DISCLAIMER

PLEASE READ THE DISCLAIMER AT THE BOTTOM OF THIS PAGE WHICH APPLIES TO ALL CONTENT IN THIS BLOG AS WELL AS ANY OTHER MATERIAL FROM WE ARE FUTURES TRADERS LLC. READING ANY CONTENT BELOW CONSTITUTES AN AGREEMENT BY ALL READERS THAT THEY HAVE READ AND AGREE TO ALL THAT IS SET FORTH IN THE DISCLAIMER AT THE BOTTOM OF THIS PAGE.


Friday, November 30, 2012

JAPANESE YEN ANALYSIS




I am down today because I decided to go back to legit titles to the articles and the traffic is falling off a cliff today to the blog. It is hard to accept for someone like me and even impossible to do, to grasp that deceiving headers on the internet is how you build a business. I guess mine were not really deceiving since I did talk about the topic but they were named specifically to target certain searches I thought might be happening. Now that my fun is over, there was a request for an analysis of the Yen yesterday so here we go.

First the obvious, we are in a down trend anyone can see that. We are seeing a lot of commercial buying in the COT report which is the red line on the chart. In blue is my new COT tool I call New Look. It is designed to move faster so that it does not always stay pegged on one side or the other of the grid against a trend. The biggest problem with COT stuff is hedgers and how they position themselves during strong trends. They are often against the trends for months at a time. You don't want to fall in love with trying to follow that as a guide for which side to trade. 

There are several instances where my new tool and the original are at odds with one another. I think the preponderance of the evidence looking at those suggests that my new tool is superior. Most recently both of them were together on the bullish side and we got a bounce of 4 or 5 days. When that bounce happened my new indicator immediately got out of the buy zone and started going toward the sell zone. This is how I want this tool to work and I am sure there are still more enhancements ahead that will make it work even better. However, for now going into today it was in neutral territory whereas the COT data was bullish. For today the COT stuff was wrong but you have to keep in mind this type of analysis is intended to pick larger moves not just a few days. As a result I don't consider either of them right or wrong at this point. The COT stuff is telling us to look for a rally here and that the next big move should be up. My new tool is not saying anything as of today, it is neutral.

If we look at a weekly chart the picture looks a bit better for bulls.




This chart shows we are getting into a price zone that in recent times has been very heavily supported by commercial buying. This is one good way to use COT data, look for major support points and where commercials have supported things in the past. From this standpoint it appears we are approaching a very good buy zone for a large move up. Also you can see in this time frame my indicator and the COT data marry up a bit better. I do like it when they agree which is where they are now and Small Specs are heavily short.

The Yen should be setting up a move coming to the upside.

I don't want people now going to a 75 tick chart and buying the Yen just because I said this was setting up for a buy. This is a fundamental setup and is in the process of developing. A further dip would be better but we don't always get perfection with this stuff.

The Newsletter may be a day late I am having some computer problems and having to email drafts to myself and edit them elsewhere then send back etc.. so it is taking longer than normal to complete.

Our trading services this month are mixed, we have a profit in Bonds and a loss in the Swing Service. I will report the results good bad and ugly, once the month ends.

Good Trading


6 comments:

Charles Hugh Smith said...

Chris, now that it's 11/30, isn't it time to revisit the Mystery Chart and see if there is any evidence the weakness it foretells from here might occur? Thanks!

Chris Johnston said...

Yes Charles I have addressed this in detail in my monthly newsletter however that has to remain on some level a higher level of information than what the blog provides since it is a pay service albeit it a cheap one.

I did a post the other day on this did you see it?

Charles Hugh Smith said...

Yes, I read your blog every day. I appreciate that you're still sharing some of your work with non-subscribers.

Chris Johnston said...

Thanks Charles and also thanks for referring people to my blog. I do have regular readers that found me through you. I will always maintain this aspect of things, it is fun even though it is a lot of work. I am going to be incorporating my blog into my website in the site redesign so it will all be in one place once it is done.

John M said...

I've received a couple of the monthly newsletters by this point and I have to say they are terrific. Simple tools like RSI and moving average bands are the kind of things that it's easy to forget about as the years go by and one gets sucked in by more 'sophisticated' tools, many of which don't work nearly as well as the basic indicators you've been featuring. Anyone considering a subscription should dive in, in my opinion. Whether your'e a beginner or a veteran, the content is always useful and, if you've developed some bad habits like many of us old-timers, it's a great corrective that can help you get back on track.

Thanks, Chris. Excellent work.

Chris Johnston said...

Thanks for the nice comment John. We all fall prey to making things so damn complicated they can't possibly work. I am glad to hear the content in these is satisfactory I put a lot of work into them.