Gold Heads North

Gold has exploded from a falling wedge and has 2000$ written all over.

David Paul

A New Season

Hi Everyone
I have been very tardy in my efforts to get this Blog up and running. I have been travelling and trading the forex and international index markets. I have not updated this Blog for a while but am glad to report that the last few posts happened as forecast. Have a look.
Good trades cannot be pulled out of a hat. I will post as often as I can, but will focus only on high probability trades which have a 70% chance of pulling in a few points.
Included in the Blog will be my trend following model of the Dow Jones 30. It has had a great record in finding 2-3 week, very tradeable moves in the latter. The JSE-Alsi40 will pretty much always follow.
I hope to locate trades in shares and the indices which will last from a few days to a few weeks. I will not look at intraday action here, as its a waste of time in the thinly traded share market. Useful only for brokers to book commissions.
Over the weekend I will post some charts of how the market looks for next week. It looks as if it will be a busy one. Maybe one that will go into the history books. Be very careful.
Have Fun
David

Euro $ and world markets

The euro $ is charting out a wave 5 of a wave 1, of a wave C as reported yesterday. I feel that we are just about finished with wave 1 down. It is clear that w5 of w1 is a falling wedge which is a bullish formation. The market will probably be volatile tomorrow as it changes direction and the Euro $ gets stronger over the next few days.

I forecast a stronger Euro over the next week prior to a wave 3 of C starting. Gold and commodity shares should bounce and wide awake traders should be looking for signals from price action to get aboard. The carry trade operators will asume that the dollar strength was just a ripple and not the trend change that it is and the carry will accelerate. This should help those holding long positions over the next week . This is a trade for the fleet of foot.

Have a good evening all.

A Stronger Dollar

Althought most reading this blog will be share traders as opposed to forex traders, the appreciation of the dollar has been key to success or failure over the past week.

It has long been my view that the run up in emerging market currencies, commodities and risky assets in general has been caused by seasoned hands borrowing dollars and using those to push prices in relativly thinly traded currencies and commodities. It is a well trodden path.

As the Dollar increases in value, for whatever reason, the carry is eroded and market participants will disassemble the trade and run for the door as fast as possible. The charts of copper and platinum show this has already started.

It is still my belief that the Dow Jones and all major stock indices are in the throes of a major bear market and that the rally from the early March 2009 is nothing more than a rally. I would expect a bounce soon but it looks as if the next leg down in this bear market, which will define a generation has started .

Above I show a weekly chart of the Euro $ which shows (using the Elliott wave) that the strength in the Dollar has a long way to go. On my other blog http://www.traderdavy.blogspot.com/ i have detailed the short term count on the euro$ for those traders who trade forex over a 2-3 day period. For those of you who trade intraday I publish all my trades at http://www.whichwaytoday.com/

I am hesitant to short shares at this level ,as in all probability there will be a bounce soon. Dont worry there will be plenty of trades to come . Lets just be patient and wait for them.

Have a great trading week.

The SA sharetrader

For the past month i have been posting mainly forex trades at www.traderdavy.blogspot.com. Its been a good period and I have made nearly 300 points in 9 trades with NO losses.

The process has been fun for me. Last week i was asked by a good friend in Cape Town to consider a similar approach for shares traded on the Johannesburg Stock Exchange. After a little thougth I have decided to go ahead with such a project. The objective of this blog will be to recommend trades which last a few days to a few months in shares and indices which are mostly based on the JSE. For this i will use only daily charts and NOT look at intraday data. The Blog will also contain my feelings as to the general direction of the stock market.

I am busy finalising the content of my website www.traderdavy.com and when this is finished it will contain links to both blogs.

I will post my analysis of the local and international markets before trading commences on Monday morning.

Have a fun weekend