MESSAGE FROM JACKO 614
It is 3.00 am NY time Monday May 31 and the market is at 1.2290
Note: The markets are closed in the UK and USA today for Spring Day and Memorial Day respectively, so it will be a very thin market today.
Last week my target of 1.2500 for a Sell trade was narrowly missed when the market rose to a high of 1.2453. The market was slammed on the head with a hammer on Friday afternoon when Fitch Ratings agency downgraded Spain's credit rating from AAA to AA+, dropping the Euro approximately 90 pips in minutes. The sovereign debt crisis that started in Greece and has now moved on to Spain, is starting to move across the European Union ... and the PIGS are starting to wilt.Firstly, the The Trillion Euro bailout fund from the EU and the IMF, that caused the Euro to rise 500 pips back in mid-May, is in serious trouble. Mainly because it has failed to instill and maintain confidence in the Euro. But even worse is that, deep in the fine print of that agreement, there are two clauses that will cause the bail-out to fail: The first is that the bail-out will be "immediately and irrevocably cancelled" if it breaches the EU Maastricht Treaty terms that there will be NO bail-outs. .... And there are already cases being brought by some German legal Professors in the highest German courts. The second clause states that if an EU member cannot raise its proportion of the bail-out funding at a cost of less than 5%, it can opt out of the bail-out. It is now becoming clear that Spain will not be able to pay its portion. This means that the burden of the bailout now gets heavier on each of the other EU members. The EU ties that bind all the countries are now getting very stretched and strained.
Secondly, The PIIGS are now trapping themselves with policies of austerity measures that are cutting public spending which is pushing up the unemployment rate (Spain is already at 20+% unemployment even before the new cuts announced on Friday). When all of Europe introduces public spending cuts right across the EU (which is what they are all doing at an exceptional pace), we will see a very large increase in unemployment right across Europe. There is only one outcome...a very deep recession in Europe....and an increase in social turmoil and unrest....and a massive increase in doubts about the benefits of the European Union.
In both cases, the only possible outcome is a radically lower Euro.
I am again keen to get back into this market. As can be seen the Fundamental news announcements are back with a vengeance and are driving this market.
If we look at the Technical charts, using 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 1.3679 (April 13), with the resistance line today at approx 1.3100. As can be seen, we are a long way from the major Resistance line. There is a shorter term line that may be the first target for any rise which is from 1.3679 (April 13) and 1.3342 (April 29) which is currently at approximately 1.2700
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. However, here is some horizontal Support at the 1.2500 area. As I stated last week (and which proved to be the case) "we may see the market try to retrace up from this area on a Technical bounce, but the danger is that an unexpected news announcement could drive it back down through it". (This s exactly what did happen)
As can be seen, again this week we are a long way from a Resistance area target. However, I will again be watching the 1.2500 line as potential Support turned Resistance line. I will again be a Seller at the 1.2500 area. (And again, I will have a 100 pip fixed Stop Loss. If the Stop Loss is hit, after the price moves another 50 pips past my SL point, I will use the AH strategy. The target price is to hold for the long term target of 1.1000. And to add to the trade each 150 pips. (This is the strategy in its original, pre GFC format))
Edit 8.00am NY time Market is at 1.2300. The market is doing very little in the Euro trades because both the UK and US markets are closed for holidays and Asian markets have also now closed. The market is very thin
Edit 12.10pm NY time Market is at 1.2270 The market is trading on very thin volume but is staying close to the 1.2300 area. I don't expect much change until Asian trading starts tomorrow
Edit 8.00pm NY time Market is at 1.2283 The market has done very little today. As we move into the Asian time zone, I would expect that the market will pick up.
MESSAGE FROM JACKO 613
It is 3.00am NY time Friday May 28 and the market is at 1.2350
The market has been moving around in Asian trading but I feel that my fish is swimming closer and closer to my 1.2500 hook. I am waiting to let the fish grab the hook.
Edit 8.00am NY time Market is at 1.2413 The market is slowly working its way up to my target area. Today is a Friday and I do not like to open trades on a Friday, but I am prepared to leave my order in place at 1.2500 for the present time. If the order has not been filled by 12.05pm NY time today, I will be canceling it at 12.05pm NY time today.
I currently have a pending order to SELL at 1.2500. I have a 100 pip fixed Stop Loss. If the Stop Loss is hit, after the price moves another 50 pips past my SL point, I will use the AH strategy. The target price is to hold for the long term target of 1.1000. And to add to the trade each 150 pips. (This is the strategy in its original, pre GFC format)
As stated yesterday, it is important to remember that the European situation has not really changed.... it has merely been delayed. In contrast, the USA is showing signs that the worst may be over in the short term and that there are signs of recovery there. The net result of those two statements is that the Euro is destined for a continued, and extended, drop in the medium to longer term. The target of 1.1000 will easily be hit by the end of this year.
Edit 12.05pm NY time Market is at 1.2371 After hitting a high of 1.2452, the market has sagged back down to its current price. This is the last day of trading for the month for most US trading houses as Monday is a holiday for Memorial Day. This week has been a choppy week with no real direction, as the two counter forces of the fundamentals try to over balance each other. However, it remains that the market is in a stalemate with both sides (Hedge Funds etc versus Mrs Merkle) in Europe very suspicious and hostile towards each other. I have just canceled my orders to SELL at 1.2500, but will be keen to re-institute it early next week.
MESSAGE FROM JACKO 612
It is 3.00am NY time Thursday May 27 and the market is at 1.2309
We are starting to see the start of a retracement driven by the Asian market. As stated yesterday, the technicals are in no-mans land with the closest Resistance area at 1.2500 and the stronger Resistance lines are higher. I will be a Seller at the 1.2500 area. (The SMSes will be sent when the market gets closer) . I have missed to much of this last leg down and I want to get back into the market at a safer, less risky, area.
Edit 8.00am NY time Market is at 1.2270 The market has dropped back marginally, but a retracement back up to around 1.2500 seems likely in the next few days. The 1.2500 area is the first area of Resistance and I am keen to take a Sell position there. I am not interested in Counter Trend trades at the present time. It is important to remember that the European situation has not really changed.... it has merely been delayed. In contrast, the USA is showing signs that the worst may be over in the short term and that there are signs of recovery there. The net result of those last two statements is that the Euro is destined for a continued, and extended, drop in the medium to longer term. The target of 1.1000 will easily be hit by the end of this year
Edit 12.01pm NY time Market is at 1.2365 The market is again heading back up towards the 1.2500 area. I will be waiting for it
Edit 6.00pm NY time Market is at 1.2360 (Plenty of notice time...Also best time to message to European and US traders) I have just placed a pending order to SELL at 1.2500. I have a 100 pip fixed Stop Loss. If the Stop Loss is hit, after the price moves another 50 pips past my SL point, I will use the AH strategy. The target price is to hold for the long term target of 1.1000. And to add to the trade each 150 pips. (This is the strategy in its original, pre GFC format)
Edit 8.00pm NY time Market is at 1.2367 My orders to SELL at 1.2500 have been placed and I am now just waiting for them to be hit.
MESSAGE FROM JACKO 611
It is 3.00am NY time Wednesday May 26 and the market is at 1.2287
The market has not changed from yesterday. The macro situation has stayed the same and the price is exactly the same as where it was this time yesterday. I have been looking for a retracement or pullback to get into this market but there has not been any suitable market movement. It is time to sit on my hands and wait for it.
Edit 8.00am NY time Market is at 1.2316 The market is sitting in a flat spot at the present time. It has been fluctuating around the 1.2350 area since May 15. The technicals are in no-mans land with the closest Resistance area at 1.2500 and the stronger Resistance lines are higher. On a fundamental basis, the market is in a stalemate with both sides (Hedge Funds etc versus Mrs Merkle) in Europe very suspicious and hostile towards each other, especially on comments that the German short selling bans will be extended.
Edit 12.01pm NY time Market is at 1.2219 The market has been moving lower as the appetite for risk diminishes and investors are gradually moving to the safety of the USD. The ongoing Euro PIIGS problems and now problems in Asia (the North Korea vs South Korea) and the talk of a China bubble and the flow on effects to the commodity currencies (Aussie and Loonie) are causing a minor flight to safety. On the technical side, if we go right down into the smaller time frames we can see the Euro moving down to the 1H support line. Even though I do not usually look at the 1H, the absence of any other Support line shows how tenuous the Support levels are when the only Support line to be seen is a very small 1H line. the possibility of a break down is increasing but I prefer to wait for a reasonable sized pullback to a Resistance line to minimise the risk.
Edit 8.00pm NY time Market is at 1.2181 The market is sitting at the lows of the range that it has been in since May 15. I am waiting for a reasonable sized pullback to a Resistance line to minimise my risk.
MESSAGE FROM JACKO 610
It is 3.00am NY time Tuesday May 25 and the market is at 1.2287
I have been looking for a retracement or pullback to get into this market but there has not been any suitable market movement. It is time to sit on my hands and wait for it. Beware of intervention by Germany again today.
Edit 8.00am NY time Market is at 1.2213 The market market has moved down to 1.2200 without a pullback of any size. The temptation to jump in is tempered by the knowledge that a market always has pullbacks and retracements ... usually when everyone is saying to pile in.
Edit 12.01pm NY time Market is at 1.2274 Watching the market today has been very slow and tedious as I wait for the retracement to allow me to get into this market. We are hearing that Germany may intervene today, though the "market noise" is not as loud as it has been last week. The 1.2500 area of Support turned Resistance is the only technical number that has any relevance to our trading at the present time. Even though it is only a horizontal S&R line, I am prepared to take a calculated risk on trading that area if we see any market news out of the Euro bloc in the next 4 hours. (They usually release the news or attack the market at 1.00pm NY time.)
Edit 8.00pm NY time Market is at 1.2328 The market has moved up marginally but we are still short of my target of 1.2500. I am hoping that the Asian market will give it a kick along and get it up to my target. Hmmm...the early Asian market is looking weak
MESSAGE FROM JACKO 609
It is 3.00am NY time Monday May 24 and the market is at 1.2493
The market in the last few week has been mainly driven by the fundamental news announcements. Tthe market has now absorbed most of the news about the action ( the potential defaults by the PIIGS) and the reaction (announcement of Euro bailout funds and also legislative measures to curb speculation). While there will still be a danger that the politicians will make further rash and ill-considered decisions, I believe that the Technicals will soon start to re-assert themselves as traders look for guidance. Note: The market is quiet leading into the European session with Germany, France and Switzerland closed for Whit Monday.
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 1.3679 (April 13), with the resistance line today at approx 1.3250. As can be seen, we are a long way from the major Resistance line. There is a shorter term line that may be the first target for any rise which is from 1.3679 (April 13) and 1.3342 (April 29) which is currently at approximately 1.2800
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. However, here is some horizontal Support at the 1.2500 area. We may see the market try to retrace up from this area on a Technical bounce, but the danger is that an unexpected news announcement could drive it back down through it.
As can be seen, we are a long way from a Resistance area target. However, I am also watching the 1.2500 line as potential Support turned Resistance line.
Edit 8.00am NY time Market is at 1.2384 This morning has been one of those mornings where, as a trader, you are keen to get in amongst it but then get distracted for ten minutes. When you get back to the terminal, you see the market has dropped 30 pips from 1.2500 to 1.2470. So you swear, then tell yourself not to "chase" the market... Then it drops another 30 pips and now the air is getting filled with blue language. And then it drops again...!!! At this point, now even your neighbours in all the apartments 5 levels above and below you know that you are unhappy about something. Before you get to the stage of being visited by the local constabulary for creating a nuisance, you come to your senses and slam the computers shut. You realize that the market will still be here later in the day and for the rest of time, so you calm down and get ready for the next opportunity. Thats what I love about forex trading. Another opportunity is always just around the corner
Edit 12.01 pm NY time Market is at 1.2403 After seeing the market drop this morning on news of the collapse of the 185 year old CajaSur savings bank in Spain, the market has now absorbed the news and has consolidated the down move. It is now looking to recover some of that lost ground and has been moving up in the last two hours. I will get another opportunity to SELL again soon.
Edit 8.00pm NY time Market is at 1.2347 Market has moved back down marginally. The horizontal Support turned Resistance area at 1.2500 is now looking to be an attractive area to Sell . I will be watching the Asian trading zone for an opportunity to sell if/when it gets in that area.
MESSAGE FROM JACKO 608
It is 3.00am NY time Friday May 21 and the market is at 1.2555
The market has now moved as high as 1.2672, but we are hearing that the ECB is not finished with its intervention yet. The ECB has been actively buying Euro / selling USD to bolster the strength of the Euro. (What an appalling long term trade that will turn out to be for the ECB's balance sheet !).
We are also seeing the time pattern of their major activity which is after the European markets close which is at 1.00pm NY time... 6.00pm London... and 5.00pm Berlin. (For a change, I am in the worst time zone at 1.00am Hong Kong when the European markets close).
I believe we may see another round of buying by the ECB again today, but the market has been pushed hard and I am keen to SELL into the next push up.
Edit 8.00am NY time Market is at 1.2540 The market has been slow in London trading but we are expecting another hit from the ECB either later today or on Monday. We may see the ECB try to spike this up through all the Resistance areas to shake out and damage the speculators and hedge funds.
Edit 12.01pm NY time Market is at 1.2560. We are just about to move into the close of European markets. This is the time that the ECB has been hitting the forex markets (when Europe and London are closed and the US market is thinning out)... and when Mrs Merkel makes any announcements she wants to see as headlines in the weekend papers. We may see a bout of volatility in the next 4 hours until the US markets close. This market is a Sellers market next week.
MESSAGE FROM JACKO 607
It is 3.00am NY time Thursday May 20 and the market is at 1.2418
The market has stayed up in Asian trade on the rumor of intervention by the ECB but the market is showing evidence that the Asian timezone traders are not believing that the intervention will take place. The move so far has been driven by the "talk" of intervention. If the intervention does take place the market will rise further. But, if the intervention fails to happen , the market will quickly erase these gains. The marginal move down in Asian trading would indicate that the market believes that the politicians are "all talk and no action" but they are waiting to see what comes out of Europe today. If the politicians are indeed, all talk and no action, the market reaction will be swift and ruthless. While this market is being driven by the fundamentals and news events, the technicals give us very little guidance. At the present time, it is really a case of staying on top of the news events.
Edit 8.00am NY time Market is at 1.2345. After a rush of blood to the head by the early pre-London traders, the market has now been dropping since London opened. Obviously they are also not convinced about the potential results of any intervention by the ECB. The danger is that if the market fails to listen to all the "talk" from the politicians, then the politicians will feel compelled to make more stupid decisions to try to affect the market. I am hearing that an intervention is now becoming more likely and it will be either on Friday or Monday. Time to be wary.
Edit 12.05pm NY time Market is at 1.2370 The market is vacillating in the 1.2320 to 1.2420 area for the last 24 hours as the market tries to determine which way the ECB is going to jump... Intervention or just talk. I am seriously hoping for an intervention to send the market up because I intend to then SELL it as hard as I can.
Edit 8.00pm NY time Market is at 1.2526 As hoped, the ECB intervened in the market and commenced buying of the Euro, sending the Euro up some 250 pips. We have not yet seen the end of this action. The ECB is not finished yet. The market will be bought up some more. There is no need to race into this market just yet.
MESSAGE FROM JACKO 606
It is 3.00am NY time Wednesday May 19 and the market is at 1.2212
This last week has been a dismal and very disappointing trading week. I have been waiting for a retracement or pullback that has never arrived and the Euro has been pummeled by news events at random times. Plus, the market is close to extreme levels of bearishness and the Average Trading Ranges (a sign of volatility) are back to 2009 levels. All of which flashes " Extreme Danger" for any Sell trade. But the Euro keeps dropping!
The temptation to throw caution to the wind and jump into a Sell trade increases at the same rate as my frustration is rising at being out of the market. Best to sit on my hands to stop them tapping the platform keys and entering a foolish trade in a vulnerable price area.
The market is again being driven by the fundamentals. Germany's decision to ban naked short-selling of shares and EU government bonds as of midnight German time yesterday smacks of desperation. Germany is also looking to impose a financial transaction tax which will only curtail trading in Germany and transfer it to other financial areas like London. I often wonder where politicians were when the brains were being handed out. They must have been in the separate department where the only things they learnt were handshaking and smiling stupidly. Because these decisions by Germany are only making the situation worse.
Edit 7.15am NY time (A little earlier than normal today) Market is at 1.2200 The trading in Europe has been very uneventful today. The politicians must be wondering what caused the Euro to drop. (Note to the politicians in Europe: It was the stupid decision to ban short selling and then start talking about a new financial transaction tax....!!!!!) Lets hope they keep their feet in their mouths for a couple of days to let the market recover. I am looking for a pullback/retracement to get back in to this market
Edit 12.10pm NY time Market is at 1.2316. The market has risen on rumors of an imminent intervention by the ECB to support the Euro. (Earlier today, the Swiss National Bank intervened in the market by selling the Swiss Franc / buying the Euro because the Swiss Franc was getting too strong. That was the cause of the rapid spike in the Euro this morning ). The ECB has now been totally politicized and is working well outside its Charter and its legal capacity. The ECB has clearly and unequivocally breached the "no Bail-out" clause of Article 125 of the EU Treaties.
Having said that, the opportunity to get a Sell position at a much higher level will soon appear as soon as the ECB intervenes. Most market interventions have a very limited time span of effect (24-72 hours). The politicians have never learned that the market is like the tide. They can not hold the market back. The market will always win over a market intervention...It is simply a matter of how long it takes to over-ride the intervention. From what we are hearing, the intervention will take place within a week.
Edit 8.00pm NY time Market is at 1.2387 The market has continued to move up on the rumor of stronger intervention by the ECB. The move so far has been driven by the "talk" of intervention. When the intervention does take place the market will rise further. If the intervention fails to happen , the market will quickly erase these gains.
MESSAGE FROM JACKO 605
It is 3.00am NY time Tuesday May 18 and the market is at 1.2388
As discussed yesterday, the market is close to extreme levels of bearishness and the Average Trading Ranges (a sign of volatility) are back to 2009 levels, so there will be some big swings in the next week or two. We are a long way away from our Daily Resistance line and the market has been volatile in the last two weeks. It certainly looks like 1.2234 on May 16 is the short term low. Even though the market has been sitting in the 1.2300- 1.2400 range I would expect a move back up towards our Resistance line again soon. However, I am not interested in making any Counter Trend trades. I will be waiting for the market to offer me a good SELL trade again.
The problems in Europe have not gone away, they are merely absorbing all the bad news. The PIIGS now have to try to actually implement some of the proposals that they have agreed to with the ECB and IMF. That will be a lot harder than they expect it to be, and I believe that, like all politicians, they will try to waterdown and cheat the system.
Edit 8.00am NY time Market is at 1.2440 The market is moving up as it consolidates after the panic of the last two weeks. However, the longer term down move is not over yet. The market will move up towards the Daily Resistance as it moves back to the longer term down trend line. It is frustrating waiting for it to move to a SELL area but it will get there soon.
Edit 12.05pm NY time Market is at 1.2360 The market is demonstrating volatility as it moves into higher highs and higher lows on the shorter term time frames. The market is moving slowly and progressively upwards but there is caution not to be caught by a strong down move caused by a news event out of Europe. There is currently a lot of watching of the PIIGS bond Auctions with the market reacting to the various prices. However, the market is now moving back to relying more on the Technical analysis now that most of the shocks out of Europe have been published and so the Fundamental news events have lost their impact for the present time. However, it is important to remember that this problem is not over and has not gone away..It is just that it has been absorbed and factored into the price
Edit 8.00pm NY time Market is at 1.2180 Just when the market was settling back into the boring old Technical rules, the market has taken a quick hit again on the news that Germany's Mrs Merkel has ordered that the German financial services regulator to ban naked short-selling of shares and EU government bonds as of one hour ago (midnight German time). She is also looking to impose a financial transaction tax and is seeking support from the G 20 group for its imposition across the G 20 group of nations. I was rudely awoken at 1.45pm NY time (which is 1.45 AM here in Hong Kong) when the market had broken 1.2300 and could not believe that the European politicians continue to make such petulant decisions. My retracement back up towards the Resistance line is taking much longer than expected.
MESSAGE FROM JACKO 604
It is 3.00am NY time Monday May 17 and the market is at 1.2304
The market has fallen in the Asian session. Interestingly, it was stable in the Australian session but Hong Kong hit it with a stick. The market is getting to extreme levels of bearishness and the Average Trading Ranges (a sign of volatility) are back to 2009 levels, so there will be some big swings in the next week or two. We are a long way away from our Daily Resistance line and the market has been volatile in the last two weeks. I would expect a move back up towards our Resistance line again soon.
On a fundamental basis, the shocks out of Europe appear to have all been factored in now. Provided that there are no more new shocks out this week, I would expect to see the market consolidate and even move back up as traders take their profits.
Edit 8.ooam NY time Market is at 1.2355 The market has consolidated and moved up to the mid 1.2300's. Provided that there are no more new shocks out this week, I would expect this market to move up for a couple more days yet as the market takes profits from the quick moves from the last two weeks. I will be looking to SELL this market again from a higher level, closer to the Daily Resistance level (currently at the 1.3000 area).
Edit 12.01pm NY time Market is at 1.2300 The European bond market is on the march again with Greece Spain and Portugal's bonds dropping again (and the interest rates on the bonds increasing and becoming very expensive for each of the countries) . From a technical view, for the short term traders, the market has bounced down off the 1H Resistance line at approx 1.2400.
Edit 8.00pm NY time Market is at 1.2383 The market has moved back to the 1H Resistance line area but this time it should be broken. The bias of the market is definitely moving back to an UP correction of the severe down moves of the last two weeks. The market is trying to move back to the longer term Daily Resistance lines.
MESSAGE FROM JACKO 603
It is 3.00am NY time Friday May 14 and the market is at 1.2568
The market has been bouncing off the 1.2520 level for the most of today. This area is the major low from Oct-Nov 2008 and March 2009. We are getting to a critical point. Asian trading has not had the courage to break the technical Support area and is bouncing it up off the Support line. I will be watching to see if London does the same. (It appears that London is sending it up in pre-London trading)
On a fundamental basis, the Euro's reputation as a viable alternative to the US dollar is now in tatters. It is therefore less valuable. We still have the situation where the PIIGS are all likely to default in the future. The bailout of Greece is merely a time delay process. Greece has been offered a bail out but the potential of it achieving the targets set for it under the terms of that bailout is zero. Similarly, there is a lot of noise coming out of Portugal (and Spain) about spending cuts to "slash" public spending from 5.1% to 4.6% of GDP. I can assure you that a 0.5% spending cut will NOT prevent these countries from sliding into default. The Euro is in serious trouble and will continue to fall to 1.1000 by the end of this year.
Edit 8.00am NY time Market is at 1.2480 The London market did crack the 1.2520 and took the market down further than I expected. It looked like a serious case of Stop Loss hunting initially so I held off. Interestingly, it has turned around on the Europe lunch time and has been moving up since. Being a Friday, I don't want to get caught like last week in a trade and be pressured by the limited time period to close by the weekend. The chance of me holding a marginal trade over the weekend again is zero. The potential for gaps to exceed the SL is too high in this news driven environment, especially with the politicians using the weekends to make grand sweeping announcements (while the markets are closed). The politicians have wised up to the fact that it is better for them to make their grandiose announcements when the markets are closed so they can get two days of publicity of their plans before the market rubbishes them. The market will still be in this area (or higher) on Monday. I prefer to SELL at a higher level on Monday.
Edit 12.01pm NY time Market is at 1.2390 After a quick jump up on weak US Retail Sales numbers early in the US session, the market has moved lower in US trading The European issue is getting deeper in trouble as bond prices for the PIIGS are dropping again.
Edit 8.00pm NY time Market is closed. The market moved down marginally in the afternoon session. The weekend may bring more surprising (and equally ineffective) statements from increasingly desperate politicians. The reality is that the Euro is doomed to see 1.1000 by the end of the year. I will be back next week to get amongst it again.
MESSAGE FROM JACKO 602
It is 3.00am NY time Thursday May 13 and the market is at 1.2663
The market has done very little in the last 48 hours. It has stayed in a very narrow 90 pip band (from 1.2605 to 1.2695) and it is sitting in the middle of that range again now. After being belted in that last trade (which is my largest ever pip loss on a trade) , I am currently sitting at -26 pips for the month of May. (Mrs Jackson has asked me to kindly get my ass into gear and make some more pips so that she can go shopping. And what Mrs Jackson wants, Mrs Jackson gets. Otherwise it is a very chilly night in the Jackson household...LOL) So I am looking forward to getting back into a trade and ending the month with many positive pips.
The market is showing some strength going into the London session. The market has had a quick sell down in the last couple of days and a retracement is expected. The market is a long way from the Resistance line and is now near the lower area near the Support line. We may see more movement back up towards the Daily Resistance line soon. However, this market is still a long term bear so I see any moves up as an opportunity to sell into the downtrend. I am not interested in any counter trend trading at this time. I will be looking for a SELL opportunity.
Edit 8.00am NY time Market is at 1.2590 The market has had a drop in the London session on an unsubstantiated rumor that Germany will announce on Friday that it is pulling out of the European Union. The market dropped as low as 1.2560 before recovering partially. (If the rumor had any truth in it, the Euro would have dropped 1000+ pips and not just 100 pips...). The market is looking weaker today, but I am waiting until it is closer to the Daily Resistance line to minimize my risk.
Edit 12.05pm NY time Market is at 1.2567 The market has been very quiet in the US session. I am still looking for a higher level for a SELL. The problems in Europe have not gone away and the Euro will fall to a much lower level in the coming weeks.
Edit 8.00pm NY time Market is at 1.2528. The market has drifted marginally lower in the afternoon session. I am looking for a higher level to SELL. After last weeks experience with holding a trade over a weekend, I am very sensitive to selling at these low levels when a news announcement can push the market UP over 550 pips in a couple of days. The market is sitting on its low of May 6 at the 1.2520 area.
Emails
There is a big backlog of emails that I am slowly getting through. I will put them in the blog tomorrow. (After the problem that I have had with the type font disappearing after putting the last lot of emails on the blog, I will try to sterilize them by putting them all on a word document before copying them into the blog)
MESSAGE FROM JACKO 601
It is 3.00am NY time Wednesday May 12 and the market is at 1.2637
I am back with a clear head and have lost my desire to rush into a "revenge Trade". The market has fallen back to the 1.2650 area and has stabilized there in the last eight hours. I will be reading up on all the news from the last two days to get a perspective on the fundamentals and then look at the technicals again
Edit 8.00am NY time Market is at 1.2691. The market is showing some strength going into the NY session. The market has had a quick sell down in the last couple of days and a retracement is expected. However, this market is still a long term bear so I see any moves up as an opportunity to sell into the downtrend. I will be looking for a SELL opportunity soon.
Edit 12.05pm NY time Market is at 1.2640 The market has dropped to 1.2640 after the Federal Reserve's Rosengren said that legislation was needed to make the biggest US financial companies hold bigger capital reserves as protection against losses. The market is now near the lower area near the Support line and we may see more movement back up towards the Daily Resistance line
Edit 8.00pm NY time Market is at 1.2640 The market has had a very dull US afternoon session with the price being back at where it was 8 hours ago. Hopefully, the Asian session may cause the market to pick up some action.
NOTE: I have noted that I seem to have a little bug in the system that occasionally reduces some of the blog passages to very tiny font and it looks as though it has disappeared. I am not sure what is causing it, and I am resizing the font whenever I see the bug, but I am not sure what is causing it at the present time. I noticed that it started when I tried to copy some emails that used a different style font to the blog.
Emails
I now have a backlog of emails which I will start answering today. Please be patient.
I am taking a break from the markets and emails etc today. I will be back at London open Wednesday May 12. (That is 3..00am NY time Wednesday). I am taking some R and R (rest and recreation)
MESSAGE FROM JACKO 600
It is 3.00am NY time Monday May 10 and the market is at 1.2971
If you have not done so already, Please read the blog entry from yesterday.
The last time I felt pain like I am feeling at the moment is when I was bent over a table at the doctors having a colonoscopy exam. The pain is in the same location but the pain was shorter and less painful then.
I have got myself into a situation where I now have just under 5% capital risk committed in this trade. Or to put it in a different way, I am now using the profit from my earlier trade in May to subsidize this trade. However, having said that, if I was NOT in this trade, the question I would be asking myself is ; "Would I be a Buyer or Seller at this point in time?" And the answer would be a very definite Seller. So I am letting this trade play itself out for a little longer.
The market opened in Asian trading sharply higher on the news that the ECB has cobbled together a 500 Billion Euro rescue package made up of 440 Billion Euros in Loan Guarantees and 60 Billion Euros in a "European instrument". However, if we look behind the grand headlines, we can see that the ECB (which is made up of all the bankrupt countries in Europe plus Germany and France) is now offering to guarantee the loans of the same bankrupt countries. So all the debts of Europe will soon belong to the ECB. It is only a matter of time before this game of "pass the parcel" (from bankrupt consumers up to bankrupt banks up to bankrupt countries up to bankrupt Central Bank) sees the end game.
I see this movement in Asia today as being very optimistic and unlikely to last more than 48 hours. So, even though I am feeling uncomfortable, I am letting this trade play itself out for a little longer.
Edit 4.15am NY time Market is at 1.3050 I have decided that I don't like this NY strategy at all. I decided to kill this trade and take the loss. I have just closed at 1.3050. It is approximately equal the profits from the first two trades in May and that was as far as I was prepared to let this strategy take me. I am taking a couple of hours away from the computer to clear my head. I will be back for the New York open.
Edit 8.00am NY time Market is at 1.2979 I am not enjoying watching this market move down after closing out at 1.3050. I have paid dearly for experimenting with a new strategy that is widely traded on the Street (maybe the big NY traders have a higher tolerance for losses because it is not their money, but I was distinctly uncomfortable when it broke 1.3000). However, I have put it behind me now and cleared my head. I won't make that mistake and trade like that again. Looking forward to the next trade using a strict 100 pips Stop Loss and using the A-H strategy EVERY time.Edit 12.10pm NY time Market is at 1.2867 The market is mocking me. It has now fallen as low as 1.2816. I am still trying to work out if the NY strategy of taking the bigger view of the market and allowing for big market movements around the trend line is now proving itself to be valid. (I took a different strategy but lost. Their strategy is still in a loss but less than mine).
Edit 7.00pm NY time Market is at 1.2777 The market has moved almost all the way back to my original entry price of 1.2725. Needless to say, I am not real pleased by that and I am in a black mood. I am going to take a break from the market until tomorrows New York open.
MESSAGE FROM JACKO 599
It is 5.30pm NY time Sunday May 9 and the market is at 1.2915
The market has opened in Asia sharply higher. The decision to stay in over the weekend was not the best decision. However, the gap between Fridays close and Sundays open are usually closed within 24 hours in over 80% of the occasions and in 95% of cases within the week. So I have taken the decision to ride this gap and wait for a better exit point later in the day. The market is very thin at the present time. I will wait until Hong Kong opens at 8pm NY time and review the trade.
Edit 8.00pm NY time The market is at 1.2870 The decision to stay in over the weekend has definitely not been one of my best decisions. It was based firstly, on the expectation that the down trend would re-assert itself and secondly, my decision to test out my response to the big New York traders attitudes to the market fluctuations. As discussed below (in Friday's 8.00pm edit), the big New York traders considered that fixed SLs were interesting but active fulltime traders should actively manage their trades to allow for fluctuations and the reversion to the trend line. Having tried it out, I can honestly say that it is not a strategy that I am comfortable with trading. My rules of using the 100 pip Stop Loss with the A-H strategy to minimize Drawdowns, and closing all trades before US lunch-time on Fridays, results in far less stressful trading situations.
Having said that, the trade is still playing itself out and the New York traders strategy may still be valid, but I am uncomfortable with the additional risk that their strategy involves. I am looking to close this trade out later today and put it behind me.
MESSAGE FROM JACKO 598
It is 3.00am NY time Friday May 7 and the market is at 1.2665
The last 12 hours has seen a sizable 216 pip retracement from the low of 1.2520. During that retracement we received advance warning by about 5 minutes of a huge short-covering order. We took the retracement and warning as a good reason to close our first and second orders to reduce our risk and left the third order. We closed both the first and second order for profits of 80 pips and 39 pips repectively. The third order was closed by our SL and is waiting for the A-H trade to be activated.
I am seriously interested in re-opening the first and second trades at near where we closed them (that is 1.2675) . We closed them primarily because of the warning of the huge order. I MAY be a SELLER again at 1.2675 or higher.
Edit 3.35am NY time Market is at 1.2715. The market has moved up. I have decided to hold off on re-opening any trades at the present time. If and when the market reaches 1.2775, my A-H trade will be activated with an order to SELL at 1.2725
Edit 8.00am NY time Market is at 1.2731 My A-H trade at 1.2725 was looking a little ordinary there for a while but is now looking more respectable. I am comfortable with the trade playing itself out. Today is Non Farm Payroll day, but it will not be as dramatic as the events of the last week, so I am prepared to leave my AH trade open. ( I may even open another trade later today )
Edit 12.05 pm NY time Market is at 1.2722 My A-H soldier is doing his job and getting all the pips back from the last trade. I am content to let him keep on working. I will leave him on duty over the weekend.
Edit 8.00pm NY time Market is closed. My A-H trade is still in play and this is one of the rare times where I have left it open over the weekend. I have also taken the SL's off so that I am in control of the trade when the market opens. One of the most interesting aspects of the trip to New York was the big traders attitudes to the market fluctuations and how they considered that fixed SLs were interesting but active fulltime traders should actively manage their trades to allow for fluctuations and the reversion to the trend line.
I have a backlog of emails because I have been finalizing all the individual Funds Investment accounts with the Auditors, as well as monitoring the trades. Please excuse my slow response. In regards to the results of the Fund, I have copied the Quarterly Report below. All the accounts have now been finalized and checked and are being sent to the investors in the next couple of hours
MESSAGE TO INVESTORS .... May 7
Below is a copy of the updated performance of your funds in the Jackson Fortress Asset Management Fund for the February to April 2010 Quarter.
The result for the latest Feb to April Quarter was 190 pips for an annualized 15.62%. We achieved that return with maximum safety since we have never had more than 2% capital risk on any trade. Also, my trading was slow in the Feb to March period leading up to my visit to New York to learn more about this industry in which I am getting more deeply involved.
I was both surprised and re-invigorated by seeing how some of the bigger players in this industry approach trading and was gratified to see that my strategies and results were very well received. They were very, very impressed with the first years results and rated our Fund in the top 3% of results for that period.
Although I, personally, am not very satisfied with this years results to date, the returns were rated by the New York managers as "well above average" for the period. I am pleased to say that the trading performance since I arrived back in late March has taken a rewarding jump forward with 245 pips in April and 280 pips in the first four days of May.
I have certainly became more focused on the job at hand. I am also considering the future option of increasing our percentage risk on each trade from 2% to 4% which would result in a doubling of the annual percentage return. I have never had a negative Quarter in the five years of trading and, similarly, the Fund in the last two years has never been close to a negative Quarter so I am becoming more comfortable with the idea of a higher rated Fund.
As you will recall, the Fund was established on August 8, 2008 and commenced trading on August 28, 2008. In our first year (shortened to 337 days by our August 28 commencement date) , we accumulated 1727 pips over 337 days for a 37.49% annualized return. We achieved that return with maximum safety since we have never had more than 2% capital risk on any trade and we achieved that in a time where every other asset class (stocks, property etc) was crashing 50% during the Great Financial Crisis..
We are now three quarter way through our second year of trading and we have earned 524 pips over the 273 days from Aug 1 to April 30 for an annualized return of 14.05%. Again, it should be remembered that we have never had more than 2% capital risk on any trade.
As stated above, he result for the latest Feb to April Quarter was 190 pips for an annualized 15.62% return.
After the pleasant 280 pips start in the first few days of the new May -July Quarter, I would expect the current Quarter to be significantly higher than any of the previous Quarters. We are already 47% higher than our total pip tally for the previous Quarter.
As stated last Quarter, I am very optimistic about 2010. I am becoming much, much more focused on trading again. After 5 years of full-on trading and 2 years of the training group (with the constant daily emails and blog updates) it is easy to get "trading fatigue". The visit to New York to see the bones of capitalism at work and to be complemented on the Fund's performance was pleasant. I fully expect that the rapid acceleration in returns which started on my return from New York will continue for next 12 months and will be more profitable for the Fund, the trading group and myself.
MESSAGE FROM JACKO 597
It is 2.55am NY time Thursday May 6 and the market is at 1.2758
The market is falling in pre-London trading. We may see panic selling in London trading. I have just SOLD at 1.2755
This market is now being driven by Fear, and to a lesser degree, Greed. It is getting close to a panic. Entering a market in this condition is dangerous because it is easy to have excessive volatility as the fear and greed sweep through the market. However, I have decided to get in at 1.2750 or higher. If I get whipped out, I WILL be using the the A-H strategy. I was hoping to see a decent sized pullback very soon but, in case I am wrong and the panic escalates, I want to be in the market.
I have no interest in any Counter Trend trades. (Anyone who attempts to stand in front of this South bound Forex Express train has a suicide death wish)
Sorry about the short warning .... I was with the Auditors checking all the last Quarters Investor Statements, when I was alerted to the pre-London market move.
Edit 4.00am NY time Market has moved up so everyone has the opportunity to get into this market. In the rush to place my trades, post here and send SMSes I forgot to add that my trades have a 100 pip Stop Loss.
Also, just so that everyone understands how the A-H strategy works: I have SOLD at 1.2755. If I get stopped out at 1.2855, then when the market has moved 50 pips beyond 1.2855... that is, when it hits 1.2905... then an order is placed to SELL at 1.2855.
Edit 8.00am NY time Market is at 1.2730 After a very ordinary entry, my trades are now in profit. Everyone who wanted to get into the trade, should have got in...and at a much better price than I entered, because the price moved up after I sent the SMSes. So if I make a profit on this trade, then you should make even more profit than me.
I am prepared to just let the trade play itself out and see where this market is going. If you look at the Monthly chart you will see that even the Monthly Support line from 0.8363 (June 2001) and others and 1.2460 (Feb 2009) has now been broken. The technical analysis tools have been pushed to the sidelines. Fear and panic are driving this market. This market is going to 1.1000 by the end of the year so I am just going to hold this trade and look to add to it later.
Edit 8.25am NY time Market is at 1.2725 I have just SOLD again at1.2714 I am doubling my trade size position. I have a 100 pip fixed Stop Loss on this trade too. Beware the US Unemployment Claims at 8.30 today
Edit 12.10pm NY time Market is at 1.2710 My two trades are playing themselves out .
Edit 8.00pm NY time Market is at 1.2657 The market is making a mild recovery from its spike down to 1.2520 (just above the 1.2500 Round number). I had been considering closing out at the 1.2500 Round Number area but I doubt that I would have been filled. Also when it hit 1.2520, it bounced back up to 1.2622 within 3 minutes... I am getting quicker at getting the SMSes out, but I am not that quick..!!
However, this crisis has more to play out. This is a "buy and hold" time (or , in this case , a "sell and hold" of the Euro ).
From a Fundamental point, the fall in the Euro will make all the Euro countries much more competitive, so the ECB would be looking at the drop in the value of the Euro with some satisfaction. If the ECB was really concerned about the weakness of the Euro, they could have simply increased the interest rates yesterday instead of holding them at 1.00% (An increase in interest rates leads to a strengthening og a currency). From that, I believe that the ECB is very happy to let the Euro drop further.
Edit 8.17pm NY time Market is at 1.2623. Am increasing my position again. I have just SOLD again at 1.2625 . Any sell above 1.2600 is a good sell. A 100 pp fixed SL
Edit 10.36pm NY time We are hearing of large short-coverings I have just closed our first and second trades at 1.2675 to reduce our risk
Edit 10.45pm NY time Market is at 1.2715 The market has been as high as 1.2722. Our third trade at 1.2625 has not been stopped out.
Edit 12.15am (May 7) NY time. The market is at 1.2732 I have just been stopped out on my third trade at 1.2725. I am now waiting for the market to reach 1.2775 which will trigger an A-H trade of a SELL at 1.2725
Emails
I have some excellent emails to publish but I don't want to clog up the blog at the present time. I will put them on the blog on the weekend.
MESSAGE FROM JACKO 596
It is 3.00am NY time Wednesday May 5 and the market is at 1.2986
My A-H trade was closed out at 1.3020 for a 280 pip win. That's nice.
I am now waiting for a retracement back up to a higher level to get back into another SELL trade. I am not expecting a big retracement but I will be looking to get back in at just under 1.3100 in the next day or two.
As discussed in a previous blog entry last month, it is important to note that ALL the currencies are falling against the USD. Therefore it is not just an issue of the Euro and the PIIGS problem. What it means is that investors can see a much bigger problem spreading and are fleeing to the safety of the USD. The "flight to safety" is usually a very good indicator that we have not yet seen the worst of this fall in the Euro (and all the other USD based pairs). As I said some months ago, this market will easily hit 1.1000 by the end of this year.
Furthermore, the panic is getting so strong that the shorter term Technical analysis measures are being pushed to the sidelines. The market is moving more on the Fundamentals and news releases at the present time. Growing fear and greed and panic over-rule technical analysis tools. The ease that it shot through a strong Round Number (1.3000) indicates that the fear and panic is getting stronger. Usually 1.3000 would have acted like a brick wall, but it went through it like a hot knife through butter.
Finally, I am pleased to say that the Jackson Fortress Managed Fund had another positive Quarter again last Quarter. (I have never had a negative Quarter in my five years of trading Forex). And it has got off to a screamer of a start for this May-July Quarter with the 280 pip start.
I am also considering opening up the Funds blog to everyone again. (The person who was causing a problem by releasing the Funds details on various Forums has now had his 12 months membership expire and I did not allow him to re-join). I have always believed that the best aspect of the Fund was its transparency. We know of no other Fund that allows its investors to see all the actual trades.
Edit 8.00am NY time Market is at 1.2925 I am prepared to now wait on the sidelines until this market makes a reasonable retracement. The market has had a major slide with no real pullbacks so I will wait until I have seen a decent pullback around the 1.3100 area. I have no interest in any Counter Trend trades.
BEWARE the ADP Non Farm Payroll numbers at 8.15am Even though the European issue is taking top billing, this news release will have an impact.
Edit 12.05pm NY time Market is at 1.2890 The market is very weak. I am on the sidelines temporarily. But keen to get back into the action.
Edit 8.00pm NY time Market is at 1.2817 I am still on the sidelines (unfortunately), but I believe that we will see a decent sized pullback very soon (within the next 12 hours). I am lowering my target entry area to just under the 1.3000 area. I have no interest in any Counter Trend trades.
MESSAGE FROM JACKO 595
It is 3.00am NY time Tuesday May 4 and the market is at 1.3177
The A-H trade (a SELL at 1.3300) is continuing to play itself out. The target remains at 1.3020.The market is dropping again. I had been slightly surprised at the low-key response to the Euro 110Billion (USD $145 Billion) bail-out for Greece that was agreed to on the weekend. The big issue that I have not seen addressed anywhere is: "Where has this 110 Billion Euros come from??? More printing of money ??? I think so !!!
The Euro will continue to fall. I am considering adding another SELL trade to my A-H trade. I am keen to start compounding my trades again.
Edit 3.30am NY time Market is at 1.3160 I am a SELLER at 1.3200 (or higher). I am hoping to sell at better than 1.3200. SMSes have just been sent. I will SMS again as I place my order
Edit 8.00am NY time Market is at 1.3100 The market has dropped quickly in London trading. My A-H trade is continuing to play itself out. Unfortunately, the market did not get as high as 1.3200 for me to add a second trade. My target price to close out my A-H trade is 1.3020.
Edit 12.10pm NY time Market is at 1.3037 The market has dropped to as low as 1.3021 so I am still waiting to be closed out. I am letting the trade play out
Edit 8.00pm NY time Market is at 1.2978. My A-H trade was closed out at 1.3020 for a 280 pip win. That's nice.
I am now waiting for a retracement back up to a higher level to get back into another SELL trade. I am not expecting a big retracement but I will be looking to get back in at just under 1.3100 in the next day or two.
MESSAGE FROM JACKO 594
It is 3.00am NY time Monday May 3 and the market is at 1.3225
My trade was stopped out at 1.3300 at 3.11am NY time on Friday. However, the market hit 1.3350 (50 pips past the Stop Loss) earlier today, which triggered my A-H order to SELL at 1.3300.That trade is now playing itself out.
Edit 8.00am NY time Market is at 1.3242 I am continuing to let this trade play itself out and get my loss back from the previous trade (plus make a profit). The trade has a 100 pip Stop Loss (at 1.3400) and a target at 1.3020
Edit 12.o5pm NY time Market is at 1.3190 The A-H trade is continuing to play itself out. The target remains at 1.3020.
Edit 8.00pm NY time Market is at 1.3195 I have been slightly surprised at the low-key response to the Euro 110Billion (USD $145 Billion) bail-out for Greece that was agreed to on the weekend. I get the feeling that it is just a pause in the ongoing problem. (Does anyone really expect the Greek politicians to introduce hard decisions now that they have the money?? They have the money so they will do everything ...or as little as possible....to stay in office). The Euro will continue to fall. I am considering adding another SELL trade to my A-H trade in the next 24 hours.
