Wednesday, March 9, 2011

Daily Trade for Mar. 9-10, 2011

$ £ € ¥

GreenForexTrading.com

ForeX  forX-tra  Gr€€n

 

Hi everyone,

 

In this e-mail I am going to give you my view on the markets for Wednesday the 9th to Thursday the 10th of March 2011.

 

The swing trade for yesterday’s Asian-London-U.S. session to BUY the EUR/USD @ 1.3845 with a STOP @ 1.3815 and a TARGET of 1.3950 for 100 PIPS did not fill by 9 PIPS.

 

The “Monster” Trade.  This trade is now a HOLD... with the AUD/USD at 1.005 is now on confirmed BUY signals.  Sentiment wise, this AUD/USD is set for further gains, and the 1.000 level looks to be bested for good.  With a STOP NOW RAISED to under 0.999 as any further decline would invalidate the rationale for the trade (see below).  Should the AUD/USD decline any further this trade will be closed for the time being as the AUD/USD is still expected to yield 1000 to 1500 PIPS over the next 2-3 months, maybe even sooner.  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.

 

Why the “Monster Trade”?  In the AUD/USD sideways action of recent weeks has served to further unwind the earlier overbought condition while forming a Head and Shoulder bottom continuation pattern on the 4-hour chart with the neckline coming in the 0.996 area.  The interpretation of the pattern in the AUD/USD presented in the last update, which was that it is marking out an upwardly skewed bullish "running correction”, remains unchanged. All that has happened in the past few weeks is that it has reacted back across the up sloping channel to arrive at support near its rising 50-day moving average again and again retesting that area.  As we can see on the chart this reaction has resulted in a complete easing of the intermediate-term overbought condition as shown by the PPO indicators, which are now bias long with a new BUY signal on the daily and working on a BUY in the weekly right at the zero line which looks to be happening...and this sucker is ready to explode to the upside.  The noted convergence of the short-term downtrend channel earlier last month was an indication that the AUD/USD would soon break out of it to the upside to resume its advance and make new highs, which it has yet to do but I expect it to this week as it breaks out of consolidating from this region. The AUD is seen here, http://www.stockcharts.com/charts/gallery.html?$XAD.

 

          Nothing has changed since yesterday, unless you consider slow choppy sideways grind a change.  With monthly rising trend-line now broken (at 77), as was expected as that was the third attack at that line (1st July 2008; 2nd Dec. 2009 and 3rd Oct.-Nov. 2010) and confirmed the three times a bounce and then a failure rule.  With each subsequent bounce becoming smaller and smaller in the USDX, a fast move to 75 should be in the cards soon followed by a collapse to as low as 72 but beware of this current bounce here as sentiment has gotten a little ahead of itself and might still need to unwind a bit to shake out the plenty of new “Johnny-come-lately” players to the short the USDX party.  The USDX rally is expected to be capped at the 77 to 77.5 area and chop is expected from here to the zone of weekly support at 75.5-76.5.

          We were looking for a small and fast U.S Dollar rally this week to both scalp some PIPS on and we got that and now it is time to continue to load up long on longer term U.S. Dollar denominated pair BUYS on any further U.S. Dollar strength or maintain the positions you already have with stops.  Witness a weekly PPO SELL signal still in alignment with a daily SELL.  So look to go long U.S. Dollar denominated pairs on any further weakness (USDX strength) into some retracement zones this week.  I expect the current USDX rally to be short-lived as the USDX is looking pretty sick now and the bounce here remains as small reversal bar that has now appeared, as seen in the USD daily and weekly chart here http://www.stockcharts.com/charts/gallery.html?$USD.

          The EUR is the inverse of the USDX and with the backdrop of a PPO that now has triggered a daily BUY signal against a weekly BUY signal extended from the 50-day moving average, and the bounce here looks to continue and now look for some bottom action on lesser time frames to enter and go long.  The current upside short term target of 1.37 areas had been achieved and now look for 1.41, after the expected retrace to 1.385, which is now being seen in the rear view mirror; and we can look for 1.425, 1.45 and 1.50 to be seen in short order, as can be expected on future dollar weakness as seen in the chart here, http://www.stockcharts.com/charts/gallery.html?$XEU.  Place your trades accordingly.  All charts courtesy of www.stockcharts.com.

          The GBP has seen some serious choppy swings and a reversal upon reversal bar on the daily and we have been avoiding this on of late but still watching it with a long bias as it becomes less stretched on the long side.  A PPO daily SELL that needs to turn up against the backdrop of a weekly BUY signal makes cable choppy as of late.  All these cross-currents still make cable a cautious play, as seen here, http://www.stockcharts.com/charts/gallery.html?$XBP.

          The JPY was too extended to play but has filled the gap under 122 and cautious longs on JPY (converse weakness in USD/JPY) can be played as seen on the chart given here http://www.stockcharts.com/charts/gallery.html?$XJY.

 

This week is banker speak heavy and rate policy and report heavy later in the week.  They are:

 

1.       Thurs. Mar. 10, 2011 - (4:30am EST) UK Manufacturing Production; (7:00am EST)        GBP UK Official Bank Rate and MPC Statement; (8:15am EST) AUD RBA Gov.       Stevens Speaks Note: this speech could indicate future rates and could affect the “Monster Trade”, and hard stops are           recommended and (8:30am EST) CAD       and US trade Balance and US Unemployment Claims.

2.       Fri. Mar. 11, 2011 - (4:30am EST) UK PPI; (7:00am) CAD Employment Change and           Unemployment Rate and (8:30-9:55am EST) US Retail sales and Prelim UoM     Sentiment and Inflation Expectations and (3:45pm EST) UK BOE Gov. King speaks.

 

The swing trade for today’s Asian-London-U.S. session is to BUY the GBP/USD @ 1.6184 with a STOP @ 1.6164 and a TARGET of 1.6245 for 60 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 $49$ for a 1 week trial.  Don’t miss out on more PIPS!!!

 

For those who join with this special, the service costs only $179$/month after the trial expires, unless you cancel the membership.  Trades are issued in real time, including exact entries, exits and detailed explanations.  The service costs $179 per month.  So go to GreenForexTrading.com now and take advantage of this 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 information posted here or on this website.



--
If you do not want to receive any more newsletters, this link

To update your preferences and to unsubscribe visit this link
Forward a Message to Someone this link

Powered by PHPlist2.10.10, &copy tincan ltd

No comments:

Post a Comment