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GreenForexTrading.com
ForeX-tra Gr€€n
In remembering Thanksgiving:
I recall learning ... about (trading) ... and of the great trader Jesse Livermore ... back in the 1930's and was brought forth by greats like John Murphy and Magee and Edwards ... I must say my search was interesting and am reminded that we all stand on the shoulders of giants that came before us.
Hello 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 Wednesday the 24th to Thursday the 25th of November 2010.
Below I give a reprint from a recent subscriber inquiry:
“A lot of my pivot levels I develop myself but also can and do use those of other services if they happen to fit with my weighting ... more for fine tuning. In a nutshell, I
weight levels based on several criteria...
The most weighting goes to Monthly and Weekly trading bands that show heavy volume
activity history around that band in the past...if they happen to coincide with key
Weekly or Daily Fibonacci levels then the weight of that potential trade increases
(and this often becomes the basis for my "FULL" recommended trades as opposed to 1/2 size recommendations), although this is not absolute as volatility and potential
intervention considerations can also change the weighting of a trade.
For example, the 1.3600 level that has been very key in the EUR/USD had a very strong weighting when looked at initially two weeks ago based on prior weekly and daily trading bands around that level last month and a confluence of overlapping Fib levels. Now that the level has been traded through twice in the last two weeks (first as support for a decent bounce on Nov. 12 good for 100 pips, then it was broken and we used it in the Live Forex Trading Room as a target to get out of a buy from 1.348 (minor key level) for 67 pips on Nov. 17 (got out a little too early, could have had 50 more pips) then it traded through it again on thin volume to the key 1.3787 area from where it was sold
for 56 pips on Nov. 22 only to watch it collapse through it the next day on choppy thin
volume. The 1.3600 level is now being given a reduced weighting (because of so many excursions through it on decreasing volume) the next time should the EUR/USD trade back to it while weighting of the 1.3484 former minor key level has increased.
Bottom line ... no one matches mine (pivot levels) because I am constantly making adjustments based on volume and time and some minor Elliot - Wave if a market is behaving impulsively (Nov.22 trade) but that is another story, while other systems are mostly static (why robot trading systems never work). It is not that difficult and you can check others pivots with your own due diligence by taking trading bands and volume into consideration as well as fib levels. I am reminded of the old adage....in trading ... ‘knowing something everyone else knows is something not worth knowing’ like frequently published pivots.”
THE BIG MOVE IS COMMING
The countertrend rally back towards 80 on the U.S. Dollar Index is playing out. I suspect before the year is out (keeping in mind markets thin out as we get later into December) we shall see a resumption to the downside and hit my first downside target of 74. The U.S. Dollar is terminally ill. QE2 is more alcohol to an alcoholic; it will wear off leaving the world’s biggest hangover. Make no mistake about it, the U.S. started a currency war and it can’t win it. For the USDX, a trade to the 79 area in the USDX coinciding with the 50-day Moving Average was exceeded with the daily close-up showing once again how important the 200-day moving average (DMA) is in flagging the next major direction for the dollar with the 80 - 81 areas now in play which should be the underside neckline test of a major head and shoulder top in the USDX, as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD. The EUR pairs were expected to be overall weaker than the corresponding correlated GBP pairs however there still appears to be rotation of relative strength between the two currencies from day to day. A longer-term collapse of the dollar is expected once bearish Dollar sentiment has been corrected and a continuation into a 2-year cycle low is now delayed possibly into spring of 2011.
After a choppy decline of the EUR/USD to the 1.348 area that was taken out and the 1.323 area is set-up next with a retest to perhaps to the 1.310 area. After which the EUR is expected to move higher, possibly to the 1.442, 1.495 and 1.600 areas. The EUR chart seen here, http://www.stockcharts.com/charts/gallery.html?$XEU shows these areas now on a sell signal. Place your trades accordingly. All charts courtesy of www.stockcharts.com.
An ABCD technical pattern is seen in the GBP that seems to temper Sterling's strength. The GBP is weakening with the 50-day giving way and 200-day moving average the next target as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP, and traders could take the GBP weakness to look for more weakness to the 200-day moving average.
For the JPY intervention is still in the cards and a daily rising trend-line, be wary of the wash and rinse ahead of a fast move in either direction that would normally be expected before the turns but now looks to be rolling over longer term. Traders should continue to use caution trading against the Yen, should any JPY pairs be traded, especially if the 50-day moving average gives way as this could leave some serious Dollar dumping being also on the same side as the BOJ for the time being, as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.
On the commodity currency front, the Aussie was at parity after an unexpected rate hike by the central bank but with commodities in corrective mode, for the time being a consolidation is likely before more continuation to the upside to work off an extended condition. Even though it looks extended, the fundamentals are supportive and should look on the long side on any pullbacks. The AUD is seen here, http://www.stockcharts.com/charts/gallery.html?$XAD.
Precious Metals - I need to say something that’s not directed to the typical currency trader but people in general. I know the answer to my own frustration as I’ve made it a critical point in my bullish argument for years: most on Wall Street and the media dislike gold or silver and what they stand for. They live off of financial assets and consider gold and silver the enemy of financial instruments like stocks, bonds and currency. With that in mind, we’re at another of those points in this “mother” of all precious metals bull markets where a pullback causes these “wrong way” characters to again fill the airwaves and print media with bubbles-bursting, tops and all their typical anti-gold/silver rhetoric. Do yourself a favor…turn some of your PIPS into physical gold or silver in your hand when you have PIPS to exchange.
These next two sessions are data light and Central Bank pontificating heavy so be careful:
1. Fri. Nov. 26, 2010 (5:30am) CHF KOF Economic Barometer.
Reminder: We are still in a very choppy market for US Dollar pairs. Chop is to be expected as the dollar rally is merely a bear market bounce in an otherwise continuing long-term down trend. Adjust position size accordingly. Sooner or later the Trading Gods deal harshly with trading arrogance. Best to keep that in mind, or maybe tape it to one of the trading screens and don’t fight the chop.
The swing trade for today’s Asian-London (US) session is to SELL the GBP/USD @ 1.5790 with a STOP @ 1.5817 and a TARGET of 1.5665 for 120PIPS.
I would like to give thanks to all you dear readers. It gives me great pleasure to be able to help you in some small way and even entertain you sometimes. I wish to thank the many who write in with such kind words. It’s truly humbling and a great honour. I know I am not perfect and sometimes my writings are much less than others but I am thankful to you all who so graciously read my screeds and sometimes mediocre work. And mostly, I’d like to thank you dear subscribers who put up with my rambling on a daily basis!
Enjoy your Thanksgiving long weekend if you celebrate it, wherever you are. And if you don’t celebrate it, enjoy the quiet that is sure to come with US markets closed Thursday and half of Friday.
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!
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Mr. Green
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