Knowledge is Power

Have a look and be aware of it.

Link:

http://www.forexfactory.com/calendar.php

Bruce

P.S. High USD/JPY is 104.929 and High EUR/JPY is 164.202

The Period at 2:30 AM and 3:30 AM and 4:00 AM and 5:00 AM all EST here which is Plus 5 GMT is when Movements can and do occur even without news.

If you are up watch these periods. Check WWW.INO.COM for US Dollar Index Charts...

I have learned something very important trading FX these last three years.

This is MAINLY a market to BUY inventory. In the end "FAIR MARKET VALUE" determines the price as competing forces (LARGE) buy and sell. The Dow would have to GO UP 1000 Points for that to happen. It Will NOT.

Regardless of any charts the RISK is THERE with the BANK Meltdown and recession and losses so SURE anything is possible but ODDS favor 102.50 before 106.00 and also The US Dollar has too get weaker for many fundamental reasons. Gold Up and Oil Up and The WORLD baiking on the US Dollar very slowly but leaving it no matter what.

That is my informed opinion based on looking at everything. The USA is PRINTING TOO MUCH MONEY and They have no other solution so Gold Goes Up. Oil Goes Up. Housing Goes Down. Economy Goes Down. There is NO WAY OUT.

Look at the Two Year US Treasuries at 2.62% and Ten Year at 4.00% so Inflation is here with loss of jobs and Asset Values going down and down and that is STAGFLATION !!!

Bruce

the us treasuries...are these some of what the fed has cut. i take it that you mean that these are low and were much higher and that is why people will dump them?

So much turmoil lately... this year has been so tough for me so far. We are in the middle of Crisis. Any News indicating improvement highly affecting the market psychology. Whereas... the REALITY... nobody know for sure. In the end... lots of INDECISIVENESS. What will happen when REALITY STRIKE? Just got to wait and see.

Look at UJ and GJ Long Term point of view... bottom out already? Or Not?

Holders of the US Dollar need to put their money somewhere since pure cash earns no interest. They buy US Bonds in various time periods. The non current ones are the Two Year, Five Year, Ten Year and the 30 Year.

You can see the prices of the Bonds always on CNBC.

In the case of the US Two Year Bonds when Parties are SELLING them the Price of the Bond goes down and the Yield goes UP.

The Yield of the Two Year US Bonds are now 2.72% and that leads me to repost something that I just posted in USD/JPY thread and Malaysia since it is current and leads into my explanation to you this morning. Your follow up questions if any would be appreciated.

Copy and Paste:

We are in a very unique set of circumstances and I cannot say that I understand it completely. The Euro is down. EUR/JPY has retraced. Oil is down and Gold is down. The Dow Futures are down however the NEW factor that we NOW have is this. TREMENDOUS amounts of money is going out of the USA Two Year Bonds as they are sold the Yield keeps going UP !!!

2 or 3 Basis Points is a lot normally yet in the last 2 weeks and more so in the last few days the Yield is now 2.73% which is amazing since the FED Discount Rate is 2.00%

What do the numbers mean. Billions of Dollars and maybe even closer to a Trillion is going somewhere ? Where and Why ? Something NOT NORMAL is going on that few are aware of. Much is going into CASH. The US Dollar is being boosted up. Just look at the US Dollar Index !!!

I need to find out why to understand it. That is why things are not behaving normally at the moment if Normal ever can be used in Forex.

US Dollar Index Link:

http://quotes.ino.com/chart/?s=NYBOT_DX&v=s

Bruce

11:36 GMT May 29th USD/JPY and JPY crosses were lent support from firmer stock markets in Asia overnight. Reports that North Korean supreme leader Kim Jong-Il was dead, possibly the result of an assassination, aided the overall gains. Denials were heard later in the session but stocks held firm, the Nikkei closed up a huge 415pts. This provided the impetus for fresh USD/JPY demand in early London - the pair breaking Asia"s 105.03 peak and extending highs to 105.30. Broader based USD demand also playing its part, with EUR/USD taking out alleged downside barriers at 1.5550. Offers in front of and just above yesterday"s 105.32 peak continue to cap the pair, which has spent the majority of the London session consolidating in the 105.10-20 area. Option barriers reside at 105.50, although the lack of any near term maturities is likely to ensure that defence is minimal. A large vanilla expiry lurks at 105.60 and could well draw if those barriers break. EUR/JPY: Left its 164.23 Asian range peak intact and instead came softer with EUR/USD - breaching its 163.67 low to touch 163.48, before returning to the upper 163"s. [email protected].

There has be a short term sea change in the directions of the Forex Currencies since New Home Sales were released a few days ago. The Dow and the US Dollar Index were on the verge of collapse. Something BAD was going on behind the scenes in the banking section. INTERVENTION was needed but there needed to be a reason or a cover to start the process. This post that I am reproducing via Copy and Paste will help everyone including myself to understand how things really work so we can better trade this difficult Forex market.

Any comments and questions that you have would be most appreciated.

Thank you for your interest and cooperation in helping us share and learn and improve our results by working together as a team.

Copy and Paste of a previous post that I did on this thread:

My contribution to this excellent new thread could not be more timely than the comments that I now will make to the technical charts reproduced above. We are talking about charts prepared by as professional a group that there is out there at the moment.

However guess what ? They are actually wrong more often than they are right. This post is not about who is right and who is wrong. It is not about who is smarter or who is not. It is not about my ego or yours. My friends here who really want to earn money to have the nicer things in life, it is about making money in forex.

There is a reason why it is clearly documented that 95% of all currency traders lose money. That includes the largest and most powerful and knowledgeable traders out there. Why do you really think this is ?

If you really have a open mind I will show you why. If you really want to have a open mind and learn and maybe change your own views in order to learn and move forward than let me present the following information for everyone to seriously ponder. Our friend who has started this excellent thread in order to help all of us in this community of FX traders at Forex Factory has given you a tremendous amount of information on the previous posts. So in my own style here is the way it is in the real world of forex trading.

Posted On: Tuesday, May 27, 2008, 12:27:00 PM EST
http://www.jsmineset.com/spacer.gif
Jim's Mailbox
http://www.jsmineset.com/spacer.gif
Author: Jim Sinclair
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Hello Jim,
Be wary of headlines that spin perception. While home sale posted an unexpected April increase, the year over year growth rate posted another decline that surpassed the previous swing low. The gray chart reveals a familiar trend of lower highs andlows. Data revision can also skew perception. For instance, Bureau of Census reported seasonally adjusted new home sales of 526,000 units in March 2008. Today’s report, however, has revised the March 2008 from 526,000 units to 509,000 units. The orange chart illustrates the common practice of quietly revising prior data once perception has been established.
Home sales post unexpected April increase
Tuesday May 27, 10:31 am ET
By Martin Crutsinger, AP Economics Writer
Home sales post unexpected increase in April but remain near lowest level in 17 years
WASHINGTON (AP) -- Sales of new homes rose in April for the first time in six months although the unexpected increase still left activity near the lowest level in 17 years.
The Commerce Department reported Tuesday that sales of new homes rose 3.3 percent in April to a seasonally adjusted annual rate of 526,000 units.
More…
Sincerely,
CIGA Eric

Click here for today’s charts from CIGA Eric




I posted the above from WWW.JSMINESET.COM It is a FREE Website so there is no excuse for each and everyone reading this post to not go there each and every day that you are trading forex. Why ? Because of the kind of information posted above. Now that you have read it here on this thread let me tell you in real time how the market was changed today by the manipulation of information even if it was not done on purpose. Not done on purpose you say. Then how can it be manipulation ? Perhaps the better word might be human stupidity ? Regardless of how you describe it the facts never can be changed because it unfolded in front of us in black and white in real time. The real time being in front of our eyes and ears and other senses.

Common Sense might be the best sense but it is just a combination of our main senses yet without it we cannot be a winner in forex or for that matter in anything else in life.

So now let me get to the point. Even though the Case Schiller Report came out at 9:00 AM much worse than expected and this is a very accepted and not manipulated indicator widely accepted and viewed by many it was distorted before it even came out. Here is what happened in front of our eyes. At about 8:45 AM this morning a FALSE RUMOR was put out there. It does not matter who did it but it got out so someone in the media had to put out the information. The RUMOR was that the Case Schiller Number would be much better than expected so of course the 15 minutes or so before 9:00 AM the USD/JPY went up as the Dow Futures turned more positive.

Guess what ? The FALSE RUMOR was false. No Matter, the SPIN or DAMAGE was done and upon release of the REAL NEWS the USD/JPY reversed briefly below 104.00 Just look at the charts if you do not believe me.

At about the same time the US Dollar Index got a boost and again look at the charts and Oil and Gold started dropping a lot.

Now the markets open up at 9:30 AM and we now are waiting for the Option Expiry of 104.00 in the currency pair USD/JPY and New Home Sales and Consumer Confidence.

The Consensus for Consumer Confidence was 60 and it came out at 57.2 YES it was TERRIBLE. Now comes the NONSENSE part of the day. Why do I call it NONSENSE ?

Here is why. All day on the mainstream media the HEADLINE is as follows;
"NEW HOME SALES BETTER THAN EXPECTED"

Gues what that PERCEPTION and NOT REALITY did while there was PLANNED INTERVENTION to give the INTERVENORS cover for the INTERVENTION.

The FALSE and STUPID fact was that there was improvement. As long as the equation 1+ 1 = 2 still applies it was NO IMPROVEMENT !

Now some of the so called 95% LOSER experts are telling us USD/JPY is going towards 106.00 or 107.00

Really then have FUN losing your money to keep your 95% averages intact. The ODDS are excellent it will not happen. Why not ?

The NUMBERS WERE TERRIBLE. All that was accomplised was to change the PERCEPTION SHORT TERM FROM REALITY TO NONSENSE and soon REALITY will regain it's position with some NEW DATA that in spite of SPIN or PROPAGANDA is no longer accepted and then the Dow goes down and The USD/JPY resumes it's move towards 102.50

It NEVER GOT over RESISTANCE at 104.40 so far. Maybe it eventually will but that is not the point. I really really hope this post will stand as the best way to show all of us here how the game or business is played or how it unfolds.

My RESULTS are AMAZING only because I understand and know how to play the game. It is like playing a Nintendo Game except if you master this game of life with hard work and effort you will become RICH !!!

That is why you play isn't it ? If you play for other reasons such as excitement, or gambling or ego massage you will surely end up as one of those in the 95% category.

I write from my heart and you choose if you want to become one of those in the 5% category. Thanks for joining with us on this thread of winners and future winners. Losers are always welcome here however it is more fun to win than lose. Of course I do not mean losers in the human sense only in the financial sense.

BOTTOM LINE Folks...PLEASE USE YOUR COMMON SENSE. Thank You...


Bruce

http://www.forexfactory.com/images/misc/progress.gif

The HIGH for USD/JPY on my trading platform is EXACTLY 105.40

100 Basis Points Above the last Solid Resistance a few days ago at 104.40

Have the fundamentals really changed in a few days to cause USD/JPY to head UP 100 Basis points more ? The answer is a definite NO and in fact it is much worse based on recent data releases regardless of the short term spin and distortion.

The point that I make is that you always need to be aware of what is going on to know how to adjust to the present situation.

The Two Year USA Bonds still trade at a yield of 2.73% and Gold is Down. Oil is Down. The Euro is Down and Dow Futures are Down !!!

It makes little sense as money is flowing into pure CASH at the Moment. Are other Countries cashing out by first getting into cash and then somewhere else ? If this is the case than you might see a shocking SELL OFF in the Dow and a RUSH out of the US Dollar elsewhere.

Stay Tuned and Be Very Careful...


Bruce

http://www.dailypfennig.com/

Dear Friends and Fellow FX Traders

I do not anyone here to think that I am so smart as to know it all. I am not as I learn everyday something new about trading Forex.

Some of my knowledge comes from locating excellent sources of information, following the contributors and once I gain a confidence in what they are saying to use some of what they say and think to mould my thinking and finally come up with my own opinion. I do look at opposite points of view in order to get balance into my thinking.

By reading the above link you will get a point of view from a successful party whose business is to know. Please feel free to post your comments, suggestions, ideas and any questions here.

Thank you.

Bruce

Here is a report that I just read that starts to answer some of my own questions about why the Two Year USA Bonds and others are being sold.

The Link:

http://www.telegraph.co.uk/money/mai.../cndebt129.xml

Snippet:

US and European debt markets flash new warning signals


By Ambrose Evans-Pritchard, International Business Editor

Last Updated: 6:40am BST 29/05/2008





The debt markets in the US and Europe have begun to flash warning signals yet again, raising fears that the global credit crisis could be entering another turbulent phase.
The cost of insuring against default on the bonds of Lehman Brothers, Merrill Lynch and other big banks and brokerages has surged over the last two weeks, threatening to reach the stress levels seen before the Bear Stearns debacle. Spreads on inter-bank Libor and Euribor rates in Europe are back near record levels.
Credit default swaps (CDS) on Lehman debt have risen from around 130 in late April to 247, while Merrill debt has spiked to 196. Most analysts had thought the coast was clear for such broker dealers after the US Federal Reserve invoked an emergency clause in March to let them borrow directly from its lending window.

Your questions, comments, observations are appreciated.


Bruce

http://www.investorsinsight.com/imag...BorderLeft.jpgOil prices have risen dramatically over the past year. When they passed $100 a barrel, they hit new heights, expressed in dollars adjusted for inflation. As they passed $120 a barrel, they clearly began to have global impact. Recently, we have seen startling rises in the price of food, particularly grains. Apart from higher prices, there have been disruptions in the availability of food as governments limit food exports and as hoarding increases in anticipation of even higher prices.

Oil and food differ from other commodities in that they are indispensable for the functioning of society. Food obviously is the more immediately essential. Food shortages can trigger social and political instability with startling swiftness. It does not take long to starve to death. Oil has a less-immediate -- but perhaps broader -- impact. Everything, including growing and marketing food, depends on energy; and oil is the world's primary source of energy, particularly in transportation. Oil and grains -- where the shortages hit hardest -- are not merely strategic commodities. They are geopolitical commodities. All nations require them, and a shift in the price or availability of either triggers shifts in relationships within and among nations.
It is not altogether clear to us why oil and grains have behaved as they have. The question for us is what impact this generalized rise in commodity prices -- particularly energy and food -- will have on the international system. We understand that it is possible that the price of both will plunge. There is certainly a speculative element in both. Nevertheless, based on the realities of supply conditions, we do not expect the price of either to fall to levels that existed in 2003. We will proceed in this analysis on the assumption that these prices will fluctuate, but that they will remain dramatically higher than prices were from the 1980s to the mid-2000s.

If that assumption is true and we continue to see elevated commodity prices, perhaps rising substantially higher than they are now, then it seems to us that we have entered a new geopolitical era. Since the end of World War II, we have lived in three geopolitical regimes, broadly understood:
The Cold War between the United States and the Soviet Union, in which the focus was on the military balance between those two countries, particularly on the nuclear balance. During this period, all countries, in some way or another, defined their behavior in terms of the U.S.-Soviet competition.

The period from the fall of the Berlin Wall until 9/11, when the primary focus of the world was on economic development. This was the period in which former communist countries redefined themselves, East and Southeast Asian economies surged and collapsed, and China grew dramatically. It was a period in which politico-military power was secondary and economic power primary.

The period from 9/11 until today that has been defined in terms of the increasing complexity of the U.S.-jihadist war -- a reality that supplanted the second phase and redefined the international system dramatically.
With the U.S.-jihadist war in either a stalemate or a long-term evolution, its impact on the international system is diminishing. First, it has lost its dynamism. The conflict is no longer drawing other countries into it. Second, it is becoming an endemic reality rather than an urgent crisis. The international system has accommodated itself to the conflict, and its claims on that system are lessening.

The surge in commodity prices -- particularly oil -- has superseded the U.S.-jihadist war, much as the war superseded the period in which economic issues dominated the global system. This does not mean that the U.S.-jihadist war will not continue to rage, any more than 9/11 abolished economic issues. Rather, it means that a new dynamic has inserted itself into the international system and is in the process of transforming it.
It is a cliche that money and power are linked. It is nevertheless true. Economic power creates political and military power, just as political and military power can create economic power. The rise in the price of oil is triggering shifts in economic power that are in turn creating changes in the international order. This was not apparent until now because of three reasons. First, oil prices had not risen to the level where they had geopolitical impact. The system was ignoring higher prices. Second, they had not been joined in crisis condition by grain prices. Third, the permanence of higher prices had not been clear. When $70-a-barrel oil seemed impermanent, and likely to fall below $50, oil was viewed very differently than it was at $130, where a decline to $100 would be dramatic and a fall to $70 beyond the calculation of most. As oil passed $120 a barrel, the international system, in our view, started to reshape itself in what will be a long-term process.
Obviously, the winners in this game are those who export oil, and the losers are those who import it. The victory is not only economic but political as well. The ability to control where exports go and where they don't go transforms into political power. The ability to export in a seller's market not only increases wealth but also increases the ability to coerce, if that is desired.

The game is somewhat more complex than this. The real winners are countries that can export and generate cash in excess of what they need domestically. So countries such as Venezuela, Indonesia and Nigeria might benefit from higher prices, but they absorb all the wealth that is transferred to them. Countries such as Saudi Arabia do not need to use so much of their wealth for domestic needs. They control huge and increasing pools of cash that they can use for everything from achieving domestic political stability to influencing regional governments and the global economic system. Indeed, the entire Arabian Peninsula is in this position.

The big losers are countries that not only have to import oil but also are heavily industrialized relative to their economy. Countries in which service makes up a larger sector than manufacturing obviously use less oil for critical economic functions than do countries that are heavily manufacturing-oriented. Certainly, consumers in countries such as the United States are hurt by rising prices. And these countries' economies might slow. But higher oil prices simply do not have the same impact that they do on countries that both are primarily manufacturing-oriented and have a consumer base driving cars.

East Asia has been most affected by the combination of sustained high oil prices and disruptions in the food supply. Japan, which imports all of its oil and remains heavily industrialized (along with South Korea), is obviously affected. But the most immediately affected is China, where shortages of diesel fuel have been reported. China's miracle -- rapid industrialization -- has now met its Achilles' heel: high energy prices.
China is facing higher energy prices at a time when the U.S. economy is weak and the ability to raise prices is limited. As oil prices increase costs, the Chinese continue to export and, with some exceptions, are holding prices. The reason is simple. The Chinese are aware that slowing exports could cause some businesses to fail. That would lead to unemployment, which in turn will lead to instability. The Chinese have their hands full between natural disasters, Tibet, terrorism and the Olympics. They do not need a wave of business failures.

Therefore, they are continuing to cap the domestic price of gasoline. This has caused tension between the government and Chinese oil companies, which have refused to distribute at capped prices. Behind this power struggle is this reality: The Chinese government can afford to subsidize oil prices to maintain social stability, but given the need to export, they are effectively squeezing profits out of exports. Between subsidies and no-profit exports, China's reserves could shrink with remarkable speed, leaving their financial system -- already overloaded with nonperforming loans -- vulnerable. If they take the cap off, they face potential domestic unrest.

The Chinese dilemma is present throughout Asia. But just as Asia is the big loser because of long-term high oil prices coupled with food disruptions, Russia is the big winner. Russia is an exporter of natural gas and oil. It also could be a massive exporter of grains if prices were attractive enough and if it had the infrastructure (crop failures in Russia are a thing of the past). Russia has been very careful, under Vladimir Putin, not to assume that energy prices will remain high and has taken advantage of high prices to accumulate substantial foreign currency reserves. That puts them in a doubly-strong position. Economically, they are becoming major players in global acquisitions.

Politically, countries that have become dependent on Russian energy exports -- and this includes a good part of Europe -- are vulnerable, precisely because the Russians are in a surplus-cash position. They could tweak energy availability, hurting the Europeans badly, if they chose. They will not need to. The Europeans, aware of what could happen, will tread lightly in order to ensure that it doesn't happen.
As we have already said, the biggest winners are the countries of the Arabian Peninsula. Although somewhat strained, these countries never really suffered during the period of low oil prices. They have now more than rebalanced their financial system and are making the most of it. This is a time when they absolutely do not want anything disrupting the flow of oil from their region. Closing the Strait of Hormuz, for example, would be disastrous to them. We therefore see the Saudis, in particular, taking steps to stabilize the region.

This includes supporting Israeli-Syrian peace talks, using influence with Sunnis in Iraq to confront al Qaeda, making certain that Shiites in Saudi Arabia profit from the boom. (Other Gulf countries are doing the same with their Shiites. This is designed to remove one of Iran's levers in the region: a rising of Shiites in the Arabian Peninsula.) In addition, the Saudis are using their economic power to re-establish the relationship they had with the United States before 9/11. With the financial institutions in the United States in disarray, the Arabian Peninsula can be very helpful.

China is in an increasingly insular and defensive position. The tension is palpable, particularly in Central Asia, which Russia has traditionally dominated and where China is becoming increasingly active in making energy investments. The Russians are becoming more assertive, using their economic position to improve their geopolitical position in the region. The Saudis are using their money to try to stabilize the region. With oil above $120 a barrel, the last thing they need is a war disrupting their ability to sell. They do not want to see the Iranians mining the Strait of Hormuz or the Americans trying to blockade Iran.

The Iranians themselves are facing problems. Despite being the world's fifth-largest oil exporter, Iran also is the world's second-largest gasoline importer, taking in roughly 40 percent of its annual demand. Because of the type of oil they have, and because they have neglected their oil industry over the last 30 years, their ability to participate in the bonanza is severely limited. It is obvious that there is now internal political tension between the president and the religious leadership over the status of the economy. Put differently, Iranians are asking how they got into this situation.

Suddenly, the regional dynamics have changed. The Saudi royal family is secure against any threats. They can buy peace on the Peninsula. The high price of oil makes even Iraqis think that it might be time to pump more oil rather than fight. Certainly the Iranians, Saudis and Kuwaitis are thinking of ways of getting into the action, and all have the means and geography to benefit from an Iraqi oil renaissance. The war in Iraq did not begin over oil -- a point we have made many times -- but it might well be brought under control because of oil.

For the United States, the situation is largely a push. The United States is an oil importer, but its relative vulnerability to high energy prices is nothing like it was in 1973, during the Arab oil embargo. De-industrialization has clearly had its upside. At the same time, the United States is a food exporter, along with Canada, Australia, Argentina and others. Higher grain prices help the United States. The shifts will not change the status of the United States, but they might create a new dynamic in the Gulf region that could change the framework of the Iraqi war.

This is far from an exhaustive examination of the global shifts caused by rising oil and grain prices. Our point is this: High oil prices can increase as well as decrease stability. In Iraq -- but not in Afghanistan -- the war has already been regionally overshadowed by high oil prices. Oil-exporting countries are in a moneymaking mode, and even the Iranians are trying to figure out how to get into the action; it's hard to see how they can without the participation of the Western oil majors -- and this requires burying the hatchet with the United States. Groups such as al Qaeda and Hezbollah are decidedly secondary to these considerations.

We are very early in this process, and these are just our opening thoughts. But in our view, a wire has been tripped, and the world is refocusing on high commodity prices. As always in geopolitics, issues from the last generation linger, but they are no longer the focus. Last week there was talk of Strategic Arms Reduction Treaty (START) talks between the United States and Russia -- a fossil from the Cold War. These things never go away. But history moves on. It seems to us that history is moving.
http://www.investorsinsight.com/imag...orderRight.jpghttp://www.investorsinsight.com/imag...rderBottom.jpghttp://www.investorsinsight.com/imag...ail/spacer.gifhttp://www.investorsinsight.com/imag...ail/spacer.gif

Change can come at us in very interesting ways.
Your fed up with $4/gallon gas analyst

John F. Mauldin
[email protected]

The High of The Session is 105.742 and the Low is 105.223

At 2:51 AM EST (+ 5 GMT) Bid is 105.327 and some important US Data out between 8:30 AM and 10:00 AM EST

Europe opens in 7 Minutes...Stay Tuned...


Bruce

Bear
Investor acting on the belief that prices or the market will decline.


Bear Market
Any market that exhibits a declining trend. In the long run they have a down turn of 20% or more.


Bull
Investor who expects markets or prices to rise.


Bull Market
A market where prices are rising or are expected to rise.


Buy a bounce
A recommendation to instigate a long trade if the price bounces from a certain level.
A strategy that focuses on buying a given security once the price of the asset falls toward an important level of support. Traders who "buy a bounce" attempt to profit from a short-term correction or "bounce" off of the identified support.
In order to use this strategy most effectively, a trader has to be sure that he or she is able to identify a valid level of support. Some traders may wish to enter a position before the signs of a bounce off of a support level, but generally this is a high-risk strategy and can result in devastating losses. Most traders will want to confirm a bounce off of a support level by using a combination of other technical indicators before entering a position.


Buy break
A recommendation to buy the currency pair if it breaks the current level specified.
A type of recommendation to buy an asset once the price is able to surpass an influential level of resistance. A move above resistance is used as a buy signal because an increase in upward momentum often follows the breakout. Buying a break is a strategy often used by traders who incorporate the use of chart patterns, trendlines and other technical indicators into their trading.
For example, suppose a stock appears to have met resistance at the $50 price level for the last year. Many traders will watch the price movement around $50 very closely because a break above the resistance would suggest that a likely surge higher will follow. Technical traders use a break above resistance to signal a good opportunity to buy because a resulting surge of upward momentum commonly follows.


Buy stops above
A recommendation to enter the market when the exchange rate breaks through a specific level. The client placing a stop entry order believes that when the market's momentum breaks through a specified level, the rate will continue in that direction.


Cable
Term used to describe the exchange rate between the US dollar and the British Pound.


Chartist
Refers to a technical analyst or one who analyses charts/graphs and data to uncover potential trends.


Correction
A reverse movement, usually negative, of at least 10% in a stock, bond, commodity or index. Corrections are generally temporary price declines, interrupting an uptrend in the market or asset.
A healthy market will correct from time to time.


Cover on a Bounce
A recommendation to exit trades on a bounce out of a support level.
The covering of a short position after it has reached and bounced off a level of support. This strategy waits for the price to move to a support level, instead of selling before, to see if the level will hold (because the trader will benefit if it doesn't hold). Once the security bounces it is clear the security will have trouble moving down further so the trade covers their short position.
Levels of support act as a backstop to a further move downward in price but can sometimes fail to hold. If a security falls below a support level it will often lead to an even stronger downward move as the level is taken out. The trader waiting for a bounce is betting that the support level will not hold and they will benefit if this materializes.


Cover on Approach
A recommendation to exit trades for profit on approach to a support level.


Dead Cat Bounce
A temporary recovery from a prolonged decline or bear market, after which the market continues to fall.
Ever heard the saying, "Even a dead cat will bounce if dropped from high enough!"?

Flat/Square
To either have no positions or positions that cancel each other out.

Fiber
Term used to describe the exchange rate between the Euro and US dollar.

Fibonacci Extensions
Levels used in Fibonacci retracement to forecast areas of support or resistance. Extensions consist of all levels drawn beyond the standard 100% level and are used by many traders to determine areas where they will wish to take profits. The most popular extension levels are 161.8%, 261.8% and 423.6%.
In practice, most traders use Fibonacci extensions in combination with other technical indicators/patterns to help them determine appropriate target prices. As this chart shows, the 161.8% level is often used to set the price target on a breakout of an ascending triangle. This specific target is calculated by multiplying the vertical distance of the triangle by the key Fibonacci ratio of 61.8% and then adding the result to the upper resistance of the triangle.

Fibonacci Retracement
A term used in technical analysis that refers to the likelihood that a financial asset's price will retrace a large portion of an original move and find support or resistance at the key Fibonacci levels before it continues in the original direction. These levels are created by drawing a trendline between two extreme points and then dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.

Fibonacci retracement is a very popular tool used by many technical traders to help identify strategic places for transactions to be placed, target prices or stop losses. The notion of retracement is used in many indicators such as Tirone levels, Gartley patterns, Elliott Wave theory and more.

Flat On A Failure
A strategy of closing out of a position and taking profits if the security in question moves up to a target level but fails to break through it. This can be seen as a method of extracting what profit a trade has been able to produce so far because the trader believes that further movement past the target level is unlikely.
For example, suppose that a trader is in a long position on a given currency pair and the exchange rate moves upward in her favor by a moderate amount but fails to move past a key resistance level she was expecting to act as a catalyst for further movement. In this case, the trader would probably deem the trade flat on a failure and close the position out for whatever profit had been earned.

Fundamental Analysis
The analysis of economic indicators and political and current events that could effect the future direction of financial markets.

GTC (Good-till-Cancelled)
Refers to an order given by an investor to a dealer to buy or sell a security at a fixed price that is considered “good” until the investor cancels it.

Hedge/Hedging
Strategy to reduce the risk of adverse price movements on one's portfolio and to protect against the volatility of the market. Hedging typically involves selling the good forward or taking a position in a related security. Hedging becomes more prevalent with increased uncertainty about current market conditions.

One Cancels Other Order (O.C.O. Order)
An order that through its execution cancels the other part of the same order.

Panic Selling
Wide-scale selling of an investment, causing a sharp decline in price. In most instances of panic selling, investors just want to get out of the investment, with little regard for the price at which they sell.
The main problem with panic selling is that investors are selling in reaction to pure emotion and fear, rather than evaluating fundamentals. Almost every market crash is a result of panic selling. Most major stock exchanges use trading curbs and halts to limit panic selling, to allow people to digest any information on why the selling is occurring, and to restore some degree of normalcy to the market.

Pivot
A price level established as being significant either because the market fails to penetrate it or because a sudden increase in volume accompanies a move through that price level.

Pivot Point
A technical indicator derived by calculating the numerical average of a particular stock's high, low and closing prices.
The pivot point is used as a predictive indicator. If the following day's market price falls below the pivot point, it may be used as a new resistance level. Conversely, if the market price rises above the pivot point, it may act as the new support level.

Resistance
A price level at which most investors expect prices to decline further. A price at which there is sufficient supply to turn a previously uptrend downward. With regards to the forex market, it is the level at which a currency cannot rise above.

Retracement
A reversal in the movement of a stock's price, countering the prevailing trend.
An example might be market risk causing a stock's price to pull back. The Fibonacci retracement tool is favored by many traders because of its abilty to identify a price level that a correction may reach before it is able to reverse and continue in the direction of the original trend.

Reversal
A sudden change in the price direction of a stock, index, commodity, or derivative security.
Also referred to as a "trend reversal", "rally" or "correction".
A reversal can be a positive or negative change against the prevailing trend. Technical analysts watch for these patterns because they can indicate the need for a different trading strategy on the same security.
For example, if a technical analyst holds stock ABC and notices a reversal pattern, he or she may want to consider closing his/her existing long position and assuming a short position to capitalize on the potential downward movement of the stock's price.


Rollover
Refers to a process of reinvesting in which, at the expiry, the settlement is postponed until a later date. The cost of the process is measured by the interest rate differential between the two currencies.

Scalping
A trading strategy that attempts to make many profits on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple hundred trades in a single day in the belief that small moves in prices are easier to catch than large ones.

Stochastic Oscillator
A technical momentum indicator that compares a security's closing price to its price range over a given time period. The oscillator's sensitivity to market movements can be reduced by adjusting the time period or by taking a moving average of the result. This indicator is calculated with the following formula:

%K = 100[(C - L14)/(H14 - L14)]
C = the most recent closing price
L14 = the low of the 14 previous trading sessions
H14 = the highest price traded during the same 14-day period.

%D = 3-period moving average of %K

The theory behind this indicator is that in an upward-trending market, prices tend to close near their high, and during a downward-trending market, prices tend to close near their low. Transaction signals occur when the %K crosses through a three-period moving average called the "%D".

StochRSI
An indicator used in technical analysis that ranges between zero and one and is created by applying the Stochastic Oscillator formula to a set of Relative Strength Index (RSI) values rather than standard price data. Using RSI values within the Stochastic formula gives traders an idea of whether the current RSI value is overbought or oversold - a measure that becomes specifically useful when the RSI value is confined between its signal levels of 20 and 80.
The StochRSI is deemed to be oversold when the value drops below 0.20, meaning the RSI value is trading at the lower end of its predefined range, and that the short-term direction of underlying security may be nearing a correction. Conversely, a reading above 0.80 suggests the RSI may be reaching extreme levels and could be used to signal a pullback in the underlying security.

Stop Order (Stop-Loss Order)
An order used to hedge against excessive loss in which a position is liquidated at a specific, prearranged price.

Support
A price level at which there is sufficient demand to turn a downtrend up.

Take-Profit Order (T/P)
An order used by currency traders specifying the exact rate or number of pips from the current price point where to close out their current position for a profit. The rate deemed to be the level where the trader wants to take a profit is sometimes referred to as the "take-profit point".
As the name suggests, take-profit orders are used to lock in profits in the event the rate moves in a favorable direction. For example, if you are long a currency pair position and believe the price will rise to a certain level, but are unsure what it will do beyond that level, placing a take-profit order at that point will automatically close out your position allowing you to lock in profit. Example: Buy $100 worth of yen at 107.4 yen per dollar = 100*107.40 = 10,740 yen
Place a take-profit order at 108.80. Price then rises from 107.40 to 108.80 Take-profit order automatically executed to sell $100 and buy 10,880 yen
Profit of 140 yen realized.

Technical Analysis
A technique used to try and predict future movements of a security, commodity or currency, based solely on past price movements and volume levels. It examines charts and historical performance.

Technical Correction
A decrease in the market price of an asset or entire market after extensive price increases. A technical correction occurs even when there is no evidence that the increasing price trend should cease. It is often caused when investors temporarily slow down their purchases of securities, which commonly leads to a pullback toward a short-term support level.
A technical correction is a drop in stock or market prices when there is no fundamental reason for a decrease. After a steady increase in value, investors may become more cautious buyers at the higher prices and look to reevaluate the market, resulting in a decrease in purchases. The drop in purchase volume will stop the upward price trend from continuing while the market re-evaluates the short-term direction.


Trendline
A line on the price or value chart of a security depicting the general direction in which the security is headed. This chart shows an example of an upward trendline:
Many people believe that prevailing trends, either up or down, will determine where a security is headed. Trendlines can be used to analyze individual securities, such as stocks, commodities or indexes, among other things.

Volatility
Refers to the tendency of prices/variables to fluctuate over time. It is most commonly measured using the coefficient of variation (the standard deviation divided by the mean). The higher the volatility, the higher the risk involved.

Whipsaw
Term used to describe sharp price movements and reversals in the market. A whipsaw would be if shortly after you bought a stock the price plummeted.

Today is the last trading day for the month of May, before we move on to June, let us keep the Major long term chart as record.

Courtesy of PFX people.

GBPUSD Long Term Chart - May 08

Currency pairs tend to move in dramatic, long-term trends that are shaped by fundamental forex market factors. Once you've identified the long-term trend, you can time your trades with the shorter-term price movement on the daily chart. Make more pips per trade by trading with the long-term trend, identifying support and resistance and analyzing investor sentiment.

USDJPY had a nice upside move as well. But like EURUSD 1.5450, USDJPY at 106.60 will show us exactly what kind of cards the USDJPY bulls are holding.

The last pair of the Major.

It is actually very beneficial to learn to draw those lines on your trading chart, which my fellow Malaysian Sham always presented on his thread. It helps to remind us of all the trend lines, supports & resistances (including Support turns Resistance STR and Resistance turns Support RTS), and Fibonacci numbers, etc.

Please try it yourself.

USD Index is an important index that shows the strength of USD

Good Morning All !!!


http://www.actionforex.com/latest-ne...2008052947637/

In the U.S., personal income for April is expected to increase 0.2%, while personal spending for the same time frame is also expected to increase 0.2%, following previous increases of 0.3% and 0.4% respectively.
April's U.S. PCE core data is expected to remain steady with a 2.1% increase year-over-year. The monthly data is also expected to remain constant with an increase of 0.1%.
Jack Bauer, fixed income strategist from Manning and Napier, said that the bond market will be focused on the inflation aspect of the report. Although he said he personally doesn't think inflation is as much of a concern as slowing growth, the markets could sell off strongly if PCE core comes in higher than expected.
"I think we are in a weak economic environment and we are going to be in a weak economic environment for 2008 going into 2009 and that is now what accelerating inflation is made of," he said. "But the market is definitely fixated on it so we are going to look at the core PCE and those will have a much bigger impact than consumer spending."


Bruce

New Data In 10 Minutes !!!


30 May 2008 11:20 GMT

BULLET: YEN SUMMARY: Opened in early Europe around Y105.35...

YEN SUMMARY: Opened in early Europe around Y105.35 and Y163.62
--Dollar-yen triggered stops through the previous high for the month at
Y105.70 in the NY session en-route to Y105.88, the highest level since
February 28, with rate later easing back to close around Y105.50.
Overnight dealing saw some month-end demand into the Tokyo fix, taking
the pair up to Y105.73 where exporter supply kicked in, with rate
easing back to Y105.40 initially, late Asia/early Europe then seeing a
dip to Y105.25, while euro-yen traded within Y163.65/164.02.
--European dealing saw euro-yen coming back to test bids in the
Y163.10/00 area as euro-dollar sold off, the cross slipping to Y163.04
before bouncing. Dollar-yen saw a subdued morning after the early
sell-off, edging slowly back above Y105.50 and ending around here,
while euro-yen traded back at Y163.75 going into US dealing.
--Dlr-yen offers Y105.85/90, barrier Y106.00 (exp today), bids Y105.20

Provided by: Market News International