Tuesday, October 12, 2010

10/12 Forex

  • EUR/USD moves to bear phase after month-long rise.
  • GBP/USD whipsaws back to bear phase.

ppspps openupper pivotlower pivot
EUR/USD US$1.38 US$1.39 oct12 US$1.40 US$1.30
USD/JPY¥82 ¥85.08 sep22 ¥85 ¥82
GBP/USD US$1.58 US$1.59 oct12 US$1.60 US$1.54
EUR/JPY ¥11e ¥107.82 sep14 ¥117 ¥108
USD/CAD C$1.01 C$1.03 sep24 C$1.06 C$1.02
USD/MXN M$12.45 M$13.07 sep2 M$13.06 M$12.28

The euro's rise against the dollar lasted 21 U.S. market days and produced a 7.6% price increase. The high point was reached yesterday when the price bounced off of the upper monthly pivot level.

Cable's whipsaw back into bear phase in trading against the dollar came after two U.S. market days in bull phase that produced a 0.03% price increase, hardly enough of to overcome the spread. The bull period began with a move to the upper monthly pivot and then a bounce down the next day.

On the Heikin-Ashi charts, both pairs showed single bearish candlesticks with long lower wicks, the wicks being an additional bear sign. A second bear candlestick would signal a downtrend.

The GBP/USD 8-day moving average has turned down, meaning that establishment of a downtrend on the Heikin-Ashi chart would be actionable. The EUR/USD ma8 has yet to turn, and so even a second bear candlestick, absent a turn, won't allow a bear position to be opened under my rules.

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.

I also refer to the Heikin-Ashia trend or candlestick. The Heikin-Ashi averages six days for high, low, open and close, signalling uptrend if the close is in the upper half of the range and downtrend if it is in the lower half. The signal for opening and closing positions require confirmation through a turn in the 8-day exponential moving average.

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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