
there will be many key reports early this week that should contribute
to early week choppy trade. We will be on the watch for opportunities
in those related pairs for good measure as it looks like volatility
could be in for this week and so just a reminder, smaller position
sizes might be warranted if looser mental stops are to be set. Now
let us go to the promised monster trade.
For intermediate to long term position traders who can handle the
heat, keep an eye on the GBP/JPY pair. It has been in a tight, low
volatility range for several months/weeks now and is poised for a
breakout/breakdown. Bound by some nice round numbers of 150 - 151.0
and 145.0 and currently at 145.20 this pair is poised to provide some
serious MONSTER PIPs in the not too distant future. Sentiment would
suggest that more weakness is due for this pair and that a breakdown
is coming but that a shakeout is also very likely (actually I expect
it). So how to play? This is how: SELL the GBP/JPY on any trade below
144.70 with a 40-45 pip stop (big stop & so smaller position size if
you are so inclined) with an intermediate target of 140.0 and a loose
(50pip) trailing stop to manage the trade as it progresses. Remember,
breakout/breakdowns often come back and test the original
breakout/breakdown price to shakeout the breakout players. The
opposite is also true if GBP/JPY trades above 151.0 the target price
will be 154.0. This may seem like a big range of 500pips (145.0 -
150.0, which we will scalp in the chat room) but for this pair this
is not. One has to look back to the action of this pair from June to
August of last year to see a similar range-bound trade that ended
with the GBP/JPY pair going from about 210 to 150 in two months&yes
thats 5000pips! Also note that if the first breakout/breakdown
reverses and trades back in its old range then an opposite move is
expected (i.e., for example, breakdown first, shakeout back into the
previous trading range and then a breakout) that the opposite move
will be that much more powerful&a true monster move!
*As of now there is no swing trade for todays session.*
That's it for today. Remember that I trade in the Live Forex Trading
Room between 1am-6am Eastern Time. I will be hosting my regular 3-4
hour session and some scalp trades could be on the menu. So there
should be a little more trending action and pips to be made.
Enjoy trading and good luck everyone!
*Trade with Mr. GREEN for a $39.00/trial for 1 WEEK*
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Trades are issued in real time, including exact entries, exits and
detailed explanations. The service costs $99 per month, and we also
offer a 7-day trial for $39. So go to GreenForexTrading.com now and
take advantage of this offer.*
*Mr. Green*
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