Most Important Week In US Equities – September 22nd 2015 Forex Commentary
Overall today was a fairly uneventful day in markets. Most all markets were well within average daily ranges and nothing new fundamentally occurred. Today I’m going to go out on a limb today and say that this week (possibly into next) will be the most important week in recent history. Why do I say that? The first main reason is from a fundamental bias. Fundamentally speaking everyone was waiting on what the Fed would do with the rate hike decision. That decision has been made and further dovish comments were also made. From a technical standpoint notice the wedge the market has been forced into. More importantly notice the stop run that we created on Thursday. After the stop run candle above the previous short term highs the market then push down even further the follow day (last Friday). Today we had some pullback which is quite typical.
In my opinion the next week or so is extremely important. If we begin to sell off again then further downside is likely in a big way. As long as we stay below the highs of the stop run I will be biased short and looking for ways to trade it. I personally prefer to not trade the S&P directly and rather trade an inverse ETF such as $VXX or $TVIX. I will update throughout the week if anything new presents itself.
EUR/USD Gives Continued Push To The Downside
The EUR/USD did give the higher probability push that I talked about in yesterday forex market analysis. Today’s push down gives a convincing break below the lower trendline we had been holding for the last few months. Make sure to check out yesterday’s analysis for more information on that subject and some points mentioned in regards to longer term trading perspective. Today I will be looking for the continued push to the downside. It is important to note that when looking for a directional move, cycle analysis is just one point and not a reason to take an entry. Simply put cycle can be wrong very easily and therefore further confirmation is always required. Further confirmation is a valid stop run from one of the pre-selected manipulation points. Once this occurs we then have a valid short opportunity.
Second Push Down On GBP/USD
Both the EUR/USD and the GBP/USD have been correlating quite closely and as such both have given what we term as a second push to the downside. The analysis for the Pound is pretty much identical to the Euro and as such I will look for the continued push to the downside. I do however believe that the GBP/USD has a higher probability of NOT giving us the third push down. The reason for that is the push we had today was well below our cycle length average and thus calls into question the next push. Again, the important point to remember is a cycle bias is just one factor and definitely not the most important factor. On the GBP/USD we have one current manipulation point from which I will be looking to take the continuation from. Should that level break to the upside and hold above it, my cycle bias will then disappear. Another option is a backside of the level trade. If your a member make sure to watch today’s video preview for a break down of that option in full.
Forex News For September 22nd 2015
As I mentioned yesterday there is no news for Monday or Tuesday that will be much of a concern for us. The big thing that is a concern is US equities. Right now they are at what I term as a decision point and the next move could be the start of a very large drop if we do break to the downside.
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