GreenForexTrading.com
ForeX forX-tra Gr��n
Hi everyone,
In this email I am going to give you my view on the market for the
Asian/London sessions in the market for today, spanning Sunday the
21st to Monday the 22nd of February 2010 and the week.
The emphasis will be on the USD and to a lesser extent the EUR. What
was written last week still applies &some fundamental shifts in
sentiment expected to play out over the next few days if not weeks.
The sentiment on the Euro is nothing short of apocalyptic will all
the bullish dollar players expecting the happy days to continue till
nirvana. Seems everyone forgot the complete bearishness in the dollar
no more than 2-3 months ago when the dollar was expected to be in the
dustbin and aside from precious metals the EU was the only play in
town. It is these extremes in sentiment that we meager souls at
GFXtrading hope to exploit with laser-like precision as half the
battle is recognizing the type of market we are in. Well that shift
is now upon us as several more pieces have come together to yield
some exciting PIPS moving forward. As explained in the Trading Room,
we were waiting to see what fabrication would come out of the U.S.
CPI report and we were not disappointed with an unbelievable -0.1%
(based on what I do not know, but it really does not matter anyway).
The dollar was relentlessly sold all day from its post induced Fed
announcement high from the � point interest rate increase the day
prior. This has created a bearish candle on the daily USDX chart and
a long-legged doji (indicating indecision..a pre-curser to a
reversal) on the weakly chart which can be seen here&
http://www.stockcharts.com/charts/gallery.html?$USD
. The Euro and British pound also have reversal bars indicating
reversals of extremes in sentiment as seen here&
http://stockcharts.com/charts/gallery.html?$XEU
and http://stockcharts.com/charts/gallery.html?$XBP
.
It is our belief that the 2-3 month dollar countertrend rally is
done. Another nail in the coffin of the dollar is last weeks
Commitment of Traders Reports showing extreme positions which are
always a nice confirmation at major turning points. Note that the
commercials (the big boys who somehow always seem to get it right)
are heavily short the USD while the large specs (wrong way Louis)
are heavily long the USD; until last week with very marginal long
exposure (although it appears that some specs got caught with their
shorts down ...pun intended...as the dollar continued to rise two
weeks ago and early this week and quickly added shorts to pick a top
and got burned, increasing their short position by almost 40%). I
expect this weeks report due out Tuesday will show a further
decreased spec short position while they stubbornly hold on to their
lopsided 12:1 long position.
Again, from last weeks Weekly Outlook& &the dollar...having
completed a classic ABC correction in a long term down trend. As for
the GBP and EUR, I am hesitant to call a bottom here as extremes can
always get more extreme, and in some pairs, one more leg down is not
off the table; and since the bounce that failed last week in dramatic
fashion&Be forewarned, a tradable bounce is near and the set-up for a
mini-monster trade could soon be in place. Well folks...that bounce
is here and expected to continue in the EUR, GBP, CHF and the
commodity pairs, AUD, CAD and to a lesser extent the NZD. The
consolidative phases are being broken to the upside in all dollar
(USD) denominated pairs. The JPY will take a back seat for now but is
expected to follow the USD in a correlated fashion.
This week we will look to HEAVILY trade dollar weakness and
retracements intraday. With several reports to trade around, this
short month could give a very profitable final week indeed. Month end
position squaring is to be watched but feel that the overall trend of
dollar weakness will be hard to fight. This also gives rise to the
next Monster Trade. In this shortened month, opportunities for more
position trades along with a hopefully a new trend play or two by the
end of the week are forecast to be in order in the Trading Room this
week.
The Monster trades. Thats right, there is now more than one! The
AUD/USD trade was stopped out last week, and the expected move back
in the 0.8950 range was brief (enough to take out stops), it still
managed to travel � way into the 0.8900 to 0.900 range and promptly
resumed its advance, further confirmed by the closely correlated
NZD/USD pair. This strength must be bought on any residual weakness
as I no longer expect a reversal to the downside, but HARD STOPS ARE
REQUIRED, just in case. I recommend scaled in BUYS (0.1 contract at a
time) on weakness in the AUD/USD in the 0.8950 to 0.9050 range or
better with looser stops than usual, around 0.8850 to 0.8875 (so
explains the very small position size), and/or scaled in BUYS on
weakness in the NZD/USD in the 0.6950 to 0.7050 range or better with
looser stops than usual, around 0.6800. Note: the AUD/USD is the
preferred pair with ultimate targets expected to yield 1000 to 1500
PIPS over the next 2-3 months, maybe even sooner. Again, NOTE: All
position trade stops are HARD stops, NOT mental stops. Remember, hard
stops for overnight positions, mental stops for day trades.
Again, to repeat, we feel the next two weeks might see some recovery
trades, albeit choppy ones. We will look to re-enter these trades and
some strength or consolidation breakouts, so stay tuned for more
up-dates. I am now running the Final Week of the Trading Room Special
of $7 for 7 days!! Dont miss more PIPS at bargain basement prices!
Again, there will be many reports to move the markets today and this
week combined with reaction moves should mean greater volatility than
most are used to in the Trading Room the past few days. That being
said we still will be aware of spike/gap volatility (chop & slop) and
adjust position size accordingly but will go in with both fists to
play any forecast breakout and/or trend plays.
*The swing trade for todays session is to BUY the GBP/USD an any
retracement to 1.5415 to 1.5425 with a STOP at 1.5395 and a TARGET of
1.5550 for over 100 PIPS.*
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 assessing and exploiting PIP opportunities as they
arise.
Enjoy trading and good luck everyone!
*Trade with Mr. GREEN for** **$7$/trial for 7 DAYS!!! FINAL WEEK*
*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 and take
advantage of this special offer.*
*Mr. Green*
* *
*Risk Warning!** *Trading foreign exchange on margin carries a high
level of risk, and may not be suitable for all investors. Past
performance is not indicative of future results. The high degree of
leverage can work against you as well as for you. Before deciding to
invest in foreign exchange you should carefully consider your
investment objectives, level of experience, and risk appetite. The
possibility exists that you could sustain a loss of some or all of
your initial investment and therefore you should not invest money
that you cannot afford to lose. You should be aware of all the risks
associated with foreign exchange trading, and seek advice from an
independent financial advisor if you have any doubts. All information
posted on this website is of our opinion and the opinion of our
visitors, and may not reflect current situations and occurrences.
Please, use your own good judgment and seek advice from a qualified
consultant, before believing and accepting and acting upon any
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