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" Experience is not what happens to a man. It is what a man does
with what happens to him" Aldous Huxley
17th March 2009
Update from the 16th March 2009 - written on the 16th March 09 21:36
The FIREFOX browser issue for the live trading room should now be fixed. We found an error in the program. Please read the following PDF If you need information on how to accept pop-up alerts. THIS IS A NEW PDF, CONTAINING NEW INFORMATION FOR BOTH FIREFOX AND IE
If you have sent me an email, requesting access to the room, then please don't email me again. I will come around to your email, but I do not have time during the day to do admin.
There is a good chance you are already registered, but you may simply not have received my registration email. To check if you are registered, go to WWT and input your full email address (in lower case) in both the username and password section.
If this fails, and you still have not heard from me by Tuesday night, then feel free to email me again on info @ tradertom.com.
The room had some issues, which definitely affected my concentration in the morning. I had a half-decent $Yen trade on, clocking up some 50 points profits, but I got somewhat thrown by emails from room members saying they had not received the signal. In the end it was a trade for nothing, with stop being hit at break even. The "night session" from 5pm to 8pm was a little better, with +47 Dow points over 4 trades.
This concludes the message typed on the 16th March 2009 21:36 - I will be back tomorrow morning, at around 7am with trading analysis and ideas. I will leave the analysis from the 16th in place as it is still valid. Good night.
17th March 2009 - 06:51am
Good morning,
It looks like the major currencies are making a trend change. Dollar Yen is breaking out of its wedge, after a 5-wave consolidation signal. This could be a big move towards 100 and beyond. The ideal entry would have been at the bottom of the channel, but this has been broken out of now. I will not chase the market, so I will see if an entry opportunity presents itself during the trading day.
Sterling Dollar is making an re-test of the channel. I believe that a sizeable move is underway in Sterling Dollar. The cycles are close to confirming that a low was made at $1.3675. Yesterday Cable broke out of the channel it has been in for the last month. This morning it is testing the top of the channel (see chart below).
On the 240-min chart you can clearly see how the index is hugging the blue trend-indicator line, indicating a trend change. The blue line is beginning to point up. The only caveat (and there always is one in trading) is that if this is simply a 3-wave corrective move, then this little bounce from 1.37 to 1.41 is all we will get.
The caveat is that Dollar strength may come in now. I don't using the words "may come in", but it is a possibility, which is why I have no position.
The next chart is the inverse Euro Sterling (ie sterling Euro), currently trading at 1.08. I have a fairly vested interest in this pair, as I converted a large part of my petty savings into this currency from Sterling, when the pair was trading at 1.40 and again at 1.28. It is an un leveraged trade, meaning I have simply bought Euros with my sterling cash. It was my personal trade of the year, BUT so you know, I am still in this trade, and I am still betting that we will see 1:1 with the Euro.
A little insight into my private life: I have a mother who lives in Spain, and as the good son I am, I go and visit as often as I can. Yes, I know it is a drag to have to go to a hot country with nice food and wine to visit one's mother, but I was brought up well. Last week I went there and took a taxi ride from the airport to the house. I's say this is a 15 min ride. The trip came to €30, which is about £26. The same ride in London would cost me no more than £12. As I read the papers on the coast, I hear about ex-pats from the UK, who are moving BACK to the UK, because they simply can't afford to live anymore. So to the person who emailed me yesterday about the fundamental reason for being "long" rather than "short", I say to you: Yes, you are probably very right. The fundamentals probably DO point to the Euro weakening against Sterling. But as you glance the chart below, do you see any technical reasons (yet!!) for being long on this chart? Imagine you didn't know what this chart represented. Maybe it is a stock, or an index, or maybe a currency. Either way the chart is pointing down, and it could go much lower, but it could also reverse. I don't know, and neither do you. All we can do is to play the trend to the best of our ability. There are no "special" circumstances" for any asset. A chart is a chart, no matter what it depicts. I once read a book about commodity trading. It went through various set-ups, and then came to Orange Juice. It concluded that in Orange Juice this particular set-up did not work, due to the nature of the product. I asked myself at the time: are Orange Juice traders different from other traders? Are they different human beings who don't fall prey to emotional idiosyncrasies? As the answer was "of course they do", I threw the book in the bin.
The charts below are from Monday's analysis. However, as they pertain to the potential swing trades I will be pursuing or are already in, I will leave them here.
The SP500 had a one-up/one down day, with no meaningful direction. I will leave the analysis in place below for the Dow.
Euro Sterling was on our focus list last week. The thinking here is that EUR GBP is retracing after hitting the two purple lines (a 1.618 and a 78.6%), and we are waiting for a signal to BUY the pair.
You heard me talk about "parity" in this pair forever. It looks like it is underway, and that a sizeable move is coming this week. The red lines is an attempt to show you how we see the move pan out.
The pair shot through resistance at 0.9070. That looks impulsive, meaning that the current move lower is a retracement.
I am watching Wednesday morning for a potential move time wise, so I may buy any weakness Tuesday night. I will keep the LIVE room members alerted.
The debate is raging whether market has made a sustainable low to put in a decent rally, or IF there is still one more leg down. I have attached a chart, which shows the potential for that final 5th move down. The verdict is still out, but the market is extended enough to pull back for half a day.
Market closed at 754 on Friday. The 61.8% retracement is at 790.
There are two dates to watch. The 19th looks like a key date, which is a Fib time extension. Also, you may or may not believe in Gann and his seasonal dates. Either way Equinox is coming up this week. So there you have it.
I once spent a whole day looking through the Dow charts for changes in trend on Equinox over 100 years. I didn't find anything to suggest that it was significant, but at least now you know!! Equinox is the 21st.
I can't tell you what is going to happen after the Swiss Central bank had their fingers in play on Friday, BUT if we get back down in the "danger zone", and we break down from the there, then this pair will disappear off the page to the downside!!
ANALYSIS
