Tuesday, August 17, 2010

8/17 Forex

  • Dollar drops sharply on bear signal against loonie, peso (USD/CAD, USD/MXN).
  • There goes that Cancun vacation. Bummer!

ppspps openupper pivotlower pivot
EUR/USD US$1.29 US$1.32 aug11 US$1.34 US$1.25
USD/JPY¥85.48 ¥85.915 aug13 ¥88.41 ¥85.20
GBP/USD US$1.56 US$1.59 aug11 US$1.60 US$1.51
EUR/JPY ¥109.94 ¥113.50 aug10 ¥115.86 ¥108.62
USD/CAD C$1.03 C$1.04 aug17 C$1.06 C$1.01
USD/MXN M$12.61 M$12.66 aug17 M$13.00 M$12.24

And not only Cancun, but that week in Montreal. Currency risk sucks.

Taking the loonie first, USD/CAD has dropped 1.1% intraday an hour into the U.S. market day. News reports attribute the move to a rejected bid by BHP Billiton (BHP) to buy Potash Corp. (POT).

The preceding bear phase lasted five U.S. trading days and produced a 1.6% price rise.

And to the peso: USD/MXN was more gradual in its decline before today's signal, dropping for four U.S. trading days in row. The total decline so far has reached 1.8%, and today's intraday move so far is down as much as 0.7%.

The reasoning in news reports is a bit convoluted. It goes like this: Troubled eurzonians Ireland and Spain had good bond auctions, and that reassured traders about Europe's sovereign debt, which lifted demand for emerging market currencies, bonds and stocks.

Well, OK. But what about the phase of the Moon, huh? And aspects to Mercury on the astrological chart. And the Ground Zero Nearby mosque proposal. And the swarm of ants I saw on my morning walk, an omen if one there ever were. Could be lots of things. Can't just credit the Europeans for this.

The preceding bull phase lasted seven U.S. trading days and produced a 0.8% price rise.

The analysis uses the daily Person's Proprietary Signal, developed by John Person, and the monthly Person's Pivot, which he also developed.

These are black box signals -- the "proprietary" means that Mr. Person knows how they work under the hood, and I don't. But they have shown a fair degree of success in identifying good entry and exit points, and I find them useful.

On the glance, "pps open" means the price at the start of trading in the United States on the day the signal appeared.

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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