Euro/Dollar

I just cut these ay 3151 -1 pip.... Its Friday.... the European equities session looks to be cast in stone as a down day....

I am calling it a week....

The level we are at is pretty ideal for the bottom of a wave 4, but with the hours left to trade in the week running out, seems unlikely a new meaningful move will get underway today. Better to take the bounce off of S1 as a chance to get out break even.... the market will still be here Monday...

1.3025 would be enough to tempt me back in for a hold over the weekend...

Limit buy orders set

3025
3015
3005

Stop loss 2970 -- breaking 2980 would invalidate the count --

Long from 3040 --- couldn't stay out of it as I watched the PA last couple hours --

S&P seems to have found a bottom -- Long AUDUSD and NZDUSD as well.... they have very similar setup to EURUSD right now...

Entered 1/3rd position at 3040... have two other orders 3035 and 3025 against 2970.... Only filled on 3040 right now.... Maybe some NY opening noise will get me filled on at last one more tranche.

You gotta love earnings season....

Filled on the 3035, lowered the last tranche entry to 3015 ---

Valid wave count until wave 4 would overlap peak of wave 1 @ 1.2980, so stop below that --

2983 to be exact would be the farthest extent we can fall before the current count -- which puts us in a wave 4 looking to catch wave 5 to a high above 3140.

Wave four can not overlap wave 1.... I have a heavy short dollar position on across several pairs. They are all correlated to the same pattern....

US equities got crushed Friday selling off sharply after putting in what looked like a bottom. Current weakness in EURUSD is through dollar strength in a flight to safety move on equities tumble in a disappointing earning season.

Asian equities usually follow the US lead.... and they have not had a chance to react to Friday's S&P 500 debacle. So I expect things to look pretty weak early this week..... we'll have to see if the European's can find a bottom and get some footing in their session.... they at least saw half the S&P 500's day Friday.

What ever happens, happens. The pattern is what it is, and I will run my trade according to the pattern until the market invalidates it. I would prefer, given common fib/wave relationships that wave 4, which I believe we are in, went no lower then 3045, the 38.2% of wave 3. But it is still a valid wave 4 until it overlaps wave 1. Stop below 2983 then (the peak of wave one on an hourly close basis), and let what will come, come.

Risk/reward is very good.... potential for at least 3141+. With a trade basis of 3027 averaged over my three entries, I am risking a little over 45 pips with a potential gain of at least 120 pips, likely closer to 140/50 pips even higher is possible(win target calculated from common fib/wave relationships in a wave 5) With that Risk/Reward ratio I only need to be correct 25% of the time to break even.

Proper application of Risk/Reward in the markets is the only Holy Grail there is. It doesn't really matter what happens to any one particular trade. The only thing that matters is that you can correctly assess Risk/Reward, and keep playing the game with an appropriate position size.

European equity open sees us nearly unchanged in equities, with a negative bias... that's good for my trade, but I need to hold it together and not get into a renewed sell off on earnings news.

Massive option strike today at 3050 is both supportive and limiting.

More worrying is upper Bolli's on the Daily is 3120, and the falling trend line from 2011 is 3135... both below where I would need a 5th wave to end.... it should end higher than wave 3 at 3140.

10 DMA which has been predictive of late is at 2995, and we still have standing bids 3000/10 for support ahead of the 2990 level, which is going to be a key level for most market participants.

Action in equities will drive for now....

Good chart showing the danger the S&P 500 is in today... If we break out of that multi-month S&P 500 Uptrend, there is no hope for a higher EURUSD.

http://www.forexfactory.com/news.php?do=news&id=391014

SP sitting rt on the 50 dma where price coincides with the top of the Draghi spike sept 6 and the bottom of the FOMC spike sept 13...

also nasdaq100 at bottom of descending channel and looking very OS cci maybe a nice place for long entry

european indexes looking firmer into early open....one i have been watching as a possible lead indicator for possible broad mkt direction is All Ordinaries....price has moved higher above long term R and any selloffs have been very very shallow...all of this in the context of a slowing China and unresolved problems in Europe..

QE forever effect? maybe

one other thought; maybe some sell the rumor in recent PA (weak earnings) and buy the news (Apple reports thursday and week 3 less impact than last week)

FOMC money kicks in soon too

Just closed my highest EURUSD entry +5 pips.... keeping the other two lower entries long against 2980ish...

Its hard to say with the influence of the options strike at 3050 where direction is heading..... given the deeper than optimal retrace of wave 3, and heavy tone this morning... I think it prudent to lower risk by taking 1/3rd of the position off, and lowering my basis by keeping the other two entries, and dumping the highest near break even....

There is an alternate count that is getting increasing notice, but it is undefined as long as 2990/83 remains intact...

I'm still betting on higher..... 3000/10 has a lot of bids, even the Sovereigns are bidding higher @ 3020/30.... other tech support near underpins...

Little reason seen to rally though, and S&P500 has me worried...

The Euro crosses are certainly going gangbusters... EURGPB took out an option barrier and EURJPY strong demand...

EURUSD seems dragging ball and chain of 3050 oversized strike that won't roll off till 10 AM NY.... stops tripped above 3070, but should be bigger ones to trip above 3080... Optionality continues to hold us down....

Must be somthing wrong with my eyes

not good........big miss by CAT

http://www.zerohedge.com/

Stop moved to Break Even on 1/2 the position leaving the rest against 2980ish....

This is not forming in an impulsive way a wave 5 should unfold. Possibly its optionality influence on PA... but have to consider alternative count that comes into play if 2890/83 taken out to the downside....


Spooky opening on Wall Street could see EURUSD come under pressure.... limiting risk, with the stop move to Break Even, but leaving some action on....

short S&P, short nzd/usd, short IBEX and MIB.also short CAC40 again.short FTSE

targets for S&P.1400 and 1375

Stop on entire position moved to 3038.... a break here would see us retest 3010/20, at or below my basis.... I am not willing to go underwater just to stick to the trade.

Last post for me...

I am booking profit here at the Option strike due to roll off in 1/2 hour... risk looks to be off across the spectrum, so expect downside on EURUSD after the option magnetism is over with at 10 AM NY cut.

Don't know if it will take out 2990/83.... but increasingly alternate counts make more sense that see that level getting taken out today or tomorrow...

Its been fun, no more posts from me.. Tom is due back today....

Better opportunities in other pairs await...

thanks for all the inputs...terrific posts.

Hi Good to be back, I just went long off DS1 @ 1,2937 SL @ 2930 TP open will BE asap, Daily still pointing downside, this is warm up for me after break. Big thanks to Mr C and others for all valuable posts, Regards Tom

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