Retracement or turnaround?

Discussion in 'Trading' started by clambill, Feb 2, 2010.

  1. I developed my own method (which is not proven yet) to participate in a change in direction. Since the stock market has gone up a couple of days, I'm inclined to think if it goes up for maybe another day and a half, it may resume its uptrend. (I developed my method for the EUR/JPY so I'm not sure how to confirm a change in direction for the stock market.)

    However, the EUR/JPY is a little closer to confirming a change in direction. But, #1, it did not react powerfully today to positive news and the upward move in the stock market and #2, it's pretty much in a consolidation phase which may mean the EUR/JPY has stalled and might be ready to plunge again.

    This makes me wonder if Forex traders are anticipating another leg down in the stock market.
  2. a major divergence occurred in November when equities continued higher but EUR failed to break 1.51, JPY 85. it appears FX is a leader in capital movements.

    i am a USD trader and will hold up to 400k as a position trade. i focus on the EUR pair and use its support/ resistance levels to trade all other financial instruments.

    i have closed all positions from the last 2 week down move in equities but will look to short ES, YM, and GC when EUR moves back above 1.43.
  3. today - chop session for the S&P500 index. at least
    so most likely your forex position won't move anywhere
  4. Well, the EUR/JPY has gone down lower and the stock market had a flatish day yesterday. So, the chances of a turnaround in the stock market is less likely now. So, more downside likely to come (in the stock market or trading range as the most optimistic situation for now).