BZ1D Trade

Buy EURUSD @ 1.4818 – 1.4865  SL:  1.4716
Scale2:  1.4770
Scale3:  1.4738

Notes: This trade is from Blue Zone (Daily Chart).  If it works out, you should plan to be in this trade for several weeks or more.  I’ll make a call at some point to close 1/2 of this position for a risk free ride.

Update: 15 November 2009 @ 17:48 CDT – This trade is up by 90 pips on the first entry (worst case scenario).

Trade Management: Close 1/2 position when price reaches 1.5016.  Leave the stop loss where it is and leave both scale-in limit orders in.

Update: 16 November 2009 @ 17:23  Earlier today I closed 1/2 of this position.  This is now a risk free trade.

Trade Management: Updated 19 Nov 2009 – Move Stop Loss to 1.4775

Watch for Trade Management Calls on this post.

I’m placing the following trade.  Video to follow:

Buy USDJPY @ 89.61  SL: 89.46  TP:  90.37
Risk = 1%

The COT data is moving in a more predictable pattern now than in the last few weeks.  As I predicted last week, the commercial traders have started to liquidate their long positions on USD futures.  It will take a few weeks for them to liquidate these positions without tanking the value too quickly.  This indicates USD strength for another few weeks vs the Euro, CHF, GBP, AUD, and CAD.   JPY futures seem to be picking up favor.  The JPY Long index moved from 57 to 77 last week.  The COT data this week supports last week’s candles nicely.  I’ll trade in the direction indicated by price action on the weekly and daily candles.

EURUSD

Weekly Bias: Bearish

Probable Reversal Zones:

R: 1.4313

R: 1.4447

R: 1.4715

S: 1.4050

S: 1.3894

S: 1.3742

Strategy: Sell rallies at PRZs and resiustance levels.   Last week’s long legged doji followed the preceding week’s shooting star.  The COT data still points to a strong USD and a weak EURO.  We’re still in sumkmer trading so I’ll be cautious.

GBPUSD

Weekly Bias: Bearish

Probable Reversal Zones:

R:  1.6672

R:  1.7031

R:  1.7517

S:  1.6267

S:  1.5980

S:  1.5730

Strategy: Sell rallies to Bearish PRZs and Resistance levels on lower time frames.  Last week’s cnadle followed up the shooting star nicely.  If it were a couple of weeks later in the year, I’d probably start building a short position on this pair.

USDJPY

Weekly Bias: Bearish

Probable Reversal Zones:

R: 95.87

R: 96.99

R: 98.12

S: 94.03

S: 93.10

S: 92.28

Strategy: Sell rallies to PRZs and resistance levels on lower timeframes.  UJ printed a DCC on the weekly.  It was just a few pips away from being a bearish engulfing pattern.  I’ll enter a short order at the 61.8% of last week’s price action with stops above the weekly high.

USDCAD followed up the preceding week’s hammer nicely.  Price began retracing from the daily PRZ at 1.1017 in the closing hour.  Current technicals and fundamentals point to a bullish week for USDCAD.  I’m looking for an “early” continuation of that retracement down to the  1.0970 – 1.0940 area then a re-test of the 1.1020 level.

Here are two possible early week trade setups:

Enter longs on a confirmed breakout (1-2-3) of the 1.1017 level with stops below 1.0988.  Target   1.1168.  Move stops to break even when price reaches 1.1079.

Enter shorts on a confirmed reversal (1-2-3) of the 1.1017 level with stops above 1.1045.  Target 1.0924.  Move stop loss to break even when price reaches 1.0988.

COT Data:

USD:  93

CAD:  13

Crude Oil:  43

Potential Reversal Zones:

1.1744 (W)

1.1441 (D)

1.1300 (D)

1.1117 (D)

1.1081 (MP)

1.1017 (D)  (Look for a 1-2-3 continuation for a long opportunity here, 1-2-3 reversal for a short)

1.0997 (Current)

1.0924 (D)

1.0800 (D)

1.0772 (WP)

1.0626 (D)

—

D = Daily PRZ

W = Weekly PRZ

MP = Monthly Pivot

WP = Weekly Pivot

Fibs:

1.1040 38.2% (Weekly Swing)

1.1168 50% (Weekly Swing)

1.1295 61.8% (Weekly Swing)

1.1192 23.6% (Weekly)

Pivot Point: 1.6389

S1: 1.6311
S2: 1.6267
S3: 1.6189

R1: 1.6433
R2: 1.6511
R3: 1.6555

Notes: We’ve pierced the daily pivot to the bull side and the market has rejected it. The 1.6350 level has been tested 4 times in 24 hours. If it is tested again in the next 12 or so hours, I doubt there will be enough buy orders left to support this level. Look for price to drop to 1.6250 level (1.6246 is my calculation) in the next 24 hours. Any shorts should be placed at the pivot with stops above the most recent high, or on a breakout of the 1.6350 level with stops just above 1.6389.

Pivot Point: 1.4076

S1: 1.3957
S2: 1.3889
S3: 1.3770

R1: 1.4144
R2: 1.4263
R3: 1.4331

Notes: Look for shorts from 1.4080 with stops above 1.4110. Target 1.3957 then 1.3889. Last night, I called for this pair to drop to the 1.4000 level, and price tested 1.4000 (1.4007 actually). Nothing tells me that this pair will turn bullish today or tomorrow. Look for the turn around at the pivot point, which is in confluence with the 23.6% fib and a key S/R level.

Pivot Point: 95.08

S1: 94.79
S2: 94.39
S3: 94.10

R1: 95.48
R2: 95.77
R3: 96.17

Notes: There is a significant conflict between different timeframes on the Yen. We’re trading below the pivot point, but the daily candle close was bullish (higher high and higher low). The daily is at the 50% fib however, so a turn to the downside would be understood. If this is the case, you can expect a large downward push.

Note: Taking the “safe” trade, this was never picked up. If you still have a long in, cancel it now.

Pivot Point: 1.6482

S1: 1.6409
S2: 1.6277
S3: 1.6204

R1: 1.6614
R2: 1.6687
R3: 1.6819

Trade Idea: GBPUSD has been trading in a wild range for the last few days. Look for a quick sohrt down to 1.6482, then a turn around. Place longs at around 1.6480 with stops BELOW 1.6445. Target 1.6548. If you really want the safety net, trade this like a retracement trade and enter your pending long order after price drops below the entry price, and let the market pick you up when the market is already moving in your direction. If you choose this trade style, place your stops 10-15 pips below the most recent swing low (or below 1.6445) which ever is smaller.