There will come a time in our “not so distant future” that I will shift my trades and longer term strategy to consider a strong USD. Not today though.
I ‘d originally posted / suggested that perhaps some time late Sept, that USD would finally find its near term low – and “do what currencies do” making a solid move in the opposite direction. The surge in USD buying over night will have taken out a large number of smaller players , and has also left me in the red on a couple of outstanding trades. Is this the start of the “real move” higher in USD? I don’t think so.
Yes we’ve seen a trend line breached, and yes the “likelihood of war” could certainly be the event that spurs true safe haven positioning ( of which USD still acts as the world’s reserve currency so…. ) – this still remains to be seen.
Does the “suddenly positive” data released this morning on U.S GDP as well unemployment claims have anything to do with it?
Would the fact that “gold has swung low on a monthly chart” ( a fairly significant dynamic when price has moved higher than last month’s high) provide an interesting point / price area to “shake the tree” a bit? Makes sense to me.
The key is not to make any big decisions until the picture is made clear. If a single day’s trading doesn’t go your way, drastically affecting your account balance – you’re trading far to large / leveraged.
We don’t do that around here.
I’ll let this “sell back off” and see where things sit later in the day / evening. My “hunch” is we’ve seen a lil surge/wiped a pile of small traders off the map, and that things will continue in the same direction.
(Wow, this topic is now obsolete and here I am late as usual.)
Hi Kong and All,
K wrote:
…do what currencies do making a solid move in the opposite direction.
The surge in USD buying over night will have taken out a large number of smaller
players.
Yes we’ve seen a trend line breached, and yes,the “likelihood of war”
…price area to “shake the tree” a bit?
…a lil surge/wiped a pile of small traders off the map, and that things will
continue in the same direction.
***End Quotes****************************
I agree. All of these items have nothing to do with the current, existing trend
however you define it. The captain begins turning the aircraft carrier on Monday to
finish by Wednesday. The same is true for larger trends.
I’m using multi length daily & weekly MAs for this discussion. Also, the time
horizon is day trading or short term swings.
Over the last twenty years very few news events, including most attacks and wars,
have had a lasting impact on a market or actually reversed a trend. Of course,
there are exceptions.
Hypothetically, yesterday’s report and subsequent sell off becomes tomorrow’s or
the next day’s buying opportunity(or vice versa). That is why I’m short Usd/Jpy and
Aud/Jpy.
My “proof” is extensive statistical analysis over a very large sample. The
conclusion is that a given day or week has a 50/50 chance of closing up or down in
agreement with the larger trend.
(N = 10 yrs of daily data each for u/y, u/c, u/e.
N2 = 20 yrs of weekly data for each of the same 3 pairs.
Trends were 4 different MA lengths for each day & week pair.
In all cases, a coin toss.).
I believe it is mostly accummulation/distribution to build big possies for big
players from the weak hands. I also believe it is the retail traders reacting to
the news & reports as if they really mean something.
By for now,
Dev