Trading Week 07/01/13

Saturday 12th (6am) 825 pips on TS signals this week!

The USDX continued its fall and the EURX its rally:

The weekly H&S pattern looks like it might evolve here:

TS Signal update: there were some laggards with the G/U and Gold but the rest are doing ok:
E/U: up 170. It has closed above the weekly 200 EMA now!

E/J: up 370.

A/J: still at around 180 pips

G/U: down 25

 Swissie: up 60

Gold: was down 70 before the signal closed

U/J: moved 140 pips

EUR/AUD: I missed this signal yesterday on the EUR/AUD. It has given 140 pips itself but I haven’t included this pair in the tally. 

Friday 11th (7 pm) TS signals give 680 pips this week

The USDX retraced a little but looks like it might continue to roll. The EURX looks bullish still too as well:

The two pairs I’m most taken with are the E/J and the E/U. I’m LONG on both with 200 locked in on the E/J.

E/U: This pair looks like it might continue up from the triangle breakout:

E/J: it is still cruising after breaking free from the 115 level

Friday 11th (10 am) TS signals give 680 pips this week

The TS signals are moving along nicely.
E/U up 85

E/J up 250

A/J up 180

G/U up only about 10

Swissie still at around 55

U/J even the U/J has kicked along to give 100

A/U: didn’t ever give a clean TS signal but continues from the triangle breakout:

I took the E/J last night and I’ve now taken the E/U. 
There were great 30 min trading opportunities on Euro pairs last night following on from Super Mario’s news release:
E/U 160 pips:
E/J 250 pips:
I’m out for most of the day as it is school holidays here and we have kids over for the day. I will update later this afternoon.

Friday 11th (6am) TS signals give 400 pips this week

Hooley dooley…..what a night….and I slept through it! The USDX has tumbled back to below the weekly 200 EMA:

The EURX has conformed to the bullish wedge breakout too. I assume that was due to Super Mario: 

I asked for ‘Cloud Convergence’ last night and…..I got it! Both indices, on 4hr and daily Ichimoku time frames, are now set up for optimum ‘Risk On’ trading:


My TS signals are firing along:

A/J: this signal is now up 100 pips

E/J: is up 150 pips

U/J: as suspected, this has stalled with the falling USD. It is currently up around 25 pips though:


I received signals on my 1am candle overnight on the E/U and Swissie: 
E/U: this has moved 70 pips since then BUT has also broken out from the smaller of 2 symmetrical triangles. Note the weekly 200 EMA just above price as well.
E/U 4hr

E/U weekly: the weekly 200 EMA may give another opportunity to enter this pair if the current momentum continues:

Swissie: has moved 55 pips since the 1am signal

G/U: The Cable has also given a signal on my 5am candle but I don’t like this pair at all:

A/U: the A/U has continued to climb after its triangle breakout but without ever giving a clean TS signal


Gold: Gold has given a TS signal on the 5am candle too. I note it is just under the daily and 4hr 200 EMA levels and monthly pivot though and these are some resistance for sure. The ‘handle’ part of the ‘cup and handle’ pattern is just above this as well. A breach of the this trend line would be VERY bullish for Gold!


Thursday 10th (9.15 pm)

The USDX is falling and the EURX is heading to test the upper trend line of the bullish descending broadening wedge pattern I’ve have in on this index:

There is major Euro and GBP red flag news out later. Who knows what impact Draghi will have this time?
I’ve had a frustrating day. More to do with exploding pecan pies in my oven and burnt maple syrup going everywhere rather than staying within the pie cases. I’m hoping sleep will erase today and herald a better day tomorrow. I’ hoping a new day might even bring some Cloud convergence, or at least the start of it!

Thursday 10th (9 pm)

The USD continues to struggle. I have had one more TS signal. LONG on the E/J:
There is still Cloud divergence though and major Euro red flag news due out later on tonight.

Thursday 10th (7.50 pm)

The U/J signal from earlier today is up too, like the A/J. I’m wondering though, if the USD starts to roll over whether the U/J might roll over too? Thus, could the U/J be forming a possible double top?  If so, I’d be stops to entry on this trade if trading it:

Thursday 10th (7.20 pm)

The USDX is stumbling at the 80.70 level again:
The EURX looks like it might be headed to the upper trend line for a flag break out attempt:

A/U: The A/U has hit the upper trend line of my bull flag pattern. Sadly, for me, none of these recent moves have been underpinned by enough liquidity to produce TS signals.:

Thursday 10th (5 pm)

It has been an interesting Asian session today. We’ve seen the USD drift upwards but, so too have some ‘risk on’ instruments: stocks (Aussie and US after hours) plus the A/J, A/U and Kiwi:
USDX 30 min

SPI 30 min (Aussie market)

S&P500 30 min

Dow Jones 30 min

A/J

A/U

Kiwi

I’m wondering if this is just ‘divergence’ at work or is it the beginning of a new paradigm…rising USD with rising ‘risk appetite’.

Thursday 10th (2 pm)

Just back in and I see the Chinese data was positive and that this gave the A/U quite a boost. This result may end up dragging other risk on’ pairs up with it too…..E/U, Kiwi etc. The A/U is now nearing a major trend line on the weekly and monthly time frame:
A/U 4hr

A/U weekly

A/U monthly

The A/J signal is moving along:

The U/J signal is up too BUT I’d be stop to entry here ASAP in case the USD falls and this reverses. 

Swissie: I see the Swissie is butting up against a major trend line on the weekly chart. An upward breakout would be a ‘risk off’ move and bearish for stocks etc.

Swissie 4hr

Swissie daily

Swissie weekly  (a bit distorted)

Thursday 10th (11.30 am)

The A/U didn’t like the poor building approval data as this hourly chart shows:

Cable: The G/U is approaching a weekly bull support trend line. Breach of this level would be quite bearish
G/U weekly

G/U daily

G/U 4hr

Thusrday 10th (10 am)

Both indices are simply tracking sideways. They seem to be waiting for some direction from either Chinese Trade data, due out sometime today, and/or the ECB conference, scheduled for later tonight.
The two Yen signals are up slightly:
U/J

A/J

Thusrday 10th (5.15 am)

The USDX has chopped a bit higher but so too have stocks. Weird BUT……that’s what I see when we have Ichimoku index divergence. This keeps protecting me from getting whipped around in trades. The USDX on the 4hr is getting back up to the key 80.70 level. This is the 5p% fib retrace from the last major swing high so a rather pivotal point for this index. Note the Bollinger band clamping down from above though:

The EURX hasn’t been scared by the rising USD though and it continues to chop around sideways. I think it’s waiting for the ECB meeting leter tonight (my time) before committing itself to any move. 

The USDX is still stuck in the daily Cloud but might emerge up and out if it continues on this tangent:

The EURX is still trading above the Cloud too. So, we could end up with both indices above their daily Cloud. Now, that would be ‘divergence maximus’!

There seems to be some further Yen weakness with signals coming in just now on the U/J and A/J:
U/J

A/J

No signal on the E/J though although a channel break seems to be happening:

I have a rule to not trade when the indices are embedded in the daily Ichimoku Clouds SO….I’m waiting for a better trading environment before taking any signals. I’ll watch these ones above though. I’m switching over to my stocks platform to check my Option trades now. 

Wednesday 9th (9.20 pm)
The EURX is fairly flat:

USDX is too:

Thus, no TS signals around just yet.

Wednesday 9th (8.10 pm)

Still not much happening. Not a lot of liquidity at the moment though.
I have got Gold making a bullish move though:
A/J starting to move too:

Wednesday 9th (7 pm)

Ok…..So….which one of you guys alerted Dean Malone about my ‘Cup and Handle’ pattern set up on Gold???

http://www.compassfx.com/video/ip/10813/10813.html?inf_contact_key=10c5f0d20fb297031d476c245cd8dbf85b45f2d448d610407234aeae4f46878b

Wednesday 9th (5.20 pm)

Still very little happening. It seems that there is some kind of trading style ‘post apocalyptic fatigue’ out there. There was so much hype about the Fiscal Cliff over recent weeks and, now, with little on the trading Calendar, it seems to be that traders are exhausted and unsure which way to run. No rally has lasted more than a few days.
No TS signals.

Wednesday 9th (2.45 pm)

Some poor AUD data put an end to any ‘risk on’ sentiment during the Asian session. Not much happening other than more choppiness. I’ve been using this down time to go over my Stocks and set up some Feb expiry Options trades.

Wednesday 9th (9 am)

Alcoa came out with Earnings that were in line with expectations but with revenue that exceeded expectations. This sent the share price up after market close from $9.10 to $9.24, a 1.5% increase. I have been tracking Alcoa, AA, in my Stocks pages for some time now. There seems to be some ‘risk on’ sentiment creeping back into some of the pairs, E/U, A/U and G/U, which may be due to this positive news. There is still no dominant trend though and price action continues to be choppy for the time being.

Wednesday 9th (6 am)

Currencies continue to be choppy and it seems they are being held victim to anxiety over the pending US stock market earnings season. Earnings season starts today with Alcoa after US market close. Until then, there seems to be no real catalyst to get things going in one set direction:

The USDX remains bogged in the daily Cloud

The E/U and Swissie never made it over their monthly pivots so voided those TS signals for me. I don’t have signals anywhere and I don’t find that surprising given the state of the USD index. 
The U/J broke the daily bull trend line but didn’t produce a clean TS signal. It now looks like it could be forming a bull flag. Trend line breaks here might give further clue:
The E/J has broken a bull trend line as well but it, too, has not produced a TS signal. It may do down the track though:
Looking at the A/J this morning I now see it trading more like the U/J. That is, having broken a bull support trend line and now trading in a channel to form a bull flag like pattern:
Ongoing BoJ stimulus makes me wary shorting any Yen pair though.
The other pairs are simply just choppy and ugly. 
We had extreme heat yesterday with 42 degrees Celsius or 110 + Fahrenheit. My internet is playing up and I suspect the heat may be the problem. There isn’t much to report but I’ll update where and when I can. I’ll be keen to see how earnings season plays out and how that impact currencies.
VIX: the Vix is at record lows and still below 14 as I type. There was an article about the Vix posted on CNBC that is worth reading and keeping in mind. Why? Because rising fear will boost the USD and that needs to be kept in mind when trading currencies. Link here: http://www.cnbc.com/id/100359775

Tuesday 8th (9.30 pm)

It is still pretty choppy across most pairs. The E/U and Swissie still haven’t moved much. The E/U has only ranged 37 pips so far today and the Swissie only 26. Trading volumes were light last US session and may stay so for a bit longer making price action even more unpredictable and, thus, choppy. This is a regular pattern I notice whenever I see index price action embedded in the daily Ichimoku Cloud and divergent between the EURX and USDX:

Tuesday 8th (6.40 pm)

Both E/U and Swissie signals are down about 10 pips but neither of them managed to close beyond their monthly pivots. I may sound like a broken record but…expect choppiness when price on the indices is trapped in the daily Cloud and divergent.

Tuesday 8th (5 pm)

My E/U and Swissie signals are still valid but they need to close above their weekly pivots. Not much else happening just yet.

Tuesday 8th (1 pm)

The USDX seems to be having itself a little bit of a pullback after the big falls from the US session:

The E/U signal is flat and I’m waiting to see if the monthly pivot can be breached here first: 
Ditto for the Swissie: 

The U/J is looking interesting though but it will take the next candle close at 5pm to possibly form any TS signal:
The USDX is back to trading within the Cloud on the daily Ichimoku chart so, I hold little hope or expectation of finding any good trades or good signals whilst this is the case:

Tuesday 8th (10.20 am)

Have finally started to read published reports that are on the same page I’ve been talking about for ages now….Cited on FX Live:

HK Press: Euro zone fades as China, US prosper
Written by Eamonn Sheridan   January 7, 2013 at 22:43 GMT 
The economies of the United States, China and much of the developing world have decoupled from Europe, leaving it to wallow in various stages of recession and fiscal disarray………. 
Manufacturing surveys published just a few days into this year laid out the divide starkly.
The US and China both came in above the 50 index level that designates growth while the euro zone languished in recessionary territory for the 17th month.

http://www.scmp.com/business/economy/article/1122225/euro-zone-fades-china-us-prosper

Tuesday 8th (9.10 am)

I’ve got new TS signals on the E/U and Swissie. I’m waiting to see if they can get past their monthly pivots first though:

Tuesday 8th (8.55 am)

U/J not falling with the falling USD…just not yet at least….

Tuesday 8th (8.40 am)

I’m now looking at the A/J as more of trading within a possible ‘bull flag’ rather than having broken a support trend line. There is AUD data out in a few hours which is thought likely to be negative so, this may impact here. I’ll look for a TS signal and trend line break but, also, for news reaction:

Tuesday 8th (5 am)

The USDX has rolled down and, I have to admit, when I saw the index charts I groaned thinking I’d have missed some good new trend moves:

Strangely though, no new good trend moves seem to have kicked in. Even the U/J is holding up:

The E/J is hanging on to the 115 level but not rolling on just yet 

The A/J has broken the bull trend line but I don’t have a SHORT signal:

The A/U is simply choppy:

The E/U is up but no TS signal just yet and note those Bollinger Bands!  They look like they could clamp right down on price movement so need watching:


I do have a SHORT signal trying to build on the Swissie BUT look at the Bollinger bands:

The other strange parallel is that even with a falling USD during the US session we have seen falling stocks. Some analysts are noting that this is simply normal following the big moves from last week. That may be the case:

I tend to think that all this divergence is merely typical when the we see Ichimoku Cloud divergence and congestion and that is what we are seeing right now. The USDX is stuck in its daily Cloud. It had looked like it might break up and out for bullish momentum but now looks like it might break back down for bearish sentiment. The 4hr USDX is trading above the Cloud: 
The EURX is still above its daily Cloud pointing to bullish sentiment. The 4hr EURX is trading within the Cloud though:

Divergence = Caution needed!

Monday 7th (9.15 pm)

No clear break with the indices:

No trend line break on the U/J: 

No trend line break on the E/J either: 
I don’t have any new TS trend signals but that is hardly surprising given these choppy conditions. This is to be expected though with Ichimoku Cloud divergence. Price is still stuck in the Cloud on the USDX daily chart. Experience tells me it’s pretty pointless looking for clear trend signals when this is the case:
The A/U is trending up but there has not been a clean TS signal.
Staring at the surf ain’t gonna make the waves come!

NB: Ichimoku Cloud divergence and choppy 4hr charts conditions sometimes yield great 30 min trend trades during the US session. I’ll be watching to see if this occurs again. The current S&P500 chart is below. I wait for the US session though to assess any new signals:

Monday 7th (7.20 pm)
It might take the US session to get things moving in one clear direction. There isn’t much scheduled news and that is usually favorable for ‘risk on’ or stock positive. We’ll see though!

The U/J is still looking tempting:

I’ll update again after my 9pm 4hr candle close.

Monday 7th (5 pm)

FX is still in a bit of no mans land for me at the moment. The USDX is trying to push higher but I’d want to see it close back above the key 80.70 level before trading ‘risk off’. I don’t have any new TS signals at this stage anyway. This choppiness is not unexpected though. We have Cloud divergence across the EURX and USDX on the daily charts and this is ususally associated with choppy longer term trading. 

Re The Yen: This article was cited on FX Live. Comments that most of the Yen weakening might be behind us now. http://www.efxnews.com/story/16645/here-why-usdjpy-big-upside-move-already-behind-us-nomura. 
E/J: This pair is struggling at the moment and would be impacted on by any profit taking on the U/J (see above article). I’m still watching to see if the weekly 200 EMA can hold this pair up:

U/J: I’m not much of a fan of this pair but, if the ‘Yen holding’ stories evolve, then this might just start to appeal for a SHORT. I’ll watch it for a TS signal, weekly pivot and daily trend line break:

Monday 7th (1.20 pm)

I’ve just had my first 4hr candle close but there are no new trend TS signals yet. The Euro and USD indices have been a bit flat without giving away any new momentum move just yet but it is only early in the Asian session:

The USDX may just turn bullish if it pushes much higher. We would then have a situation where  price is above the Ichimoku Cloud on both the 4hr and daily chart and this is deemed as bullish. Until recently, this situation also corresponded to ‘risk off’ and meant lower stock prices and lower values for risk pairs like the AUD, NZD and EUR.  I’ll be watching to see whether this correlation still holds if the USD continues to push higher:

The E/J has pulled back to just under the 115 level. I’m watching to see if this level holds and, if not, then whether the weekly 200 EMA at 114.542 will hold:

Some Asian markets have just started to push lower but this is being reported as some profit taking. We’ll see how Europe opens.