Daily GJ Technical Analysis

chart 15min

cup and handle pattern

UPDATE:
the pattern is invalid as price failed to break previous low
no trade taken

9 am Malaysia time
h4 chart

rising wedge pattern

UPDATE:
6.15 pm - lower wedge line broken and price touched 205.91 (potential gain of 130 pips)
next TP: 205.50 (161.8% fibo level)
TP hit at 6. 40 pm (165 pips gain... hehehehe)

9 pm Malaysia time
H1 chart

nice pinbar
strong reversal indication

UPDATE:
Price kept ranging
at 4 am, price made a new low of 207.08
(potential 70 pips gain)

h1 chart

rising wedge formation in action
to watch closely on price action within the converging trendlines
should price break downwards, ideal SL should be at 208.70 (20 pips above apex). 1st TP is 204.20

UPDATE:
Tuesday (April 29) morning:
price is still in ranging mode
however, this pattern is still valid
watch out for update at the latest post

5.30 pm Malaysia time
h4 chart

bearish dragonfly candle has formed
a bear candle is currently in formation
should price close below the red trendline, a substantial downwards move is expected

UPDATE:
8.30 pm - price failed to close below the trendline due to good result of US Core Durable Goods Orders
206.00 level still persists as a strong resistance now

Yesterday (Wednesday) and this morning, I could not post any analysis due to poor internet connection........
Will start posting as soon as the internet connection back to normal....

2.30 pm Malaysia time
h1 chart

a variant of head and shoulder formation
a close below neckline (203.3x) should see a further downwards movement

UPDATE:
price bounced off neckline
head and shoulder formation did not materialised

April 21 (Bloomberg) -- U.S. stocks fell for the first time in five days after worsening credit losses at Bank of America Corp. and National City Corp. undermined confidence that banks are overcoming the subprime mortgage market's collapse.

Bank of America, the second-largest U.S. bank by assets, retreated after bad loans caused first-quarter profit to trail analysts' estimates. National City tumbled to a 17-year low as Ohio's biggest lender was forced to cut its dividend and sell stock at a 40 percent discount to last week's closing price. Schlumberger Ltd., the world's largest oilfield-services company, led a rally in energy shares that limited the market's decline, after oil rose to a record above $117 a barrel.

Source: Bloomberg

1 am Malaysia time
5min chart

noticed cup & handle formation...
shown here 5min chart for better clarification purposes....

read more about cup and handle here

H4 chart

1. price bounced off top of the channel
2. long upper shadow candle followed by a bearish candle

maximum SL at swing high + 20 pips (209.18)

UPDATE:
4.30 pm -price went down to 205.57 (a potential of 150 pips gain)
7.00 pm - price went down further to 204.70 (approximately 250 pips gain)

11 am Malaysia time
h4 chart

three inside down pattern is forming
should the current candle closes below the bearish harami candle, price is expected to test the green trendline again

UPDATE: BOE intervention caused price to shoot up to 208.98
Stopped out (150 pip loss)

Next h4 candle will determine next course of direction

April 17 (Bloomberg) -- Merrill Lynch & Co. posted its third-straight quarterly loss and will cut about 3,000 jobs after at least $6.5 billion of writedowns and a 40 percent drop in investment-banking fees.

The first-quarter net loss of $1.96 billion, or $2.19 a share, compared with earnings of $2.16 billion, or $2.26, a year earlier, the third-biggest U.S. securities firm by market value said today in a statement. Analysts had predicted a loss of $1.72 billion, based on estimates compiled by Bloomberg.

Source: Bloomberg

April 17 (Bloomberg) -- The Bank of England said financial institutions bid for 50 billion pounds ($99 billion) in its weekly auction, the most in three months, as a worsening shortage of credit increased the need for central bank funds.

The Bank of England offered 13.7 billion pounds in today's sale, it said in a statement in London. That made the operation more than three times oversubscribed. Total bids were the most since Jan. 10.

Financial institutions are struggling to raise money and refusing to pass on the Bank of England's interest rate cuts to consumers. That's forcing Prime Minister Gordon Brown and policy makers to find new ways to end the logjam in credit markets. The cash shortage has already ended the U.K.'s decade-long housing boom and threatens to push the economy into a recession.

Source: Bloomberg

1 pm (Malaysia time)
h4 chart

1. price rejection by h4 trendline?
2. evening doji star formation??

still holding my previous sell (currently at -36 pip drawdown)

UPDATE:
price shot up to 200.74 (172 pips drawdown)
5 pm Malaysia time status at -93 pips
SL (201.02 - 200 pips) was hit at 12 pm Thursday April 17
Now still waiting whether to apply AH strategy or looking for better entry

3 am (Malaysia time)
H1 chart

1. bearish engulfing candle??
2. fibo 76.4% rejection??

UPDATE:
engulfing candle formation failed
price went up to 199.95 (94 pip drawdown)
see above post for further update

10 pm (Malaysia time)
H1 chart

1. pinbar candle?
2. trendline rejection?
3. fibo 50% acts as resistance?

UPDATE:
Market kept ranging afterwards. Maximum drawdown was 36 pips. As of 2.30 pm next day, price went down to 199.09 (potential 97 pips gain)

April 14 (Bloomberg) -- Stocks dropped in Europe and Asia after Royal Philips Electronics NV reported profit slumped 75 percent and the Group of Seven finance ministers said global economic prospects have weakened. U.S. index futures retreated.

Philips, Europe's largest consumer-electronics maker, declined after saying television prices fell in the U.S. KDDI Corp. sank in Tokyo as full-year profit missed its target. Wachovia Corp. slipped in Germany after bringing forward its earnings announcement. British Airways Plc led airlines lower as Morgan Stanley recommended selling the shares, while ABB Ltd. decreased in Zurich after Lehman Brothers Holdings Inc. downgraded the world's biggest builder of power networks.

more here.

Three premises of technical analysis:
1. market action discounts everything
2. price moves in trends
3. history repeats itself

A quick look at weekly chart will tell us every time a bear candle appears after a bull one, there would be a significant downwards move the following week.

So, let the party begins......

2.45 am (Malaysia time)
15min chart

a symmetrical triangle is forming
in most cases, this pattern is a trend continuation indication
more information here

1. My SL was hit at 200.80
2. Price went up 107 pips to 201.87
3. Noticing bull weakening (double top & price consolidation), I placed an open sell order at 200.80
4. Price went down and hit my open order
5. Price went up to 201.26 (46 pips drawdown)
6. Bear took over and WHAMMM!!!! hit my previous loss entry point (198.90)

THANKS JACKO!!!!

" But I am also starting to notice that it doesn't really matter anymore where I buy or sell. The anti-hedging strategy is FAR, FAR, FAR more important." - Jacko

April 10 (Bloomberg) -- The Bank of England probably will cut its main interest rate for the third time since December as the worst housing slump since 1992 fans concern the economy is slipping into a recession, a survey of economists shows.

The nine-member Monetary Policy Committee, led by Governor Mervyn King, will lower the bank rate by a quarter point to 5 percent, according to 52 of 61 economists in a Bloomberg News survey. The rest forecast it will stay at 5.25 percent. The central bank announces the decision at noon in London.

Source: Bloomberg

H4 chart
5 pm (Malaysia)

price has broken bottom trendline
expecting price to hit 192.xx next

UPDATE:
1. Woke up next morning 5 am - price went up 195 pips (200.75)
2. Stopped out at 200.80. Will wait to apply AH strategy

See how I recovered my loss here

9 pm
H1 chart

engulfing bearish candle
fibo 61.8% rejection

UPDATE: Hit 168.1% (199.11) at 1 pm (Malaysia time) April 10. Potential 260 pip gain.

April 9 (Bloomberg) -- The yen rose against the dollar and euro as a decline in Asian stocks prompted investors to pare holdings of higher-yielding assets funded with loans in Japan.

The currency gained the most against the Australian and New Zealand dollars, two favorites for so-called carry trades, after Standard & Poor's downgraded the three largest U.S. mortgage insurers and UBS AG said Australian banks may increase provisions for bad debt. The British pound slid to a record against the euro after an industry report showed U.K. consumer confidence was the worst in almost four years.

``Falling stock prices are harming investors' risk tolerance,'' said Satoshi Okagawa, head of the foreign-exchange forward trading group at Sumitomo Mitsui Banking Corp. in Tokyo, a unit of Japan's fourth-largest publicly traded lender by assets. ``Downgrades on the largest U.S. mortgage insurers are bad for market sentiment. The yen is being buoyed by this.''

Source: Bloomberg

8 am (Malaysia time)
15min chart

Rising wedge is forming
To go short once the bottom trendline is broken

UPDATE: Price hit yesterday low 201.14 at 12.30 pm (80 pips gain)

April 8 (Bloomberg) -- Federal Reserve officials anticipated that the economy will shrink in the first half of the year, with some concerned about ``a prolonged and severe economic downturn,'' as they cut interest rates last month.

``Many participants thought some contraction in economic activity in the first half of 2008 now appeared likely,'' the Fed said in minutes of the March 18 Federal Open Market Committee meeting released in Washington today.

Source: Bloomberg

There is a pennant pattern developing at H1 chart.

Expect the price to accelerate downwards once the support at 200.80 is broken.

UPDATE: After several attempts, 200.80 was broken at 8 am April 10th (Malaysia time). Price made a new low at 198.89 (potential of 250 pips)

"My method" can be applied to any currency pair (or gold or any market) that trends. Only the parameters of the Trailing Stop Loss and the contract size are the variables."

In the case of the GBP/JPY, it is more volatile than the EUR/USD, therefore the Trailing Stop Loss should be larger and the number of contracts should be smaller (relative to EUR/USD)

1. If you look at the weekly and daily charts, there was an impressive turnaround in July 2007 and the market has been trending downward ever since. Therefore the main trend is down.
Furthermore, that downward trend since Oct 2007 has accelerated.
Remember: If the chart starts at the top left corner and ends at the bottom right corner...the market is going DOWN (It is amazing the number of people who can't see that!!)

Therefore, as a Trend Trader, you should only be trading in the main , or "short", direction for the GBP/JPY pair.

2. Stops
From a quick look at the GBP/JPY pair, it would appear that for a medium term trader, that you would need to use stops of about 150 pips. (Big enough not to be whipsawed by the "noise" of the market, small enough not to cause too much damage too your account...but also sufficient to tell you that your entry was wwwrong)

Also, when you have got this down pat, you should then think about using Trailing Stop Losses that continually lock in your profits as the market continues to move in your direction.
AAAAhhhhhh !!!!! SUCCESS !!!!!!

3. Anti-Hedge Insurance
Now lets look at the other scenario. You know, the one where you were wwwwwrong. (I have trouble saying that word... LOL ).
The Anti-Hedge is a method that will minimise your drawdowns AND will get you back all or most of your losses if you make a bad trade. It was explained here yesterday. Go here

http://www.forexfactory.com/showpost...ostcount=70735

Use those three steps, plus some reasonable money management and you are assured of successful trading.


http://www.forexfactory.com/showpost.php?p=1921509&postcount=70845

April 8 (Bloomberg) -- U.K. house prices dropped by the most since 1992 in March as the seizure in credit markets worldwide forced banks to pull mortgage offers, a report by HBOS Plc showed.

The average cost of a home in Britain fell 2.5 percent to 191,556 pounds ($379,000) from February, HBOS, the U.K.'s biggest mortgage lender, said in a statement today. The 1 percent drop in the first three months of this year from the fourth quarter was the biggest since 1995.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ar4cEW7TvLSM&refer=home

H1 chart
11 am (Malaysia time)

1. fibo 38.2% rejection??
2. bearish harami candle??

UPDATE:
As of April 6th 7.30 pm (Malaysia time), price was at 201.42 (230 pips gain). Maximum drawdown is 68 pips.

April 7 (Bloomberg) -- Asian stocks fell for a second day, led by banks on speculation profits will be eroded by losses in subprime mortgage-related investments.

Mitsubishi UFJ Financial Group Inc. dropped after the Nikkei English News said Japan's six major banks may report a 40 percent drop in combined profit. Australia & New Zealand Banking Group Ltd. declined after saying it expects to set aside A$975 million ($898 million) to cover bad debts.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0czjEu8cLcA&refer=home

April 7 (Bloomberg) -- Optimism for a dollar rebound that pervaded the currency market at the start of the year is fading.

Futures traders doubled bets against the greenback in the past two months, data from the Commodity Futures Trading Commission in Washington show. Citigroup Inc., Deutsche Bank AG and Royal Bank of Scotland Group Plc, which handle almost 40 percent of global foreign exchange trading, say the currency may slump to $1.65 per euro by October, from $1.57 on April 4.

http://www.bloomberg.com/apps/news?pid=20601087&sid=afD_62wZROpg&refer=home

A chart pattern that consists of a small white candlestick with short shadows or tails followed by a large black candlestick that eclipses or "engulfs" the small white one.

As implied by its name, a bearish engulfing pattern may provide an indication of a future bearish trend. This type of pattern usually accompanies an uptrend in a security, possibly signaling a peak or slowdown in its advancement.

Daily chart of GU, UJ & GJ
Bearish candles appear on these three pairs' charts.

Strong indication of bearish move next week.

April 4 (Bloomberg) -- The pound fell against the euro and the dollar after a government report showed the U.S. shed jobs for a third month in March, fueling concern a recession in the world's largest economy will damp U.K. growth.

The pound dropped versus 14 of the 16 most-traded currencies tracked by Bloomberg today after the U.S. Labor Department said payrolls shrank a more-than-expected 80,000. The report prompted traders to add to bets the Bank of England will cut interest rates to shore up the economy. Policy makers are forecast to lower the main rate a quarter-point at their meeting next week.

http://www.bloomberg.com/apps/news?pid=20601083&sid=aMPRzwPAbth4&refer=currency

Daily chart (market close)

1. Price failed to break daily trendline
2. Bearish engulfing candle has formed

TP: 198.82

UPDATE:
1. 8 pm April 5th (Malaysia) price went up to 204.42 (maximum drawdown of 219 pips)
2. 5 pm April 6th (Malaysia time) price went down to 201.16. (108 pips gain)
3. At last, TP was hit on April 10th (1 pm Malaysia time)

April 4 (Bloomberg) -- The U.S. lost jobs for a third consecutive month in March and the unemployment rate rose to the highest September 205, pointing to an economy that may already be in a recession.
Payrolls shrank by 80,000, more than forecast, after a decrease of 76,000 in February that was more than initially reported, the Labor Department said today in Washington. The jobless rate rose to 5.1 percent, the highest since September 2005, from 4.8 percent.
Job losses have shaken consumer confidence, contributing to a weakening in spending that has almost stalled growth. The report reinforces forecasts that the Federal Reserve, whose Chairman Ben S. Bernanke this week acknowledged the economy may face a recession, will need to do more to prevent further deterioration.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0jzaeOfHZkw&refer=home

April 4 (Bloomberg) -- Asian stocks declined for the first time in three days, led by technology companies and automakers, after a U.S. jobs report renewed concern that growth in the world's largest economy is slowing.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ayNVVrBrH58k&refer=home

H4 chart (8.15 am Malaysia time)

1. Price bounce off daily trendline?
2. Bearish doji candle has formed?

Next H4 candle should provide more insight on today's move.

UPDATE: At market close, price was at 202.23 (possible 180 pips gain). Maximum drawdown was 107 pips.

6 am (Malaysia time)

1. triple top formation??
2. bearish harami candle??

1st TP: 197.62

UPDATE: stopped out (200 pip loss)

5 pm (Malaysia time)

A triangle pattern is forming at h4 chart.
1. Expecting the upper trendline to act as a resistance
2. A bearish dragonfly candle is formed.

Stop Loss: 199.44 (20 pips above 50% weekly fibo)
Possible TP: 193.67

UPDATE: At 7.45 pm, price hit SL - loss of 150 pip