Trading Excellence

Good input as usual Galactisol... I note that your short term is 3-5 days whereas mine is moving in that direction... from mostly daytrading to swing. Did you find the Elliot Wave info. fits with what you are doing currently?

The USD/CHF picture now needs an update as the pattern may have failed (it "truncated" to use an tech term) to reach ideal target before moving up substantialy. I'm not sure what moved it so quickly, something fundamental perhaps. I would have expected it to possibly drop from about 9975ish but its up to 0044 now.

Same basic thing with EUR/CHF and GBP/CHF due to USD/CHF, a less than ideally complete Elliot pattern... normally its the USD/CAD that seems to lead the way with ambiguity :)

The U/CHF could drop from 0050 to do a double bottom and complete what pattern is generally expected as ideal with Elliot Wave counting however the determining factor wil be fundamentals I suspect. Hence the focus on ideal entries and conservative exits in case the 5th wave impulses fail. Note in picture below that wave 4 is high, almost too high to be considered a 4. I sold anyway with small stop hoping it drops at least some, probably to 1.0000 or close to. So the ABC up for 4 proposed could be a 1235 up instead. By the weeknd it will probably be confirmed as one or the other.
 

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USD/CHF rose more than when I sold, hitting a small position with close stop @ 65 perhaps I should have scalped going against a big push so quickly at less than ideal bouncepoint. Caught the bouncepoint on G/J though and took 42 pips selling. Now watching U/Chf again for another safer sell opportunity as it hovers in the mid 80's.

NZD seems to be struggling but has better interest rates than many currencies, the Elliot Pattern seeming to be a bit unfinished an upward trend.
 
By Joe Schneider

April 10 (Bloomberg) -- Canadian Finance Minister Jim Flaherty said he expects ``significant discussions'' on the global credit crisis when Group of Seven ministers and central bankers meet tomorrow in Washington.

The talks will probably focus on the ``need for disclosure'' by companies selling mortgages and other securities, and ensuring such products are subjected to ``the best evaluations possible,'' Flaherty, 58, said today in Toronto at a luncheon hosted by the C.D. Howe Institute.

Finance ministers from Canada, the U.K., the U.S., Japan, Germany, France and Italy are scheduled to discuss the credit crisis, including how to encourage financial institutions to provide more details about the risk to their assets. G-7 officials also will meet with bank executives.

A meltdown last year in the Canadian asset-backed commercial paper market, which caused the freeze of C$32 billion ($31 billion) of securities, shows the need for a single securities regulator in Canada, Flaherty also said.

``The primary responsibility in this situation has been that of provincial regulators,'' he said.

Also of concern to the G-7 is the slowdown in the U.S. economy, prompted by subprime-mortgage defaults and the worst housing-market slump since the Great Depression. The global economy faces a 25 percent chance of falling into recession, the International Monetary Fund said yesterday.

`Longer and Deeper'

The economic decline in the U.S. will likely be ``longer and deeper than anticipated,'' Flaherty said, adding that Canada will ``manage'' amid weaker demand from its main export market.

Flaherty said his government's tax reductions -- including cuts to the national sales tax, taxes on businesses and personal income taxes -- are helping to boost the domestic economy.

``We will reduce taxes further, as resources permit,'' he told the Toronto audience.

Flaherty also repeated calls for the Ontario government to reduce business taxes to 10 percent by 2012 so Canada can promote itself as the jurisdiction with the lowest business taxes among the G-7.

To contact the reporter on this story: Joe Schneider in Toronto at jschneider5@bloomberg.net.
 
U/Chf (long)


Maybe excellence, what we're trying to achieve, has more similarities than we might think. The only trade I found on yesterday evening (East Time) that might be worth the bet was the same double bottom you wrote of. I didn't take it in the end because I thought it was a bit late and got worried about RRR issues.
I think there is an opportunity there! There a to types of money still coming into this pair: Carry (stocks' bias, in my opinion, will be up for somedays as Stochastics on daily charts are oversold and turning back); Interest Rate Differencial (though in favor of Chf, this type of moneyflows usually take guidance from Eur/Us and it doesn't seem like it has much room up for the next days, it is simply so overbought in weekly and monthly charts that don't expect many to put in their money and in a longer timeframe I concur with K. Lee of Fx Daily it should be more like a narrow range than really a downside correction); Technically I think it will go up, with a very similar analysis to yours.



Aud/U (Short)

Still waiting for the daily stochastics cross-over below 80, but want to take profit right away after, because weekly charts show strong tendency on the upside, already put RRR aside and started focusing on a chance to get out with some profit.



Eur/Aud (short)

The daily charts movement is in line with expectations, very volatile (it's really in this pairs nature for the last 2.5 years). Got watch and see if developments are in line with past posted expectations. Also I like this one in terms of portfolio risk as I'm even on Aud positions.


Eur/Chf


Just a little word on this one. I was right, you got out at the exact momment, congratulations once again!


U/Cad

The time has come, it found resistance just above the 20-day SMA + doji candle-stick pattern + daily stochastics are overbought and in my view, preparing for the bearish coss-over. Hoping to take half at 1.0008 and going to think this weekend on a good point to take the rest out, at a profit I hope.


Elliot Wave

Haven't started using it because want to learn more about the indicator before incorporating it, but it should be soon I'm almost finishing a book I'm currently reading and then will start the Elliot Wave one...





:cool:
 
Small note: FX Daily opinion I mentioned is Kathy Lien's, in case u want to take a look at the site and articles (worthwhile opinion). Also has a book, haven't read yet, but expect to, later (about day trading Forex).


USD/CHF

Technical analysis is all about probabilities. Sometimes it fails, specially when we are talking about carrytrade. though Fx is very respective of technicals the same doesn't apply so scrupulously to stocks, eventhough holding something short on stocks, I thought it wouldn't go down that was the sentiment earlier. But GE is big blue chip and consumer confidence can make a difference and does make a difference when readings come as low as it has been for the last 16 years.
Still the bottom technical pattern hasn't been broken. Anyway, some earnings bad news might trigger further down slide andnext week we have PPI and CPI, at least... None of these events are as startling as past ones that spurred spectacular price falls (though yesterday's Lehman fund seizure could've been interpreted differently).
 
By Haris Anwar

April 11 (Bloomberg) -- The Canadian dollar's link to commodities has been weakening as investors shift their focus to the global economic outlook amid the credit turmoil rooted in U.S. subprime mortgages, according to RBC Capital Markets.

Canada's dollar surged last year to 90.58 Canadian cents per U.S. dollar on the strength of soaring commodity prices. The currency stalled this year, though prices of crude oil, gold, and wheat continued to rise. Commodities account for about half of Canada's exports.

``The foundation for the Canadian dollar has been eroding,'' David Watt, a senior currency strategist in Toronto at RBC Capital, said in an interview. The firm is a unit of Canada's largest bank. ``The correlation between the Canadian dollar and commodities has broken down as the focus shifts to global growth.''

The currency, known as the loonie after the image of the bird on its one-dollar coin, has declined 2.48 percent this year to C$1.0231. The Bank of Canada's commodity price index touched 267 on March 12, the highest level since at least 1972.

The Canadian dollar will weaken to C$1.10 by the end of 2008 as global growth declines and the Bank of Canada lowers borrowing costs further, Watt said.

The central bank cut its benchmark interest rate a half- percentage point on March 4, to 3.5 percent, to spur growth as the U.S. economic slowdown hit Canada's exports of manufactured goods. It was the third reduction since December.

The rate will fall another half-percentage point in the second quarter, to 3 percent, according to the median forecast in a Bloomberg News survey. Policy makers are scheduled to meet next on April 22.

``With the downside risk dominating the global outlook'' and ``the Bank of Canada poised to ease further, the backdrop for the Canadian dollar is deteriorating, setting the stage for'' a weak loonie, Watt wrote in a note to clients today.

To contact the reporter on this story: Haris Anwar in Toronto at hanwar2@bloomberg.net.
 
By Chris Young and Lilian Karunungan

April 11 (Bloomberg) -- The Australian and New Zealand dollars completed a weekly gain as rising prices of commodities the nations export such as coal and iron ore bolstered speculation their economies can weather a global slowdown.

The New Zealand dollar pared its weekly gain after an industry report today showed home sales slumped to a seven-year low last month. The Australian dollar traded near its strongest in three weeks and the New Zealand currency at a two-week high as the UBS Bloomberg Constant Maturity Commodity Index, a gauge of 26 commodities, advanced for three straight weeks.

``The commodity income continues to keep both economies stimulated,'' said Richard Grace, chief currency strategist at Commonwealth Bank of Australia in Sydney. ``Interest rates are at quite attractive levels and you've got softness in the U.S. dollar. The combination of those things keeps the currencies well supported.''

The Australian dollar bought 93.10 U.S. cents at 4:34 p.m. in Sydney, compared with 93.42 in late Asian trading yesterday and 92.28 cents a week ago in New York. The New Zealand currency bought 79.81 U.S. cents in Wellington from 80.16 cents in late Asian trading yesterday when it reached 80.26 cents, the highest since March 28.

The Australian currency rose to within two cents of its 23- year high this week as local producers won a tripling in price for coking coal and are getting at least 65 percent more for iron ore following contract negotiations.

Exports of raw materials contribute about 17 percent to Australia's economy. New Zealand gets more than a third of its export income from meat, wool and dairy products. Fonterra Cooperative Group Ltd., the world's biggest exporter of dairy products, forecast today a 64 percent increase in its milk payment to its farmers after drought in New Zealand slowed a decline in world prices.

Strong Commodities

``Commodity prices remain supportive'' for the currency, said John Horner, a currency strategist at Deutsche Bank AG in Sydney, in an interview with Bloomberg Television. ``In that environment we continue to see the Australian dollar to move higher in coming weeks.''

Melbourne-based BHP Billiton Ltd., the world's biggest mining company, won a 220 percent increase in the price of coal sold to ArcelorMittal, the largest steelmaker, according to UBS Investment Research on April 8.

The Australian and New Zealand dollars are favorites of carry trades because the nations' benchmark interest rates are at 7.25 percent and 8.25 percent, respectively, compared with 2.25 percent in the U.S. and 0.5 percent in Japan.

In a carry trade, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the borrowing and lending rate. The risk is that currency market moves erase those profits.

The Dollar Index traded on ICE Futures in New York, which compares the currency to those of six trading partners, fell to 71.997. It touched an all-time low of 70.698 on March 17.

The Australian currency will rise to 96 U.S. cents by June and the New Zealand dollar will advance to 82 cents, Grace said.

Housing Data

The New Zealand currency fell today after the Real Estate Institute of New Zealand Inc. said the number of homes sold dropped 53 percent from a year earlier after sliding 32.1 percent in February. The local dollar also fell after the government blocked a bid by Canada Pension Plan Investment Board for a NZ$1.8 billion stake in Auckland International Airport.

Traders are betting the Reserve Bank of New Zealand will cut its record-high 8.25 percent benchmark interest rate this year as a cooling property market reduces consumer spending and slows inflation. A report this week showed business confidence dropped to a 33-year low in the first quarter.

``The direction of the New Zealand economy points to the downside, and the economic data is heavy on the currency,'' said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. ``Initially, the currency was sold on the news the Canadian bid for the international airport was vetoed by the government.''

Traders expect the central bank to cut its benchmark rate to 7.5 percent in the next 12 months, according to a Credit Suisse Group index based on trading in interest-rate swaps.

Bonds

Australian government bonds fell, snapping a two-day advance. The yield on the benchmark 10-year bond rose 8 basis points to 6.14 percent, according to data compiled by Bloomberg. The price of the 5 1/4 percent bond due March 2019 fell 0.574, or A$5.74 per A$1,000 face amount, to 92.968. A basis point is 0.01 percentage point.

New Zealand's government bonds were little changed. The yield on the 6 percent note due December 2017 held at 6.47 percent, according to data compiled by Bloomberg.

To contact the reporter on this story: Chris Young in Sydney at cyoung12@bloomberg.net; Lilian Karunungan in Singapore at at lkarunungan@bloomberg.net

Last Updated: April 11, 2008 03:02 EDT
 
AUD/USD could bounce up more than what it did the first time i hit the trendline and reversed as shown by red "c" however if it doesn't then the ABC down will expand and reverse further down at an area that I don't have analysis shown for in the picture. I prefer the first bounce off trendlines and in the case of the AUD/USD it was more than 50 pips. I was away from computer when it happened or would have taken the trade as a buy at 9275ish and exited a partial position at about 25-30 pips profit and left remainder in to see if the AUD/USD goes much higher.

The black 123 is possibly a larger wavecount that could end up as a 5 wave set up a few hundred pips higher. The red ABC down seems clear although there is a lesser chance that it is a 12345 down and the black 123 is an ABC up before large drop.

In other words I hunt for bouncepoints and take profits no matter if I'm right or wrong on larger scale. The developing habit of always leaving a portion in trade is to catch the larger trend in a big swing if analysis is right. Hope that is clear.

Good weekend!
 

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Hope u enjoyed ur weekend!


Perspective for the week


Most pairs seem to be in the late stages of trends (daily timeframe). Not really expecting much action to get in, just occasional narrow range small oportunities.
Looking for some kind of a retracement on Eur/Usd, to get in.
Stocks are more likely to get into range bound trading, than it was a week before. S&P should touch lower bollinger daily band and probably bounce back and my guess is it would be somewhere around tomorrow or thursday with readings from inflation indicators. As of today, CPI (or the harmonised version for EU area) is comming in very strong for France and Italy, not so much but still alarming for GB. I'm thinking if it is so tough for Euro zone, it should probably reflect the same tendency on US reports for inflation.


Aud/U


Liquidated my position, as it was counter to weekly trend, @ .925 (30-40 pip profit).


Eur/Aud

Still in expected ground. But it should get into narrow range trading by this week on daily charts. Upper daily bollinger band is getting lower which is a good sign, but still have to wait and see.


Carry trade

Oportunities might come along in anticipation of S&P bounce-off from lower daily bollinger band. But it would still be a risky play since in an events-driven environment, any strong news might start a new bear slide. And in this market technicals can be overturned in an easier manner. Also, here my focus will be on earnings (Goldman Strategists are expecting "Awful" readings) that might move the markets.
Even if there are no good trades, it will be an opportunity to test our patience and nerve!




:cool:
 
The weekend was good albiet busy, thanks. Too busy for analysis unfortunately. I don't have the lifestyle in close enough conformation to trading yet.

There's a bouncepoint looming on the CAD/JPY at about 100.00 and if at computer I'll contemplate selling with enough to take partial position off at 30-50 pips and leave the rest to see if it drops well rather than expanding the pattern up into a larger one. That correspondes with the U/J reaching a sell point at above 101.75 and with the U/CAD that appears ready to rise a bit at least from current 0175 area.

G/J seems to be working down for a bit yet so selling on peaks and exiting on lows with respect to the Elliot pattern has proven good and hopefully will again. Currently it's at 199.55 and could drop to 198.50 area again.
 
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