Lost in the shuffle of the battle in DC were some economic numbers. Yesterday, durable goods fueled the downside and today, a better than expected claims number (below 400k) is fueling:
1. the "technically oversold rally"
2. a "dead cat" bounce
So muich more is to be digested with the debt ceiling. We are getting past earnings and it seems "QE3" has unofficially begun with the European bailout. That is a lot for a trader to deal with so until things are more clear, sound technical trading with proper trading size is key.
Yesterday volatility increased and we had the EUR/USD trade above the average daily range:
Past performance is not indicative of future results
Today, we are back to smaller ranges as equities move the upside and the dollar trades sideways. Making the segway from forex into equiti8es/options, let's look at the Dollar Index (DXY):
Past performance is not indicative of future results
Sticking with the D theme, let's look at DIS and a nice shot at a trendline bounce:
Past performance is not indicative of future results
Overall, no one knows what the deliberations/outcome will mean for the markest. I have stressed over and over that you have to go "back to basics" and know your trading market very, very well and trade it for its own separate entity. There is no way that ANYONE has been through a QE1, QE2, QE3, etc... before. No one has been through a debt crisis and the possibility of downgrading American credit. I sure will not tell you where we are heading, but I do know that whether you are a trade or investor, if you use sound technical analysis and you use solid trading plans with money management AND you DO NOT focus on the money, you will be successful (if that is, there actually is volatility).
Happy Trading and Be Environmentally Cool
Coach Brian
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
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