The break lower I think was overdone perhaps, but the real weakness will be shown as the pair closes the window on the gap lower. The euro has not climbed enough to reach 1.3088 and I should mention that the U.S. Dollar Index has yet to close the gap higher on its chart.

The $EURUSD breakdown was likely over-exaggerated on the elections but I think the move lower is still the path of least resistance. The move to the upside must be tempered with the likelihood that selling pressure is waiting between 1.3080 and 1.3100.

The U.S. Dollar Index $DX_F has moved lower but has yet to reach the 79.58 gap close. 

And while the Dow Jones (YM contract) did close the gap, it has yet to accelerate far from the area.

The daily $YM_F has retraced to the 38.2% Fibonacci Level of the last major move lower, closing the gap and keeping prices from rallying higher. Use the 38.2% level as the line in the sand going into tomorrow’s session.

Check out my free nightly videos over at www.TradeForexFutures.com

I’ve embraced the fishbowl. In fact I accepted it on day one when I began writing and coaching.

If I am going to teach people how I trade (notice I said how I trade and not how TO trade!!) then I am going to have to aspire to the fishbowl level of transparency of showing everything I do and how I do it. It’s really that simple. The only thing that I can share honestly is my viewpoint and actions; I certainly don’t know it all. I just know what I need to know in order to carry out my plans and strategies. No one can possibly know it all in the forex. It’s impossible. There’s just too many variables and a large cast of characters.

There’s no place to hide in the fishbowl – Trading Out Loud can be a burden – but it’s a burden I carry gladly because the benefits far outweigh the headaches (well, on most days anyways…)

Twitter honestly was useless to me until I discovered StockTwits. It immediately gave me A PURPOSE to tweet and to follow other people. Then came chart.ly. I love chart.ly because it allows anyone to share there ideass about a market and better yet a specific trade. I love the aspect of the latter.

Consider what goes into a *simple* five minute trading video (which you can easily record through chart.ly):

1. First you choose the market and even the time frame of the subject of your video. Five minutes may seem like a long time but personally I have to really have a clear and succinct trading idea to make the cut off! That’s another PLUS because a trade should really not be so complex that it could not, in the most direct way, be described in less than 300 seconds!

2. You will likely have an angle which is to say, you are a buyer or seller or interested in setting up a buy or sell. There should be a angle to your video otherwise you’re not really saying anything. Let people know your opinion and position.

Here’s why…

3. Sharing your opinion and position for public consumption makes you clarify your thoughts. In your own mind, not said aloud as put to video, lots things will make sense. Try and explain your idea to someone else through video and suddenly the flaws of the set up or thinking begin to show. I will tell you that video has saved me from more than one of my own set ups…in fact I have ended more than a couple videos early and before hitting “delete” my final words were usually something like “and then, so… mmm…Oh what the $%#!”

You’ll want to add a StockTwits “tweet” to your “Trading Out Loud” approach. A $ in front of the symbol and a $$ after the tweet will put you among the best group of tweeters around, StockTwitters!

Consider that tweeting makes you publicly accountable. Push a bunch of crap out there and people will know it. And please don’t be one of those people who tweet “bought EUR/JPY here”. Really?? Useless, utterly useless. The symbol, a price, and the time frame should be a minimum, if you can explain even a bit about the strategy (e.g. swing, momentum, pullback, dip, candle formation, moving average, trend-following, whatever, please do it!)

I promise you that Trading Out Loud is will transform your trading. Life in the fishbowl is not easy, but neither is life in the markets.

Let me be the first to welcome you to the fishbowl.

But the bigger difference between each of these charts is their respective market trend. You can be bullish a market, bearish a market, and have no opinion about a market. The latter – no opinion – is where I am at with the $EURUSD (and the U.S. Dollar Index $DX_F for that matter). Despite each of their recent dramatics, neither is going anywhere.

Daily charts with no trending Directional Bias are account killers. Over the past two decades, hundreds of webinars, seminars, and working with traders, range-bound markets (when they go unrecognized) have emptied the most accounts among traders. The issue is that traders tend to categorize markets as either bullish or bearish but seldom neither. The problem with this is that often, when a daily chart does not have a trend, there is no dominant psychology ruling that market.

The AUD/USD is trending lower, nicely, hence there’s a clear direction, or Directional Bias. The Bias tells me if there’s an overall or dominant psychology in the market. The fact that the $AUDUSD has a downtrend on its daily time frame helps me with intraday time frame trade selection as well.

When the daily is trending (up or down) I can say that there is an overall opinion that is ruling the market and if there is one, my preference is to follow it. If I am going counter-trend, I will limit it to short-term time frames which to me means the five, 15, and 30-minute charts.

If I have an opportunity to short into a longer-term rally like the daily – since it’s in a downtrend – I’ll do it.

The process of finding clarity in a market has four steps and I’ll leave that to my next update. For now, start by asking, before you set up a trade: Is there a trending Directional Bias in the market I am looking to set up a trade in?

Once again the U.S. Dollar Index is falling from a rejection from the 80.00 area. This time the market was able to climb to 80.36 before falling back below 80.00 but there has not been a rapid sell-off from there. Instead we’re seeing price action hang around – as if unable to leave the gravitational pull of the 80.00 level.
There continues to be very little this dollar can offer by way of insight into the next leg of sentiment and momentum and in fact because of the “two to four” o’clock angle of the 34EMA Wave, I look for exhaustion. The problem is that there are multiple levels of resistance overhead  - and equally uncertain is which of them many support levels below could ultimately become a floor. The triangle pattern will only be in play if the volatility drops and the range narrows, flattening out the 34EMA Wave.

I have been focusing mainly of the Dow Jones to gather any insight into risk and will continue to do so. Another reason is that I am not trading the dollar right now – since it lacks Directional Bias – and frankly using a market I don’t actively trade to gauge risk is like dancing when you really can’t hear the beat.  Intraday the most clarity I can see right now is the uptrend on the four-hour chart which is actually triggering a swing buy as prices sink into the dynamic support of the upward angling 34EMA Wave. Right now, the dollar is simply not that interesting and without a clearer picture of QE and whether the U.S. equities market is ready for a more significant downside correction, there’s just not much that the dollar wants to say.

So now he’s got to put his “Statement” where his “testimony” was; he’s gotta back it up. Walk the walk, well, actually talk the talk.

We’ll know at 2:15pm EST tomorrow.

In the meanwhile, the U.S. Dollar Index $DX_F and the Dow Jones Industrial Average pretty much stayed put with low enough volume in the equities that tumbleweeds were rolling by.

The U.S. Dollar Index is at an interesting perch – trading so close to the 80.00 level that the dollar bulls can taste it – but losing momentum north of the major psychological level. The daily chart’s market phase is chop and slop at best so the lack of commitment and follow-through should come as no surprise and yet prices can’t drop from here either.

So the deciding factor, as the greenback is stuck in the muck of indecision and a blurry risk environment, is likely to be tomorrow.

Despite the U.S. Dollar Index current bullishness, the market trend is more akin to the chop and slop of Distribution than anything else which – for now – means that the bears are fading the moves through 80.00.

So here’s the conundrum: IF the economy IS really heading in the right direction and QE should not be expected (consider it shelved for now) then should equities advance? Since the dollar pushed to a higher high today (it hit 80.16 today) is the market further discounting that QE should stayed shelved? And IF the economy is improving when does all this QE unwinding finish and send the U.S. Dollar Index lower as equities rally in the *normal* inverse relationship the Dow-U.S. Dollar have had.

Near-term the intraday trends are showing weakness as the Asian session rolls on. The downtrends on the 15 and 30-minute time frame would trigger a swing short at between 79.90 and 79.87 which means that I’d be relying on the 80.00 as ceiling and have this major psychological level to my back – which is a nice thing to have.

There is the scenario that the dollar can rally along with equities if further monetary stimulus is a no-go and the economy is a go.

If Bernanke doesn’t back up his March 6 optimism, look for the dollar to get pounded as QE is baked back into the cake.

This is paragraph from a recent article I wrote about harmonics.

Actionable application of analysis (three three A’s a trader must live by) is often the most difficult aspect of trading. Chartists and technicians alike could pour over charts spending sometimes hours on their analysis but if the end product is not resulting in actionable price levels or as I call them “decision levels” there is no point in the analysis. Hence, the old saying: paralysis of analysis. The idea behind a “decision level” is not only that it is support or resistance but that it is a level that will be reacted to. There are three reactions that can be expected at any decision level – regardless of how it’s indentified – and that is to accelerate through it, stall at or around it, and/or reverse from it.

I don’t see anything that would change my mind about the uptrend in equities. I am upset that the Dow didn’t even give me a correction lower to the 20 period SMA close. (How’s that for a shallow correction??)

The U.S. Dollar Index rally from a 78.12 low show that there’s still buying support just above the major psychological level however I’m more interested in just how long the rally can sustain support above the 78.43 to 78.50 area.

The end-of-day U.S. Dollar Index is still bearish as prices continue to trade below the 20 period SMA close and the chart is arguable in a shallow downtrend that has not yet established itself, making corrections like today’s potentially more trouble for the bears than if the trend were established.

The move in the U.S. Dollar Index is not done and for that reason EUR/USD entries will be taken on the short-term time frames like the 15-minute chart which is still in a “four to six o’clock” downtrend. The intraday trend should be respected until the downtrend begins to show signs on fatigue. In which case, the 15-minute is equally adroit at triggering a Wave Reversal long entry if the pair can rally through the 34 period EMA high.

The 15-minute EUR/USD will trigger swing shorts between the 20 period SMA close and 34 period EMA low as long as the intraday trend is down.

]]> http://ragheehorner.com/staying-nimble-with-the-eurusds-intraday-weakness/feed/ 0 http://ragheehorner.com/this-is-a-correction/ http://ragheehorner.com/this-is-a-correction/#comments Wed, 15 Feb 2012 20:58:05 +0000 Raghee Horner http://ragheehorner.com/?p=2018 This is a correction…for now. In this video I discuss the levels of support and acceleration I am watching and why it’s too soon to get too bearish. There are levels at which I will shift my opinion but we’re just not there yet. Near-term I will start entertaining some risk off positions but longer-term the trend in still up and risk ON is the still the dominant psychology.