Archive for September, 2007
US Dollar Bites the Dust !!
By Marek W. Stupka | September 30, 2007
The US Dollar experienced heavy sell-out on the last day of September. As the once glamorous US currency continues to fall, other ones hit multi-year highs.
The greenback dust-biting train seems to be unstoppable. On the other hand, its greatest rival, the Euro, enjoys yet another all-time high. Notice the EURUSD weekly chart below:
If you closely observe the chart above (click on it to see better detail), you discover that the current EURUSD price action actually broke out of the long-term channel, and is now rising aggressively. Channel breakouts are one of the many techniques taught from A to Z in the 1-on-1 training. All participants applying what they’ve learned were able to make money on this one…
As already mentioned above, the major dollar counter-currencies enjoy peak price levels. Besides the Euro, these are the Australian and Canadian dollars. Aussie has posted 18 year high, and the Loonie 31 year high!
Undoubtly though, every trading train must turn back somewhere. What comes up must come down! The question is when. And how intensely. The sophisticated techniques and strategies of the Technical Analysis, covered in the 1-on-1 Training, have the answer…
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CAD Stronger Than the USD!
By Marek W. Stupka | September 23, 2007
On Friday, for a short period of time, the Canadian Dollar was stronger than the US Dollar. And thus the loonie concluded its long fight for reaching parity…
It has been a great week for the Canadian dollar - and for the other small, or commodity, dollars (meaning the Australian and the New Zealand dollars) as well. The reason behind their overall growth are big moves in the commodity markets, and the continuing greenback weekness. Take a brief moment to look at the chart below:
Canada is definitely performing great. Its ongoing struggle for reaching parity with the USD has been present in the markets since the very beginning of 2007. The question now is - will the CAD rise continue..?
The overall market sentiment is undoubtly loonie bullish. One can judge so by the sheer intensity of the USDCAD down-moves, as well as by the fact that the pair has reached parity on Friday even despite the actual fundamental story of the day for the Canadian economy - the Retail Sales - posted -0.8% drop, instead of the expected rise!.
Whether the CAD skyrocketing move is going to continue further is hard to say at this point. However, because the pair is now at its important psychological level, my advice is to avoid trading it now, and wait till the patterns clear up. We also have to take into our considerations the pair’s correlation with other currency pairs, namely with the EURUSD, that is hoovering just below its historical peak 1.4120, while many analysts agree that it might consolidate, if not reverse, in the weeks to come…
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Euro Reaches All-time High!
By Marek W. Stupka | September 16, 2007
On Friday, Euro has reached its highest value against the US Dollar in history. On the same day, the US economy reported monthly loss of 4,000 jobs…
The Non-farm Payrolls came out negative for the first time in 4 years. We’ve seen another data negative for the US over the last couple of months. We’ve heard of turmoils and liquidity crunches in Wall Street! Many are asking: Where does the story end for the USD?
Among traders around the globe one can witness feelings of insecurity, and even fear, from what is going on in the markets right now…
For those of you who suddenly feel insecure because of the low Dollar and the high Euro, it is important to realize that what we see in the markets was to be expected long time ago. In fact, I have been pointing out to the likely future weakness in the US dollar already in the end of 2006 - comb through the archives and you’ll see the proofs…
Anyway, it is equally important to know there’s ABSOLUTELY NOTHING TO FEAR OF NOW! The main reason we can stay coolheaded in times like these is that we are the Technical, not Fundamental traders. As my 1-on-1 students already know from the technical updates sent to them directly and exclusively as long as they’re participating in the training course, the current market price development is just a logical consequence of the overall techncial setup prefering the Euro and other majors as well as small, or commodity dollars, to USD.
WE CAN BENEFIT FROM PRICE ACTIONS LIKE THESE! The chart you can see above merely captures the basic price movement of the EURUSD currency pair. The complex technical analysis of the EURUSD (and other pairs) is accessible only from the exclusive part of the 1-on-1 Training website. You must be logged-in to see the updates and benefit from them.
There’s one more thing I’d like to share in here. Since September 2006, I have been recommending to all of my students living outside the United States to switch the basic currency of their trading accounts to Euro. In other words, if USD is not the currency you pay your bills with, it is a wise and savvy thing to denominate your trading account(s) in Euros. Since I live in the E.U. and I am able to pay for my stuff in Euros, I decided to swap my trading accounts (be it my personal account, or my managed accounts) to Euro-denominated already in Summer 2006. And I have never regretted it since. Now I offer the same piece of advice to you - do it before you lose more money on exchange rates…
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Dow Jones and the Carry
By Marek W. Stupka | September 6, 2007
In the world of trading it is no secret that Dow Jones Industrial and the Carry Trade are closely correlated. The question is: Can we benefit from the correlation?
The tight relationship between the Carry and the Dow has been present in the markets for years, and even decades. However, it is only over the last couple of months that the correlation is the strongest over the last 8-10 years. It is an exciting news, since now the Dow is leading the Carry, not the other way round, as used to be the case before!
Have a good look at the daily INDU$ chart above. Now compare it with a daily chart for any of the carry currency pairs. If you can see instant resemblance, you can sleep well tonight. Yes, you’re good at this! You’ve just proven yourself to be a quality trading analyst. (But wait! It gets even better once you apply to the 1-on-1 Training course!)…
The reason why these two financial market instruments are correlated is that they both are a direct reflection of the market risk. Whenever global investors show signs of high sentiment prefering the risk appetite in financial markets, both the Dow and the Carry immediately experience increased level of demand. And, on the contrary, when the investors tend to step away from they high-risk / high-yield investments, both Dow and the Carry begin to suffer and post lower and lower price levels.
As I already mentioned, this tight correlation has been present in the markets for many, many years, and I honestly can see no reason why it should suddenly collapse in the weeks to come.
There’s one more thing I like to share within this post, and it is the “September stock effect”. Every investment pro in Wall Street is well aware of the fact that September is generally and statistically the worst month for the stock performance ever. There are many reasons to this, the details of which exceed the scope of this article. In any case, it is good to keep this small piece of information somewehere back in our minds when trading the carry…
Now, knowing all this, currency traders can easily benefit from the strong relationship between the Dow Jones Industrial and the Carry Trade. The trick is real straightforward and easy. All we have to do, really, is to get access to a quality stock/index charting package (if your broker’s platform does not supply one, you can either subscribe to one, or google up a free application).
Once we spot a significant price change posted in a 1h-1d chart for the Dow, we should get alert and analyze our preferred Carry pair, t.m. USDJPY, NZDJPY, AUDJPY, GBPJPY, etc., for the same price action. — If you don’t know how to perform a quality Technical Analysis reserve your spot in the 1-on-1 Training, and you will start trading profitably in days! — However, it is also important to stress here that we should not follow the Dow performance blindly, but are encouraged to only trade the Carry when it is in line with our own analysis!
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New Zealand: Kiwi Still Down!
By Marek W. Stupka | September 3, 2007
In course of the previous week, NZD has been the weakest performer against the US Dollar. In fact, the currency has lost more than 270 pips in just few days!
Remember when in this Summer NZD has been climbing unstoppably, even despite direct intervention of the Reserve Bank of New Zealand? Well, those times are over now. This high-yielding carry trade favorite is now dropping down-under, mostly due to sharp return to risk aversion in Wall Street.
Adding fuel to the fire, the far-from-stellar Kiwi economy continues to dissapoint on the large scale. Worse than expected NZ Building Permits (-15.5% vs 14.2% exp.), Money Supply (9.2% vs. 10.7% exp.), and NBNZ Business Confidence (-38.5 vs -33.8) did little to nothing to help regain investors’ confidence in this otherwise strong economy.
Kiwi continues to fall even despite the fact Wall Street has now recovered from the risk aversive mood, and the stocks aim up again. This price action is mostly caused by the prevailing sentiment - the NZ sentiment index is positioned in the strongly negative territory.
Economy reports for the New Zealand economy are expected to get better this week. However, they will very likely not have much impact on the bearish NZDUSD price curve. The underlying market sentiment and expectations - two most influential elements of the Fundamental Analysis - are clearly pointing towards continuing of the NZD fall.
The general risk sentiment in the global economy is undoubtly prefering low-risk trading approaches and strategies. And the expectations? After the recent market turmoil, investors around the world continue being highly unsettled, and are unlikely to change their minds any time near…
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Triple Moving Averages
By Marek W. Stupka | September 3, 2007
If you are one of my 1-on-1 students, you definintely know by know that I like to use Triple MAs for planning my mid-term trades. Here’s a small example…
Observe the 1h chart for NZDUSD above. At the point I am publishing this post, the pair shows a great SHORT trading opportunity! How do I know it? Well, first of all I recognize the position of the 3 moving averages present in the chart. I analyze their placement against each other and the price - and recognize the relevant Market Personality.
[ Notice that the MA settings presented above are NOT EXACTLY the same ones that we use in our charts. If you wonder about the exact settings I use, send me an email, and I'll send them back to you as soon as I find time for it. ]
With my students we recognize four main Market Personality types, and are able to trade each of them in an entirely different manner. The Market Personality rules are explained in great detail in the 1-on-1 Training, along with interactive case studies and assignments.
But back to our trading opportunity. According to my analysis, small portion of which I am presenting to you here, the pair is just about to fall down now. I will not go any further as far as how deep it can decrease, or where you should place your Stop-loss or Profit Limit. All of these information are covered in the training course.
Anyway, you can consider the chart above sort of a quality, albeit incomplete, trading signal. The general idea behind posting it here is to prove to you the quality of the trading techniques and strategies that me and my students are using (and cashing-in) every day.
Check the pair’s action in a couple of days! If NZDUSD decreases for at least 50-70 pips, you can’t argue with our trading style anymore. It is time to face the truth. What we do at Gepard Investments, Inc. is just the right way to trade!!!
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