The View Down River Friday, 1-27-2006 EURO FX (EC) What a day. Things are continuing to improve. The trade is now up 36 points per contract. I think there is still some wood to chop through this area and with the data next week, it may be a little choppy. I am seeing a move up possibly out of the gate next week as things return to equilibrium. On the postive side, Euro FX closed within a key zone for me, but we are pulled back right on a launching area. Once we get a close down in the 1.2075 area, I will feel much better and plan to add here. If price does move up, then I am looking for the 1.22 area to contain. A move up to at least 1.2170 is likely and another run up toward 1.2277 could occur. I did find it interesting that the GDP data did not have more of an upward effect. This is sending a strong message in my opinion, however volume is still well below average. I saw a lot of exodus hitting today. Lot's of indecision, but some buying seemed to appear near the end of the day at this level. Let's take a look at how things are doing.... The dollar index closed just where I had hoped at 89.33. I think it is still vulnerable to a bounce down short term, but this is very bullish to me and a leading indicator. The USDCAD position is churning and coiling tightly at the bottom. I guess the OPEC wizards kept this loonie currency down today. I am still extremely bullish at this level, but the bottom may still be tested. If the break does occur up, then this could be an explosive move in my opinion. I still think it is a good time to load up the wagon here. USDJPY held a very bullish channel today. Obviously, things are going to be rocky going into 118. I do see a probable move down to 116.91 and maybe onto 116.26. If it does occur, I would be a buyer here. Or a buyer once above 118 area. Again, Gold is setting up for the big move down. Heading into the mid 400's. First stop will be around 510 or so. Crude is headed for the 40's. Next focus number should be around the 52 area in the not too distant future. indexes - Bounce has begun. DOW 40,000 or so. hehe. Of course, one unusual syllable or weird NFP could blow up the monitors either way. It's all in good fun or good trading. Focus on creating wealth. Take controlled risk and be rewarded. I love the USA. DownRiverTrader
January 31, 2006 The View Down River Euro FX (EC) Time for an update. The FOMC announcement was today and here is how things are shaping up. Price closed around 1.2183. I am down 23 points per contract. I am still seeing the move down, but price held today on the move down at a key support. Just below 1.2150. I need this area to give way and hold, then a breakdown of 1.2117. I think alot of the big boys are short the dollar. If things do begin to unwind downward, it could be a mass exodus. I think Gold went to 5000 today and my USDCAD postion is struggling. I am still holding this postion long and expecting a nice move out of the hole. Maybe Gold is being used in IPOD's? USDJPY is still in a bullish position and needs to break thru 118 and hold. The dollar index is still in an acceptable range to me and I am looking for a move up thru 89.24 to hold and advance. Good trading everyone. DRT
The 1.2090 to 1.2080 area that we just hit is huge support. If price holds and moves up strongly, it may be the same old story ahead for a couple days. If this level gives way, I expect to see 1.1906 in the near future and maybe 1.1880. These two levels will be extremely supportive and we will need a break here for any meaningful run South. Not sure we have the horsepower to break this current level this afteroon. Good trading everyone. DRT
February 1, 2006 NY Close Euro FX (EC) EC closed today at 1.2091. I had hoped it would close below support but price is now sitting on a key area that could move up. I am counting on the Asian folks to help move it down, but it looks a little vulnerable to the topside move. There was some solid buying at the lows today. I would look for 1.2133 area to contain it. My trade is now up 69 points per contract. So things are a little improved. I do have spot closing in a bearish area and I can see a move down to 1.1900 or maybe a little lower before any real major trouble. Guess we will see what Mr. Tritchett has in mind tommorrow morning. My CAD trade is trying to break out. Even a little leaky oil today could not blast it off. Oil and Gold were both off today and the USDJPY is right on schedule and is now trying to break thru key resistance at 118.00. Should be interesting. There is a fairly clear path above this level up to 120.70 or so. The dollar index is improving but needs to break thru 89.62. Still it looks pretty solid. Good Trading Everyone DRT
I am currently short at 1.2117. According to my analysis this might be the best opportunity to get short before we see 1.1950 and lower. Happy trading everyone. If I am wrong, I guess that is what they make stops for. Regards Steve
This was a decent place to short on the hourly charts Steve. Only one caution is the NFP report tomorrow, so you need to be careful where your stop is. Volatility can sometimes take you out quick in the first 2 or 3 minutes and then it continues on it's merry way the same way it was headed---or if there is a huge surprise then it possibly can actually change the direction of the market . The former is usually what happens as opposed to the latter unless the market was ready for a reversal anyway. Just be careful with the stop. Sometimes I will remove the stop for the first few minutes of the report.
The Big Data Report Well here we are....enough said. My gut feeling on this (and it is only traders intuition) is that the report will not be as great as everyone is thinking and we will see a reaction to buy Euro. In a way, I almost hope this happens. If this occurs and we move up, I am going to watch for weakness later in the session or early next week. If the dollar can overcome this, I think the resulting move back down past current levels will reassure me that the dollar is in control for a while. I think the average hourly earnings growth may be more important for the Fed when you look beyond the "hipe" of the number of jobs. If the growth of US hourly wages is below the growth of inflation, that sends a strong message to me. Good luck today everyone. Trade carefully. DRT
Well.....here is the picture after the payroll release on Euro futures. Just like spot yesterday we are at the bottom of the channel and there will likely be many who want to buy here. Spot did exceed the bottom channel. I am watching to see if it jumps back in today. Good place to buy EC for some?? Or will the bottom channel give way just like the spot did. Should be interesting.