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2009 October

October 27th, 2009 @ 3:16 pm by The Geek

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I hate it when my plans don’t work.

I always knew the truth is out there. Just like Mulder from the X Files.

Moments after i released yesterday’s article, the price sliced through the trendline and way below! This was a plot to rob me of my bragging rights!

Luckily, i had my safety belt on. Proper money management.

If you did too, you would have survived to trade another day.

Remember NO one can ever predict 100% what will happen next in Forex.

Let us see.

eurusd

The dollar bashed away all the support lines like a race car dashing to avoid tolls!

sp500

Our emotional friend finally turned depressed. Dropping all sentiments right up to 1060′s doors.

We may bounce a little here so watch out for it.

Oil is resilient at $77 while Gold decides to join S&P 500 for a down ride. It currently hangs around $1038.

***

While the bulls whimpers due to the wounds, the fundamentals supporting the case for a weak US dollar still exist.

The deficit, the foreclosures, the failing banks, etc

This may be a minor correction and some traders have called this a chance to get in cheap for the train ride north.

At the current levels, any brave bulls will need to attempt 1.4840-14860 again.

The victorious bears may try to take this below major line 1.4800.

It is important to note that many of us are on margin accounts and hence such moves are amplified.

In the world of the big boys, this may be a mere knock on the bullish trend.

It is important to understand this and to continue to monitor the clues of the market.

There have been talks that this sell off is simply based on rumors.

This is not a surprise as i really mentioned that this week is laden with US news.

If so, we may resume the bullish trend soon.

Even more so should there be another rate hike soon by a central bank since RBA opened the doors to it.

I will leave Mulder to investigate on the rumors while i trade my chart.

***

Have you ever wondered if there are aliens out there in space?

I always do.

Not that i want them to come to Earth and do an Independence day scene real life, but imagine what will their society be like?

Do they have forex? LOL

Trade SAFE!!! ( I want to really say this again. If you got your hands burned yesterday, then you have not been using proper money management. GO AND READ MY STORY ABOUT TOM and trade only when you are ready. PLEASE money is hard to come by. )

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October 27th, 2009 @ 1:18 am by Setyo Wibowo

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The EURUSD had a significant bearish momentum yesterday, bottomed at 1.4844 and closed at 1.4863. The CCI bearish divergence I showed you on Saturday give us a valid signal about bullish exhaustion and bearish momentum. On h4 chart below we can see that price violated the bullish channel to the downside indicating potential bearish view.

eurusd4hchart

On my daily chart below we can see that we are in critical phase where price now testing my key support level 1.4850. Break below that area could trigger further bearish momentum towards 1.4450 in medium term outlook. The bias is bearish in nearest term but we need a consistent move below 1.4850 to confirm further bearish correction scenario at least towards 1.4700 area. Immediate resistance at 1.4920/50 area. Break above that area should keep the medium term bullish outlook intact but become unclear in nearest term.

eurusddaily

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October 27th, 2009 @ 1:08 am by Setyo Wibowo

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EURJPY Forecast
My concern about EURJPY is in transition and we need to wait for further development proved to be right. On daily chart below we can see that price failed to break the upper line of rectangle area at 138.68 and had a bearish momentum. I see interesting relation between the upper line of the rectangle area with the CCI, as you can see in my daily chart below. Every time price failed to break above the rectangle and CCI in overbought area, we had a significant bearish momentum towards the lower line. Now I am expecting the same thing, a bearish momentum at least targeting 136.26 area in nearest term. Only valid break above 138.68 area should lead us into new phase of the bullish scenario. Immediate resistance at 137.70 area. Break above that area should trigger further bullish momentum re-testing 138.68.

eurjpydaily

GBPJPY Forecast
The GBPJPY had indecisive movement yesterday. The pair attempted to push lower but failed to break convincingly below my support at 149.40 so far. I think we are in no trading zone but I am expecting another downside pressure re-testing 149.40 before aim for 147.03 area. Immediate resistance at 151.16 (yesterday’s high). Break above that area should trigger further upside pressure re-testing 153.20.

gbpjpyh4

AUDUSD Forecast
The AUDUSD continued it’s moderate bearish momentum yesterday. For me, the fact that price able to move away from the bullish channel indicating potential downside pressure testing 0.9090 area but overall we still in range area of 0.9270 – 0.9090 area. Immediate resistance at 0.9180 – 0.9200 area. Break above that area should trigger further bullish momentum re-testing 0.9270.

audusdh4

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October 27th, 2009 @ 12:59 am by Setyo Wibowo

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GBPUSD Forecast:
The GBPUSD made indecisive movement yesterday, made a Doji on daily chart. My technical strategy yesterday, about to place a short position around the upper line of the bearish channel worked fine, as you can see on daily chart below, that area is a good resistance area and that area remains a good place to keep short with tight stop loss above it. I still prefer a bearish scenario at this phase, with medium term technical target at 1.5800 area. Immediate resistance at 1.6394 (yesterday’s high) and around the upper line of the bearish channel. Break above the bearish channel should lead us into no trading zone as price might start to regain it’s bullish momentum once again, and nearest bias would become unclear for me. The bias remains bearish in nearest term and still targeting 1.6113 area.

gbpusddaily

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October 27th, 2009 @ 12:52 am by Setyo Wibowo

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USDJPY Forecast:
The USDJPY attempted to push lower yesterday but failed to move below my key support level 91.40 and closed higher at 92.23 indicating bullish momentum is still there. However, like I said yesterday, I will keep stay out for now as 92.50 area remains potential strong resistance. Only valid break above that area could lead us to further bullish scenario. Key support level also remains at 91.40. Break below that area should trigger further bearish momentum back towards 90.50 area. CCI in overbought area and heading down on daily chart suggesting potential bullish exhaustion.

usdjpydaily

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October 27th, 2009 @ 12:30 am by Setyo Wibowo

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USDCHF Forecast
Finally, my trendline resistance was convincingly violated to the upside and price now traded above 1.0166 resistance area (now become support) indicating serious threat to the current bearish outlook and potential bullish reversal scenario. The bias is bullish in nearest term targeting 1.0280 area. Immediate support at 1.0166 – 1.0120 area. Break below that area should lead us into no trading zone and price might regain it’s bearish momentum once again re-testing 1.0040 area.

usdchf4hchart

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October 26th, 2009 @ 3:13 pm by The Geek

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Happy Monday blues!!!!

Go grab your latte, grumble about the stack of work! Yeah!

Remember my surprise article during the weekend on the EUR/USD, everything seems to go according to plan so far.

You all know the drill when a plan of mine goes right.. but i will save it for tomorrow.

I will stay true to my teachings and not presume! You can never predict 100% forex and hence anything can happen in the next few hours. Save the boasting for tomorrow!

I have other things to boast in the mean time!

EVERYBODY! THREE TIMES!

I like it when my plan goes well!
I like it when my plan goes well!
I like it when my plan goes well!

eurusd

The currency pair respected my trendline today!

Bouncing off like a bear on a hot pan! ( PUN INTENDED BEAR FANS! :P )

sp500

Our emotionally disturbed friend the S&P 500 remains so.

Undecided, it ranges between 1080 and 1100. Is there scalping for S&P 500 ? hee

Gold tries hard to return to it’s glory of $1060 while Oil kissed $80 again!

***

With all 3 clues green today, i am looking towards a green day for the EUR/USD too.

Respecting the trend line is a good sign and this suggests that the bullish trend is not quite over yet!

However if you have been reading my articles, you will notice that the ranging scenario seems indeed to be developing.

1.5000 seems too dear to be left behind for now and the currency pair merely edges forward.

However i noted that a poorer than expected release from Germany today had little effect on the EUR/USD.

Traders merely shrugged it off like a annoying fly! Pretty bullish to me.

Bullish developments will need to take over 1.5063, today’s high followed by 1.5088.

Bearish attack if successful, should bring us under 1.5000 and close below it.

Lots of important US releases this week and hence watching the price reaction at these events will shed more light.

Remember to turn on your proper money management switch ok? :P

***

Headaches!!! Since 8 hours ago i have been plagued by it.

Looking at the com makes it worst but hey, nothing beats writing for you folks!

Was having a conversation with a friend about the current rally and he was saying… ” aye it is like this always at the end of the year.. watch what happens when the new year comes ”

YIKES!

but we wont be worried if we have proper mm right? hee

I bought a game over the weekend and i can’t play it due to the poor mouse response. My rig is ok so it is definitely the problem of the game! lol cost me like 24 micro pips humph!

See you soon and trade safe!

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October 26th, 2009 @ 12:10 pm by Matt "NewstraderFX" Carniol

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This is a bit off-topic as far as an immediate forex trade is concerned, but there’s a very relevant economic lesson to be learned regarding the debate over health care reform.

The cost of delivering health care is bound to go up no matter what the politicians decide to do vis a vis a government run program or any other solution they may come up with, and the reason is because there’s no way to improve health care productivity. Let me explain.

Productivity has to do with the efficiency with which a business or other enterprise can deliver goods and/or services to the market place. Productivity is a measure of output (for goods and/or services) per worker or worker hour. Obviously, the more output that can be gotten per worker, the cheaper is the cost to deliver a good or service, making that good or service more competitive in the market place as its price declines. Rising productivity is an essential element in keeping inflation down.

In general, improved technology allows a business to produce goods or services at a faster rate (i.e. more can be produced per worker or worker hour). Technology therefore is the key to increasing productivity.

For example, early in the 20th century, Henry Ford and other car makers were producing cars by hand, an expensive process which made the cost of purchasing a car too high for the average consumer. Ford’s big contribution to the automobile industry was the creation of the assembly line, which allowed more cars to be produced per worker hour at a cheaper cost of production. Eventually, the retail cost of a car was reduced to about $600, making them affordable to a large base of consumers.

In other words, a new technology (the assembly line) allowed for increased productivity.

The same thing happened throughout the 1990’s when the use of computers in business became more widespread. Businesses were able to produce more goods and services per worker hour because the improved technology allowed workers to do more per hour. Just as with the invention of the automotive assembly line, computers raised the rate of productivity for businesses which used them.

The delivery of health care to consumers however is a totally opposite story, because there’s no way for improved technologies to increase productivity (i.e. lower the cost of delivering the medical service). In fact, the use of new medical technologies in general only serves to drive the cost of health care delivery ever higher.

Up until about 1995, x-rays were the main form of diagnostic imaging. When doctors were looking for disease or injury, x-rays where the tool of choice. The cost of the average x-ray was low-typically about $100 for a standard chest x-ray. But then, a new technology called Magnetic Resonance Imaging (MRI) became widely available, and doctors began to use it because it provided a superior diagnostic image. Disease and injury were seen more clearly and doctors could look into parts of the body that x-rays could not.

All that was fine except for one thing; the cost of a typical MRI was (and remains) about 10 times the cost of a typical x-ray. In other words, the implementation of a new or improved technology did not result in an increase in the productivity of delivering health care to the marketplace place. In fact, it only served to drive the cost higher meaning that in economic terms,  improved technology resulted in a decrease in productivity.

There’s another factor which relates to the productivity of health care delivery; as new and more expensive technologies are developed it becomes incumbent on the doctors to use them. For example, because of potential litigation issues, doctors tend to order expensive MRI’s for every little ache and pain whereas before, they might have just ordered an x-ray. Doctors have to do this now because if they don’t order an MRI (or other expensive test), they run the risk of being sued for malpractice should it turn out that the patient has a serious problem which the MRI (or other technology) would have picked up.

Of course, in general the more services a doctor can provide, the more his or her income will go up. And if the doctor owns the MRI machine (or other technology), every test ordered is more money in his pocket. So, the incentive for the doctor is of course to order more and more expensive tests because by doing so, they decrease their exposure to potentially damaging litigation while increasing their incomes.

What all this means of course is that as far as health care is concerned, new technology tends to decrease productivity i.e. drive up the cost of delivering goods and/or services to the end-user, the health care consumer. In fact, there’s only one way to actually decrease the cost of health care.

In California, a study of the Blue Cross/Blue Shield insurance coverage’s revealed something interesting; approximately 20% of requested services were actually denied for coverage, meaning that the insurer refused to pay for the services requested. That drove down the cost of health care all right-California’s health care insurers turned about $10 billion in profits in 2008, helped in no small part by denying about 20% of the requested services. So, denying coverage is about the only way to reduce the costs of health care, at least for the insurer. For the purchasers of coverage, the costs only go up.

So, for those of you who are worried that government-run insurance coverage will result in the use of so-called “death squads,” that facts are that such things already exist in private health care.

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