USD/CHF Weekly Breakout
USD/CHF 1-Hour with PSQ9 and lime green bracketing:
Sunday (Aug 14th) High = .79142 & Sunday Low = .78173
A = Aug 15th 06:00 high .79960 *
B = Aug 15th 10:00 low .78626
C = Aug 15th 12:00 high .79249
* Pair made a 138.2 extension to .79960 based on plot:
Low = Aug 12th 16:00 .76998 and High = Aug 14th .79142 (Sunday High)
The FE 100 price of .77870 was hit by the Aug 15th 15:00 candle. The Friday high was .77846 (white X) prior to the gap up the following Sunday.
From the beginning of this thread, we spoke about being aware of where we are in the price movement when assessing a potential breakout trade.
If we subscribe to the FE 100 being the highest probability, we would have known to keep that trade for a short duration and target the FE 100 if we can keep the R/R palatable, or reject it entirely.
This particular pair was choppy viz-a-viz the Sunday breakout. Understanding fib extensions/S&R will reduce losses attributed to false breakouts, and/or allow targeting small profit targets with more confidence.
As always, use money management.
Last edited by fxbaja; 08-18-2011 at 04:18 AM.
Attached is 30-min EUR/USD with SQ9(price) and Andrew's Pitchfork plot:
Handle = Aug 16th 16:00 high 1.44708
Upper corner = Aug 17th 13:30 high 1.45162
Lower corner = Aug 17th 07:00 low 1.43233
Horizontal fib plot:
High = Aug 17th 13:30 high 1.45162
Low = Aug 17th 15:30 low 1.44204
138.2 = 1.43838 (just hit during 04:00 candle)
Expect hit and bounce at median line (middle fork line).
The Bears are rattling their teeth and growling "We told you so".
DAX down 6%, DOW down 4% dipping below 11,000.
Gold up to $1826
Negative U.S. Jobless Claims 12:30
Negative U.S. Home Sales 14:00
overriding higher than projected U.S. CPI at 12:30.
Attached is continuance of EUR/USD APF chart. After a 37-pip bounce up off the Median Line during 10:00 hour. pair just made a 161.8 extension (plot not shown) to Lower_ML2.
Gray color 50% fib. The red horizontal line intersecting this area is the Sunday High.
Nightmare on Wall Street VI
Attached is the CFD US30 4-hour, which tends to mimic the Dow Jones 30 Futures.
High = Aug 5th 11,578 Low = Aug 9th 10,444
1st Peak = Aug 15th 11,480
2nd Peak = Aug 17th 11,529
Fibo fan: Low = Aug 9th 10,444 High = Aug 17th 11,529
Price just arrived at the fan's 61.8% ray and horizontal 61.8. Chart's horizontal plot is upside down, thus inverted 38.2 = 61.8.
We did that to show the pullback was to the 88.6% retrace level.
Lot's of fodder for dinner conversation. This types of market movement is good for intra-day and swing traders, but we don't gloat too much as the stock investors are getting slammed.
US regulators stepping up their scrutiny of European banks......according to bloomberg t.v.
Attached is the CFD GER30 daily chart, which tends to mimic the DAX.
Low = Mar 16th 6,413 High = May 2nd 7,603
161.8 extension to downside = 5,678 hit Aug 8th on first trading day after the S&P downgrade of the U.S. long-term debt.
Has been trading between 161.8 and 127.2 fibs, but testing below support now. The 200% fib = 5,223
Other labels are Mar 16th low, just after the earthquake in Japan. June 30th end of QE2, since everything is connected now and that event closes the tap to a certain extent.
Last edited by fxbaja; 08-18-2011 at 03:11 PM. Reason: other labels...
Bloomberg interview: Oliver Chang - Morgan Stanely
Plan for investors to fix up foreclosed homes in the U.S. for rentals. Will create jobs.
They’re on the right track but the pace have not and will not be quick.
Our Jack Out Of The Box plan:
Volunteer program whereby banks and other institutional owners of foreclosed inventory shall be allowed to place assets in a tightly run lottery.
There is an estimated 5-8 million foreclosed homes, including shadow inventory.
Another 11 million of the 55 million homes with mortgages are in danger of default.
5 million foreclosed homes can removed from the banks’ balance sheet in one year. They will receive full invested amount.
This will provide a jolt up in jobs and peripheral benefits to the economy.
Provocative twist includes restricting lottery to households with a maximum annual income of $80,000. This group represents 75% of all households.
Minimum holding period may be enforced. Bank appraisal/underwriting guidelines to ignore transfer value of these properties.
N.A.R. will object after mistakenly concluding that short-term pain in loss of commission (from homes transferred by lottery vs normal sales), is not worth the acceleration of process.
The N.A.R.'s Housing Affordability Index does not paint an unbiased picture. Why should the U.S. be happy that it takes about 50% of a household's net income to service the cost of ownership?
AUD/USD PSQ9 to Aug 19th
Here is the view with PSQ9 and MML.
Horizontal fib plot (yellow):
Low = 1.04322 High = 1.04960 (both Aug 17th pivots)
The fib plot's high is near the MML 4/8th (blue), and the Low is near MML 3/8th (green).
There are 3 Mars lines, which are near flat in trajectory.
The degrees are 0, 90, and 180.
We can see the breakout to the upside hit the 261.8% extension and overshoot the Mars 180-degree. This was a BAJA bearish divergence on top as we mentioned.
Price declined and bounced at/respected each level of support en route down. This includes the
MML 4/8th, same area as High and blue 50% from wider plot
Mars 90-degree (same as 38.2)
100%, same as Low of course
Mars 0-degree, same as blue 38.2 from wide plot. Moon 90-degree also here.
Lower 200% and 161.8
End of 15:00 hour signifies end of de facto European session.
The US Philadelphia Fed Manufacturing Survey figure came out overwhelmingly below projections at -30.7 points in August, after growing 3.2 points in July.
However, overnight trading indicated that things were going to be bad. Attached is the CFD SPX500 which can mimic the S&P 500 Futures.
Using simple plots for horizontal and fibo fan:
Low = Aug 9th 1080.1 High = Aug 17th 1208.1
Arrow and label points to the 07:00 European open (price 1180). This candle period closed below support of 1180 and the 23.6 fib.
Price only stalled minimally at the 38.2 fan ray 09:00-10:00.
The U.S. session opened at 13:30 with price about 1161.
What we're saying is that the U.S. session joined the selling at about halfway point.
The Philadelphia Fed data wasn't released until 14:00, which is the candle that opened below the 50% fib. This data is being cited as a main reason for today's fear selling.
This chart shows that traders in Europe started fleeing to safety, well before the Phil Fed data.
This is not to say that the metric is not important, as it is said to be a leading indicator for lower Non-Farm Payrolls. Some investment banks now saying America is teetering on the brink of recession.
Some feel the U.S. had never really emerged from the last recession, with the FED just artificially and temporarily dressing things up (inflate). But, remember FED Chief Mr. Bernanke is an expert at addressing problem models from the 1930s. "He wrote the book".
Last edited by fxbaja; 08-18-2011 at 05:09 PM.
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