Congratulations! Economy is on the verge of recovery, according to FED Chairman Mr. Bernanke. These comments came during at an annual FED conference in Jackson Hole, Wyoming. He largely gloated over all the steps taken to improve economy- stimulus packages, bailouts, rate cuts, quantitative easing etc, etc. Interestingly enough, his speech never mentioned the criticism received for pumping money int AIG and other less than successful operations. The worst is over! Have we not heard it before? Repeatedly? For my money, we are not in any recovery, until economy starts gaining net jobs. That’s when it means something. Oh, yeah, and improved credit flow, too. Well, I hope this time he knows what he is talking about.
My little faith notwithstanding, markets liked the comments. Stock market went on a nice run and some currencies also responded or extended their moves. One of them was Canadian Dollar, which I have been following closely lately. Perhaps too closely. At any rate, yesterday I interpreted CAD-JPY action as a reversal, after fairly large sell off, and decided to try a long trade. I was using a typical reversal pattern for this trade, or, more precisely, breakout from it. Entry was chosen for 86.50.
This was NOT a painless trade. During Asian session price collapsed to 100SMA. I made another entry, which happened at 85.87. Risk was small, 85.40 provided support and it held, if by few pips. Action stabilized in that area and later on proceeded higher. Couple of hours ago, speech by Mr. Chairman gave Canadian Dollar additional boost. I was looking for 87.75, hourly candle came just short. Exit was at 87.45, for +95 pips and +158 pips respectively. Not bad after all.
This set up was featured in last post, where I also expressed mixed feelings about other JPY pairs, particularly NZD-JPY. It looked fairly weak over past couple of days, so it was my instrument of choice, should yen crosses collapse. They nearly did and I even placed a sell order under the low . Price reversed before reaching it. I didn’t make any long trades in this cross. One could call it a missed opportunity, 200 pips run up. There will be other trades
This pretty much sums up the week. Couple of CAD-JPY trades, which, after all, I’m pleased with. Nothing seemed easy. Focus will go to other pairs next week, so as not turn this blog into “CAD-JPY chronicle”. But there is one more thing about this pair that needs a finishing touch. This will be done tomorrow. Two more orders were discussed here, both of them buys. EUR-AUD is still valid and GBP-NZD, which is cancelled. This trade came within like 5 pips of getting filled, before price collapsed. Lucky me, at last.
Mike K.
On the verge of recovery…
Congratulations! Economy is on the verge of recovery, according to FED Chairman Mr. Bernanke. These comments came during at an annual FED conference in Jackson Hole, Wyoming. He largely gloated over all the steps taken to improve economy- stimulus pack…
TRade I don’t take makes good. Just my luck. But tell you what- persistance pays. You are dsciplined, stay focused and hitting them. It is fun to follow.
This is the trade we talked about in comments 2-3 posts ago. It worked. Not for me, trying to sell instead of buying, being influenced by some chat room. The more informtaion I absorb, the more confused I get. It is hard to make a decision.
Yes, it can be difficult to make decision, especially if you listen to too many opinions. After some time it might next to impossible to pull the trigger. More focus is needed. I know you do your own analysis, perhaps you should stick to them.
I’m burned out. Caught the pips on the one hour risk-off firesale in the early Thursday Asian sale. Lucky. Or scared, don’t know. I could smell the rat coming because Benake was on schedule, and sure enough, 250 pips in two hours on a roundtrip. I am happy that Europe service industries are recovering, or ECB would have to lower interest rates and pound the savers. Guess crude likes zirp too. Wild swings mean unstable systems. Though it won’t be a replay of last year. Too obvious. Dollar devaluation?
I think you are nuts, buy your trading is good. Good read.
Vlad, I agree with you that we shouldn’t see anything like last year. And the Dollar devaluation is not here yet. Don’t know when, but typically devaluations don’t happen without increased inflation preceding it.
Do you trade full time?
[...] As stated in original post, I was not looking for an all out market reversal, but rather a pull back. This doesn’t mean that a complete turn around could not happen. It only means that I wanted to catch the part of the move that has the highest probability of taking place. Now that this particular situation has played itself out, objective was reached, one should conduct new analysis to determine if the price will continue lower, or resume its previous up trend. I’m more focused on smaller time frames for now, as was shown in other posts about CAD-JPY trading. [...]
[...] On the verge of recovery. | fxmadness.com fxmadness.com/2009/08/21/general/on-the-verge-of-recovery – view page – cached Congratulations! Economy is on the verge of recovery, according to FED Chairman Mr. Bernanke. These comments came during at an annual FED conference in Jackson — From the page [...]
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