Posts by "cygnus"

Said, so based on your understanding the collapse of Lehman Brothers in 2008 was not bad for the US? After that crisis became apparent the eur/usd fell over 3,700 pips in a few months.

"10 pip shy of my 4040 level and good reaction so far. This kinda stuff is TRADEABLE"

Of course your analysis is tradable, DaveO. I suggest you stay with your own strategy and don't listen to naysayers.

The "symmetry" I believe you were reffering to is wave A equaling wave C in a corrective 3 pattern (what would be expected to happen in a perfect 5,3,5 corrective pattern). EW works exceedingly well these days in EUR/USD and the USD index. I jumped onboard for the short - filled at 4020...

"Hey puzzo... how's it going?
i don't know if you remember but i told you never to trust stochs and rsi's on it's own alone... they are simply indicators... can't really trade on those indicators alone..."

The only thing I find to be useful in such indicators from time to time is divergence between the indicator and price movement, particularly where the divergence appears where the indicator is moving down from over bought territory of up from over sold territory. This signals a potential coming price reversal. Other than that, I agree that they are lagging indicators and not of much use (i.e. other than divergences), in my opinion.

Fundamentals are more a symptom of sentiment. For example, it is sentiment that causes manic bubbles in markets and it is sentiment that causes those bubbles to break.

There is always a fundamental story told as to why one should buy at a top and sell at a bottom.

Sentiment does not turn on a dime. It is like a large ship that must maneuver slowly as it turns about. Volatility has sharply increased since 2008 as sentiment turns. I think the next push down will eventually involve more wide spread recognition of systemic imbalances (and consequences) caused by massive deleveraging and a simultaneous drop in equity markets. Huge amounts of credit evaporating and more capital preservation will have a deflationary effect in the US. More QE will achieve little to counteract the situation. If this is how things develop, it would not bode well for the eur/usd. I could, however, see more upward movement for the pair (perhaps even as far as to around 1.40). However, this rally may be short lived at this point. Sentiment for the pair in futures is getting to an extreme, which could mean the rally is ripe for reversal soon, in my opinion.