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This weeks GBP/JPY Analysis & Predictions

  • #81
  • Oct 15, 2007 4:30am Oct 15, 2007 4:30am
Nothing has really changed with my positions. I'm still holding shorts for the longer term with the main target being around the mid 231 region. I may take some off at 234 and hold some for a potential 221 target though most will be banked around 231.5 should it print.

Now, if this upward move continues and exceeds the recent high 240.50+ then I will start to reverse my shorts into longs with targets of 244, 247 and holding some for a potential 251 target.

At the moment we are at a faily strong brick wall that has normally taken about 2 weeks to break, so being on the underside of the wall I will remain bearish but gradually turn bullish if it starts to fracture. At the moment we have been lingering around this wall for a week and we should find out this week whether it holds or breaks. Either way, I believe the deciding move should be a big one.

In the mean time, I will enter intraday moves as I see them.
  • #82
  • Oct 15, 2007 4:42am Oct 15, 2007 4:42am
Here is a chart. The grey line is the wall.
Attached Image
  • #83
  • Oct 18, 2007 4:52am Oct 18, 2007 4:52am
Looks like some kind of diamond formation is in progress (bearish sign) and the way things are going, we could retest that ascending trendline sideways. I'm still waiting for a downward break.
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  • #84
  • Oct 18, 2007 5:21am Oct 18, 2007 5:21am
I'm still waiting for a downward break but it's far from certain. In this case the diamond is bearish (being a continuation pattern).

All in all, lately I have seen a lot more bearish signs than bullish so lets see if they end up paying off. I am still holding my shorts from two fridays ago on the basis that they will hit the first two targets or get reversed for a long journey up. Pro stops will come into play when we get the next wave down (i.e. breaking that daily trendline).

Also notice the rounding top on this chart. A sign of a trend reversal with a head and shoulders sitting on top.
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  • #85
  • Oct 20, 2007 12:23am Oct 20, 2007 12:23am
thank you Hakuna Matata, My2buoys , Karmostaji and Zoran for your ongoing analysis. The 4 of you are the elite in chart analysis and trading both on weekly and daily basis. thank you for everything. Helps us traders in becoming better.

Fer
  • #86
  • Oct 21, 2007 1:11am Oct 21, 2007 1:11am
hope everyones having a fantastic weekend !

analysis posted:

http://www.forexfactory.com/showthre...=1#post1667323
  • #87
  • Oct 21, 2007 11:27am Oct 21, 2007 11:27am
It seems the majority are having the bear fever for this week and they could be correct, but I don't have that fever yet. On the daily chart, after the reached the 61.8% which we have been waiting for, it was rejected and price has come back down to the 50% (235.20). If we draw a new fibo (green) from the last bull-run from the breakout we had 2 weeks ago, the 50% fibo is right on the daily one and price is current around there, but it could still dip to 61.8% (233.90) area before bouncing back up and most probably going to 243.50 area. Remember, if we get a sell-off or panic selling then everything I just said is useless, so just be careful and don't jump the gun, have patience and wait for confirmation before pulling the trigger, good luck.

http://img235.imageshack.us/img235/7804/gjsi4.gif
Trade what you see, not what you think.
  • #88
  • Oct 21, 2007 3:39pm Oct 21, 2007 3:39pm
I have changed my longer-term view of GBP/JPY bullishness, which I thought could last to perhaps even the end of the year. I now believe that bullishness will only last for about two more weeks maximum, based upon the info I have been showing on the Weekly Charts. From a monthly perspective I now see longer-term bearishness based upon bearish divergence on MACD to price, which I hadn't noticed before. Because this is the Monthly chart, I think the bearish reversal will be substantial, though I don't want to make any predictions because we are dealing with the Monthly chart here. By comparison, the 4H bearish divergence we just experienced over the last two weeks has taken GBP/JPY down over 500 pips. You can only imagine how far down Monthly divergence might take this pair. The divergence on this chart is designated with the two purple trend lines. I also am showing two Tom Demark trend lines, one is recent and one is longer-term. The first shows support around 231.75 and the other around 172, which could be a multi-month TP goal for this divergence and overall coming bearish downtrend which this chart seems to be indicating. Of course, the lower trend line will move up with each passing month. By the time price hits it down the road it might be around the 210 area Markam has been forecasting for several months now.

M2B
Attached Image (click to enlarge)
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  • #89
  • Oct 21, 2007 4:01pm Oct 21, 2007 4:01pm
Weekly Chart analysis from the last few weeks is still right on course. This past week was a correction before a final move up over the next one to two weeks, when price will climax at the crossing of the vortex (purple horizontal line). Some have called for a retest of the 241 area. If we do get two more weeks of bullishness, I think we could see a retest of 244, and then the big turn down to fulfill bearish divergence on the Monthly chart will begin. I currently see 244 as a top retest area. I don't think we'll see 251 again for a long time (I'm talking years if the Monthly chart plays out as I see it). Notice also that Stochastics on the Weekly is oversold and starting to turn over. I'm guessing that within two more weeks it will have crossed down to begin price's descent in a bearish reversal. I have also plotted the current Weekly trend line on this chart which is right around 235.20, right around current price's close over the weekend. Momentum is showing strong bearishness on this chart but my Weekly chart will not actually turn over until 00 GMT tonight, in about three hours. I expect it to flatten out to allow for a week or two more of bullishness.

M2B
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  • #90
  • Oct 21, 2007 4:17pm Oct 21, 2007 4:17pm
Not much more to comment on concerning the Daily Chart. Four solid down days have brought us to right around the 50 Fib level of the last move up. The Daily trend line is right around 235.10 (right near the Weekly trend line area as well). Stochastics is oversold and in need of a corrective move up. See the above Monthly and Weekly analysis for further reasoning on my belief that this week will end up bullish. There is a slight possibility, based upon the 4H bearish divergence I have talked about for the last two or three weeks, that GBP/JPY could still go down another 200 pips to the 233 area. That would also be the 61.8 Fib level from the last move up. If it does go that low I still believe it will move back up into the 240's before the major bear move down begins. As I am getting ready to post this new chart, my new Daily candle has just opened with a gap of almost 80 pips to the downside. Let's see where price takes us the rest of the week.

M2B
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  • #91
  • Oct 21, 2007 4:23pm Oct 21, 2007 4:23pm
There is bullish inverted divergence forming on the 4H Chart, though it hasn't yet consummated. It is definitely showing me that we are going to see another move back up soon. Stochastics is oversold as well at the moment. Not much more to say on this chart for now. See the above charts and posts for more detailed analysis for the coming weeks and months.

M2B
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  • #92
  • Oct 22, 2007 5:27pm Oct 22, 2007 5:27pm
Quoting my2buoys
Weekly Chart analysis from the last few weeks is still right on course. This past week was a correction before a final move up over the next one to two weeks, when price will climax at the crossing of the vortex (purple horizontal line). Some have called for a retest of the 241 area. If we do get two more weeks of bullishness, I think we could see a retest of 244, and then the big turn down to fulfill bearish divergence on the Monthly chart will begin. I currently see 244 as a top retest area. I don't think we'll see 251 again for a long time (I'm talking years if the Monthly chart plays out as I see it). Notice also that Stochastics on the Weekly is oversold and starting to turn over. I'm guessing that within two more weeks it will have crossed down to begin price's descent in a bearish reversal. I have also plotted the current Weekly trend line on this chart which is right around 235.20, right around current price's close over the weekend. Momentum is showing strong bearishness on this chart but my Weekly chart will not actually turn over until 00 GMT tonight, in about three hours. I expect it to flatten out to allow for a week or two more of bullishness.

M2B
Correction on the above highlighted statement. It should read overbought, not oversold.

M2B
  • #93
  • Oct 22, 2007 8:18pm Oct 22, 2007 8:18pm
I'm long 232.72. 50p TS. 00:31 GMT.
  • #94
  • Oct 27, 2007 6:22am Oct 27, 2007 6:22am
weekly analysis posted, enjoy

http://www.forexfactory.com/showthre...75#post1682975
  • #95
  • Oct 27, 2007 6:32pm Oct 27, 2007 6:32pm
I have been reading a lot this weekend about the accelerating strains on the financial system, and I have pretty much decided that it really doesn't matter what the fed does, the system is going to collapse very shortly.

I am going to simply quote from various sources some the critical items that are coming together and setting events into play that may not be stoppable. I am trying to tie it all together in a manner that can hopefully explain this situation. if so, I will update this post later in the weekend.

At this point, I am about 80% confident that we will see a record setting crash in the US stock market in the next month.

Quote
October 26 – Bloomberg (Jody Shenn and Shannon D. Harrington): “Moody’s…cut the ratings of collateralized debt obligations tied to $33 billion of subprime mortgage securities that were downgraded this month, a decision that may force owners to mark down the value of their holdings. Securities with ratings as high as AAA from at least 45 CDOs were either cut or put on review for a downgrade…”

Quote
October 26 – Financial Times (Ben White and Michael Mackenzie): “Subprime mortgage anxiety continued to spread on Thursday as a leading derivatives index hit a new low and fears grew that Merrill Lynch and other banks could be forced into even bigger asset writedowns. Trading in the riskiest slice of the ABX index of bonds backed by home loans made in the second half of last year hit a new low of 18 cents. The risky slice of the index is down about 30% since the end of September when banks closed their books for the third quarter… The ABX decline has helped fuel speculation of further big asset writedowns by banks and insurance groups… William Tanona, Goldman Sachs analyst, said he expected [Merrill Lynch] to take an additional $4.5bn of writedowns in the fourth quarter on its remaining $20.9bn portfolio of CDOs and subprime mortgages. His estimate was based on movements in indices tracking the value of subprime mortgages and securities made up of those mortgages. ‘While only a proxy, we believe this price action does not bode well for the firm’s existing $5.7bn exposure in subprime mortgages,’ Mr Tanona said. ‘Second, the TABX index, which we have been using as a proxy for CDO assets, has also deteriorated 18-35% across all of the tranches with the most significant deterioration coming at the most senior levels.’”

Quote
October 26 – Financial Times (Stacy-Marie Ishmael): “The perceived creditworthiness of two of the largest financial guarantors in the US on Thursday plunged to lows not seen since the worst of the credit squeeze in August. MBIA and Ambac are specialist companies that guarantee the repayment of bond principal and interest in the event of an issuer default - including bonds backed by subprime assets. After both companies this week reported third-quarter losses, investors have begun to speculate that the monolines, as they are known, might themselves in default on their outstanding debt. Spreads on five-year credit default swaps written on Ambac’s debt widened by 50 bps to 300bp, according to Credit Derivatives Research… In other words, the annual cost of insuring a $10m portfolio of Ambac’s debt over five years has risen by $50,000 to $300,000. The previous record of $238,000 was set on August 16…”

We’ve definitely reached a critical point worthy of the question: Can “structured finance,” as we know it, survive the California and U.S. mortgage/housing busts? I don’t believe so. For one, the historic nature of the Credit Bubble virtually ensures the collapse of the Credit insurance “industry” (companies, markets, and derivative counter-parties). The mortgage insurers are now in the fight for their lives, while the “financial guarantors” today face an implosion of their “structured Credit” insurance business. Worse yet, major problems in municipal finance (certainly including California state and municipalities) are festering and will emerge when the economy sinks into recession. It is worth noting that California revenues were $777 million short of expectations during the first fiscal quarter (see “CA Watch” above).
  • #96
  • Oct 28, 2007 5:38am Oct 28, 2007 5:38am
I have the same views as you, but I am not as sure about a crash or a bear market anymore as I would have been a few years ago.

The best example was a few days ago (Wednesday), when the DOW was ready to drop further and then spiked up 150 points just like that.
The market is so obviously manipulated it makes me sick.
And that's what I suspect for the future. They just can't let it fall because it would have a desastrous effect on the financial system and the confidence of the people and the whole system.
They'll probably always find a new way to bail out the banks and investment guys and the money and the rest doesn't interest, because it doesn't count.
The US could go into recession for years and nobody would know, because the people are too stupid to see what's before their eyes and only believe what's said on the media.
And the media only reports what they are told the y should report.
And the numbers that are reported are false and manipulated anyway, so this game could go on many more years.
There has to be a very big event from the outside to let the system collapse and let all the lies be exposed.
Otherwise there will always be a cover-up because everybody benefits from the status quo.




Quoting markam
I have been reading a lot this weekend about the accelerating strains on the financial system, and I have pretty much decided that it really doesn't matter what the fed does, the system is going to collapse very shortly.

I am going to simply quote from various sources some the critical items that are coming together and setting events into play that may not be stoppable. I am trying to tie it all together in a manner that can hopefully explain this situation. if so, I will update this post later in the weekend.

At this point, I am about 80% confident that we will see a record setting crash in the US stock market in the next month.
  • #97
  • Oct 28, 2007 10:18am Oct 28, 2007 10:18am
I hope everyone had a good weekend, and ready to grab more pips from the beast

Daily chart:

Here's a simple looking daily chart with 2 trendlines and a fibo retracement, you can see we have been bouncing off those fibo levels and trendlines, price is close to the 50% level, which way are we going next? hmm It can go either way and a breakout should happen soon (this week maybe), so keep your eyes on the chart and don't miss out on the fun

http://img137.imageshack.us/img137/2935/gjeb3.gif



4H chart:

Ok, let's look at the recent fall we had from 240 area to the 230 area, the price has retraced 50% and then back down to 23.6%, now we're back up close to 50%, what's next? The chart says it all, a breakout should be coming up soon this week.

http://img99.imageshack.us/img99/4307/gjce0.gif
Trade what you see, not what you think.
  • #98
  • Oct 28, 2007 11:51am Oct 28, 2007 11:51am
1H chart:

Breakout soon..

http://img70.imageshack.us/img70/906/gjqc5.gif
Trade what you see, not what you think.
  • #99
  • Oct 28, 2007 1:44pm Oct 28, 2007 1:44pm
And lets not forget the weekly view !!!

The is a huge H & S... makes me think over all breakout down ??? BUT there is a Pin Bar from last week saying we go up first maybe...

Karmo you have good charts !!! Finally someone talking about GBP/JPY the right way !!!
Attached Image (click to enlarge)
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  • #100
  • Oct 28, 2007 1:51pm Oct 28, 2007 1:51pm
I agree that things cannot go on much longer... the feds jumping in last month to help did not get rid of the real problems... but make the crash thats coming, going to be harder... though I don't know about it being in one month... maybe during this next year when everyone finds out the housing and mortgage mess is bigger than any one really let on...

Oh,,, and is anyone gonna be buying toys from China this Christmas ??? That won't help things... or will it... now we all have to buy expensive electronics instead of toys made with lead based paint...

Here's another thought... maybe they have been using lead based paint for the last 20 years so all us Americans are now brain dead... is that what has happened here in the US ???

Quoting markam
I have been reading a lot this weekend about the accelerating strains on the financial system, and I have pretty much decided that it really doesn't matter what the fed does, the system is going to collapse very shortly.

I am going to simply quote from various sources some the critical items that are coming together and setting events into play that may not be stoppable. I am trying to tie it all together in a manner that can hopefully explain this situation. if so, I will update this post later in the weekend.

At this point, I am about 80% confident that we will see a record setting crash in the US stock market in the next month.
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