Sunday Evening 27 November 2011
We have not looked at currencies very much, of late, primarily due to
the politicalization of most of the international markets as the Comedy
Of Errors plays itself out on the world stage. For those endeavoring
to follow the lies put forth each day by central bankers, the hyenas of
the world of finance, and the leaders of the various countries who
demonstrate with unwavering clarity that they haven't the slightest
clue as to what they are doing, the comics page has reached front
page of all newspapers,
It is always best to start with an overview of where the markets are in
order to put them into some kind of perspective, and a monthly chart
is our beginning. We see price is about where it was about 6 years
ago. An early rising Rip Van Winkle would say he has not missed
much in that span of time. It can be said that since the 120 area high,
[on this chart], in 1999, after a two year break and a two year rally,
the Euro has been in a broad trading range for about eight years.
The reason for starting with the higher time frame is that it is more
controlling than lower time frames. From the monthly, what is
obviously clear is that there is no trend. Most money is made from
following trends. Not much more need be said of this chart.
Sometimes, a different picture can emerge from a lower time frame.
This does not appear to be the case, here. What we see is greater
detail of a non-trending market. We labeled the lower highs and lower
low to help delineate a trend. Generally, lowers highs and a lower low
would denote a downtrend, but the net result, carried forward, leads
to the same conclusion: no trend.
Hard to make money in a non-trending market.
One conclusion we may be able to glean from this is that the Euro
is undergoing a large distribution, unless a higher high develops,
and even then, it may just prolong the analysis and take more time
to reach a resolve.
Could the daily be any different? Not really. From June 2011 through
September 2011, anyone who claims they made money trading the
Euro is either very lucky, or a liar. [Maybe professional day traders
Taken by itself, the daily chart looks negative, but given price is in the
middle of the next two higher time frames, such a conclusion can be
misleading, even unprofitable. We put the obvious conclusion at the
end of the chart, something which everyone in the world can see...a
potential near-term double bottom?
Whenever a coin flip offer the same odds of winning in a market, and
keep in mind the craziness that has engulfed the Eurozone, for all the
friction and sparks, there is not much going on, and that comes as a
bit of a surprise, given the Chicken Little "The sky is falling!" alarm
that seems to reverberating throughout that part of the world.
One of our beliefs is that the charts do not lie. We just do not see
much truth, here.