My system is based on price action rather than vols. I'd love to show you a screenshot, but, honestly, I'm far to sure you decode the methodology in just over five minutes or so. Think of it as a statistically accurate moving average.

Sounds pretty interesting. No worries at all about disclosing your methodology, obviously, but I'm sure many of us would be interested in future signals that the system gives you.

USDJPY - The ratio of long to short positions in the USDJPY stands at 1.40 as nearly 58% of traders are long. Yesterday, the ratio was at 1.73 as 63% of open positions were long. In detail, long positions are 4.0% lower than yesterday and 13.8% stronger since last week. Short positions are 18.5% higher than yesterday and 56.2% stronger since last week. Open interest is 4.2% stronger than yesterday and 22.6% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.


Source: FXCM Dealing Desk

For historical data and the latest charts based on the SSI please visit http://www.dailyfx.com/story/strateg...903946044.html

For information on an FXCM Managed Fund that takes advantage of the SSI, please review our Sentiment Fund at: http://www.fxcmmanagedfunds.com/ or call +1 646-432-2968.

On a related note, the USDJPY continues to trade within its incredibly narrow range, continuing to reject the key 116.00 marker.

I'm really waiting for a break higher to initiate positions, but staying below this level suggests that the pair may in fact go on to test previous support near 114.00.

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116.00 continues to hold up pretty well as resistance, and I don't think we'll have any meaningful moves above that level as US equities have been sticking to pretty thin ranges (at least over the course of Tuesday). We may see this continue ahead of Friday's NFP report, so if you're looking for a breakout, you'll probably need to wait a few days.

I'm also positioned for an upside break with a limit order. If I'm watching while it does its thing, I may be encouraged to add on momentum; but that depends on the quality of the event risk, price action and volatility at the time. I considered putting in a limit short order to cover a downside surprise; but the support levels don't look clear enough for everyone to respond in unison and really get things moving.

At the same time, seems to counter the claims that the equities may be peaking before financial shares light the way lower. Should we assume that the risk correlation still holds and we necessarily have to look to a stock rally along with our upside USDJPY break, or do we look for some independence between the asset classes?

I would also think that the ultimate breakout move is scheduled for 12:30 GMT Friday; but we have seen many instances where the big moves are triggered a 12-36 hours before the release of major event risk. It seems when technical levels are strained (perhaps too many touches on range resistance or an early apex on a symmetrical triangle), the square books ahead of event risk encourages big money to take advantage of their leveraged influence and gun price action.

I'll be watching USDJPY closely, now until noon Friday.

The ratio of long to short positions in the USDJPY stands at 1.19 as nearly 54% of traders are long. Yesterday, the ratio was at 1.73 as 63% of open positions were long. In detail, long positions are 11.0% lower than yesterday and 5.5% stronger since last week. Short positions are 29.5% higher than yesterday and 70.7% stronger since last week. Open interest is 3.8% stronger than yesterday and 22.1% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.


Source: FXCM Dealing Desk

For historical data and the latest charts based on the SSI please visit http://www.dailyfx.com/story/strateg...903946044.html

For information on an FXCM Managed Fund that takes advantage of the SSI, please review our Sentiment Fund at: http://www.fxcmmanagedfunds.com/ or call +1 646-432-2968.

Antonio,
I sent you an email about this, couldn't find a way to message you here for some reason.

hi all i said my post no 503 and 506 that usd/yen is correction 4 wave .i think not that yen have enough power for exit from this line .yen have difficult with this peak

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Dollar yen came withing 3 pips of generating a long signal, and, barring a collapse in prices overnight, will generate a buy signal tomorrow close. Which leaves me in an awful predicament...

do I put the trade on before NFP and hope for a good number?

or...

do I sit until 8:30 doing nothing but lose carry, and take the fundamental into account with my technical and risk missing out on half a figure or so???

seems like an easy call to me..."Not gonna do it, wouldn't be prudent"

USD/YEN LOSSES .......MEANS WHAT YEN IS GOING TO UP FROM LEVEL 116.75 TO 118 OR IT COMING DOWN TO LEVEL 114.75????????

My entry point was officially reached in the USDJPY's run up yesterday; but since I was watching it happen, I decided to remove the order before we got there. We had good momentum through 116; but beyond that, price action was petering out. And, with growing risk behind the central bank activity today and NFPs tomorrow, I didn't see much follow through before the economic backflow on natural momentum alone. Holding a long USDJPY position that would likely remain only modestly in the money or actually pull back before the event risk just did not look appealing to me.

Now, I'm wondering if I still have a good trade here in the context of looming event risk. My thoughts are waiting to see if USDJPY holds around current levels and putting in an order for a break above 117 just before NFPs. At the same time, a pull back is looking very rewarding at these levels. Perhaps a short as close to 117 as possible could wind up with a target around 115 or 114.50.

Anyone else in now or contemplating event-driven trades?

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As this is a contrarian indicator, when longs exceed shorts, the SSI provides a signal to short and vice versa. Since the reading is for USDJPY, the SSI would suggest USDJPY is heading lower.

However, 1.19 is hardly a signal for this pair. With 54 percent of the market long and 46 percent short, you are not statistically far enough from a neutral reading to justify a contrarian standpoint. A strong reading can be plus or minus 3,4,5 or beyond (take a look at USDCAD's level at 5.09).

What's more, there are more subtleties to trading sentiment. For example, we have found in the past that the retail market is often times on the right side of the trade during ranging conditions (which USDJPY has been in for the past few weeks). Therefore, it is important to understand the reasons for the changing positioning so that you can really get a feeling for the data. As an example, when there is a major turn off of support, the ratio will often times decline. This happens because unexperienced traders often take profit a lot faster than they are willing to book losses; so they are quickly taking profit and perhaps missing out on a developing trend higher. More disciplined traders and big money could be holding onto the trade to exploit momentum. So, it is useful to follow trends in sentiment to understand the broader perspective rather than just the day to day movement (which can often be too subtle to successfully trade). This is why I read the weekly SSI report and only take note of the daily readings once in a while to keep a reference.

Answer- NO

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