Thursday, November 11, 2010

11/11 Forex

Swiss franc strengthens, Australian dollar dithers
  • U.S. dollar, Cable to bull phase against the Swiss franc (USD/CHF, GBP/CHF).
  • Australian dollar again shows bear phase against the U.S. dollar after yesterday's bear signal ghosted away (AUD/USD).
  • I ponder the failings of the pps.
ppspps openupper pivotlower pivot
EUR/USD US$1.37 US$1.41 nov8 US$1.45 US$1.39
AUD/USD US$1.00 US$1.00 nov11 US$1.04 US$0.99
USD/CAD C$1.00 C$1.02 nov1 C$1.01 C$0.99
USD/JPY¥82 ¥81 nov9 ¥82 ¥80
GBP/CHF C$1.56 C$1.56 nov11 C$1.54 C$1.50
GBP/USD US$1.61 US$1.61 nov9 US$1.59 US$1.54
EUR/JPY ¥113 ¥114 nov8 ¥117 ¥112
AUD/JPY ¥82 ¥79 nov2 ¥85 ¥80
USD/CHFSF0.98 SF0.97 nov11 SF0.99 SF0.93
NZD/USD US$0.78 US$0.79 nov9 US$0.82 US$0.77
USD/MXN M$12.27 M$12.39 oct21 M$12.32 M$12.04
The bull phase on GBP/CHF pushed the price above the midline. The preceding bear phase lasted only six days and resulted in a price decline of 0.4%.

 The USD/CHF shows a similar pattern but with a slightly longer and much deeper preceding bear phase, which lasted seven days and produced a price decline of 2.1%.

 AUD/USD showed bear phase at the open of the U.S. market day on Wednesday, but the signal disappeared intra-day.

As I've noted often, such "ghosting" is an inherent characteristic of Person's Proprietary Signal. John Person says that a signal only becomes "official" at the close, but forex markets trade continually.

To pick an official end of the trading day for forex is like poking a stick in the ground and declaring that to be the end of eternity. It can be done -- I do it -- but it is entirely arbitrary.

In fairness to Mr. Person and his signal, the macd and stochastic show similar "ghosting" behavior, and the only way to avoid ghosting would be to use end-of-period data only, which would make the pps less responsive to market conditions and therefore less valuable.

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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