heads up, multiple pair is giving entry soon. at the moment EU is looking good. happy trading everyone.
- #5,081
- Jan 7, 2008 10:43am Jan 7, 2008 10:43am
- Joined Oct 2007 | Status: Trader | 6,522 Posts
- #5,082
- Jan 7, 2008 12:09pm Jan 7, 2008 12:09pm
- Joined Oct 2007 | Status: Trader | 6,522 Posts
By shmcc2000, Today 12:23am, Topic Market Insights
The Dow and EUR/JPY are at “Make or Break” points right now!
Right now the Dow Jones Industrial Average and the Euro vs. the Japanese yen (EUR/JPY) are at crucial levels.
If they cannot hold the black support zones (see attached charts), then look out below. For both would set up for a huge fall. However, if they can hold these levels, then there is still hope for the Dow and the carry trades such as EUR/JPY.
Personally, I believe we’re entering a recession. So if these bounce off of these levels initially, I feel that it will be short lived. Then the next time it confronts these levels it would fall through (if it doesn’t do so this time).
The earnings momentum simply isn’t there to support stocks. Just last week the unemployment rate in America jumped from 4.7% to 5%. Now that may not seem like a lot but when you consider that there are 300 million people in America, a small percentage difference is huge. In fact, last month there were only 18,000 people hired nation wide. Now that’s not much for a whole nation. So you can see that hiring has all but dried up in America for the time being.
When companies aren’t hiring and their doing more layoffs…I don’t have to wait until their earnings reports come out. I’ll already know what they think of the future outlook for their company just by their “hiring and firing” trends. Since I see hiring declining and “firing” increasing, I know that they feel that the “demand” for their products and services will go down. This is why I feel that if not now, these levels will be broken very soon on both the Dow and EUR/JPY.
Carry trades such as EUR/JPY have held a high correlation do the Dow Jones Industrial Average for a while now. The reason is because traders felt risks were worth taking on stocks and carry trades. However, when they feel things are starting to slow down economically, then they shun stocks and carry trades. Thus both sell off at the same time. Also, many traders borrowed funds in yen between 0% and .5% to buy things they felt were going up in value such as Dow stocks (which were a falling dollar play), and high yielding currencies such as the euro, British pound, New Zealand dollar, Australian dollar, etc.
As traders feel the risk of holding these assets increases (due to a slowing economy), they sell them off and “pay back” these loans in yen which makes the yen (JPY) go up in value. So this causes the Dow and JPY to trade opposite each other over time. When the yen goes up, it brings the euro down against it and so EUR/JPY goes down as the Dow does.
It’s possible there could be a short term bounce here at the black support zone drawn on the charts but if it holds this time, I’m looking for the next test of it to break down and reflect the fundamentals of the slowing U.S. and global economy.
Sean Hyman
Editor/Trader, www.money-trader.com
www.worldcurrencywatch.com
Attached Thumbnails
http://www.forexfactory.com/attachme...1&d=1199722839
http://www.forexfactory.com/attachme...1&d=1199722839
I like the explanation so much that I copy the whole thing to here... so that easy for me to search for it later on for future reference. Good explanation regarding RISK AVERSION Psychology... easy to understand
Dunno what to trade.
- #5,090
- Edited 10:42pm Jan 7, 2008 10:29pm | Edited 10:42pm
i would only trade the gj if it breaks daily pivot low at 213 or yesterday high
ok, from my indicator, still waiting for price to break 60sma on 5 min chart, i suppose wait for the second candle to close then place an order. this is my opinion. stop loss must be there.
if it doesn't break, price must be all above 60sma on 1 hr, 30min and 5 min chart. time to go long. patience. i use few different strategies on gj. 13ema to check on false breakout.
- #5,091
- Jan 8, 2008 12:48am Jan 8, 2008 12:48am
Looking at GJ, all my forecast charts r going long, so i will go long for today too. Entry 215.20 SL 214.90 TP 216.20. Good Luck. Yen is weak now.
Thanxs...
.
Banker please return my pipins. 
- #5,093
- Jan 8, 2008 12:59am Jan 8, 2008 12:59am
Gehh ... thanks s@v@nt ... manage to pick up 30 pips with tp on NU.
Thanxs...
Those who know to draw trend line should notice a almost perfect uptrend line on NU, but always trade with care ok, the market is not our's. Good Luck Monthly Profit & Lost :-
May - +85 pips
- #5,094
- Jan 8, 2008 1:22am Jan 8, 2008 1:22am
- Joined Oct 2007 | Status: Trader | 6,522 Posts
8:01am GBP http://www.forexfactory.com/images/m...act_medium.gif BRC Retail Sales Monitor y/y 0.3% 0.8% 1.2%
4:00pm GBP http://www.forexfactory.com/images/m...mpact_high.gif Halifax House Price Index m/m ??? -0.5% -1.1%
Ready for the "BOMB" when LONDON OPEN Red News in the morning been ignored. News release at 4pm expected to be RED. Nothing certain yet.
4:00pm GBP http://www.forexfactory.com/images/m...mpact_high.gif Halifax House Price Index m/m ??? -0.5% -1.1%
Ready for the "BOMB" when LONDON OPEN
Red News in the morning been ignored. News release at 4pm expected to be RED. Nothing certain yet. - #5,096
- Jan 8, 2008 1:30am Jan 8, 2008 1:30am
How about Long GBPCHF ?
Cannot short AUDUSD. Still too strong.
Long GBPAUD is out of question too due to strong AUD forward momentum.
Only 1 trade. Long GBPCHF at 2.1995. Wait for at least 500 pips profits.
If it give 500pips i think GJ could go over 1000 pips up or down. It will be fun.. and crazy Monthly Profit & Lost :-
May - +85 pips
8:01am GBP http://www.forexfactory.com/images/m...act_medium.gif BRC Retail Sales Monitor y/y 0.3% 0.8% 1.2%
4:00pm GBP http://www.forexfactory.com/images/m...mpact_high.gif Halifax House Price Index m/m ??? -0.5% -1.1%
Ready for the "BOMB" when LONDON OPEN
- #5,100
- Jan 8, 2008 1:58am Jan 8, 2008 1:58am
Last time when it happened like this... expected RED but market strongly going opposite way before the news.... then perhaps the actual News gonna be GREEN... leaking news... MAYBE... all those BIG PLAYERS already placed order in advance. I am just gonna STAY ASIDE until the NEWS RELEASE....
If green news ,i think chances of seeing 217 is big for today. Good luck all! Here comes the raging bull!!!
Monthly Profit & Lost :-
May - +85 pips