Forex Course Currency Trading Commentary

Sept 21, 2004

As you can see, price tapered off and went sideways,

entering today’s session at M3. Today was supposed to

be an M2/M4 day; it was realistic to expect that price would

‘reach’ for M4, once it was provided support by M3. As

you can further see from the following daily chart, price

then ‘reached’ for Tom DeMark’s ‘down’ trendline. Were

price to penetrate it convincingly, that would be a

license to steal. Just load up the boat, and paddle like

heck. As at this writing, 9:45 am ET, that established

line has held, as strong resistance to price’s advance.

Once price violated M3 and the ‘ceiling’ provided by the

double top, it was clear sailing upstream 76 pips, the

average daily range for the euro I like to work with.

(See currency trading chart below)

Sept 22, 2004

If you look closely at the hourly chart (next slide),

you will notice that we have retraced 50% of

yesterday’s gains, which is a Fib phenomenon for

your Feb fans out there. Call it what you want,

but it works. Theoretically, that should be the end

of the slide. Fundamentally what this means is

traders either took profits, or chickened out. Too

much chocolate all at once post-FOMC. Once

price became overbought on MACD, and price

began to slide, that’s when traders would have

gunned for that Fib trade. MACD has now

neutralized on the hourly chart, and is bullish on

the daily chart.

(See currency trading chart below)

Sept 23, 2004

Weekly claims up and US data looking soft; hence we have

a strong euro today. Of course, you didn’t have to be a

brain surgeon to make money after my call yesterday,

wherein I said the swoon was probably over, having put in

a 50% retracement (noted below). We are now back up

above Tom DeMark’s ‘down’ trendline on the daily chart

that was breached the day before to the upside. By ‘filling

your boots’ I meant to ‘buy.’ Thanks to Gek McGregor for

pointing that out to me. Had you heeded my words

yesterday, your account would be healthier today to the

tune of ~ 83 pips (as at 9 am ET). We are presently above

the 200 moving average on the daily chart – and above

Tom’s resistance line (the previous ‘down’ trendline on the

daily chart).

(See currency trading chart below)

Sept 24, 2004

As you can see, the euro found support at M2,

right at the London open, which is interesting

in that today was declared an M2/M4 day – M2

being the projected low for the day. Pretty

cool, eh? That trade, up to news time, which

is when you want to be out of the market,

brought in 55 pips. The news this morning

related to durable goods basically meant that

U.S. manufacturers are faring quite well.

However, if you look at the DJIA and the Dow

transports, you will notice that the Dow is not

keeping pace with the transports. Translation:

The U.S. is shipping a lot of product around

the country, but more of it is from overseas.

Such divergence between the two indexes does

not auger well for the stock market, nor the U.S.

dollar or economy. I remain skeptical about the

robustness of the so-called economic recovery.

(See currency trading chart below)