AUDJPY: Poised?

I don't have time to snip a chart or anything, however I'd suggest taking a few moments to analyze the AUDJPY.

What I see is the potential for a so-called "big W" on the 3 hour chart. You'll notice the right side of the W has a double bottom. If we do get the full "big W" we should see some dramatic upward movement over the week.

Fundamentally, inflation, employment and other indicators in Australia seem to indicate the need for the RBA to continue to increase rates. If any more hot growth news comes out prior to February we may see speculation on a 50 basis point increase instead of the widely expected 25 basis points.

In summary, look for a safe low-risk entry point if your analysis of the charts agrees (or even disagrees) with mine.

UPDATE: If you disagreed with me you'd be happy with this morning's (Jan 20) breakdown... though so far the next resistance point seems to have held.

Da Signals

It takes a lot of fortitude to use them but I think the signals blog is proving itself useful.

For example, right now we seem to have established a bottom in the recent AUDJPY downward movement.

So, especially under such a condition, we get good results if we see a signal and then look for confirming behavior. Basically, the signals are great lead-ins to a period of analysis.

No, they aren't all useful. As you would expect there will often be signals that are simply useless. The key point is that you don't have to be watching the markets all day long to take advantage of signals. You can simply fire up the charts and issue a yes or no decision several bars after they arrive.

Signals Blog Online

Just a short note to let you know that my new signals blog is online. Obviously this is a use at your own risk situation.

Robot Price Alerts

Anyway, when my robots notice various conditions they will post a message concerning the event in question.

The only notice type currently active may identify a situation that will either have a short term AUDJPY price rise offering a scalping opportunity or a longer term bottom situation if the pair is continuing an upward trend.

Skeptical About The AUDJPY?

I'm sorry you feel that way. Perhaps after looking at the following chart snip you'll think that you may have missed the boat.

See how the daily chart shows solid support since March? March! Hello, it's a little too late to be skeptical. The question you have to ask yourself is why has the AUDJPY been performing so well and how long will it continue to do so.


On another note, I'm going to start posting "signals" to a companion blog soon... perhaps as early as next week. I've already created the blog. These won't quite be signals but they will be alerts suggesting points of opportunity.

AUDJPY: Possible Consolidation?

It's nearly 9:00am EST and we didn't drop low enough to get a real double bottom. We may have begun a consolidation process between 73.50 and 70.25 while the market figures out whether the next move is up or down.

We'll have to see whether we continue to have lower highs and higher lows.

If we are consolidating, then it's not hard to spot the support and resistance lines that will be likely to provide opportune long and short entry points.

In short, opportunities for doubles, possible consolidation, and so on. Personally, I have a long term upward bias -- so take any of my opinions with that grain of salt.

EDIT: By the way, I'm generally looking at the 1hr when doing analysis.

AUDJPY: Long Entry Decision

I've been having some success calling the shots on the AUDJPY charts.

This morning we've been having a correction from yesterday's highs. While I've been hearing scuttlebutt on twitter concerning shorting the carry trades, I remain upward biased.

My view, the current drop in price is setting us up for a possible double bottom or simply a W shaped chart. Simultaneously, I do see some stochastic and RSI confirmation that this is likely.

So, I'd suggest keeping an eye on the movement. We are at or are approaching a long entry decision point.

Catching The Run To 71.00

Did you ride the recent run in the AUDJPY to 71?

I was lucky enough to grab and hold a chunk at 65.62 and I'm pondering whether or not I want to let it go.

We've just had a double top on the 15 minute chart. The 1 hour is oversold. I think we are going to get some bounces upward due to exuberance, but it seems about time for a pullback.

I've sold off the nibbles I also acquired on the way up. I think I'll try to sink my chunk. I'd really like to have some sunken carry trade chunks earning interest and I am long term bullish on the AUDJPY.

Be ready for a drop, perhaps today, likely before the weekend.

AUDJPY Signal

Okay, this isn't really a signal, but what the heck. It looks like the AUDJPY is positioned to head downwards on the 3hr, 1hr, 15min and 5min charts.

Yes, yes, I know. It doesn't actually mean it's going to do that. However, this does mean it's a good time to do your own technical analysis and see whether you see a reversal or a breakout.

Either will do.

Overnight Rally

I like to imagine I am in tune with the markets. My trading record may not agree with this minor flight of fancy, but nonetheless, it's much more rewarding to have a feeling of control.

This morning, waking up much earlier than normal, I thought I'd take a look at the section of the Forex world that I follow... the AUDJPY.

Aha, not only did we have a nice rally -- an echo of the DOW futures up by several hundred, but according to my chart it was the perfect time to take a nip. It looks like we're about to push above 58.70 and start another leg of upward movement.

It looks that way to me. Be warned, mileage may vary.

UPDATE: We have the upward break so now the question is... will we break 59.50?

UPDATE: We're around 50.20 right now... it looks like a test of ~59.50 is imminent.

UPDATE: We've just had a quick push up to ~59.50 and now it's slightly above...

UPDATE: I'm taking my profit... it's time to get ready for work and it looks like it's time for a down leg.

Carry Trade Musings

Did you see the carry trades collapse today?

Neither did I.

In fact, things looked downright orderly. Nay, they looked rational. Is this a trick or have all the truly skittish abandon ship at this point?

Be warned, I'm almost always too quick to look past current issues, discounting the ability of the current situation to cause additional convulsions before passing. However, with that said, I'm getting interested in the carry trades.

The AUDJPY, for example, has a lot of retail appeal in Japan. Over time the rate of return during rational market periods is very attractive. There is always a small but consistent upward pressure in this pair.

Both the 1hr and the 3hr charts (Oanda has a 3hr instead of 4hr time frame) could be interpreted as ready for an upward spike. Think I'm nuts? Then get ready for a downward spike.

Just keep in mind that carry trades wind up fairly slowly, most of the time, and unwind with great speed. Your opportunity for quick profit comes with panic and unwinding.

UPDATE: Now, Wednesday morning, we see a recent carry trade meltdown and coordinated rate cuts. Once again I feel compelled to point out that you might just be able to reverse my opinions and be profitable...

Open Your Eyes

With revived expectations of a bailout package to be voted on this Wednesday evening, it's not hard to spot some double bottoms and double tops on various charts. Okay, maybe not perfect classic formations, but nonetheless, worthy of note.

Obviously, there is no guarantee that the bailout package will be adopted. There is also no guarantee that these formations will complete and activate.

However, it would be foolish to ignore the possibility. Open your eyes, take a look, and find a way to profit from the bills adoption or rejection!

Bernanke's Signal

I think the Bernanke signal I highlighted a while back is batting 100% right now. You did catch the markets tanking because he was speaking to congress, right?

When Ben speaks... markets tank. It seems you can Bernanke on it.

Double Top Warning

It isn't here yet, and that means it may never arrive, but we are currently looking at a potential double top on the AUDJPY.

This means that the DOW could also be poised to give up some recent gains.

Obviously, the DOW can do what it wants, but if you are seeing gains right now and are thinking of jumping in, be wary.


Personally, I'm hoping for the downturn. If it happens according to "my" chart then it means that I'm able to take advantage of the movement. It also means that the AUDJPY will be "on sale" as it will eventually rise again. It will always rise again as long as the carry trade remains associated with the DOW.

UPDATE:

The rollover continues...


While anything can happen, ignore such signs at your own risk!

UPDATE:

I hope you were paying attention this morning...


The market has now made a double top and reacted to it. The DOW has followed/driven the AUDJPY (since I'm sure the overseas markets have a say in the matter too) and once again I have a strange feeling of "control" which is certainly misplaced.

The Bernanke Signal

If you haven't noticed, Bernanke has turned into a Forex signal.

The market will rise, anticipating that he'll say something useful, or helpful, but then he actually starts speaking and we get a precipitous drop in prices.

Of course, when rate cuts are announced we will get a momentary spike, but it will only be lasting if the rate cuts are deeper than the market has already built into prices.

Keep talking Bernanke, I've got a short position!

Amazing New Signal Devised

Based on recent performance this new signal operates at near 100% efficiency. From now on I'll blog about entering long and short positions in near real time. Whatever I do, just do the opposite. You'll be rich in no time!

I highly recommend grabbing my blog feed.