Forex Trading Signal 9-18-2009

Sir Pipsalot

Former FPA Special Consultant
Messages
511
Hey folks,

Well, the EUR/USD seems to have topped out for now a bit above 1.4720 as I mentioned yesterday, and we seem to be into some type of wave 4 consolidation or retracement. To me the action over the last 24 hours looks like a smaller degree triangle that should break to the upside as wave 5 starts up here soon. However, if 1.4688 gives way, it will mean the consolidation is more of a zig zag and it will pull down deeper, or even be a preliminary sign the ultimate top is in place and we won't have a final blow off rally after all. Because of the pattern here, I'm recommending a long from the 1.4700 to 1.4720 area (I mentioned it yesterday afternoon as a reply to yesterday's signal on the message board http://www.forexpeacearmy.com/forex-forum/current-forex-trading-signals/5803-forex-trading-signal-9-17-2009-a.html#post20865) and a stop loss at 1.4680 seems appropriate. Personally, I have take profits at about 1.4755, 1.4800, 1.4870. Remember though, that betting on the upside here is risky since the big trend turn from up to down is likely just around the corner, so I'm saving the bigger trade for the next good shorting opportunity. As a reminder, once this move tops out we should see a 20%+ decline in the EUR/USD over the long temr meaning somewhere in the 1.10 to 1.15 range or lower, so getting in short near the top should prove quite lucrative if done correctly and if this indeed ends up happening.

The same can be said about stocks. We still have some probable upside left as the last of the weak bears finally give up and pile into the market. My best guess at the moment is we'll see 1100 or close to it sometime soon. I'm still in long a portion of my trade from last week at 1029 and I'm holding that portion for a TP near 1100. As with the Euro, the bigger money will be in the short if and when we get that turn, so I've been working hard to identify the next potential top, and I'll let you know when it's here. To reiterate, the Elliott Wave technical and sentiment forecasts call for a bigger % drop than what we got in the recent crash, which would send the S&P 500 below 500, and I agree with them 100%. So while I'm not in short yet, I'll be eager to jump on the next opportunity and let you know when I do. Personally, I think another big leg down on the recession would put fair value of the S&P around 250 and make the bank stocks even more worthless than before, so now's a good time to do some due diligence and figure out how you'd like to take advantage of a steep market selloff if/when the opportunity arises.

Gold seems to be behaving similarly to the Euro in that it has pulled back over the last 24 hours and probably has another decent rally left in it. To recap, I went long on gold at 976 and am closing the last portion of my trade with a 1035 TP if we can get up there. As with Stocks and the Euro, Gold and Silver should present good shorting opportunities around the same time. One of the big reasons for each of these markets having strikingly similar forecasts is based on liquidity. Right now liquidity is driving just about everything. Increasing liquidity comes along with risk appetite and drives the USD lower (more supply) and pushes stocks and commodities higher (more demand). Shortages of liquidity that come along with risk aversion drive the USD higher (too little supply) and pushes stocks and commodities lower (more sellers for cash than buyers). The coming trend shift may start with one market, but it will probably pull all of them along with it because the underlying shift will be one towards poor liquidity and risk aversion.

In news Thursday, again each news item we were watching came out too close to expected to provide us a short term trading opportunity off the surprise. Friday offers no decent economic news to look out for, so we'll just hold off until next week until things pick up there.

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To our success,
Sir Pipsalot
 

Samuel Odunlami

Recruit
Messages
2
Live trade

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mechtech63

Corporal
Messages
123
Sive Morten comments

Sir Pips, what do you think of Sive's comments below?

Sive said:
Trade EUR/USD possibilities (1):

For those, who is already had long positions: hold them surely till 1,4820. But I think we will reach 1.4950 and even can touch 1.52. You may tight stops a bit, when market will be closer to 1.4900.

For those, who out of the market: may be there will be an opportunity to go short in 1.49-1.52 range. Looking for signs of correction. But such kind of deal should be short-term. You can go long using your own entry technique until 1.4850 level is reached.


(1) “Trade possibilities” are not detailed trade signals with specific entries and exits. They are expectations about possible moves of the market during the week based on market analysis..
I'm hearing from you that we are near the top, base on possible Wave 5. However Sive seems like he sees 300 to 400 more points coming. Very hard to place a trade here.
 

kamillo80

Recruit
Messages
6
thank you sooooo much

i am newly joined to the forum and it makes me a great pleasure to read you analysis thank you so much
 

cosmopolit

Private
Messages
18
I'm hearing from you that we are near the top, base on possible Wave 5.
However Sive seems like he sees 300 to 400 more points coming.
And why do you think that the "wave 5" could not be from 300 to 400 points? :)

P.S. At the end of 2007, when EUR.USD was at about 1.44, many "wave analysts"
predicted that it was the final 5th wave and that EUR.USD should retrace a lot, but
it turned out that EUR.USD went about 1600 points up before the actual "retracement"
started.
 
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Sir Pipsalot

Former FPA Special Consultant
Messages
511
Sir Pips, what do you think of Sive's comments below?



I'm hearing from you that we are near the top, base on possible Wave 5. However Sive seems like he sees 300 to 400 more points coming. Very hard to place a trade here.
We'll have to see who's right. There's a chance the Euro may move in such a pattern that we're both right, but I'm obviously more bearish medium to long term than he is.
 
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