Just a quick comment

Hope everyone is enjoying the time off. Looks like we are in the process of getting our end of year melt up here. Whenever I look at low volume pushs to new high I am getting very concerned with more upside. I remember last year I was trying to short a bit too early and ended up having to carry quite a draw down but the end of jan showed big gains on the short side.

Not sure if this goes into the "I learned my lesson" type of category but I am looking to enter shorts very soon, not today, but most likely in the first week of january. For now I am 100% cash with the exception of my USDJPY trade - unfortunately USDJPY looks corrective here so I am thinking we may push on to break through this resistance cluster or at least test the upper most ranges (which also means I am getting stopped out).

Other then that, I ask you to look at the monthly charts for AAPL and GOOG. Wow is all I can say - I think once you see what develops there you will concur that some pull back is very likely - considering that those 2 are the bull pushers I would expect the market to follow.

At this point a correction will be good for both bears and bulls, we shake out some weak hands, figure out how strong support is on volume and have a chance to see what 2010 will hold for us.

Statistically we are at bullish extremes, more so then ever before, I would dare to say those extremes are stronger then the bearish levels we had seen back in march which ultimately resulted in this amazing move higher. The month of January at least will give us more signs of what the year has in store for us.

Till then, enjoy your time away and have a good jump into the new year.

Happy Holidays Again

I am out - probably will not hear from me till end of the year. Have a great holiday and enjoy the time off.

Farewell 2009

More FX obessions

Again talking about USDJPY. Sorry that I have been focusing a lot more on FX at the moment. It will change once the new year comes. FYI I have not made a single SPX based trade for the past 2+ weeks and been only focusing on FX (EDIT: with the exception of course on taking equity positions but only certain picks).

Ok I have marked a serious area of resistance and support with the blue rectangle. As you can see this has been a point of battle over the past year either trading above or below.

Currently MACD divergence on the daily is quite high so even if this does not move lower we need to continue sideways to get rid of the overbought conditions. The channel is the one I had been describing in the past and we are lining up nicely with the big support/resistance zone and previous down channel. So thus far it makes it 3 indications that we have some serious resistance ahead.

The last and final observation is the fact that every advance of the declining lower trend line ended up with a parabolic or overthrow like ending move - its even more visible on the 60 min. This again happened here with the last 3 days having been quite strong.

At this point my stop is close above the peak high now with minimal capital being risked ($200) and possible gains of a move towards a minimum of 88-89 ($3300 gains at 89). If the bottom is in on this currency pair its ok, we break important resistance rally some, and eventually will come back where we can go long. Either way a good setup.

As you can see risk/reward wise FX offers amazing setups and since you have so many different markets it pays of being patient and waiting for setups to come to you (instead of me chasing SPX).

USDJPY - Attempts

As mentioned I am looking at this one very carefully to be able to build a longer term short position. This one is a bit tricky since the majority of my FX trades had been based on more shorter term positions. I had made quite a few attempts in the first few weeks of my FX world a few months ago but not successfully.

At this point I am trying it again, a bit different though. This one is actually a very nice setup. I tried short yesterday towards the close as the 60min had a barrier it could not get passed, stop was rather tight on this one as we still had a bit more risk at another jump higher (thanks USD).

We are seeing the same pattern again today, first spike to mark the high and a few unsuccessful attempts to break through. Its nice since it allows you to build a position at the edge of the range with a tight stop. This time around the position is split with a tight stop again above the range and one thats a bit further away (while I sleep things happen you know).

Just for reference, here is my last long term attempt on this one ...

Got a nice short close to the top (blue line) and stopped out right at the top (red line). Not going to let this happen again this time around.

Again, I will be making quite a large "2010 start" post with a lot of focus on FX. One can say this has been my new "playground" with very little capital exposed and surprisingly quite a nice amount of gains.

USDJPY

Something to consider. I am going to watch this one closely for a reversal.