General Notes:
The giant OIL spill in the gulf of Mexico is a very good example of one of the major factors influencing the financial system: Why the government doesn't solve the problem? BP (The bad guys), and every known professional in this field, are working hard to stop the leak, but for some reason the public look at the government to "solve" the problem.
As if the government is some kind of entity that knows and can do everything. We think otherwise. The OIL spill is a great environmental disaster but the government is not the answer.
The companies involved have all the incentive in the world to fix that more quickly to avoid two things: damage compensations and legal problems, and a more profound blow to their public opinion rating.
The government should regulate the industry enough to make sure that standards and rules are kept. Its main role in this and others areas is to make sure that corruption is not producing disasters.
But asking them to "solve" a technical problem? It is not like a relief program ("Katerina") or a security issue. It is an expertise issue. The same applies to the financial system: Corruption and excess should be the role of government (white house, Congress, FED) to avoid the need for bailouts. Making them the managers (Tsars) of industries is in our opinion a very bad idea.
By the way, Monday next will be our last post in this venue. It was a great pleasure to share with you all our small insights on the markets.
AUD/USD Visual Trading Update
Price and Indicators Technical Overview:
The double bottom did hold and we see now the starting phase of a corrective move. Will it go very high? It depends on the EURO and China but also on the short covering action in the pair. A normal correction is between a third and two third, so they are the probable targets. Look at the Fibonacci ladder for levels.
The recurring feature in many risky assets is the positive divergence between price and the RSI-ADX combination: When you see a double bottom (or a new low in price) with a positive divergence in the RSI, while we had already an extreme in the ADX (trend acceleration indicator), it is usually a very good sign for a change in direction (daily chart).
EUR/USD Visual Trading Update
Price and Indicators Technical Overview:
Short covering or not, it is still a fractured pair and we need to see some more upside action before we know that the trend has changed. Maybe double bottom here also? We look at the ADX for the main guidance here because the extremes in it (and the reversal) are showing that the pair could have reached the highest conviction level for shorting. A move up (conviction for the other side) could take a while…
The recurring feature in many risky assets is the positive divergence between price and the RSI-ADX combination: When you see a double bottom (or a new low in price) with a positive divergence in the RSI, while we had already an extreme in the ADX (trend acceleration indicator), it is usually a very good sign for a change in direction (daily chart).
USD/JPY Visual Trading Update
Price and Indicators Technical Overview:
Last time we said: "You can see the exact correlation between the stock (risk) markets and this pair. It is the "funding" carry trade game that is moving the pair these days and the technicals are quite bad. In principle, we should see a test of the lows at least. Maybe a double bottom was found here?" 88-95 is the very big trading range here. Look for the 4H chart to make some higher or lower highs and lows before deciding.
Charts Legend:
3 Price Windows: Main (Daily), Right Side (Up: 4 Hours, Down: Weekly)
INDICATORS:
Simple Moving Average (20): Green
Average of Average (9 weighted): Violet
Price Channel (20): Orange
Volume: Black
Daily separations: Black Dots
Support & Resistance price areas: Light Blue Areas
Trend lines and Channel Boundaries: Blue
Elliott Waves Counts: Black and Blue numbers
RSI (10): Blue, ADX(20): Blue
Green Wave Capital LTD (c) INFO@GreenWaveCap.com
