Monthly Thread: February 2004

[rezo_s]

Hello Everyone,

Little late with opening a thread for this month, but I had some problems with the broker right at the opening of the week
business is business; nothing we can do - there are problems in any business, and ours is not an exception.
Ok, little bit about the market.

Well, it seems to me that the market is a little bit confused whether to resume with the USD selling right now or we should see some strengthening before that. USD strengthening was on its way, but as we see, USD is still very very vulnerable and any little reason is enough for market to start covering USD longs.

Andre said he was seeing the triangle possibility long before there was any indication for it, and he was 100% correct. There is a nice triangle - it can be observed on dailies, but its best seen on 240 mins (EURO). Triangle was also on USDCHF, and it seemed like it was broken, but now there is a "new" one. I think the break of the formation will be the indication to follow.
Previously, when I was talking about target for the south move, I was talking about 1.20 - 1.2150. As for the possibility for upside - I think its at least the 1.29 top retest. As we see, there is enough room to trade both ways and nice targets.
At the moment, I am more looking at the downside break, but you never know for sure. If indication are good, I may even enter inside the triangle. Will see.

This is a very good figure we got here, and market is currently working it. I suppose in the near future the trading range will be tightening as we approach to the corner.

 

[rezo_s]

USDCAD

Here is another interesting situation I am looking at right now. Its USDCAD. As those of you who followed my posts last month know, I was bullish on this pair from the beginning of January, and entered long at 1.3128 with target set back then to 1.3360. Well, the target was met but I was taken out before with smaller profit. Now we have been as high as 1.3440 today, and I am still looking at the pair for possible break upside. Yes, this time it will be a break if we get sustained break above the triple top on dailies.

 

[rezo_s]

USDCAD 240 and 60 min charts

If we look at the 240 min charts, we can observe what a nice trend line we got, and its suggesting buying near 1.3250 with stops below 1.32, but on hourly chart, line through recent 2 bottoms suggests buying below current 1.3330 levels, where 3d bottom could be formed.
In case we do continue north, I think near term target is 1.37 - 1.38.
I may consider buying near current levels (1.3330). Will see.

Good Trading everyone, and have a profitable week and month,



Rezo Shmertz

 

[rezo_s]

EURUSD triangle

Good Morning Everyone,

Well, we are still in the triangle on the EURO, and are awaiting for the break. It may hapen anytime from now to early next week (I think monday - tuesday is the latest). Break should be impressive, so lets see what will it be. I thought I may enter even inside the triangle (was considering to sell for break south), but now I have doubt if its possible. Will see.
In short, lets see how it goes.

Good Trading Everyone!

Rezo

 

[darktone]

same as before?

hello rezo
finding the churning E$ a handfull at the moment, sitting on hands and watching the 2 hour for next signal

i guess odds favor north for now

 

[rezo_s]

Morning DT,

If we look at the major trend, of course up is the direction, but technically the correction was already on its way, but the last event with the congress envelope mixed the picture, but it still didnt change it strong enough to rule out the continuation of the correction. We didnt get to 61% and not even the 50% (1.1950 and 1.2150 respectively). Of curse its not a must, but still it looked quiet confident to get there.
I see all triangles as able to break both sides, but when one side is technically supported, I may not wait for a break and enter inside the formation. I trade breaks, but not often. I guess this time we just have to wait and see, because triangle is a triangle and we are gonna be late with the break if we dont see it this week.

Good Luck,

rezo

 

[darktone]

yep got the triangle and am also looking for entry(probably long). not that much to go on inside it though.
all attempts to break north were capped yesterday which cost me a couple of mini stops. 50/50 at the moment through my eyes.

Also, the risks of holding a position over the weekend? especially if we dont get a decent profit cushion built up could be a hazard. you never know if one of them will put thier foot in it

looking forward to post G7

 

[rezo_s]

And another thing worth keeping in mind when talking figures: entering on break is in a way questionable, as who can definately say what and when is the break for sure. Me personaly, I prefer seeing at least 240min candle close, but still, in most cases I prefer to see much more than that.
For now, I am flat on this pair and on all majors. . .

 

[darktone]

re trading breaks..ive started to trade (lol better make that try!) to trade trend/pattern breaks in the 30 min and 15 min. ive been on the wrong side early jan and looked for other methods for entry as the SR swing stop and reverse id been using got trashed when we broke trend.
Trading the breaks ive missed more than ive scored mainy due to bad technique and trying to get it sorted, the risk can be nailed to 10 pips (sometimes less) per attempted entry. net results for the last couple of weeks are flat + a little bit but still chasing the the first couple of january weeks losses.. net up since august 120% so cant grumble to much.
ive been stopped flat on more than a few of these trades after theyve been 60 or more pips to the good due the bad exit technique. i always like to let run if i can but am fast finding that no 'one, stratergy will work all the time..

 

[rezo_s]

Week: Feb 09 - 13

Hello Everyone,

Hope you all had a wonderful weekend. Lets take a look at the market a bit before its opening.

EURUSD:

As those who followed this thread know, we were inside the triangle formation on the single currency. This is a major triangle, which is viewable on daily charts, but I was showing it on 240 min charts for better viewing. So, as I said it was a major triangle formation as its on daily charts, and on Friday we got a break upside, which should trigger major move north. This is a great signal for direction to come in the near term AT LEAST!
1.29 should be retested, so if talking about the minimum target, then there you go. I think 1.29 will be seen as soon as the coming week if nothing dramatic happens. I should remind as always, that this is market we are talking about, so there is no 100%, or even 60%. Everything is possible, but at the moment, the breakthrough out of the triangle and as strong one as we saw is a fantastic indication.

I will be seeking for an entry to buy from the beginning of the trading week. Sometimes we are lucky enough to see the price coming back to the broken line just to bounce back and resume the way up, so if we see that scenario, it can be used as a good entry opportunity.

Still there is a little BUT… the break was on Friday, which means that partially the rally was caused by short position coverings. If we break back into triangle, then the original break upside can be totally ignored and we should see further action.

So, in case price does come back to the break line which is roughly speaking around 1.2620/30, it is still a good opportunity for longs with stop slightly below 1.2550 figure. Stop at 1.2540 looks ok for now. But this is only pre-opening comments, so it’s not 100% accurate at the moment. I will be updating, so those who are interested, van follow.

At the moment there is nothing much to add on the single currency.

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As for the other currency pairs on the market, well, if talking about the remaining 4 majors, naturally those should also show strength against USD. But the one I would like to mention is the British Pound. It’s showing very nice resistance to any selling, and is looking very nice – even better than EURO.

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USDCAD: Canadian still looks as one of the weakest against the USD, and I wouldn’t recommend to look at selling this pair right now. It may become more attractive later based on its performance, but not right now.

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Crosses:

EURJPY: looks like a good buy. May consider later, but not while I have tradable majors. Crosses can be traded for diversification purposes only. For many reasons, majors are better to be traded, so taken current situation, main focus at the moment is on EURUSD and GBPUSD

GBPJPY: Just as against USD, cable looks more attractive on this cross as well. Nice and confident move north may be expected


Have a great Trading week to come,

Regards,

Rezo Shmertz

 

[rezo_s]

Week 22 February 2004

Greetings Everyone.

Aggressive sell off (euro) - the one we saw on Friday. It may have been expected after the failure to break 1.29, but it was still questionable whether it was too early or not to start buying the USD. Ok, that's all history now, so lets think about what is it there to look for.
I will be concentrating on the 4 majors, as there is enough interesting happening there not to look for other markets. But if someone has got any other requests, I can tell my opinion on it if it’s of any value; no problems - just let me know.
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EURUSD:
Lets take a closer look at EURUSD daily chart. After we broke the long term and strong trend line in the mid January (first sell off from 1.2900 figure), we saw the double bottom formation (green area). The double bottom was simultaneously forming a triangle (blue lines). The triangle was broken in the beginning of this month, after which we got the huge gap on 09 of Feb (opening below Friday closing). Now, as we see, the 1.2900 was unsuccessfully retested for a break North, and we are witnessing a sell off once again. 1.2480, which is the triangle support line may provide some support, but better support may be expected from the double bottom area around 1.2350.
At the moment its hard to foresee or assume whether there is a chance to go below 1.2350, but I think this time, it looks more serious, and if it really goes below 1.2350, 1.2100, followed by
1.1850-1.1900 are possible.
Its still too early to talk about any serious South direction for now, those are only possible scenarios, but indications are already pretty good. Technically speaking, its possible, but time is the question. North trend was very strong, but if move down persists, selling may become a good option in coming weeks. For now I am sidelined, but will be watching for further developments.

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[rezo_s]

GBPUSD
No need in much philosophy here to see that Cable was and is much more confident than all other major currencies against USD. New highs, very strong buying, but now I think its provoked by the overall USD strengthening. After the break which I mentioned in the beginning of the month, we got a very strong buying. At the moment its same story here as on Euro - sidelined, except for the fact that it may not as strongly be considered for selling as other currencies may be. This is only how things look at the moment, and as we know things change with the time.

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[rezo_s]

USDJPY: Very attractive for buying even though we saw very strong USD buying already. The possible target I see at the moment is 111 figure (to be more accurate, 111.10 – the 38% fibo of August 2003 – recent 105 lows). First resistance is coming from 110.00–110.50 area, after which the 111.00 should be triggered.
If we continue looking at the Fibo levels, we see that next important level coming is the 50% near 113 level. I don't know how relevant is it to talk about it right now due to the long lasting down trend. It took more than half a year to make this way down, so taking back 50% of it seems little too much in such a shot period.
To sum up, 111.00 seems reasonable to be seen in coming week(s), but afterwards and even on the way there, we may see selling anytime. Therefore, buying should be done with tight stops (not more than 50 bp). This is the only one out of major pairs I see as best to buy. Will see during the week how it goes. Once again, looking at overall picture, its best to stay away for some time and watch for further developments, but if buying USD, then this is the pair to do so.

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[rezo_s]

USDCHF:
Same as on Euro – for now sidelined, but USD may be a good buy next week(s). On the bigger picture USD is still very weak, and we can talk only about corrective move right now. Not more than that. Let’s see how it behaves around the first resistance area coming: 1.2650-1.2700. Afterwards, we may start talking about 1.29 as an initial target to start buying for.
I repeat that USD was, is and may stay very vulnerable for a longer period of time, so its better to wait for further signs of USD buying before going for it with confidence.
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That’s is for now.

Good Luck Everyone!

Rezo Shmertz



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