As stated yesterday, my sense of frustration and impatience with this market was very high. I can see what it was doing (dropping) , I can see my missed entry point (1.4900), I can see that I was rational in not chasing the market, I can see where I think it will pullback to (1.4700+), and I can see that it is going to take days to get there.
So it is with some sense of pleasure that I am watching the market (hopefully) start to climb off its low at 1.4304 and head up to an area where it will be in the sell zone.
I get the feeling that we are going to have an active Christmas period as the market reacts to critical news (like the recent downgrading of Greece's credit rating...and the impact on the rest of the EU community) in the thin markets.
Edit 8.00am NY time Market is at 1.4340 The state of play is that we know that the trend has changed. The market has made its first move down (to 1.4300) since the break of the Daily Support/Resistance line at 1.4900. We are now waiting for a significant pullback from that drop, so that we can place some long term Sells.
Edit 12.05pm NY time Market is at 1.4281 The pullback I have been waiting on is seriously overdue.
Edit 7.00pm NY time Market is closed. The market has fallen very quickly since it broke the 1.4900 Support line just 10 trading days ago. I expect that the next 10 trading days will see some serious pullback on that fall. I will be watching the market over the Christmas period to capitalize on any pull back and establish some long term shorts for the 2010 year. I believe that the trend has now changed and that we will see a sustained long term increase in the USD ( a fall in the Euro) over the next 12 months. I also think that a target of 1.2500 is highly possible for 2010.
Given the huge volatility impact caused by the Great Financial Crisis over the last 15 months, we have traded reasonably well this year. (The recent failure to get set with a sell at the target of 1.4900.... which we missed by just 10 pips...was a very sad miss. However, it is only 10 days worth of missed trading opportunity and the market will recover some of that drop very soon). I believe that this strengthening of the USD is in its very early stages and that 2010 will be an excellent year.
MESSAGE FROM JACKO 511
It is 3.00am NY time Thursday December 17 and the market is at 1.4400
After staying up all night in the hope that the FOMC announcement would give a nice bump up in the Euro, so that we could sell it, I have woken to find that the major move happened in our local Asian trading time zone. This is easily the quietest period of the day for the Euro so it is obviously serious Asian (China??!!) buying of USDs. There has been a quick move down in the Euro on the strengthening USD.
Looking on the bright side, the only thing worse than not being in the market.... is being in the market the wrong way. (Anyone in US or European timezones with overnight long positions have all just been stopped out, I would think)
I am concerned that we may be seeing a repeat of the strong USD buying that occurred at from 08/08/2008. (It was the start of the Beijing Games). It is worth going back and having a read of the blog from that time!!
The risk of loss from jumping in at this time is waaaay too high. I want a significant pullback. This is the type of market action where everyone starts to say that this drop in the market will go forever....Then it snaps back!!!
Edit 8.00am NY time Market is at 1.4355. On the basis of the depth of this drop in the market I am looking to reduce my target sell price from the 1.4900 area to maybe as low as the 1.4700 area, but will be watching the price action between now and when it moves back up.
As I said some days ago, the trend has certainly changed, so it is now just a case of getting in at a position that has minimal risk of loss attached to it. Once we are in the market, we can then start to compound our positions using the markets money. The main rule isDo not lose money.
Edit 12.10pm NY time Market is at 1.4310 As much as I want to jump into the feeding frenzy of buying the USD and taking a short term short on the Euro, I have decided to stay on the sidelines.
Edit 7.00pm NY time Market is at 1.4341 My sense of frustration and impatience with this market very high. I can see what it is doing, I can see my missed entry point (1.4900), I can see that I was rational in not chasing the market, I can see where I think it will pullback to (1.4700+), and I can see that it is going to take days to get there.
Having said that, with the benefit of perfect hindsight, it is easy to see that a better course of action would have been to throw caution to the wind and, as soon as the Daily Support/Resistance line was broken at 1.4900, to just sell it and keep on selling. (Some of you did).
But that is the advantage of hindsight..it over-rides and negates the emotions and thinking that you had at the time when the action was done.
MESSAGE FROM JACKO 510
It is 3.00am NY time Wednesday December 16 and the market is at 1.4520
As stated yesterday,I am now looking for a sizable pullback so that I can establish some long term short positions. One of the advantagesof trading the Daily charts is that they are more predictable. Thedisadvantage is that if you miss a trade entry, you have to wait a while to get the next opportunity. (I missed my sell trade entry of 1.4900 by only 10 pips when the market went to 1.4890 on Dec 7...a very sad miss !!!).
I never like to "chase" a trade if I miss it, I prefer to get the next trade set-up instead. So I am now waiting for a decent sized pullback to get the next wave down.
Looking at the Daily chart, you can see that it is extremely rare for the market to have a 500 pip move without a subsequent 200+ pip retracement move. Patience is required. But it will be well worth it. We are in the very early stages of a new bear market for the Euro (or more correctly, a new Bull market for the USD)
Edit 8.00am NY time Market is at 1.4565 The market has started to move back up after hitting a low of 1.4503. We may have seen the start of the retracement of the move from 1.5000 to 1.4500.
Edit12.10pm NY time Market is at 1.4570 The market has been choppy today with no real direction, but the price action looks biased to the up side.
Edit 7.00pm NY time Market is at 1.4525. The market had its usual quick fluctuation up and down with the FOMC announcement but then settled back to where it was prior to the announcement. The market has basically flatlined since then. The market is still stubbornly stuck in the mid to low 1.4500 area.
Emails (see Message 507)
MESSAGE FROM JACKO 509
It is 3.00am NY time Tuesday December 15 and the market is at 1.4614
The market has remained flat since the start of the week but is showing some weakness heading into the London open.
The market position has not changed from Message 506. That is, I am certain that the trend has changed. I am looking forward to getting set in some serious long term short positions over the next couple of weeks. If you look at 20001, 2002, 2004 and 2006 you will see that the December/January period is a time of major reversals. I think that 2009 will join that list.
I have seen a lot of similarities with this current market, and how it is behaving, to the turn in 2006. Those of you who have read the history of my trading will know that the turn of the market in 2006 was the start of my massive growth in Forex.
I really think that this current market turn will be a repeat of the same.
BUT, one thing that the forex market does with great consistancy is to move up and down in the range. I can also see the market moving back once or twice (to around 1.4900-1.4950) to shake out the weaker players. Then it will progressively drop lower and lower but before it does, there will be some good opportunities ahead to get some big short positions established.
If you look at a Daily chart, it is easy to see that 1.4900 is a very likely target for the market to move towards.
Also, if you look at the weekly chart, you can see the potential of this move down (sub 1.3000??). Now that we are back trading on the Dailies those are the moves I want. And compounding up the lot sizes as we go.
I believe that the USD has started its fight back. The US economy has been ground down since mid February and is starting to show faint signs of recovery. And as I have said before, the US economy is still the most powerful economic engine in the world.
I am still a SELLER at 1.4900.
Edit 8.00am NY time Market is at 1.4535 The market has moved lower in London trading. Not being in the market at the moment is annoying, but the risk of selling without waiting for a pullback is taking an unreasonable risk. The market almost always has pullbacks. I don't think that this one will be different.
Edit 12.10pm NY time Market is at 1.4514. I am watching for a pullback of any decent size to sell into this market.
Edit 7.00pm NY time Market is at 1.4542 A disappointing day today. I am now looking for a sizable pullback so that I can establish some long term short positions. One of the advantages of the Daily charts is that they are more predictable. The disadvantage is that if you miss a trade entry, you have to wait a while to get the next opportunity. (I missed my sell trade entry of 1.4900 by only 10 pips when the market went to 1.4890 on Dec 7...a very sad miss !!!).
I never like to "chase" a trade if I miss it, I prefer to get the next set up instead. So I am now waiting for a decent sized pullback to get the next wave down
MESSAGE FROM JACKO 508
It is 3.00am NY time Monday December 14 and the market is at 1.4675
The market position has not changed from Message 506. I am still a SELLER at 1.4900
I am about to go into a meeting. I will be back for the US session
Edit 9.00am NY time Market is at 1.4640 Apologies for the delay. As stated last week, I am (51%) certain that the trend has changed. I am looking forward to getting set in some serious long term short positions over the next couple of weeks. I can also see the market moving back once or twice to shake out the weaker players. Then it will progressively drop lower and lower but before it does, there will be some good opportunities ahead to get some big short positions established. But I am just waiting for a suitable pullback to higher levels to establish some short positions
Edit 12.05pm NY time Market is at 1.4645. I am feeling very confident about the market in the next couple of months. I am seeing a lot of similarities with this current market, and how it is behaving, to the turn in 2006. Those of you who have read the history of my trading will know that the turn of the market in 2006 was the start of my massive growth in Forex. I really think that this current market turn will be a repeat of the same.
I am waiting for a pullback up to around the 1.4900 area (the 50% fib from 1.5140 to 1.4586).
Edit 7.00pm NY time Market is at 1.4654. The market was very dull in afternoon trading today with minimal movement
MESSAGE FROM JACKO 507
It is 3.00am NY time Friday December 11 and the market is at 1.4725
The market position has not changed from Message 506. I am still a SELLER at 1.4900
Edit 8.00am NY time Market is at 1.4766 The market has been as high as 1.4775 so we have see the expected gradual move back up in the direction towards 1.4900. I am still a seller at 1.4900.
For the adventurous traders: You should be in at 1.4700 (as per yesterday's recommendation) If you are not in by now, it is too late.The market at the current level does not warrant the risk of going long at the current level
Edit 12.10pm NY time Market at 1.4610 Market is weaker than I expected. This wil need a review of entry target next week.
Edit 4.00pm NY time Market is closed. I seriously underestimated the move down in the morning session today. The market is now a bear market. After looking at the Daily (and Weekly) chart I can see that there is a long way for this to move down over the next 12 (?) months but I now have to wait for a pullback to get into a position. I will be taking short positions aggressively from now on.
IMPORTANT: On a personal note, I usually do not trade over the period leading up to Christmas and New Year. However I believe that this period will be an important and critical time in the change of trend for the market. So I intend to continue to trade and post the blog during that time.
However, a major time commitment is the time spent on answering emails. Mrs Jackson has asked (demanded !!) that I compromise by agreeing to not answer any emails over that period so that we can have at least some time to ourselves.
My staff (except one part time admin staff) have been given their vacation time during this period.
So as of the close of business today, I will be continuing to post my trades and send the SMSes and update the blog, but I will not be answering emails until after the Christmas and New Year period. I will answer emails again from January 4, 2010.
MESSAGE FROM JACKO 506
It is 3.00am NY time Thursday December 10 and the market is at 1.4710
As discussed a couple of days ago, I am (51%) certain that the trend has changed. I am looking forward to getting set in some serious long term short positions over the next couple of weeks. If you look at 20001, 2002, 2004 and 2006 you will see that the December/January period is a time of major reversals. I think that 2009 will join that list.
I have seen a lot of similarities with this current market, and how it is behaving, to the turn in 2006. Those of you who have read the history of my trading will know that the turn of the market in 2006 was the start of my massive growth in Forex. I really think that this current market turn will be a repeat of the same.
BUT, one thing that the forex market does with great consistancy is to move up and down in the range. I can also see the market moving back once or twice (to around 1.4900-1.4950) to shake out the weaker players. Then it will progressively drop lower and lower but before it does, there will be some good opportunities ahead to get some big short positions established.
If you look at a Daily chart, it is easy to see that 1.4900 is a very likely target for the market to move towards.
Also, if you look at the weekly chart, you can see the potential of this move down (sub 1.3000??). Now that we are back trading on the Dailies those are the moves I want. And compounding up the lot sizes as we go.
I believe that the USD has started its fight back. The US economy has been ground down since mid February and is starting to show faint signs of recovery. And as I have said before, the US economy is still the most powerful economic engine in the world.
For the adventurous traders: I believe that the market is sitting close to its short term bottom at the 1.4700 mark. The market may drop below it so wait until it has turned and is heading back up so as not to catch a falling knife. As outlined above, I think the market will try to climb up towards the 1.4900 mark, so there is a "risky" 200 pips on offer. Its not for me, but if you are adventurous, the probabilities of going long (to 1.4900) is much better than going short at the current levels. (Save the shorts until the market is at better prices).
Edit 8.00am NY time. Market is at 1.4732. The market has dropped to as low as 1.4685 and has now risen to its current price. There are no US news events today.
I am still a seller at 1.4900
Edit 12.10pm NY time Market is at 1.4717 A slow day on the market so far in the US session. Maybe the afternoon session will show some decent activity
Edit 7.00pm NY time Market is at 1.4730. A very slow day on the US markets today. However, everything written above (especially for theadventurous traders) still applies.
MESSAGE FROM JACKO 505
It is 3.00am NY time Wednesday December 9 and the market
Wayne has a migraine and is currently sleeping. He will be back tomorrow
Mark
Edit 6.15pm NY time I am back!! After a near 16 hour solid sleep (with the weirdest dreams !!!) I am back and feeling much better. The market has done little in my absence so I don't feel as though I have missed any real action. I will be back for the London open tomorrow
MESSAGE FROM JACKO 504
It is 3.00am NY time Tuesday December 8 and the market is at 1.4810
The market got to within 10 pips of my target with a high of 1.4890.... I am leaving my Sell order there for the moment as I think we may get another bite from our fish. I am still a Seller at 1.4900
Edit 8.00am NY time Market is at 1.4790 The market has moved away marginally from my Sell order, but one thing that the forex market does with great consistancy is to move up and down in the range. And if you look at a Daily chart, it is easy to see that 1.4900 is a very likely target the market to move towards.
Again there is no real news events in the US today, so the market has no drivers of price this morning.
I am still a Seller at 1.4900
Edit 12.05pm NY time Market is at 1.4736 I have returned from a dinner function hoping that the market had moved up and maybe triggered my sell, so I was disappointed to see that it had fallen a little further. I was hoping to snare the 1.4900 fish today. As discussed on previous occasions, the market often turns around in the US afternoon session.
I think ( only 51% certain) that the trend has changed. I am looking forward to getting set in some long term short positions over the next couple of weeks. If you look at 20001, 2002, 2004
and 2006 you will see that the December/January period is a time of major reversals. I think that 2009 will join that list.
But as I have said above, I can see the market moving back once or twice before it does, so there are some good opportunities ahead to get some big short positions established. (If you look at the weekly chart, you can see the potential of this move down). Now that we are back trading on the Dailies those are the moves I want.
Edit 7.30pm NY time Market is at 1.4705 The previous trade opportunity when I wanted to sell at 1.4900 but the market only went to 1.4890 is now looking a sad miss. I missed that entry by only 10 pips.
Emails
Email 1
I read an article earlier this week and would like to know what your thoughts are on the matter. It noted that there seems to be a trend lately where the London session is having more influence on the Eur/Usd movement; that the NY market seems to follow the London lead. (This has been the case for 5 market days in a row -- possible more scattered.) Hmmm Yes, but the US news has far more impact than any Euro news
It went on to mention on the fact that 'everyone' is selling the dollar and getting away from it looking for a stronger currency. Not any more ......
I'd guess we're a good distance away from the dollar not being the world currency, but there is a lot of chatter on the streets. Also, I've read that the trading volume of the London Forex Market is nearly double now what's traded during the NY session. Not sure about that source. I think that is is getting close because of the reduction in the size of US hedge funds that got killed in the GFC.
Email 2
The market has taken a fall but I think that it will go up more. What do you think? I believe that the trend may have changed. ......I have been leery of the Euro Bull since early November when the higher highs were only marginally higher each time. I think that the trend has changed (but only 51% certain) and I am looking forward to getting set in some long term short positions over the next couple of weeks. Having said that I fully expect that there will be opportunities to get back into this market at 1.5000 again in the next 2-3 weeks. This will not be a precipitous drop all the way down. This market will come back but I would be surprised to see it break its previous highs
Email 3
i was wondering about the outcome of NF employment. The result of -11k vs forcasted -119k showed a suprising difference. Now i would think that good news for the dollar would actually weaken the dollar because that is how it's been since the financial crisis and the safe heaven search. How do you know that this sentiment has changed or how should one understand it :) No, the market fundamentals are now coming back to reality...That the US economy is still the best economic engine in the world and that lower job loses means that it is picking up strength
did you expected this to happen ? when news is good the dollar rises ?From now on, I think so...
MESSAGE FROM JACKO 503
It is 3.00am NY time Monday December 7 and the market is at 1.4873
The USD has finally shown some strength on the back of Fridays NFP numbers. The Support line on Friday at 1.4870 was broken when the market dropped as low as 1.4821. This break was a (convincing?) 50 pip break of the line. (It barely made the set 50 pip limit) The market has been moving back up to that line (now at 1.4900 approx) in the last 10 hours since the markets re-opened
I have my charts open to 300 periods of the Daily time frame.
The Resistance line. At the present time there is no descending Resistance line of interest. In regards to horizontal Resistance lines, the Resistance is now at the previous high of 1.5144.
The Support line is found by linking up the lowest points on the Daily chart starting from 1.2460 (March 3) and 1.2886 (April21) and and 1.4628 (Nov 26) we can see that the old rising Support line is today at around 1.4900 (rounded up slightly).
The 50% Fib line between 1.4626 (Nov 2) and the new high of 1.5144(Nov 24) was at 1.4885. That 50% Fib has already been broken when the market fell to 1.4828 on Nov 26) , so we then looked further back to the previous low of 1.4480 (Oct 1) and the latest high of 1.5144 (Nov 24) to calculate the next 50% Fib target ...which was 1.4812.. The market fell on Friday to 1.4821 which was close enough.
In light of the above we have two conflicting signals. The primary one is that it has broken the Daily trend line by 50 pips (...barely). The second, and conflicting signal, is that it has bounced off the 50% Fib line.
I am looking to see which signal proves to be the stronger. (My guess is to the short side as a Trend line break trumps a 50% fib line bounce).
The news calendar is remarkably clear of major US news events until the US Trade Balance numbers on Thursday Dec 10.
I am more interested in watching how the US market treats this market today, rather than London. I think New York will give us a better indication of the medium term direction.
Edit 8.00am NY time Market is at 1.4798 The trend line did trump the 50% fib line when the market dropped to 1.4757 breaking the 50% fib line. The market has now clearly broken the Daily trend line. This market will bounce back up and confirm the drop with a touch of the old Support line at 1.4900 which will now act as Resistance. I will be a Seller at 1.4900 (or higher, if I can get it)
Edit12.10pm NY time Market is at 1.4812 The US`market has been surprisingly quiet. I was expecting a much more active market after Fridays move and the London earlier session. Maybe the afternoon session will pick up the pace.
Edit 12.50pm NY time Market has moved up quickly on Ben Bernankes speech in Washington. Still ongoing...
I am a Seller at 1.4900
Edit 7.00pm NY time The market got to within 10 pips of my target with a high of 1.4890.... I am leaving it there for the moment as I think we may get another bite from our fish.
Emails
I am a little slow on the emails from Friday...Mrs Jackson caught me on the computer on the weekend and went ballistic ...so I will catch up the emails in the next 24 hours
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