Mar13 (Thu) – Market Analysis

(Posted on Monday morning because of computer issues)

Position Management: I stayed up for the AUD employment report, and was able to tighten my stops around 10pm.  Just prior to the news I was able to tighten the stops further into actual profit territory.  Of course, there was no guarantee that my stops would not get slipped in the case of a bad report.  However I was also able to increase the targets to some extent, and seemed to have lucked out in picking good levels using the pivots.  The employment report came out favorably and there was an upward revision to the previous figure. I ended up with +96 on AUDUSD, +87 on AUDJPY and +106 on EURAUD.  My risk on the three positions was 1.5R – the final profit was +3.37R. Nicely nicely.

FX Market

No changes in the STAM rankings from yesterday.  The strong, weak and middle camps are still the same. 

Weak Chinese and strong Australian data came out overnight during the Asian session.

There is some USD data at 12.30.  No other Tier-1 data today.

Equities: The Nikkei and the European indices continue to fall (except for Italy).  Continuing bearish pressure.  The US markets are not retracing in such a manner – why is there a discrepancy between the markets?  Each of the US markets formed a nice bullish pinbar on the daily chart yesterday – after a down-day on Tuesday.  However, on the whole this is not valid for a STAM entry because there has not been a significant retracement.

Oil looks similar to the chart of the European indices, where as Gold is continue to rally – now trading $1,370 – however often ranging as much as $25 in a single day – thus being difficult to trade.

After staying up for the Australian employment data release, I only arrived at the office around 10am this morning.  Thus I did not check for setups on the 7am candles.

11am setups for FX:

  • There was a S3S setup on AUDUSD – i.e. shorting the currency pair – however I cannot take this trade because US news is coming out in 90 minutes.  There was also a “near good enough” setup on NZDUSD (also to go short) – again prevented from taking the trade because of imminent USD news.
  • STAM setups – There is a valid S1B setup for GBPJPY, for which I am entering orders into the market.  No other setups.  Final Note on this one:  Whilst I was still completing my analysis, the pair started moving upwards, without me getting filled on my long order (I was trying to shave a few pips off the entry price).  The pair proceeded to move some 45 pips higher before falling over and falling right past the intended stop loss level.  Thankfully I had removed the pending buy order from my platform.  See the attached chart for how it played out.

 

3PM UPDATE: S3 setups available on NZDJPY (to short) and on GBPUSD (to short).  Shorting NZDJPY would be going against the trend in place on the bigger timeframe, therefore I passed on this setup.  Cable, on the other hand, has been trading in a range for several weeks now – hence the proposed short trade is not against a clear trend on the daily timeframe.  Instead I am shorting nearer the top end of the consolidation range. [With the benefit of hindsight – with the Yen pairs, and to a lesser extent, the CHF crosses, I also need to remember the potential for Yen strength or CHF strength to quickly and abruptly come into play on the basis of the Ukraine situation – thus although NZDJPY is trending up, there is always the potential for a sudden flight to safety – and particular the Kiwi-Yen cross, since the Kiwi is generally seen as a risk-on currency – thus in the case of flight to safety I should expect NZDJPY to fall heavily

There were no STAM Setups on FX.  The equity market are falling across the board with decent size.  This is presumably on the basis of the risk-off sentiment which has been clearly visible in both the FX and equity markets over the last hour.

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