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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
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Trading University
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Seeking Alpha
My book:
The Secret to Trading Forex, Futures, and ETF's: Risk Tolerance Threshold
  • Euro & Franc: Save Room For The Meat In The Middle  0 comments
    Feb 4, 2014 1:25 PM | about stocks: FXE, FXF, UUP

    A trend trader's goal is not to pick tops or bottoms, but to capture the proverbial "meat in the middle", i.e.: the bulk of a market move following a reversal. We see the Euro and Swiss franc entering that phase right now.

    Draghi earned the market's respect two summers ago when he called the bottom just above 1.20, and that respect is not going to change. Likewise global money centers that had long Euro exposure to their loan portfolios have had ample time to clean up what they could, and hedge what they couldn't. And Middle East, Russian, and Asian financiers who prefer to avoid U.S. Dollar holdings will have little choice but to shift into Greenbacks if USDCHF breaks above the January highs.

    Figure 1. Weekly Euro Chart with 5/8ths Gann Line

    Technically the Euro produced a double-top right at a .625 retracement late last year and is currently staring over the edge of an 8th month trend line induced cliff - see Figure 1. From our perspective the risk lies in Euro exposure with the path of least resistance lower into the spring.

    To see Jay Norris highlight trade set-ups and signals in live markets during the London/U.S. overlap go to: Live Market Exercise. Jay is the author of "The Secret to Trading: Risk Tolerance Threshold Theory".

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

    Disclosure: I am long UUP.

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