Monday, 27 June 2011

.236 Fib bounce

5.51 pm eurotime: Closed short postion at 1.4273

-eur+US$1.4289. Initial stop 5pts now at b/e. Obj the up sloping RL @ 1.4220-.1430. sell on confluence of horizontal RL ( thick) and D-sloping RL ( see middle chart and previous euro chart on Fri last). This position will be closed by end of Euro session regardless.

Friday, 24 June 2011

EURUSD...draw this yourself

Draw this fork using on weekly chart using pivots 1.3667 (approx) 21/Dec/04
1.1639 13/Nov/05 and 1.6062 on13/July/08 and you get the major ML in magenta pink in the two charts shown here. A break below it now looks likely.
PS: With a line of such importance it is not unsual to see 'gap' behavior on or near so i would not bet ( although i am not a betting person) against such a opening on Sunday evening however only a fool would be short of this market until we are out of this sideways coiling pattern and have a clean break of direction.


Thursday, 23 June 2011

USDX +GBP fundamentals

--Doom sayers zero in on pound

--Weak economy, scaled-back rate rise expectations dent sentiment

--Perceptions U.K. may waver on fiscal tightening another factor

      By Siva Sithraputhran     Of DOW JONES NEWSWIRES     

LONDON (Dow Jones)--If a stream of negative comment from investment banks this week is to be believed, the pound is heading for skid row as a confluence of factors weigh on the U.K. currency. Money flows are already pointing that way.

Data detailing the Bank of New York Mellon's custody activity shows a sporadic drip of pound sales since late April has developed into a torrent of outflows in the past week or so, as fundamental support for the currency has cracked.

The minutes of the Bank of England's June meeting, out Wednesday, capped a month of weak economic news and slashed economic projections.

The U.K. economy is in a forlorn state, the prospect of an interest rate rise is slim and the promise of fiscal discipline--which some weeks ago had some hailing the pound as a lesser safe-haven currency--is looking shaky as political tensions and industrial strife begins to mount.

While there is nothing concrete to go on yet, some are beginning to wonder if the country's coalition government will succumb to pressure to revise its tough spending cuts, said Neil M

ellor, a strategist at Bank of New York Mellon.

Unions in the U.K. are warning of a national day of action against austerity plans June 30 and more strikes are planned. In addition, the government's junior coalition partner, the centrist Liberal Democrats, is under intense pressure to show it can influence policy by softening some planned reforms after being trounced in local elections in May.

"There is a perception that the austerity plans are being chipped away a little bit," Mellor said.

At the heart of sterling's weakness is the moribund state of the U.K. economy, which is now widely seen keeping rates at record-low levels for the rest of 2011 and perhaps beyond, reducing the pound's relative attractiveness.

"The fiscal tightening in the U.K. comes at a price. Monetary policy has to be loose," said Ankita Dudani, a strategist at RBS, noting the sharp downward adjustment in rate-rise expectations seen thus far in 2011.

Earlier this year, the market had priced in a whole percentage-point increase in U.K. rates by the spring of 2012.

The Bank of England's minutes also suggested another possible round of quantitative easing is back on the agenda, contrasting with Federal Reserve Chairman Ben Bernanke's insistence later that day that such extraordinary measures will end in the U.S. this month, as scheduled.

The pound plumbed all-time lows against the Swiss franc Thursday, on last count at CHF1.3389, and fell below $1.60 against the dollar for the first time since April 1. But a more spectacular bashing may be on its way.

There is potential for the pound to sink to around CHF1.20-CHF1.25, analysts at Barclays Capital predict.

Morgan Stanley, meanwhile, sees the pound trading against the dollar at $1.49 from $1.62 previously.

"Among the G10 we believe that the pound is likely to be most at risk of a decline against the dollar over the next six months," the bank said Wednesday.

At 1255 GMT, sterling was trading at $1.597 against the dollar and CHF1.3408 against the franc.


-By Siva Sithraputhran, Dow Jones Newswires; +44 (0) 20 7842 9462;


(END) Dow Jones Newswires

June 23, 2011 09:08 ET (13:08 GMT)

Wednesday, 22 June 2011

The power of the reaction line.

see previous post first

EURGBP cont..again + Russell 2000 mini

See the simple candle chart of the russell.. Double tops?

Tuesday, 21 June 2011



Hold on tight for the second try to get through this warning line (see it in the previous 15 min charts this afternoon-- it originates from the most recent controlling swing fork/RL/WL grid from 25 May with pivots .8640 and .8713 & .8608)


Stop to b/e

30 sec Ensign


+ EUR -GBP @.88636 STOP .88603


4 different reaction line template views of EURGBP. A retracement back to test support of the .8840-50 area looks probable and depending on how price behaves when it arrives there I would may look to go long. Any failure to touch several CL's which lie below price will confirm my bullish view for Eur vs GBP

Monday, 20 June 2011



This looks like a strong market and i suspect we will see the Euro strengthen against Sterling this week. Long term i am also bullish. The most recent reaction line is from the pink/magenta fork. The two grey down sloping forks form pivots A & B both indicated price is well supported and a price failure form the most important A pivot is a CL failure. Th2 60 min chart shows the WL from the reaction grid which is anchored on the controlling swing (Nov-Dec 2010)


US $ Index

Friday, 17 June 2011


Dr Mircea Dologa writes in his advanced book (Vol2)
" We would argue passionately that multiple Pitch Fork patterns greatly enhance the potential trading result"........ and also says "The chart might seem unbearably messy but this method is indispensable for understanding the market flow"
I have been fortunate enough to be able to devote much of my working day to advancing my own approach and some years ago i started spending time getting my head round this concept of using sequential forks drawn from the highest time frame downwards and what has evolved since 2008 is a predetermined multiple pitchfork/median line and reaction line 'protocol' or trading set of rules. The reaction lines really hold the secret for me and price action or price behavior often falls into a category of recognizable set patterns. This behavior is somewhat similar to price at a ML but I have found there are two important factors. 1. strength of market direction ie. current trend and 2. angle of the RL/ML and of course the periodicity of the RL ie what time frame does its 'parent' fork belong to? Simply put -all reaction/warning/median lines are not born equal.

As time has progressed i have become much more occupied and busy and from June 2011 will post less frequently weekly or bi- weekly and not daily due to ongoing trading projects and in-depth market reaction line analysis which is done manually and takes much time
Below is EurGbp from 5 min upwards. Please read this earlier post link