July 4 - 9 2010

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July 4 - 9 2010

Post  Levaz on Sun Jul 04, 2010 11:16 am

We will stay out of the market tonight and tomorrow just to see whether the new dynamics of the market are going to stay or not.

We will be looking for positive signs of BoJ intervention and also for sustained intervention from the SNB.

Here are the trades that we will be looking to get into this week.

EURUSD - probably looking to short it in the next couple of days IF we see signs that the market is tiring of buying Euros - ideally we want to be short at around 1.2750 but we need to see if the market can overcome 1.2600 which has proven to be resistance so far.

GBPUSD - we want to short this pair around 1.5300 as there is a very old and very strong trend line resistance dating back form 2008. So that should provide ample resistance for a good retrace back to the 18 day moving average, which is below 1.5000.

The risk factor to these trades are poor US economic data and the break down of the support on the US Dollar index at 83.00. We have support on this index at 81.00. Key point being 80. Anything above 80 is generally good for USD strength. Note that all the stock indexes are also very bearish and are just hanging on to support. Generally, the longer the market lingers around a support or resistance, the higher the probability that it will bust right through. We have also entered the Summer Trading months, so be prepared to deal in markets with lower liquidity, which will peak next month with the annual European August holiday.

On a side note, I have noticed that I have been trading far too much than my normal. I believe this may a result of trying to get you guys at least one trade almost everyday. As a result, my focus on my normal long term trades has been side lined, and while we have been profitable every month, the yield curve has been very choppy, I prefer much smoother curves.

So we are going to stay out of most crosses, and concentrate on the majors. These trades carry a much higher risk:reward benefit, and are much more trend following that the others. The net result is fewer trades with a potential of better profits.

Levaz


Last edited by Levaz on Fri Jul 16, 2010 10:07 am; edited 1 time in total
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Re: July 4 - 9 2010

Post  Levaz on Mon Jul 05, 2010 7:22 pm

Market were of course closed due to the US long weekend, and not much occurred during the Asian or European session. Whenever one of the major markets is closed, my data is incomplete, so i am unable to make a reasonable assessment of where the market is most like headed in the next 24 - 48 hours.

We are still looking to short the Euro. Those of you that are impatient can start right away. However, I would highly recommend waiting till at least 1.2600 before shorting the market. I am still waiting to see if I can get a slightly better price. My ideal price would be between 1.2700 - 1.2750 but if the market decides that risk aversion is the name of the game due to:
- the various austerity programs (to be read as slowing down the economy) from Europe and UK,
- the deliberate slowing down of the Chinese economy (to prevent a nasty housing bubble),
- the tanking stock markets as a result of corporate selfishness
- - - - banks are hoarding all that bail-out cash that they are supposed to be lending to Joe Public,
- - - - Corporations are holding cash, cutting staff and streamlining production by taking full advantage of general market fears (which does not really justify their lack of hiring), they are simply trying to cook the books, get leaner, and get ready to beg for more money so that they can some "create" some jobs for the sad public that they "oh-so-much" want to help with tax payers money!!
- the talk of additional QE measures from the Fed while everyone else is cutting down expenses (when will they realize that the US consumer has no obligation to feed the whole world and in turn save nothing for themselves), but the corporations continuously con the govt. to give them more of the tax payers money(which is borrowed from future potential taxes, by the way) in the hopes that these corporations will hire more people (suckers!!!).

All in all guys, this is not a happy picture. This means extreme volatility in the markets, and now summer means less liquidity. So please use tight stops, accept your losses and move on.

We are still waiting to short the GBPUSD at 1.5300 - the only reason the GBP is moving up is due to Euro and (recently) USD weakness. This strength cannot last, as the bad news from Europe will take a much higher toll on the GBP than the USD or the Yen.

Still, we cannot take that for granted, so we place a very tight stop loss of no more than 50 pips when we take the trade.

No trades for tonight. Take some small trades shorting the Euro and the GBP, that is safer as it is in the direction of the long term trend. Keep tight stops, in case I am wrong. The market is well known to make us all look like a bunch of twits - Razz

Levaz

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Re: July 4 - 9 2010

Post  Levaz on Tue Jul 06, 2010 7:36 pm

We are still going to wait on the EURUSD. It is creeping closer to the trend line resistance. AS it gets closer, we need to keep an eye on the EUR and USD index to get a gauge of our next move.

Meanwhile, it appears that the GBP has not been able to take advantage of the USD weakness.
So let us take the following trade

GBPUSD short at 1.5200 SL 1.5250 TP 1.5100

The risk to our trade is that the EURGBP had reached a technical barrier at 0.8350 which is also the 200sMA on the 4H charts. If the market shorts the EURGBP pair, that will give the GBP a boost and may take out our trade. However, if the Euro strength continues, as is expected, then that will help our trade.

There is a chance that the market may not go back that high to pick up our trade, it is much too low at current prices. So, the alternative is around 1.5180, but remember that increased your risk as well by 20 pips. The last entry point could be 1.5150, but this is way too low to justify the target profit, so I would not recommend this entry.

Levaz
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Re: July 4 - 9 2010

Post  Levaz on Wed Jul 07, 2010 6:00 pm

GBPUSD short at 1.5200 SL 1.5250 TP 1.5100

The GBP did not drop as quickly as I had wanted it to. As a protection against any surprises, please move your SL to Break Even or lock in at least 10 of profits.

Levaz

UPDATE (7:50PM) - indicators show that the GBP is to rise some more. So if you are in trade, please do lock in at least 10 pips of profits. Point to note, although the indicators show that the GBP is set to rise within the next 24 - 48 hours, they are on the decline. This could mean we have reached or are very close to a top. This would nicely coincide with the trend line resistance which is at 1.5300. Let us see how this works out.

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Re: July 4 - 9 2010

Post  Levaz on Wed Jul 07, 2010 8:17 pm

We have several potentials for tonight.

USDCAD short at 1.0530 SL 1.0630 TP 1.0350
Note that the market tried to come back already and maxed out at 1.0482, so we MAY have to be pro-active to get our trade picked up. I will wait as per the signal as I do not like to chase the market.

EURAUD short at 1.4700 SL 1.4875 TP 1.4450
When the short covering stops, the pair drops like a rock. It is currently sitting at 1.4618, and chances are that it may not come back to our desired entry point.
You may want to jump on the band wagon if it cracks 1.4600 without much resistance (i.e., at least attempt to make a come back to 1.4650 or higher). Don't get greedy if you take the aggressive entry, take 50 - 100 pips and get out.

EURCAD short at 1.3279 SL 1.3335 TP 1.2965 (for now)
This should be a perfect trade, the set up is near perfect as it can get. Unless some calamity come up, this could turn out the be THE trade for us this month. You may want to look closely at the price action, sometime when there is heavy selling, the pair is not able to cross the nearest 50 or 100 mark - in this case 1.3250. There is no rush on this one, so once you see a down move, get in on it, but use small orders, as we can possibly build our positions in a couple of days.

EURUSD long at 1.2610 (or 1.2631 for the aggressive traders) SL 1.2578 TP 1.2725
Please note that we have a very long term resistance at 1.2732 and I am pretty sure, but have no confirmation at this time, that there is an Options Expiry at 1.2750. Also, note that both the Euro and the GBP have been faltering at the same time - 1.2650 for the the Euro and 1.5200 for the GBP. As these zones could prove to be potential turning points, take this trade with extreme caution. Small orders that you can afford to write off.

Levaz
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Re: July 4 - 9 2010

Post  Levaz on Thu Jul 08, 2010 7:36 am

USDCAD short at 1.0530 SL 1.0630 TP 1.0350
This did not get picked up at the desired entry point. There is a chance it may come closer in the NY session.

EURAUD short at 1.4700 SL 1.4875 TP 1.4450
Depending on where you got in, 1.4650 or 1.4600, this one has already hit the target. The low was 1.4444, so either 150 or 200 pips in the bank.

EURCAD short at 1.3279 SL 1.3335 TP 1.2965 (for now)
We are in trade at 1.3250, as mentioned that the pairs sometimes get blockaded at the round numbers. Currently sitting at 20+ pips

EURUSD long at 1.2610 (or 1.2631 for the aggressive traders) SL 1.2578 TP 1.2725
This one did not come to our desired entry point, so only the aggressive players were picked up on this order. Currently sitting at 30+ pips

Levaz
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Re: July 4 - 9 2010

Post  Levaz on Thu Jul 08, 2010 7:32 pm

We are going to give the EURAUD another whirl tonight.

EURAUD short 1.4590 (1.4540 for the aggressive traders) SL 1.4690 TP 1.4100

Let us be ambitious, we try to get 400+ pips on this one. Assuming that some of you did get in on the trade last night, we are ahead and are now betting the winnings from this morning.

The downside is risk aversion - and EURUSD hitting a brick wall at 1.2725, the major resistance.

That bring me to our outstanding trade - EURUSD - from last night.

If you got in on the aggressive entry of 1.2631 then you are still in trade and about 60 pips in profit right now (7:28pm EST). You have two choices, lock in a small profit of 10 - 20 pips OR move your stop loss to Break Even and let the trade play itself out. If you are going to let the trade play out, move your Take profit to 1.2950 for now.

IMPORTANT NOTE: if you move your TP to 1.2950 AND the pair move above 1.2750, use a trailing stop of 65 pips. This "should" provide us ample room from being stopped out too early. Or you can trail with a 100 pips, but I am not keen on giving back too much to the market so early in the month. We need to build some pips.

We also have another active trade - the EURCAD - which, yet again, was probably picked up by the aggressive traders at 1.3250. This pair heavily underperformed yesterday and may even make an attempt for the recent highs, but let us see how it works out.

If you are not sure, or do not want to risk your funds, then close the trade if you are in it. At current prices of 1.3242, you should be able to get out at break even. If did not get picked up myself yesterday, as i like to wait for the trades to come to me (told you guys, I am a very lazy trader). And it looks like we just may get that (yesterdays entry) price tonight.

Levaz

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Re: July 4 - 9 2010

Post  Levaz on Fri Jul 09, 2010 7:57 am

EURAUD short 1.4590 (1.4540 for the aggressive traders) SL 1.4690 TP 1.4100
Trade was not picked up, the market has not really moved much with this pair.

That bring me to our outstanding trade - EURUSD - from last night.
This pair is still in trade. On the up side, market did attempt to break 1.2725, coming as close as 1.2721, and did not decisively bounce from that level. Keep the stops at BE (or lock in 10 - 20 pips) and let us see what happens today. In either event, if you are in this trade, please close it before the end of the day. We don't want any nasty surprises on Sunday.

We also have another active trade - the EURCAD - which, yet again, was probably picked up by the aggressive traders at 1.3250.
The market came close to my desired entry, but no cigar. If you did get in at 1.3250, then you are currently sitting on 150+ pips. I would lock in about 100 pips of profit, so move your Stop loss to 1.3150. We are just about 120 pips away form our take profit.

Levaz
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Re: July 4 - 9 2010

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