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Sean Hyman · #**244** (**permalink**) 08-18-2009, 01:00 PM

Quote:

Originally Posted by Ilovepippin

How is that a fantastic chart? Is this pro-carry trade or what?
What I see is a corrective channel, in form of a wave 4, which is showing much divergence in the MACD. I see a clear impulse wave down, and even if my wave iii is in fact a v, which I don't believe because 3 waves come with deep MACD readings, then this is still at best a wave 2.

A MACD reading above zero is not necessaraly bullish, in fact, this one is bearish since it crossed down already. It might be held up by the zero line, but will eventually fall through. Also, RSI, although not as clear, is also showing divergence. Volatility although normal right now, was up 16% yesterday after someone sneezed. Better be very careful right now, sentiment is still bearish.
This pair is about to continue its main direction, which is down.

Ilovepippin, thanks for commenting. I'll take the other side of your trade. If these global economies are coming out of a recession like their GDP numbers show...which means that corporations should be on the mend too ...stocks should improve and carry trades should do the same (with pull backs along the way like we've had the past few days).

Aussie's stocks are stronger than that of many world stock markets too, which will help "inflows" of money into their stocks that FIRST must to through the "door" of their currency to get there.

Hey dude, seriously...thanks for your insights. Whether I agree or disagree, it's always good to have the different view points here. Besides, there's nothing that says I'm always right. That's what good risk management is for...for when I'm wrong. hehe!