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Jay Norris
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Jay Norris is a 20-year CBOT floor veteran, author of the Best Seller "The Secret to Trading Forex, Futures, and ETFs: Risk Tolerance Threshold Theory", "Mastering the Currency Market", McGraw-Hill, 2009, and "Mastering Trade Selection and Management", McGraw-Hill,... More
My company:
Trading University
My blog:
Seeking Alpha
My book:
The Secret to Trading Forex, Futures, and ETF's: Risk Tolerance Threshold
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  • The End Game For The Euro Rally

    Our studies are still bullish for the Euro, and supported by a powerful bullish seasonal at the end of December - see Figure 1.

    (click to enlarge)
    Figure 1.

    The seasonal chart shows us that a price spike for the Euro is characteristic over the last two weeks of the year. We would see that spike as a fitting cap for the secondary rally which started last summer. We also feel that at this point most market shorts who had decided to ride out Boss Draghi's Euro buy recommendation in August have been stopped out. We see recent short seller capitulation as a sign that we can now consider a bearish shift back in-line with the Primary Pattern which is bearish - see Figure 2.

    An interesting thing about long-term trends is that the closer you get to long-term structure on the chart - in this case resistance -- the more relevant that long-term pattern becomes to traders. In Figure 2 we've marked the long-term resistance levels in EURUSD which reminds us that as long as price is trading below them, the long-term trend is down. Shorter-term patterns and momentum however, are still our focus today, as is that before mentioned bullish seasonal. Short term momentum generally means a test of longer-term structure - in the case of the Euro a test of resistance at 135.00.

    (click to enlarge)
    Figure 2. Weekly EURUSD Chart

    Given the holiday season is well upon us I can't help but think that it really doesn't matter much which way the market moves until now and year end, but we do see going short as still a bit premature. On the other hand, every day brings us a little closer to the end game of this 5-month counter-trend rally.

    Happy Holidays!

    Jay Norris is the author of Mastering the Currency Market, McGraw-Hill, 2009. To see Jay point out trade set-ups and signals in live markets go to Live Market Analysis

    Trading involves risk of loss and is not suitable for all investors

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Dec 21 3:38 PM | Link | Comment!
  • Markets Holding Steady

    Despite a bit of turmoil in stocks due to the inability of politicians to agree on a fiscal cliff solution, our readings are still indicating a firm footing for asset class markets. The S&P 500 is showing the majority of its patterns higher, as are the patterns in AUDUSD, and the upstart currency market leader USDJPY.

    S&P 500
    M Grand Up
    W Primary Up
    D Secondary Up
    240 Day to Day Up
    60 Micro Up
    15 Micro Down

    AUDUSD
    M Grand Up
    W Primary Up
    D Secondary Up
    240 Day to Day Up
    L-T Micro Up
    60 Micro Down
    15 Micro Down

    USDJPY
    M- Grand
    W - Primary Down
    S-primary Up
    D - Secondary Up
    240 Day to Day Up
    60 Micro Up
    15 Micro Up

    Jay Norris is the author of Mastering the Currency Market, McGraw-Hill, 2009

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Dec 21 10:53 AM | Link | Comment!
  • Mid-Week Forex Forecast For Wednesday, December 19th, 2012

    Video Version: Midweek Forex Forecast YouTube

    Stocks and currencies continued their strong tone into midweek with the S&P 500 reaching a 2-month high, and the Euro posting an 8-month high and closing above 1.32. A steady drumbeat of good news out of Washington regarding the fiscal cliff, and a relative lack of bad news out of Europe or anywhere else supported global markets into Wednesday. A strong USDJPY - a weak Yen - also continues to be a bulwark for the bull thesis and a confirmation that Japanese investors are finally investing outside of Japan again. If you have been in Japanese Yen over the past 6 years you have seen your buying power improve dramatically, until now. Japan's newly elected PM Abe is quickly pushing ahead for a healthy spending package which is seen by the markets as yen bearish, effectively removing the Yen's previous safe haven status. Another safe haven market that is no more is the Swiss Franc. There was very little market chatter in the way of UBS's decision to charge its clients for Franc deposits, effectively heralding in the age of negative rates as a way to encourage businesses and individuals to convert savings to investments. All this has had a bullish effect on EURUSD with the 1.35 level looking quite achievable before year end.

    While the Euro had little trouble vaulting the late summer highs, the Aussie has taken pause - it is still only midweek though. The Aussie has been in a holding pattern for the last 5-sessions letting U.S. blue chips, USDJPY, and the Euro take the lead on the upside. We see support in AUSDUSD down to 1.05. We also see a weak yen as being beneficial to the Aussie, which is another way of saying we see Japanese investors continuing to invest in Aussie debt and equities.

    To view video version go to: Mid-Week Forex Forecast YouTube

    To see Jay Norris point out trade set-ups and signals in live markets go to Live Market Analysis

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Dec 18 5:35 PM | Link | Comment!
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