It looks as though an overbought reversal may be due before the next leg higher can easily happen... I’m continuing to see the swing change, S&P momentum just turned Long, and three out of six global drivers are now long, with a mixed read on the Japanese Nikkei and oil right now.
These is the levels I am looking for a short term trend change
S&P 500 at 936 is overbought and 905 is neutral
Dax at 5000 is overbought and 4850 is neutral
Nikkei at 9460 is overbought and 9550 will be looking long
Oil at 64.30 is overbought and 65 will be looking long
Gold at 937 is neutral right now and needs to move below 920
Euro at 4100 is neutral needs to see 4250
S&P, German Dax, Japanese Nikkei, all refer to the Futures markets. They run 23 hours a day, and will vary from the cash market that is open just for an eight hour session.
When all 6 of these fall in place THEN we will see the move we have been waiting for across all the pairs and there will be some very nice pips to be had.
Looking at all the major dollar pairs The mixed reads look as though they will lead to a swing long on the major currencies that will send the dollar lower, and if that holds we will be then looking for global markets to push equities and oil higher. It all now depends now on whether equities and oil can move higher.
the break-out moves are likely to come around 20:00 EDT, 02:00 EDT, and 07:00 EDT. Now ask yourself why these times and what happens at these times and you have the answer.
$index looks pretty sad and hanging on a cliff right now.
The Japanese markets are closed for a bank holiday monday, and the order flows may be affected at the open. The global markets reacted well to the Intel earnings report early last week, and after the initial reaction held a steady course. look for the new momentum that comes from this week's releases, both calendar and earnings. Canada dominates the early part of the week with the BOC rate decision. I am looking to buy the CAD for a further drop in the UC
The big one to see from last weeks data was the net flow of investment into, and out of, the U.S. dropped into the negative on a month-on-month basis, the TIC data report showed. Although a two month lagging indicator, it does put fuel on the fire of the 'Strong Dollar' administration policy that gets spouted at every turn.
The stronger the Usd gets, the weaker the economy read will be, in this stage of the global business cycle and the administration does not want either. But, they do have to keep talking up their stance that the dollar will get protected, and will be unscathed, by the economic stimulus that has put the global economies in hoc for some time to come.
What this TIC report shows, is that overseas investors are possibly looking to reduce Usd exposure, this was
$30b away from the expected number. This is also the report that shows the numbers, that feed the U.S. Current Account overdraft. Unless Treasury Income Capital hits at a stronger rate than this, the U.S. will lose the ability to stimulate anything other than the sound-bite headlines. Interesting to say the least.
This report clears up the reasoning, behind the decision that Alan Greenspan, the former head of the Fed, made that the production and publication cost of M3 money supply numbers was prohibitive. They are available, but do not now hit the mainstream headlines.
Here is something you can try
Instead of the TV or forums
, maybe think about turning on the daily and four hour bar charts, load up a 90 Simple Moving Average, and set it on the close. When the daily chart touches the SMA, switch to a 4 hour view, and consider the next break that the four hour chart offers, in the direction of the daily trend.
Switch to a 15 minute time-frame at that time and set the next break of the line as your entry, looking for momentum at 20:00 EDT, 02:00 EDT, and 07:00 EDT, and looking for a 20-30 initial move, that may just turn into a runner.
Why a 90SMA? ask the institutional traders and professional traders. again notice the times mentioned? These are the most important times in forex trading and if you look back at the history you will see the significance of these.
When any pair reaches the R3 or S3 PP’s you can be assured most times the market is way over extended and will retreat back to the neutral PP, it being the new daily PP from the days move. From there sit back or go have lunch, dinner whatever until the market reveals where it wants to go because there is nothing to trade.
When you take into account everything that moves this market and wait for it all/most to line up you will have your price with a better than average chance of making your pips with little to no DD.
I am done now, probably could have assembled it together better than this but its all there for next week at least.
you will find trading far simplier when you are not chasing a market but waiting for it to come to you. Less stress too, you will know from the -/L of the weekly and daily's what you are looking for so set a price alert there and wait.....I think you will see far more pips waiting for your price then you will trying to out smart or guess the market.
