Oct28 – Market Analysis

Personal Reflections

Today is the first day of working out my “home office” – over the weekend I managed to the relocate the office.  My coach advised that I should refrain from trading during the last office-week, and the first home-office week.  So last week ended up being the last office-week without me really knowing, and I actually traded the normal status quo.  Anyways, this week I will trade the STAM but with a risk of 0.1R on all the trades – given that the work environment has drastically changed, it could easily have a significant impact on my trading – for this reason I must really limit my risk – however I do also want to stay abreast of things and keep my edge, thus I will continue with the market analysis and putting on trades albeit at 1/10th the value.

I am also starting in Joe Branco’s trading room this morning, every day 7am-10am.

Open Positions

EURJPY trade – the market gapped up 40-50 pips – I am glad that I halved the risk in my position – it was another week of decently sized Yen gaps.  The trade is now in profit by around 30 pips.

S3 positions – AUDNZD got closed out on market open on Sunday evening – 10 points beyond my intended stop – that was in fact the high of the market – so a bit unlucky there.   The EURCHF and GBPNZD are both still open.  EURCHF is again approaching the target level.   It got within 2-3 pips on Friday before retracing.  Interestingly GBPNZD is moving down even though Sterling has been rallying against USD and Yen this morning.  Moved target on EURCHF slightly higher on basis of pivots.  Moved stop to 2316, a few pips below daily and weekly pivot line.

Overall Markets

Equity markets are performing strongly – rallied further on Friday and are also pushing up this morning.  Gold is pushing a bit higher to $1,350.

FX Markets

Further changes in the market.  NZD has weakened a further two points to 7, with CHF and EUR picking up those extra two points.  Thus my bias has changed further – I am looking to buy CHF, EUR and AUD, and I am looking to sell USD, JPY and CAD and potentially even NZD.  I am neutral on GBP.

Weekly Momentum Changes – Another weekly candle has closed – therefore it’s time to look at the momentum readings:

  • CHFJPY has turned bearish (just)
  • CADJPY turned bearish
  • AUDNZD turned bullish
  • EURNZD turned bullish
  • NZDCHF turned bearish
  • NZDJPY turned bearish
  • USDCAD turned bullish

Additionally there are some currency pairs on the verge of turning: NZDCAD (to bearish), GBPNZD (to bullish), NZDUSD (to bearish), Gold (to bullish).  In summary, on the currency front NZD momentum is weakening, CAD is weakening, and JPY is gaining.

In terms of weekly momentum points points- EUR 6, AUD 6, JPY 5, CHF 4, NZD 3, USD 3, CAD 1 and GBP 0.

Momentum on Equities – Nikkei has turned bearish, Italy and Spain are turning bearish – the rest of the indices are still bullish and many are in overbought territory. All except these three are in S1B environment.  The aforementioned three are no longer in S1B because they momentum is changing/has changed.

Phew – that’s a lot of commentary – from a setup perspective I am interested in the following:

  • Shorting GBPAUD (S2S) – pullback and bearish price action on D chart – ready to go at any moment, make decision shortly.
  • Buying AUDUSD (S2B) and AUDJPY (S1B) – pullback on D chart, awaiting bullish price action on either D or 4H chart – check at 3pm tonight, 11pm and 7am.

Next action

Check setups for AUDUSD and AUDJPY

 

 

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2 Responses to Oct28 – Market Analysis

  1. Shorted GBPAUD @ 1.6850, stop 1.6895, target 1.6695 – risking 0.1R (£125) – this is a S2S STAM trade. Selling weakening currency, buying strengthening currency. Pullback on D/4H chart, bearish price action (pin bar) on D chart. No scheduled AUG or GBP news until Thursday (except for RBA person speaking tonight at 11.30pm).

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  2. Checked 4H charts for AUDJPY and AUDUSD. No evidence of bullish price action – AUD is continuing to weaken. No STAM trade at this point. The GBPAUD already came within a whisker (1 pip!!) of getting stopped out, but it’s still there. I must be the luckiest trader in the City in terms of stops!

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