It is 3.00am NY time Wednesday February 24 and the market is at 1.3524
As stated yesterday, I underestimated the strength of the 1.3700 Resistance area and was half-expecting a break through it. But the market has stabilized at the low 1.3500's and has started to move back up in the Asian session, though pre London trading is looking weak.
We are still in a long term down trend (which I expect to hit 1.1000 by the end of this year). But I also believe that we will have a short term retracement to the 1.4000 area which is back up to the Daily Resistance line and the 50% fib point.
I am prepared to wait for the correction to 1.4000 to complete and then get in aggressively on the trend for the next leg down.
Edit 8.00am NY time Market is at 1.3550 The market has moved up marginally but has stayed within a narrow range Mr Bernanke's testimony and the US New Home Sales numbers will cause volatility at 10.00am today. Also Mr Geithner speaks at the same time and his extraordinary ability to put his foot in his mouth always offers potential for market movement.
MESSAGE FROM JACKO 546
It is 3.00am NY time Tuesday February 23 and the market is at 1.3670
The retracement move back up to the Daily Resistance line (and 50% fib) seems to be picking up momentum as more and more of the recent record number of Sellers look to get out and close their positions.
The move up may find some resistance at just under the 1.3700 area ( the more aggressive, shorter term Resistance line from 1.4579 (Jan 13) and 1.3788 (Feb 16) which is currently at around 1.3680). But if it breaks through that resistance we should see my target area of around 1.4000 come into focus reasonably quickly.
Edit 8.00am NY time Market is at 1.3578 The market peaked at 1.3692 after hitting the Resistance at just under 1.3700. But it then failed to break through and has fallen back.
I expect that it will mount another attack on the 1.3700 Resistance area very soon.
Edit 12.10pm NY time Market is at 1.3518 The market is continuing to fall back after its failure to break through the 1.3700 Resistance area.
Edit 7.00pm NY time Market is at 1.3521 The market has stabilized at the low 1.3500's. I underestimated the strength of the 1.3700 Resistance area...
The adventurous traders may wish to again take BUY positions from any quick pullbacks to the 1.3550 (or lower) levels as the market continues to correct upwards.
I am prepared to wait for the correction to complete and then get in aggressively on the trend for the next leg down.
Emails
I am slowly slogging through the emails. Please be patient. I will get on top of them all very soon.
MESSAGE FROM JACKO 545
It is 3.00am NY time Monday February 22 and the market is at 1.3627
As discussed on Friday, it is possible that the initial major drop is over and the long-awaited retracement has just commenced on the Daily charts. There was an extreme and a record number of net short positions late last week. As the market moves back up in the next couple of days, more and more of the recent Sellers will be looking to get out and close their positions.
I have my charts open to 300 periods of the Daily time frame.
The Resistance line is found by linking up the highest points on the daily chart starting from 1.5140 (Dec 2) and 1.4579 (Jan 12) , with the resistance line today at approx 1.4000.
However, I am also looking at the more aggressive, shorter term Resistance line from 1.4579 (Jan 13) and 1.3788 (Feb 16) which is currently at around 1.3700.
The Support line is of no real value at the present time since there is no upward sloping Support lines of value in any proximity.
The 50% fib lineThe more relevant 50% fib line is the target retracement number of 1.4000 which is the 50% fib from 1.4580 (Jan 12) to 1.3444 (Feb 17)
I am prepared to wait for the correction up to near 1.4000....the Resistance line, the 50% fib from 1.4580 (Jan 12) to 1.3444 (Feb 17), and the round number .... and then get in aggressively on the trend for the next leg down.
Edit 8.00am NY time Market is at 1.3610 The market has done little in the London session. There is no news of any importance today so we will see the full impact of US trading sentiment today.
The adventurous traders did well late last week. The adventurous traders may wish to again take BUY positions from these current levels as the market corrects upwards.
I am prepared to wait for the correction and then get in aggressively on the trend for the next leg down.
Edit 12.05pm NY time Market is at 1.3590 A slow US session so far.
Edit 7.00pm NY time Market is at 1.3600 The lack of any news events in US session lead to a quiet and lackluster session
Emails
I have started answering the backlog of emails again today. We are starting to get back to normal around here after a turbulent and traumatic three weeks, which was compounded by the Chinese New Year holiday for my staff last week. I sincerely apologize for the disruption. As stated in Message 540, all memberships will be extended by two months as compensation.
On a personal note, One of the benefits of the blog is the historical trading diary that it generates for me and you.
The big disadvantage is that it dramatically opens up my private life and personal actions because I feel obliged to give you the reasons and justifications for any times that I am not available.
MESSAGE FROM JACKO 544
It is 3.00am NY time Friday February 19 and the market is at 1.3480
I am starting to despair that this market will never retrace again... but then commonsense prevails.
The market has been badly battered by a combination of the Greek debacle, the possibility of an early Fed hike in interest rates and China's efforts to slow its economy. But the market never travels in one direction forever. There are always pullbacks and I am now just waiting for the next pullback. Having said that, I am surprised at the depth that it has dropped on this leg down.
I am prepared to wait for the correction and then get in aggressively on the trend for the next leg down.
Edit 8.00am NY time Market is at 1.3521 Looking at the charts, we can see that the spike down caused by the FOMC statement yesterday afternoon may have been the exhaustion spike for this market drop. I am hoping that the initial major drop is over and the long-awaited retracement has just commenced.
The adventurous traders may wish to take BUY positions from these current levels.
I am prepared to wait for the correction and then get in aggressively on the trend for the next leg down.
Edit 12.10pm NY time Market is at 1.3555. The market has started its retracement back up. There are a record number of net short positions (see yesterdays Message). As the market moves back up, more and more of the shorts will be looking to close their positions. So I expect the retracement to be quick.
The adventurous traders may wish to take BUY positions from these current levels. (The retracement will go higher)
I am prepared to wait for the correction and then get in aggressively on the trend for the next leg down.
Emails
Am taking sometime today to spend with Mrs Jackson. In my efforts to catch up on two weeks admin work that accumulated while we were in the States, I have neglected her badly. Will look after any outstanding emails on Monday.
MESSAGE FROM JACKO 543
It is 3.00am NY time Thursday February 18 and the market is at 1.3547
I have just opened the platforms. The market is getting very oversold in the short term.
As discussed yesterday, I rarely use the CFTC Commitment of Traders (COT) data, but it is showing that there is an extreme and record level of net short positions in the Euro against the US dollar, leaving relatively little room for further selling. (Unfortunately the DailyFX.com article, "US Dollar to Decline on Extreme Forex Positioning," was taken down during the Asian session).
I would be very careful of opening any SELL positions at these low 1.3500 levels.
I am prepared to wait for the correction and then get in on the trend
The US Producer Price Index (PPI) and US Unemployment Claims are the news items at 8.30am with a follow up Philadelphia Fed Manufacturing Index at 10.00am followed by FOMC Statement at 4.30pm.
Edit 8.00am NY time Market is at 1.3580 The market has been pulled up off its lows in London trading. The reaction to the US news items will give us a better indication. Its too low for me.
Edit 12.10pm NY time Market is at 1.3568 The market has had a quick run up to 1.3653 on the news but has not been able to overcome the power of the down trend. The market has been pushed back down again.
Edit 7.00pm NY time Market is at 1.3455 This market was seriously dropped on the FOMC Statement. ...Is this thing ever going to retrace???... I am not being suckered into selling at this low a level.
MESSAGE FROM JACKO 542
It is 3.00am NY time Wednesday February 17 and the market is at 1.3776
The market has done very little in Asian trading. Most Asian countries are celebrating Chinese New Year. (Australia and New Zealand are the exceptions). Here in Hong Kong there are "Lion Dances" everywhere, accompanied by loud banging of drums and cymbals (to ward off bad luck). All very exciting, especially for the children.
I was mildly tempted to take a counter trend trade yesterday on the break of the more aggressive, shorter term Resistance line from 1.4579 (Jan 13) and 1.4026 (Feb 3) and 1.3839 (Feb 9) and 1.3801 (Feb 10) which was at around 1.3700. However, the ghost of the last counter trend trade still haunts me so I have decided to wait for the market to move higher up and take the trend trade instead.
I know that some of the more adventurous traders took me at my word that the 1.3700 Resistance area was "not very strong" and placed some very short term buy trades on the break of 1.3700 and have grabbed some quick pips.
I intend sticking to the trend trades and using the compounding (and I don't care how long I have to wait to get the right trade). If you look at the Weekly or Monthly charts you can easily see that the market has become much more "erratic" in the last 18 months as a result of the GFC and my counter trades were simply not getting a good enough success rate. Also, the countertrend trades had the effect of "getting in the way" of placing the more profitable trend trades. (Mrs Jackson is still teasing me about that missed 900 pips ... because I was trying to be too smart and play both sides of the market, and trying to be a fast-trade trader... Just trade the trend and compound up the profits by adding trades.)
I have also had some emails about my statement that "1.000 will be hit before we see a break of the 1.6000 again". I am a strong USD bull. I think the EU has BIG problems.
I am prepared to go on record that I believe that we will see the EUR/USD at 1.1000 by the end of this year.
Edit 8.00am NY time Market is at 1.3733 Lots of news coming out from US this morning but the key one is the US Building Permits number at 8.30am and then at 2.00pm this afternoon the FOMC Meeting minutes will be released. Both are market moving announcements.
The market has broken through the 1.3700 Resistance area (which was not a strong Resistance), then risen as high as 1.3785 and has now dropped back.
NOTE: It is still above the shorter term Resistance line from 1.4579 (Jan 13) and 1.4026 (Feb 3) and 1.3839 (Feb 9) and 1.3801 (Feb 10) which was at around 1.3700.
It remains to be seen if this drop back is a "confirmation" touch of the Resistance line before it continues upwards OR it is a resumption of the downtrend.
I am hoping that it will track upwards closer to my 1.4000-1.4100 SELL target area.
Edit 12.05pm NY time Market is at 1.3630 After bouncing around the 1.3700 mark for over an hour, the breakdown of 1.3700 was quick. A sizable retracement will occur soon on the Daily chart.
Edit 7.00pm NY time Market is at 1.3604 The market is getting veryoversold in the short term.
I rarely use the CFTC Commitment of Traders (COT) data, but it is showing that there is an extreme and record level of net short positions in the Euro against the US dollar, leaving relatively little room for further selling. (See DailyFX.com "US Dollar to Decline on Extreme Forex Positioning").
I would be very careful of opening any SELL positions at these levels.
I am prepared to wait for the correction and then get in on the trend
Emails
I have been quickly working through the backlog of Fund administration paperwork and emails from the last two weeks very quickly now. (I am the only one in the office because everyone else is on vacation and celebrating the Chinese New Year festivities). I expect that I will have caught up completely within the next 24 hours. So if I haven't answered your email, please be patient, I will get to it very soon. (It is amazing how fast you can get through work when there are no distractions!!)
MESSAGE FROM JACKO 541
It is 3.00am NY time Tuesday February 16 and the market is 1.3654
I want to thank each of you for bearing with my absence over the last 12 days. It has been a very difficult time for me and Mrs Jackson.
The market yesterday was quiet due to the combination of the Chinese New Year holiday in Asia and the Presidents Day holiday in the US.
I have my charts open to 300 periods of the Daily time frame.
The Resistance line is found by linking up the highest points on the daily chart starting from 1.5140 (Dec 2) and 1.4579 (Jan 12) , with the resistance line today at approx 1.4100.
However, I am also looking at the more aggressive, shorter term Resistance line from 1.4579 (Jan 13) and 1.4026 (Feb 3) and 1.3839 (Feb 9) and 1.3801 (Feb 10) which is currently at around 1.3700.
The Support line is of no real value at the present time since there is no upward sloping Support lines of value in any proximity.
The 50% fib line The market has now been as low as 1.3531 on Feb 12 which is below the extreme 50% fib line from 1.2331 (Oct 26, 2008) to 1.5144 (Nov 24, 2009) at 1.3737.
I am watching to see the reaction of the market to the shorter term Resistance line at 1.3700 outlined above.
My strategy for 2010 is to keep longer trades and will be looking to add to the positions to compound up some profits. We may have missed some of the initial move down when I fluffed that excellent 900 pip trading opportunity midway through January but the next retracement will take it back up to a high level (1.4100??) before sending it down much further.
My strategy is to snare a some trades at a good Resistance /congestion area and then let the market downtrend look after the rest.
I am also keen to get back into compounding my trades. (Adding to open trade positions)
As stated in Message 537, I think that 1.3000 will be easily reached. I think that 1.2500 is highly possible. And I think that 1.000 will be hit before we see a break of the 1.6000 again. I am a strong USD bull.
Edit 8.00am NY time Market is at 1.3636 The market has moved close to the 1.3700 Resistance area at 1.3682 and then moved away slowly. The 1.3700 Resistance area is not very strong but appears to be holding for the present time.
Edit 12.10pm NY time Market is at 1.3765 The market has broken through the 1.3700 Resistance on the news that Greece is ahead of its Deficit- reduction targets and will not require any bail out from the European Union according to the Greek Finance Minister. (Yeah...Right !!!!... Does anyone believe a politician who says that his government has turned it around that quickly?? ). This is a short term technical correction back up to maybe 1.4100, before the resumption of the down trend
In the longer term, the Euro is going down to 1.000.
Edit 7.00pm NY time Market is at 1.3763. The market has broken through 1.3700 Resistance on its way to a correction target between 1.4000 and 1.4100 which is the 50% retracement between the shorter term move from 1.4578 (on Jan 13) and 1.3531 (on Feb 12).
Emails
I am slowly getting over the different time zone shift from our trip to the States and back. I am currently working through a backlog of Fund admininistration paperwork and will answer all emails as soon as possible.
MESSAGE FROM JACKO 541
It is 5.45am NY time Monday February 15 and the market is 1.3627
I have just returned from a most stressful week in very difficult weather conditions (The US has been having widespread snow storms all week).
We have just had a gruelling 16 hour direct flight home with two screaming young children in the row behind us that made our flight an absolute horror!!.
I am going to have a sleep and will be back for the London session tomorrow.
MESSAGE FROM JACKO 540
I have just received some very bad news. I am flying back to the United States as soon as possible today. I expect to be unavailable until February 14/15.
Please do NOT send any emails during that time. I will not be reading anything until I return.
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