My Game Plan For Today
Not that you need
reminding, but make sure you turn your computer off after the first
hour today, after that it will become a complete coin toss as volume and
interest will become sparse. The same will apply to Friday as well.
Nonetheless, I expect a few decent swings at the ball in the opening hour which
will add a little cash for frivolous Turkey Day purchases.
My game plan will remain the same (there is a
shocker): maintain a sharp focus on the Dollar via the
DXC to time not only the S&P’s but also the gold stocks. Yesterday
morning offered some excellent set-ups in the mining shares. After that I laid
low and concentrated on my FX position and looked for other potential
candidates. In the end, I conceded that since it was a holiday week, do not add
to anything unless it jumps out at me, as of now that has not happened. The
EUR/JPY short, which was up then down quite
a bit yesterday is still a trade that is not playing out. As you will notice
below, the chart, at least based on the stochastics is giving a decent sell
signal, however, the 50-day ema (red line) is providing solid support at
present. My target for this trade is down at 125. In fact, I was short this
same “pair” back from October 9 at 128.07 and closed it out on November 13 at
126.89. Yes, it was a solid trade, but the fact that it breached 125 (a solid
support area) and did not accelerate was a bit puzzling. When you combined the
subsequent bounce in the dollar that same week, I was left with no choice but to
cover.
Now, the scenario is unfolding again. Yes,
technically it still looks solid, but the fundamental back-drop has changed
slightly. A recent survey of the Japan’s top 18 exporters forecast a EUR/JPY
rate in March 2004 of 126.
What I found of more interest however is that only 3 of the 18
were forecasting a rate below 125. So, was that buying frenzy last week the BoJ
at work protecting un-hedged exporters? Trust me, this is not some conspiracy
theory. It is a well known fact the BoJ intervenes in the FX market on a large
scale. Just look at the amount of Yen spent on intervention in this “cross”
alone.
In addition, consider the recent change in
sentiment towards the EUR as a safe haven currency in light of recent terrorist
attacks. This trade will require close attention until the 128.37 level is
broken.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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On that note, have a wonderful Thanksgiving Day
Holiday. Enjoy the time with friends and family, it is an ideal way to clear
the mind and come back sharp and ready to go next Monday. Above all, remain
safe if you are traveling.
As always, feel free to send me your comments and
questions. There will not be an article on Friday.