The Wallace Trading Method

added: Nat Gas

don't think session analysis, correct or incorrect has a place with B&H trading, so
will leave it out. although this change to B&H trading is something I'm still working
on, s'ok at the moment, everything's working together, just wonder how it'll be when
there's corrections going on and everything's going in different directions

the JPY trade was right on a fibo level - I found out later but is finally rising again
similar with the Crude - it's on a fibo

Gold looks like it's formed an AB reversal base, which I recognized before the trade
was entered, but I've a longer timeline on it and the higher tfs still point down
the question is tho, how much of a loss to risk and stay in the trade ? especially as
the price could easily pop back up to 1620 again
I'll sit with the trade as a 'lesson' and see what happens. I could also enter a Buy as
in Canada a B and S can be entered on the same pair and cfds. not sure if I'd trade
a gold cfd, there's 3 different futures contracts, I haven't yet worked out the different
costs between them and the cfd, so don't know yet which is the best choice, gold's
cfd has a much higher margin requirement than the SPX500


For Thursday March 7/13

- DXUS$: Buy ~ 81.5850 ~ Hold
AUSUSD: Sell ~ 1.03182 ~ Hold
- EURUD: Sell ~ 1.31896 ~ Hold
AUSUSD: Sell ~ 1.03182 ~ Hold
GBPUSD: Sell ~ 1.51595 ~ Hold
NZDUSD: Sell ~ 0.83775 ~ Hold
USDCAD: Buy ~ 1.02137 ~ Hold
USDCHF: Buy ~ 0.92946 ~ Hold
-USDJPY: Buy ~ 93.4140 ~ Hold
- - Gold: Sell ~ 1573.69 ~ Hold
CrudeOil: Sell ~ 89.8200 ~ Hold
Nat Gas: Sell ~ 34.7000 ~ Hold
- - DJIA: Buy ~ 14059.0 ~ Hold
NASDAQ: Buy ~ 2746.73 ~ Hold
Rus2000: Buy ~ 912.000 ~ Hold
S&P 500: Buy ~ 1518.13 ~ Hold

3:40pm pst
 
For Friday March 8/13

omitting the trades list, if a trade takes place I'll just post it

writing a mini report for the weekend – observations on the 'ch- ch- ch- changes'

. . . . . . . . . . . . . . . . . . . . . . Prior . . . . Consensus . . . Consensus Range
Nonfarm Payrolls - M/M change 157,000 . . . 171,000 . . . . 130,000 to 225,000
Unemployment Rate - Level . . . 7.9% . . . . . 7.8% . . . . . . . 7.7 % to 7.9 %

Jim Santelli's observation on CNBC was that a weaker than expected number will
be read as positive for the stock markets - Fed's spending continues

my observation is that with the payroll tax changes, the employed are not so quick to
stop working, or give up their job, have dismissed thinking about trying to change jobs
and this has become a universal attitude with the US employed
it means there are fewer vacancies, fewer job opportunities, fewer hirings
I think the number will come in low, or low to middle, and the rate 'may', uptick

as far as the euro and $'s concerned; the $'s been stopped at what I think of as
an interim fibo level for the past 4 sessions, it could be the top of its range for the
present, but I'm stuck on seeing it hit the 83 - a dangerous attitude to have

so my attitude to the euro is I may add another Sell, up until I go to bed, or after the
NFP release, and if that's the case, I'll also add another Sell to the AUDUSD, but
the high side of the euro could go into the 1.3180s, ending the week there . . .
4:33pm pst
 
all trades closed except for 3 losing trades, and back to session analysis —
see attached for details

For Monday March 11/13

the DX$'s H was 82.945 . the D is up to a couple of 61s and a couple of time targets
but the C was 82.731 at the ml of a sec, which all suggest it'll keep going up
Wednesday the EU Parliament votes on the EU budget, if the budget is voted down
don't know but presume the news would be negative
together then more downside for the euro to . . . there's an area around 2.90 , 2.87-5
where there might be a bounce. the price could stay up for an hour, maybe the first
4H, but watch it as it may break down from the open. all in all, Sell
3:10am pst
 

Attachments

For Tuesday March 12/13

I don't believe a base has formed and a new rally is beginning, rather a correction
and feeding into the Budget vote on Wednesday, something similar to last week

so far the price's corrected to a 50 , there's a couple of 61s in the 1.3060s area then
above that the gl at 1.3080 , but I don't think it'll get that high famous last words
what I think may happen is the run up, then a decline to the NY open down to -
depends how high it gets but say 1.3020s , then a rally again into the close

don't know yet what time the vote will be announced, similar here to the NFP, even if
the budget's voted for doesn't mean the price won't sell off, there's no good reason
for it to rally and just another eu negative if the vote's against the budget

Thursday sees the ECB Monthly Bulletin, EU employment and the beginning of the
EU Economic Summit

continuing rally would I think have to break thru the 1.3080 and 1.31
so a possible Buy, Sell, Buy this session and Sell, for or on Wednesday
3:45pm pst
 
For Wednesday March 13/13

this is a tough correction to try and interpret much less second guess
a resolution to reject the budget adopted on 7 March representing the vast majority
of MEPs is itself now seeing some rejection, so the vote may be a 'yes - But' which
may or may not be interpreted as negative; announcement time not known

the EU Summit is Thursday and Friday and the way my analysis is going I think it
may be an up session today then a renewal of the downside

I think any rally would end on the eu open, downside first ? 1.3010ish ? into the
1.2990s ? upside, 1.3032 , 1.3045 ? then in theory the Sell, or, the vote's a positive
result and there's a rally and a close up day
4:35pm pst
 
the budget was voted down but not out I think, negotiations to follow

For Thursday March 14/13

the price finally broke down yesterday rather than on Monday as I'd thought, but not
as low as I'd expected, better late than never

what I'm thinking is the price goes down again and then turns up on Friday. not a lot
of downside, rally up a bit, the 1.2985 area till the eu open again then down

the weekly hasn't had a wave break yet and next week could provide one, but the
price could continue down on Friday which makes sense, rounds the week off for a
fresh start Monday; and the price could continue declining today without a rally

how low ? 1.2865 ? but also much lower, 1.2660-30 , and again, there's no reason
why the price shouldn't continue down next week
upside from here ? back up to 1.3060-+ ? that could happen too

however, given that the $ has popped the 83 , I'm inclined to think it will be travelling
higher on its way to 83.5 , and so will go with the continued euro Sell
3:30pm pst
 
For Friday March 15/13

'the weekly hasn't had a wave break yet' - should have stuck with that and not brought
the $ into it, although . . .

the $ did make a new H yesterday, the euro did make a new low; the $ has made
what looks like a reversal formation, the euro has made what appears to be a base

I thought we might have been out of the complexity but it's continuing. remaining in
the correction could see the euro travel up to the 1.3060 area, into the 1.31s area
and still be correcting. to become a correction wave on the weekly means closing
up next Friday at a higher level still, a correction that's part of the whole downtrend

so the price should continue up and remain up. I don't know there's anything that's
expected from the EU Summit and that the present price action is only 'waiting and
see' action and will resume the downtrend in this session, later in the day

looking for an up close whatever that price may be, or we will notice that the price is
declining and trade accordingly
4:06pm pst
 
For Monday March 18/13

what I'm thinking is, first, I don't know what the price is going to do, but working with
the idea that the $ upside hasn't finished yet

aside from the Flash, Zews and US stuff the main fundamental is the FOMC, and
while we do not expect any increase in the FFR, we focus on what the Chairman
may say, may not say, will repeat but re-phrased, leave unsaid, etc, etc, etc

so I have no price targets but expect a sideways churn, possibly, until Wednesday
when I expect/think the euro price wil resume its decline —
or do I have that arse backwards ?
1:30pm pst
 
att: http://www.xe.com/currencycharts/?from=EUR&to=USD chart of the euro dump
on Sunday/Monday
first Sunday I didn't look at XE prior to writing the analysis, not that it'd have made
a difference. what's amazing is how the price dropped about 140 pips and then went
back up by the same amount before the permanent decline began again
have to wonder if one should keep Any open positions over weekends, although the
a long term Sell of the euro from Feb 1 would have benefitted

For Tuesday March 19/13

the price has recovered getting on for 61% of the - chasm. the 60 has at present the
appearance of an H&S and if that's what the formation is, suggests another decline
of the price back possibly to the lows below 1.29 where it might, form a base; one
time target I have on that is midmoring eu time, 3am/6am NA time, begining a rally
from that low

another interpretation is the price drops and holds 1.2918 then begins a rally which
could begin on the next 4H bar

and what about the price based during the first two Sun/Mon 4H bars, has made a
primary rally and correction, and has begun to rally again which will ? close the gap

the price could also drop thru the LL 1.2881 and keep declining

the Weekly did get its wave break with the Friday close and imo's done enough for
it to continue down and break the 1.26

it's difficult to for me to believe the price will rally back up and 'close the gap', a gap
that's the largest I'm aware of for the euro, particularly since we're still waiting on
further possible consequences and repercussions of the action the Cypriot govern-
ment is undertaking, and an action that as yet remains unresolved . . .
4:40pm pst
 

Attachments

For Wednesday March 20/13

price bases during these first 2 ? hours - if it hasn't already, then a rally ?
not a lot of upside, 1.29-2920 , probably a Lot of sideways movement until the
FOMC then the decline, , , or could the price decline to the FOMC and then rally ?

price could of course continue declining; thinking Fri or Mon for 1.26 area with a
break around the 1.2770s
3:55pm pst
 
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