Technical and Fundamental Trend Reversal Signals? 

April 16, 2010 - Daily Chart (Click to Enlarge)  - Dow Jones US Bank Index - A boring line chart in the Wall Street Jourmal on Thursday April 15 caught my attention over the weekend as a parabolic spike was evident at the right edge of the chart. Closer inspection showed me several bearish technical indicators: Evening Star, Break of Trend Channel, and a 2.382 Fibonacci Extension resistance level - point to a possible Trend Reversal.

By Jerry Furst- Sr Analyst “1st on Forex” www.Investors-Education-Network.com

Yen Loses Ground after Non Farm Payroll

JPY-USD 30 Min Chart -  March 8, 2010 Shows Non Farm Payroll Spike follwed

by Consolidation - Forming a Flag Pattern

Thoughts On the Euro - Lack of Direction

- I don’t like the Euro right now

- Looks like sideways consolidation - chop on almost all time frames

- for good reason - GREECE

- My crystal Ball is cloudy on the Euro - “try again later”

EUR-USD 2 Hour Chart - March 8, 2010 -

Euro Downtrend Stalled - Greece Concerns Continue

February’s GDP  and Global Warming?

February’s GDP estimate is expected to come in at 5.7% the same as last months number. The consensus range is a narrow 5.4% to 6.0% of GDP growth (source Econoday).

In January US GDP was reported to be 5.7%. This was at the high end of the consensus range of expectations. The consensus range for January (source Econoday) was expecting GDP to come in between 3.5% to 5.7%. This kind of sounds like global warming in a way that makes people say is this real? Time will tell!

Expectation Range is Tight

The expectation range for February is tight and this may be cause for more extreme volatility.  February has a tight  0.6% range in contrast to January’s 2.2% spread

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),

Tune in to the Free Webinar on the US GDP Report live on FX Street starting at 7:30am EDT (12:30 GMT) – click here to register

Triangle and Inverse Head and Shoulder Complete Their Pattern Targets

AUD-USD 60 Min Chart 24 Hours Later  (Click on chart to Enlarge) shows the

Triangle and Inverse Head and Shoulder complete their pattern targets - The Inverse Head and Shoulder Pattern failed with respect to being a “bullish” pattern - but as often happens, if the pattern fails it will make a double bottom. And that’s what happened - as you can see the chart pattern target drawn the previous day was indeed hit and was exceeded.

Previous Days Post

AUD-USD 60 Min Chart February 22, 2010 - Previous Days Blog Post shows the potential chart patterns that indeed hit and exceeded its targets. (Click on charts to enlarge)

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

Submitted for your appproval and comments

There is a possible rally being setup for the AUD-USD and Gold as the following charts will show some really stong and similar chart patterns and correlations.

Recurring Chart Patterns - Click To Enlarge Charts

AUD-USD – 60 Min Chart Feb 22, 2010 shows a Inverse Head and Shoulder pattern with a triangle pattern built into the right shoulder.

The Same But Different?

GLD Weekly- Looks Very Similalr to 30 min AUD Chart - clcik on the two and compare

This chart pattern is almost identical to the Weekly chart of the Gold ETF – GLD that I had posted on extensively that worked out so nice. The difference is that the Aussie chart is a much shorter time frame at 60 minutes and as I type price is threatening the resistance levels of the Triangle Pattern.

Notice the two price Targets above – one for the Inverse Head and Shoulders and the other price target for the Triangle pattern. Almost identical to the AUD-USD Chart

AUD-USD-GLD  Correlations

AUD-USD-GLD  30 Min Chart - Correlations

What makes this even more coincidental is that gold and the AUD-USD pair have a strong correlation as is shown on this 30 Minute chart

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

Fed Transparency Seems Clear – But What’s Ahead?

As the markets had a knee jerk reaction to the Bernanke’s decision to increase the Discount rate the real focus needs to be watching the Fed Funds rate.

The Fed has been quite transparent and the FOMC announcement in January hinted that the discount rate might be adjusted.

Can you trust the numbers?

The economic data coming out all seems to be good with last weeks inflation numbers showing consumer prices going down (minus food and energy) – But can you trust these numbers? Do you believe that GDP is really at 5.7% last month? Do you believe that Unemployment in the US is only 10%?

Wishful thinking with Rose Colored Glasses got us into this mess – and all the happy talk and window dressing will not fix the underlying problems.

Models with No Losses

The whole mortgage and banking bubble was allowed to inflate on the premise that the risk and rate of homeowners defaulting on their loans was practically insignificant and easily insurable.

Municipal Bonds Next?
State, City, and Counties in the US are struggling as Real Estate values plummet and foreclosures skyrocket – revenue collection is a problem. Christine Richard and Darrell Preston at Bloomberg have a great article detailing some of this problem. One quote from that article that has my attention is:  “It is a worst-case scenario if the dynamics of the municipal bond market change,” said Rob Haines, an analyst who covers the bond insurance business at CreditSights Inc., an independent research firm in New York. “The companies have modeled in virtually no losses.”

Meanwhile a Look at the Charts

EUR-USD Feb 19 2010 - Daily Chart (Clck to Enlarge) Is the Euro Over Sold?

DX - US Dollar Index  - Daily Chart - Feb 19, 2010 -

Is the Dollar Index at Trendline and Fibonacci Resistance?

Jerry Furst is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients Click Here for a Free Self Evaluation Survey.

Ripple Effects of Confidence and Lack There Of

Trichet and the ECB are scrambling to help contain the Greece crisis inside the Euro Zone. The alternative is that the IMF might get involved - putting the Euro at a confidence deficit that might ripple across both sides of Europe and the Atlantic - and the Pacific as well…

Paper Money in Question?

Marc Faber - The other Dr Doom – is reported to have said on Bloomberg’s Asia Confidential “when Greece is bailed out it will be another indication that paper money” will come more in question. Faber went on to say that the severe drop in the Euro in the past weeks may be overdone and thinks a rebound is possible. He also postulated that if Greece is forced out or leaves the Euro it could make the remaining Euro countries stronger…. Who knows….?

The Charts show the Euro rebounding on the shorter time frames.

EUR-USD 1 Hour Chart – Price is Rebounding towards the Resistance of the downward Trend Channel Click Chart to Enlarge

EUR-JPY 30 Min Chart- Shows a possible Inverse Head and Shoulder - a break above the neck line resistance may lead the way to a larger move on the Euro’s correction.

Jerry Furst is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients Click Here for a Free Self Evaluation Survey.

USD-JPY 4 Hour Chart shows Fibonacci Support and Resistance above and below trend channel - while price flirts with either direction. (click on chart to enlarge)

The large downtrend has been violated to the upside and has created a smaller but well formed upward trend channel.

Support?  The Supporting trend line of that well formed trend chanell is holding nicely - and currently coincides with the 25% retracement at 90.28

Resistance? - The 38.2 Fib holds resistance at 90.90 and previous prices show serious congestion at that level.

A break of that support line to the downside may signal a continuation of the larger downtrend chanel

On the flip side: price is currently bouncing off that support to the upside, and may  upwards the top of the smaller  upward trend chanel

Time and Price will tell!

Jerry Furst is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

The European Central Bank (ECB) announced that they are ending the emergency “swap line facilities” that were put in place during the “dizzy dayze” of the financial meltdown.

This came out at 2:15 - Just at the same moment as the FOMC was due to announce their interest rate decision and give hints of forward looking monetary policy.

Fed Policy: No Change - Wait and See Starts

In a 9-1 decision the Federal Reserve kept rates steady as they see “economic activity continuing to strengthen” and they believe that “the deterioration ion the labor market is abating”. The Fed also stated that the TAF – Troubled Asset Facilities - will be winding down and that they need to monitor how the economy responds as the stimulus and emergency lines are pulled back.

Euro Flirts with the 4000 Level

The Euro tested the 1.4000 level after the FOMC announcement and then retraced approximately 50 pips – leaving some traders a bit frustrated if they were expecting a violation of that big number.

Tune in to Monday’s Free Week Ahead Webinar and FOMC on Wed - Click Here to Register

Jerry Furst is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients Click Here for a Free Self Evaluation Survey.