12-28-09
6:14a GMT – I hope everyone had a relaxing few days off last week! This is generally the slowest week of the year before the New Year, and I know many of you are still out for the week on vacation, but the markets are open so the signals will continue! We finally saw a breath of life out of the bulls last week as the EURUSD managed to close on a high note, climbing above 1.4400 and almost piercing the 23.6% fibonacci retracement resistance from 12/3-12/22 at 1.4330. Price also managed to break the downtrend resistance we’ve had since December 3rd.
Daily Outlook: So what does this all mean? Well, if we were in a long-term downtrend for all of 2009 I would let this go and continue selling, but given the thin markets and the fact that we have actually been in a strong uptrend all of 2009 these are enough bullish signals to make me a believer – I looking to buy on dips today.
Trading Idea: I’m looking first for bullish signals near support at 1.4320 and, if that gets broken, I’ll look above 1.4275. From 1.4275 targets are 1.4315, 1.4345, 1.4390 and 1.4420. Make sure to keep an eye out for candlestick signals here to confirm the trade.
(click to enlarge)
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December 28, 2009 at 09:31
Good morning Mark! and everyone!
Hope you all did have wonderfull time. Slower week coming?, might be just few nice rallies. I am will be very cautious this time of the year, had some bad experience and learned my lessons.
December 28, 2009 at 13:29
Better to be safe than sorry with the forex markets – there will always be a next time as long as you hold onto your money!
December 28, 2009 at 09:32
Here the only news thats coming out today, don’t yet know it there are any other annoucements:
2009 Economic Calendar, monday 28.DEC 21.30 GMT
POWERED BY ECONODAY
United States : Money Supply
Definition
The monetary aggregates are alternative measures of the money supply by degree of liquidity. Changes in the monetary aggregates indicate the thrust of monetary policy as well as the outlook for economic activity and inflationary pressures.
Why Investors Care
In recent years, the various money supply measures have not mattered to most investors – though that has changed somewhat recently. The monetary aggregates (known individually as M1, M2, and M3) used to be all the rage when the Fed did not publicly announce it interest rate target because the data revealed the Fed’s (tight or loose) hold on credit conditions in the economy. The Fed in the past issued target ranges for money supply growth at its first report to Congress each year. In the past, if actual growth moved outside those ranges it often was a prelude to an interest rate move from the Fed. Today, the Fed no longer sets money supply targets due to a variety of changes in the financial system and the way the Federal Reserve conducts monetary policy. Monetary policy is understood more clearly by the level of the federal funds rate.
But with the Fed cutting the fed funds rate to essentially zero in December 2008, markets began to look for other ways (other than rate changes) for viewing the progress and impact of quantitative easing – and tracking the money supply became one of numerous methods of seeing how the Fed’s further injections of liquidity were filtering through the economy.
Importance
This indicator has had low importance during the Fed’s publicly announced interest rate targeting period but has gained a little more stature during quantitative easing since the fed funds rate has been at essentially zero.
Interpretation
Markets focus on measures of money supply that are relatively liquid – M1 and M2. These are basically cash, checking deposits, and savings types of accounts. However, both measures are somewhat volatile on a weekly basis and monthly data give a better picture of how much liquidity the Fed has injected into financial markets has been converted into readily spendable forms.
Source
Federal Reserve Board of Governors
Availability
Thursdays.
Coverage
Data are for week ending on Monday two calendar weeks prior to release (April 6, 2009 data released April 16, 2009).
Revisions
Yes.
December 28, 2009 at 13:31
I don’t thing this will cause too big a move, personally..
December 28, 2009 at 10:44
Hi mark,
Welcome back mark and believed you had agreat christmas. Reference to you above signal.Looking for bullish signals near support 1.4320.Does this mean i have to take a buy position when price gets to or a bit below this point and take my first profit@ 1.4275?Do i need any confirmation again before i enter the market again?if yes how?for the 2nd,3rd,4thh and 5th target.Please explain better.
Thanks for yoy time man.
December 28, 2009 at 11:33
Hi Mark,
There seem to be a short opportunity when in the range of 1.4410-1.4430 resistance. Overbought signals are showing from all chart ranges.
Any advise on that?
I’m still weary of trading during these few days as market is really thinning.
December 28, 2009 at 13:32
Normally I’d be deadset against it as we just broke the downchannel and I don’t trade against the trend, but signals are mixed enough that that level could provide good short-term selling opp. I would look for some confirmation though with candlesticks.
December 28, 2009 at 11:43
Brandon,Try to include your indicator i.e what you look out for or what you see that make you feel that there will be selling@that range.
December 28, 2009 at 11:47
There might be divergence on 1hr timeframe at i.4418
December 28, 2009 at 11:47
There may be divergence on 1hr timeframe at i.4418
December 28, 2009 at 13:33
Hi Hakeem, divergence in which indicator?
December 28, 2009 at 11:49
Hi Hakeem,
I understand that this “chatroom” uses a lot of basic analysis such as candlesticks, supports/resistances for signals. For myself, i am also currently using Stochastics and RSI combined with Bolinger Bands for “extra precaution” (being a conservative guy).
I was looking through the 1 week charts for 30 mins and 1 hour as well as the 4 hour chart for both 1 month and 3 months. All of which shows signs of overbought. We’re also approaching a relatively medium strong resistance at 1.4400, hence my question to Mark about a short position to 1.4350-1.4325.
Fundamentally, i feel the EUR/USD will be bullish when it turns 2010.
Cheers!
December 28, 2009 at 12:22
Great brandon,i just want other traders to see what you are seeing on your chat it makes them become a better trader.Really,am talking about the newbies so that they dont get hurt in a trade as some of this forum users may not want to wait for marks signal or trading idea.This goes to mark,i still want you to tell us the indicatos you are using and what you look out for before pulling the bearish or bullish trigger?And how you negotiate technical with news fundamental(i.e important news to avoid and when to resume a trade).Since this platform is for education and profiting from your trade sequel to your research plus the pros analysis and direction.
December 28, 2009 at 13:35
Hakeem, I don’t use any classic technical indicators. I just use what the chart gives me: support/resistance, candlesticks and (occasionally) fibonacci replacements. And if the trend is strong enough I will enter at support/resistance without confirmation from candlesticks.
December 28, 2009 at 12:33
going short on gbd/usd , 2 hanging mans / shooting star on 1H . And stoch has dropped below 50. Waiting signal still on the Eur to go short.
December 28, 2009 at 12:39
Mark,
When should I use the daily Fibo vs the monthly fibo vs another timeframe? I notice sometimes you base your analysis on different fibo timeframes.
December 28, 2009 at 13:37
Hi Lisa, glad to see you back! Check out #8 on my FAQ and see if that answers your question:
http://piphut.com/about/faq-for-free-forex-signals/#fibonacci
December 28, 2009 at 13:54
Mark,
Thanks. I’m understanding from the FAQ that it’s because of the larger timeframe produces better levels for the fibo.
Also,I have been around almost every day except 12-24 but just haven’t been trading because of the thin levels and because I have been traveling and missing the signals.
I hope that you had a wonder holiday.
December 28, 2009 at 13:12
Tommy: going short on gbd/usd what is the entry point and what are you targets ?
December 28, 2009 at 13:27
My days strategy:
Gbd/usd
Entry at 1.5990 (fibo 61.8) , target 1.272 fibo at (1.58720). SL at 1.5991
And on the Eur RSI well directed and for long entries above 1.435 and short below that. long targets 1.4445 and 1.45 and extensions.
Ofcourse I am aslo scalping all the time:) Hence I am little bit hedging today.
December 28, 2009 at 13:29
aforex is not your prober name??
December 28, 2009 at 14:00
Hi Mark,
If the feds are selling us treasuries at 1pm eastern, wouldn’t this be bullish for the EU today?
1323 GMT [Dow Jones]The Treasury market continues to under selling pressure as investors set up for $118 bln governement debt auction, with the first leg in $44 bln two-year note sale scheduled at 1 p.m. EST. The two-year note’s yld touches as high as 1.03%, the highest level last seen in October. The 10-year note’s yield touches the highest level since August as the selling is exaggerated by thin holiday trade. As of 8:20 a.m. EST, the 10-year note is 10/32 lower to yield 3.85% while the 30-year bond is 12/32 lower to yield 4.71%. The two-year note is 2/32 lower at 1%. (MOZ)
December 28, 2009 at 14:00
Hi Mark and the rest of the gang
I gather it’s too cold to do something outside? Well, join me in the vineyard and build up some sweat!!! .. and later we can have a cold one in the shade. ::)
December 28, 2009 at 14:30
Hi everyone, hope you guys enjoyed your holliday, happy pipping!!
December 28, 2009 at 15:21
MARK,M
MY POST AT 10.44a.m
December 28, 2009 at 16:47
Good morning everyone, I hope you all had a wonderful Christmas. It looks like a slow day so I think I will continue reading ” Trading in the Zone “. Mark have you every read it and if so what where your thoughts.
December 28, 2009 at 18:59
I started the same book last weekend. And also Suri Duddella’s :trade chart patterns like pros. Will post my thought later:)
Slow day today. Anyone else following or trading gold aswell. Would be nice to hear ideas , tecnicals on this area ?? Thinking of shorting in the gold.
December 28, 2009 at 19:05
I expect it to be slow until about the second week of January..
I follow gold with a passing interest. You can check out some correlation charts here:
http://piphut.com/forex-tools/live-charts/
December 28, 2009 at 19:17
Hey Tommy, I am about 3/4 the way through it. I think it will be good for me. I have never read “trade chart patterns like pros” is it like “Forex Patterns and Probabilities:Trading Strategies for Trending & Range-Bound markets”.
December 28, 2009 at 19:01
Nope never read it. What is it about?
December 28, 2009 at 19:07
Hey Mark, It is about the psychological attitude of successful traders and how to create a winning attitude. It goes mainly over the psychology of trading. It’s very good:)
December 28, 2009 at 19:35
Really shortly about the book and what it is for: the mentals of trading, to trade from a confident, disciplined, and consistent state of mind. Old trading coach as the writer.
December 28, 2009 at 20:09
Sounds like my trading style!
December 28, 2009 at 20:35
yeah ! You could even be the writer Mark..hmm:)
December 28, 2009 at 20:59
Mark and Mark Hmmmmmmmmmmmmmm;)
December 28, 2009 at 21:50
Hey Mark, on that note, where did you learn to trade, how was it you found your way to this “arena”? Did you go to schools for it or are you from a trading family? Did you just learn about it and educate yourself with books on trading?
December 29, 2009 at 06:45
Matt, self-taught for the most part. I used to trade stocks (and still do but not as much) but fell in love with the 24 hour nature of forex and the better technicals in currency markets. I think the hardest part of trading is the mental discipline it takes and that translates from stock trading as well.
I had somewhat of a mentor with stock trading, but the majority of my learning came from reading books, chatting in forums like this one, demo trading and live trading. And journalling. Keeping a journal is so huge and so few people do it. When I first started trading I took a screenshot of every trade that I did, pasted it into a word document and wrote my technical analysis of why I was entering that trade. That way when I looked back at the end of the month I could see exactly what I was looking at when I made the trade and what my thinking was. Honestly that more than anything else helped me learn discipline as I started to see “oh this actually wasn’t a good signal because I missed this” or “I knew I had doubts about this one when I got in but didn’t want to miss out!” Waiting until the end of the month to review the trades worked well too because I had already moved on and forgotten the trades in my mind – they weren’t as raw.
December 28, 2009 at 19:01
Hi There everyone, I just wanted to say hello as this is my first posting to piphut and all you piphutters. It took a while to find you but I’m glad I did. I am based in London and would consider myself an ‘experienced novice’ at forex, if there is such a thing but looking forward to learning things fast. At present I am still bearish on the EURUSD until convinced otherwise. Hope you all had a great christmas and wishing everyone a happy and pip-prosperous new year.
PS. This may sound like a stupid question but what are HTML tags for. I have never come across them before. I’m a Mac man……
December 28, 2009 at 19:03
Hi Badniguel, welcome to PipHut! HTML tags are not a Mac or a Windows thing – they are a web thing. I assume you are asking because of the message you post a comment about “you can use these html tags…”. Basically they allow you to bold your comments, or italics, etc.
December 29, 2009 at 11:08
Hi All, Hope u had a good Christmas break!
Just to point out, for the last two years or so, i have realised that at many points while trading eur/usd, there seems to be an invesrse relationship with usd/jpy and s&p 500 index!!!
What is anyones take on this? I say this because if you have a view on usd/jpy or S&P 500 and are unsure about EUR/USD, maybe u can still take a postion on EUR/USD!!!
Im short EUR/USD at 1.4420