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GreenForexTrading.com
ForeX-tra Gr€€n
Hello Everyone,
First item of note is a personal one: I have a serious buyer in search of a significant quantity of gold (tonnage)...if you or if you know of anyone willing to sell such quantities, please contact me at www.MrGreen@GreenForexTrading.com. This is much appreciated. Thank You. Mr. Green
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 10th to Monday the 11th of October 2010 and the week.
ALERT!!! “Monster Trade” With the EUR/USD now around 1.394 I recommended Scaling In SELLS (0.1-0.2 contract at a time) on strength in the EUR/USD in the 1.394 to 1.405 range as now a deeper pullback is expected short term. Shorter term retracements in the 1.388 and 1.350 areas can be aimed for when adding or positioning on EUR/USD strength. Expect increased volatility, but positions can still be added at this point all the way up to 1.405 with STOPS in the 1.418 area. The rationale is given below. NOTE: All position trade stops are HARD stops, NOT mental stops. Remember, hard stops for overnight positions, mental stops for day trades.
About Scaling In
“Scaling In” simply means breaking up the initial entry position into multiple parts and deploying them at selected intervals, instead of firing the entire trade magazine all at once. The only reason we might resort to scaling is if we have good reason to believe our expected support zone may have become obsolete. We usually take an initial position in our expected support zone with a fairly tight stop. Obviously if we get stopped, we were early to the trade. Early is just another word for “wrong.” If stopped, we reassess and adapt to the new market reality. If we were not early, and our position shows us that we are right, then we add to that position once the trade has managed to “prove” itself by advancing out of the support zone box, raising our trailing/trading stop in the process. The two or more portions make up a full position. When we speak of scaling, it means we have become willing to break up the trade entry into two or more parts, with the first part at the very top of the expected support box and the second part within it. Rarely will we ever take a new position outside our expected support box.
ALERT!!! A DOLLAR COLLAPSE IS ON HOLD. A POSSIBLE REVERSAL TO UPSIDE IS EXPECTED IN THE USDX. CURRENT LEVEL OF 77.0 EXPECTED TO HOLD AND 78-80 IS EXPECTED TO BE RETAKEN SOON. THE ULTIMATE USDX TARGET OF 71 IS NOW DELAYED AND EXPECTED BY DECEMBER.
Note: Another full blown crisis is brewing in the revealing fraud that is the US mortgage market and should crush US banking system. Yes, it is expected to become very serious and should provide the catalyst for the expected dollar decline into December, for now the lamestream media is ignoring it, hoping it does not surface before midterm elections...will they succeed?...stay tuned.
All countries are now in a war with each other to have the weakest currency, with the false belief that having a strong currency destroys their export markets. When history looks back to the time period we are currently in, our world leaders (especially our elected representatives in the US) will be considered the most incompetent and corrupt in world history. Talk of currency wars have heated up as several events have converged to make the public increasingly aware of the on-going competitive devaluations around the globe. The news on currency wars has picked up lately as the Federal Reserve has promised to rain more dollars on the American economy (and confirmed by subsequent statements from Fed members), and the Bank of Japan (BoJ) has directly intervened in the currency markets for the first time since 2004. On Thursday, the BoJ promised to remain active in the currency markets even as this has resulted in further yen strength (what failures they are). With intervention still in the cards and a daily rising trend-line, be wary of the wash and rinse instead of a fast move in either direction that would normally be expected before the turns. Traders should still use caution should the JPY pairs be traded for the time being as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
Google trends show a recent surge in searches in the United States on “currency wars” that has reached previous peaks. News reference volume has surged higher than those previous peaks. The even larger spike in searches in 2004 coincided with Japan’s last intervention. Despite all this commotion this joker >>> John Lipsky, the IMF’s first deputy managing director, insists that no currency wars exist and that it is the media fanning the flames of conflict. Listening to these so called “experts” is a joke. Such denial makes me more confident that no material change will come out of the IMF or G7 meetings. It will be devalue as you were with the lingering question being “what is the market’s relative appetite for buying/selling devaluing currencies?” I have one thing to say here...GOT GOLD?
The increasing clamor came ahead of an IMF meeting Thursday and a G7 meeting this weekend where the topic of global trade and currency rates are hot topics. It is probably no coincidence that gold and silver started to go parabolic ahead of these meetings. The euro’s test of the 1.40 level against the U.S. dollar seemed to be a sufficient catalyst to cool off the rocket fuel quickly and abruptly. These moves have created “bearish engulfing” patterns in gold, silver and most dollar denominated currency pairs, which typically signal the end of a rally. The euro’s test of the 1.40 level against the U.S. dollar should be used as a trigger to trim long positions as given in an earlier forcast that the ECB will start talking EUR down against the 1.40 level. Parabolic moves typically signal the end of a rally as the final skeptics and last buyers try to hop on a trend, so Tuesday and Wednesday’s moves put me on alert. I am now expecting some kind of correction that will cool things off and provide the next buyable dip in dollar denominated pairs and if I am wrong and the train continues to run from here, then I will reassess and change positions. Interestingly, the dollar index is also testing an uptrend line from the 2008 lows. A break below this trendline will signal a likely retest of the 2009 lows in short order (and next the 2008 lows). A successful bounce from this trendline could send the dollar hurtling right back to the 200DMA resistance which is the rationale for the “Monster Trade”. Earlier I had expected more of a Head and Shoulder neckline underside retest, however, the USD selling just conitinued without an underside retest, but now we must be positioned for that possibility. The daily close-up shows once again how important the 200-day moving average (DMA) is in flagging the next major direction for the dollar as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD. The EUR pairs were expected to be overall weaker than the corresponding correlated GBP pairs however there appears to be rotation of relative strength between the two currencies from day to day. The EUR is now at key weekly and monthly pivot resistance and a decline or consolidation at the least is expected before the advance is expected to resume, as seen in the chart that can be seen here http://www.stockcharts.com/charts/gallery.html?$XEU. In summary, the a minimum retracement to 1.351 with a possible 1.333 should be in the cards. Loading up is recommended as given in the “Monster Trade”. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
The GBP is still in bullish alignment with the 50 and 200-day moving averages as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP, and traders should take a wait and see approach although a trading range is expected it could be fast and be ready to jump on either way if it moves.
On the commodity currency front, the Aussie looked on the verge of collapse but then reversed the reversal and looks like it wants to make a run towards parity with the US dollar. It is rapidly approaching levels last seen prior to the onset of the credit crisis back in 2008. Technically, the Aussie Dollar is now trading inside a larger range of 0.946 to 0.991. This makes 0.956 to 0.967 a retracement zone target. This is really nothing compared to the bigger picture. The longer rally from 0.877 to 0.991 makes 0.935 a potential downside target once the reversal top is confirmed, although highly unlikely at this point. An up-trending Gann angle at 0.930 could slow down the pace of the expected decline. The AUD as seen here, http://www.stockcharts.com/charts/gallery.html?$XAD, is hanged up at recent highs.
Most of this week’s key reports are towards the end of the week. They are:
1. Mon. Oct. 11, 2010. Canadian Thanksgiving & U.S Columbus Day, both national Bank Holidays...expect a thin trading environment.
1. Tues. Oct. 12, 2010 (4:30am EST) UK CPI <<<usually reliably tradeable on pre-report sentiment.
2. Wed. Oct. 13, 2010 (5:30am EST) UK Claimant Count Change.
3. Thurs. Oct. 14, 2010 (8:30am EST) US PPI and Unemployment Claims and (8:30am EST) CAD Trade balance.
4. Fri. Oct. 15, 2010 (8:30am EST) US CPI, Retail Sales and Consumer Sentiment.
Due to US and CAD Bank holidays there is no swing trade for today’s Asian-London-U.S. 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 assessing and exploiting PIP opportunities as they arise.
Enjoy trading and good luck everyone!
Last Friday’s swing trade to SELL the EUR/USD technically did not fill (missing the fill by 3-4PIPS), but we were able to adjust entry in the Live Trading Room to get those PIPS. Don’t miss out on more PIPS!!!
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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 information posted here or on this website.
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