FOREX PRO Weekly May 02-06, 2011

Hi Sive, The market volatility (mostly on xag and xau) occurred at 6:15 pm Eastern Time USA. The announcement about Osama Bin Laden did not come until 11:25 pm Eastern Time and was not leaked until 10:35 Eastern Time. The first rumor that this might be the case came after 9:45 pm when the President called for a news conference to be held in two hours from then. Yet virtually every news source is attributing this huge volatility to the news announcement, which in fact came 5 hours after the volatility occurred. Bin Laden's demise is an illogical reason to give for volatility which occurred 5 hours before the news was first leaked so the commodities slide cannot logically be attributed to this.

It seems to me that perhaps the markets do what they want to do (or rather what the market makers want them to do) and then news sources and analysts "find reasons" to explain these moves.

Sive, do you have any comments on this?
 
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Hi Sive, The market volatility (mostly on xag and xau) occurred at 6:15 pm Eastern Time USA. The announcement about Osama Bin Laden did not come until 11:25 pm Eastern Time and was not leaked until 10:35 Eastern Time. The first rumor that this might be the case came after 9:45 pm when the President called for a news conference to be held in two hours from then. Yet virtually every news source is attributing this huge volatility to the news announcement, which in fact came 5 hours after the volatility occurred. Bin Laden's demise is an illogical reason to give for volatility which occurred 5 hours before the news was first leaked so the commodities slide cannot logically be attributed to this.

It seems to me that perhaps the markets do what they want to do (or rather what the market makers want them to do) and then news sources and analysts "find reasons" to explain these moves.

Sive, do you have any comments on this?

Hi Cosmos,
I even do not know what to answer. Probably it could be just ocasionally in one time.
Sometimes it happens, when it's hard to explain some movements.
May be somebody among forumers know something...
On TV this retracement was explained by particularly Ben Laden death.
 
Hi Cosmos,
I even do not know what to answer. Probably it could be just ocasionally in one time.
Sometimes it happens, when it's hard to explain some movements.
May be somebody among forumers know something...
On TV this retracement was explained by particularly Ben Laden death.

After doing some looking, I find that silver actually slid on news that the CFTC is raising the margin requirement. From the Wall Street Journal: "Traders said the declines were triggered after Nymex raised its trading-deposit requirements, known as margins, over the weekend. To trade silver futures, investors typically pay only the margins, which cost a fraction of a contract's full value of around $230,000."

This explains the silver slide but not the various commentators' erroneous assumptions that the slide was a result of Bin Laden's death. I can see that doing one's own research is vital in trading.
 
nzd/usd

Hi Dear Sive;
I'm sorry for asking again. But, i'm asking for educational reasons.
I realized that the nzd/usd closed under the 3x3 this night.
Is it already too far away from the first close under the 3x3?
Also, if one does enter where would he set the stop?
one last question, does the chart show W&R?
sincerely
mjunkyard
 
EUR/USD Daily Update, Tue 03, May, 2011

Good morning,
Market again turns to energy accumulation - current situation looks very similar to coiling under 1.45 area. Look - inside day, then "high wave" and possibly inside day again. So, we should expect some explosive move, but where?

Currently market is not at overbought as on daily (1.5009) as on monthly (1.4933), so it's quite possible that market could show attempt to accomplish 1.4950-1.50 daily targets.

If market will show downmove (as it was around 1.45), then I suppose major area to watch for - 1.4575 - Conlfluence support, weekly support 1 and monthly pivot.

4-hour and hourly charts
Here we can see something, that reminds broadening top. This is a reversal pattern, but here it's not perfect. Will it work or not, I don't know.
But if we will apply some rules for trading it, then we can say follows:
1. If market will take out highs around 1.4890's - then it will erase as broadening top as Butterfly Buy. In this case - we can count on move to 1.50 area roughly;
2. IF market will stop at some retracement level (look at hourly chart) and reverse to downside - then retracement could be deeper. Possibly even to 1.4575.
But appearing of this pattern let us place tight and reasonable stops - above the high of broadening top pattern. IF you intend to trade Short of cause.
 

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After doing some looking, I find that silver actually slid on news that the CFTC is raising the margin requirement. From the Wall Street Journal: "Traders said the declines were triggered after Nymex raised its trading-deposit requirements, known as margins, over the weekend. To trade silver futures, investors typically pay only the margins, which cost a fraction of a contract's full value of around $230,000."

This explains the silver slide but not the various commentators' erroneous assumptions that the slide was a result of Bin Laden's death. I can see that doing one's own research is vital in trading.

Hi Cosmos,
excellent work. This indeed could lead to such price action.
I even havn't thought about it, because it's very rare happens when exchange change margins so significantly. Besides, unfortunately I do not trade silver very often.
Thanks
 
Hi Dear Sive;
I'm sorry for asking again. But, i'm asking for educational reasons.
I realized that the nzd/usd closed under the 3x3 this night.
Is it already too far away from the first close under the 3x3?
Also, if one does enter where would he set the stop?
one last question, does the chart show W&R?
sincerely
mjunkyard

Hi Mjunkyard,
Do not apologize - this is educational forum. We are here to ask and to get answers with each other.
Let's move through you qest-s:
1.There is no second close below 3x3 - as on futures, as on spot (at least due Alpari UK). I attach the chart with it;
2.Yes, if even we will see second close now - it is not good for DRPO. Pattern should have very close tops in term of height;
3. DiNapoli approach suggests, that your stop should be beyond 0.618 resistance from the highest point of DRPO (i.e highest point of thrust) and low of confirmation bar.
But I prefer to use 0.786 or 0.88 level.
 

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Hi Cosmos,
excellent work. This indeed could lead to such price action.
I even havn't thought about it, because it's very rare happens when exchange change margins so significantly. Besides, unfortunately I do not trade silver very often.
Thanks

Thank you, Sir. I appreciate your comments.
 
Hello Sive. Can you tell me if this is a correct context for B&B Buy if the bar closes above the 3x3? If so, is the target .618 of the whole move down? Or .618 of the most recent move down? Thank you for teaching.
 

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