GBP/USD FOCUS

(CLICK HEADLINE FOR COMPLETE ARTICLE WITH CHART)

As it stands, today's daily close will create a pivot point for a bull pivot. The swing bar will be the range bar bear candle from June 8.

All the other bars since June 8 have been contained within this range bar which makes them inside bars. Therefore the close of Friday's bar formed an internal bull pivot since it occurred inside the range of the June 8 bar. Hence, my bullish call for today to trade alert subscribers.

Today's Aud/Usd trade hit target for 38 pip profit. Usd/Cad up 35 pips and Eur/Aud is even

Jerry

EMAIL ME

DATA NEUTRAL NEWS

Well, the U.S. trade data today could have been a firecracker but turned out to be a fizzler instead. Markets move on either good news or bad news but today's data was neutral leaving the big money to wait for more data.



And that data is forthcoming tomorrow with the U.S core inflation numbers. This is a big daddy report and the big boys have kept their powder dry for this one, so I expect some tradeable setups that will be suitable for entry.


For the full article click the headline.



Jerry
EMAIL ME

NO MARKET VOLITILITY

Until today there was no volatility in the forex market. If you noticed there were very small ranges in all the pairs until today. You have not heard from me in a couple of days because I've been extremely busy working out the bugs out of the trade alert service just launched and I've been putting together another lesson on support and resistance for the members section for LCM students.

This lesson is very extensive and takes time to put together but it will be worth it for you I promise. some things I put together is almost like a mini book within itself.

But now, back to the market. See, on Friday there were large moves in most of the pairs that broke most support/resistance levels triggering profit taking and stops. Whenever this happens this means that most traders are out of the market because everyone has taken their profit or been stopped out.

So, the first 2 days of this week had extremely low volatility in most pairs. You've got to understand then, that operators must make many small back and forth swings to move the market in order to draw in new players into positions. Operators can't play until they have someone to play with.
When enough traders have taken positions then true moves will again start to exhibit themselves in the market. Those moves began today. I mean, how you gonna hunt stops until you have stops to hunt.

Then, most major players have been waiting for the major U.S. trade data that begins Thursday and Friday. Everything that has happened up to now has just been the setup for this data. Just know that you don't have to trade every day to make money. The less market exposure you have the less risk you have. You can't lose when you're not in the market and you shouldn't be in the market unless the market signals you to be in the market. Not because you need a fix for action or feel you're missing out on some moves. The fact is, just because a market is moving doesn't mean that movement presented a good trading opportunity. Many times a move, especially in times of low volatility, the move is just a set up to draw in enough positions so operators can meet their quota of blood when they spin the market back to it's true direction.

The farther you enter a market away from a support/resistance level the greater your risk because operators use these areas as their predator zones. They can easily swing a pair back to a support/resistance level to shake out weak hands but they take a risk of triggering the market in a direction that's not profitable to them if they take it beyond support/resistance because that starts a stampede. When the herd starts to stampede even the lions risk getting trampled.

So, I've taken this opportunity of slow motion to get caught up and organized on some things the last couple of days and my youngest daughter is graduating from high school tomorrow so family obligations have also taken up more of my time than usual. I can only hope that as much as I have given freely of my time at no cost that from time to time you will excuse a quiet moment from me.

Jerry
EMAIL ME

EMAIL ALERTS TO CELL PHONE

I see that some of you need a little help with setting up email alerts by cell phone. while I'm not suggesting anyone, I have my hands full with all of the trading aspects I provide but I have attached a link to a site that may be of help. I do not use this service nor have any affiliation with them so I can't answer any questions about the service, but from scanning the site it looks as though it may be useful if the service works as advertised. The best thing about it is that they offer free email to your cell phone. The link to the site is below. If that doesn't fit your needs I suggest doing a search for email phone alerts or contact your wireless phone provider.

Jerry

TRADE ALERT SERVICE LAUNCHED

FOREXTRADINGMAJIC.COM IS PLEASED TO ANNOUNCE IT'S NEW TRADE ALERT SERVICE. FOR DETAILS AND A FREE 10 DAY TRIAL CLICK THE HEADLINE ABOVE.

JERRY
EMAIL ME

SUPPORT/RESISTANCE CONTINUED

(CLICK HEADLINE TO SEE EURO/USD &GBP/USD CHARTS)
when you get to the page click charts.

If we continue with our example of overhead resistance, when price hits resistance the real battle between buyers and short sellers begins.You have two types of traders here. The longs that bought here and are waiting for price to come back to them so they can sell and break even.

Then you have the short sellers who sold here and did not take profits and see their paper profits eaten away and don't want to go negative.So, at resistance it is counter intuitive because you've got sellers who will have to buy to close their short positions and you have buyers who have to sell to break even.

If price closes above resistance on higher volume this signals a valid break through of resistance because that tells you that all the short sellers have gotten out and the breakout was sustained by new buying. If the breakout is on lower volume it cannot be sustained because it is not supported by new buying, and indicates the move was a short covering rally.

In most cases due to buyers selling to break even there will be a bounce off the level even if it does eventually signal a valid breakout later. A valid breakout without a bounce indicates a strong move and a continuation to major resistance is a high probability.

However, a reversal is different from a bounce. A reversal is a three bar pattern which consists of the bar that tests resistance, the bar after the bar that tests resistance, and the bar following that bar.

There are more explicit details in THE LAWS OF CHARTS AND MEN but here are some basics.

If the 3rd bar closes down below the low of the 2nd bar you have a reversal and probability is high that price will go back down to test the prior high which it had broken through to get up to the level of current resistance.That prior high is now minor support on the way back down where the same process repeats itself.

This is the nature of support/resistance reactions. That is why Support and resistance tops and bottoms are often called reaction highs and reaction lows by professionals.The reaction is the psychology and the chart pattern indicates the resolution of the psychology at that particular level.

Jerry
EMAIL ME

SUPPORT/RESISTANCE CONT.

CLICK THE HEADLINE ABOVE FOR GBP/USD CHART. (click on charts when you get to the page)

Support/resistance is relevant to tops and bottoms.The basic terminology is overhead resistance and bottom support. Wherever price is positioned, the closest price top above it is the 1st level of resistance. The closest price bottom below is the first level of support.

But, before one can see S/R one must know what constitutes a market top and a market bottom and it is not necessarily the highest price that creates a top nor the lowest price that creates a bottom. The LCM technique of pivot recognition identifies a true top or bottom.

That is the most fundamental reality of support/resistance.Then you have separations into major support/resistance and minor support/resistance. The definition above illustrates majorsupport/resistance.

Then you have minor support resistance. For example; the closest market top could be 200 pips overhead. That is major resistance.

But 100 pips overhead, before that market top, is a prior market bottom. This prior bottom is also overhead resistance but it is classified as minor resistance. This functions oppositely on the way down.A move that is with the trend can be expected to break through minor resistance and test major resistance.

A move against the trend can be expected to be stopped by minor resistance.When a market hits support/resistance there will occur a reaction. The reaction can be read by the pattern that forms at support/resistance and knowing how to read the reaction will tell you if price will proceed to the next S/R level, bounce off and then recover to continue through the level, or reverse off the level to test S/R in the opposite direction.

To be continued.

Jerry
EMAIL ME

EURO/USD SUPPORT/RESISTANCE 6-4-07

BELOW ARE THE DAILY CHART SUPPORT RESISTANCE LEVELS FOR THE EURO/USD.

TO SEE THE CHART( click on headline ) AND CLICK THE CHARTS MENUE

Support/resistance is the cornerstone of any trading method. It is the most basic fundamental aspect of trading and is often over looked. After scanning the web to see what free info is out there to to teach you support and resistance I see that the info available barely scratches the surface. Therefore I will use this week to illustrate the concept.

This week I will be focusing my teaching on support and resistance. If you are new to trading, this is where you should start. This is the first level of knowledge that a trade must have in order to be a successful trader. So today I'm giving you the support and resistance levels for this market and I want you to watch how the market reacts to these levels.

Any entry or exit decisions should be made at these levels. intra-day trades should be made on intra-day chart pivots off these levels.If you enter between these levels you risk will be back to the prior level.

OVERHEAD RESISTANCE
3462
3540
3610
3677

UNDERLYING SUPPORT
3411
3340
3253

Jerry
EMAIL ME

AUD/USD ANALYSIS

This pair is sitting at the upper trendline near the high of April 19. If we get a close above the upper trendline Audie shorts are in for some serious pain.All major indicators including moving averages are signaling up. We may get a short term bounce down off this upper trend line but all signals are pointing up right now.

The market has closed back above 23% fib retrace after attempting but failing to pullback to 38% from the upswing that began March 5 and ending April 18.So now there is fib support at 23%, and also double bottom below 23% the current up move is off a double bottom, the upper bollinger band is expanding.The market has closed above 61% fib retrace from the May 15 high and will soon test 100%. When you get a pullback that closes above 61% retrace it is a good signal for trend termination and even more certain when there is a 100% retrace.

The market has completed an A-B-C Elliott wave corrective swing from the March 5th up move and volume is maintaining it's average flow.Short sellers can hope it pulls back to the 10 period moving avg around 8225 that is still below the 20 period moving avg but is pointing up in an attempt to cross back up through. It current posture is providing support.

To summarize; there are many more reasons for this market to go up than down. The reaction at the upper trend line will decide the battle between shorts and longs. A close above the trend line will have many shorts buying back to close their position and thus, this additional short covering will propel price upwards from there.At the moment, there are a lot more reasons to buy this pair than to sell it.

JERRY

EMAIL ME

STOP HUNT TRAP IS SPRUNG

LOOK AT THIS 30 MIN CHART 15 MINUTES AFTER THE DATA RELEASE. THIS IS THE REASON I USUALLY SIT THEM OUT. THIS IS TOO MUCH LIKE A CASINO FOR ME. WHY GO THROUGH THIS WHEN THERE ARE SO MANY ORDERLY , PREDICTABLE MOVES FOR US TO TAKE ADVANTAGE OF. THIS IS GUT WRENCHING NO MATTER WHERE IT GOES FROM HERE...

JERRY

U.S. TRADE DATA

Well I guess I will sit this one out. I use the euro/usd and the gbp/usd as a barometer. The market seems to have it's poker face on.

There are a couple of subtle hints though that makes me lean towards a dollar bearish release.

the 4hr has formed an internal bear pivot on the gbp. Since this bear pivot is inside the range bar from yesterday's rise this pivot is questionable as the top of that range bar is the true swing bar.

Secondly, the last 4hr bar closed down on higher volume but did not close below the low of the prior bar. This is a volume divergence on the 4hr. This is an indication that selling volume has dried up before the release and supports yesterdays bullish volume divergence on the daily chart where we had an up close on lower volume to indicate selling volume had dried up on the daily.

The same profile is in effect with the Euro. So, I could be wrong but I smell a bear trap setup before the news release. But with so much data coming out today and the convergence of signals not being conclusive, I will sit this one out because I only trade based on high probability.

Jerry
EMAIL ME

U.S. PAYROLL DATA

The market is waiting for the payroll data from the u.s. at 8:30 am est. but that's not all. there are a total of 11. yes 11 data reports coming out of the U.S. today.

That's a lot of opportunity to shake traders out of their cash. I don't see the market doing anything until then. We will see what the setup looks like 30 min before the release.

However, the daily charts on both the euro/usd and the gbp/usd shows that selling has ended and the momentum has switched from down to up on both of these pairs. But everything that has gone on for this week has just been positioning for this payroll report. As far as reports go, this is one that sets the tone for direction for the next couple of weeks so it is one of the monster reports.

The euro/usd formed a bull pivot at the close of yesterday's trading but did so on lower volume which makes it more suspect than usual because of the data coming out.

What should concern the trader is the amount of other data to go with it which will allow for stop hunts with news as the excuse throughout the day. The best advise I can give you now is to keep your bullets in the chamber until the report or just before the report when you can see how the market has positioned itself for the data.

But the inside operators always know in advance so based on the subtle change in the volume profiles my bias at the moment is against the dollar and I anticipate dollar negative news.

But all in all the picture is giving conflicting signals so I consider it a weak bias at this time because the weakness of the down volume could just be a byproduct of many traders waiting this week out for this big news data.

I won't know until 30 to 15 minutes before the data if I will take a position or sit this one out.

Jerry
Email me