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

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.

Wednesday has lots of news ahead of NFP

US News Scheduled For Wednesday is loaded  as we lead up to Friday’s Non Farm Payroll report. ADP Job numbers come out at 8:15 followed by the GDP and Corporate Profits report at 8:30am. Chicago PMI then follows at 9:45am.

Tune in to my US GDP report  webinar here on FX Street starting at 7:30am where we will look at the fundamentals and technical’s  before during and after the news!   See Link Below to register

Charts of Future Past - Before and After - Click to Enlarge Chart Images

Below are three of my recent posted charts before and after - side by side.  

GBP-Yen Sept 18-29 Daily Chart - Shows the completion of the Double Top and “M” pattern that is continuing to trade to the downside inside a nice trend channel.

GBP –USD Sept  18 – 29 Daily Chart - Shows the Head and Shoulder Pattern completing the formation that was in progress back on Sept 18 has now gone “to and through”  the “Neck Line”.  The question now is: Will the Sterling bounce and correct to retest the neckline, or continue to the 200% extension target of the Pattern… or go sideways..?

AUD-JPY Sept 23-29 4 Hour Chart – Triangle with Inverse Head and Shoulder Pattern worked out beautifully to the Downside as it now looks more like a Double Top and “M” formation – The previous post from September 23 is now complete! Price has now retraced quickly back to the trend line.

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FOMC Announcement - Live Webinar This Wed Sept 23 Click Here to Register

US GDP Report – Live Webinar – Wed Sep 30 Click Here to Register

Search for Safe Havens - Dollar Again?

Although the US Dollar has been under pressure for the past few months - Is it time for a greenback rebound? The search for safe haven leaves little hiding places. Gold has now settled comfortably above the $1,000 mark and predictions of $1,250 are now being bantered around.

Pound Sterling Technical Analysis - September 19, 2009

The Sterling -Dollar and Sterling Yen are showing some bearish patterns on the Daily charts.

Pound Sterling - US Dollar - Daily Chart September 18, 2009

GBP-USD Daily Chart shows a “Head and Shoulder” pattern nearing completion with potential targets after the Neck Line is Hit. (Click to enlarge)

Pound Yen - Daily Chart - September 18, 2009

GBP-JPY Daily Chart has more room to go down before completeing this pattern - but this daily chart might be viewed as bearish to aggressive traders of the Sterling Yen pair. (Click to enlarge)

Tune in to the “1^ston Forex” Webinars on FX Street

Every Monday - The Week Ahead at 16:00 GMT (12 Noon Eastern)- Click Here

FOMC Announcement - Live Webinar This Wed Sept 23 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.

Asian Markets in the Drivers Seat

The FX week began Sunday evening in New York with the China Equity markets selling off. Initially the US Dollar gained ground - but then gave it back over the past few days. China’s equity markets have shed over 4% in the past two days as signs of exports and lack of internal demand are weighing heavily on the low cost producer. Most likely the weak consumer demand is continuing to trickle back to the manufacturing floors around the Asian markets.

S&P Chops Around - FX Markets Go Sideways

The SP 500 and Futures markets have been consolidating during most of the New York sesssions Monday and Tuesday. This has been keeping the FX Sessions quite choppy. The Yen crosses regained some of their strength and are currently poised at around a 50% retracement at mid week.

By Jerry Furst - Sr Analyst “1st on Forex”

US Economy Going and Growing Up Fast? -  Not So… Fast!

The Consensus Range for Friday’s  US GDP  is -2.8 to 0.7, with a consensus number of -0.7%  growth . This is highly optimistic since last month’s GDP number came in at a negative -5.5%. The “rose colored glasses and windows” crowd would love to claim the worst is over.

Jobs is the Answer

The reality is that the jobless rate is still ugly and new jobless claims are still rising. Anecdotal  talk of extended benefits being pulled back may soon paint a inaccurate picture that the jobless rate could be artificially made to look better - sooner – as continuing unemployment claims will be dropping soon as benefits expire and people fall off the unemployment benefits list as “no longer seeking employment”.

S&P 500 test of 1,000 Imminent ? and then Lookout Below?

The S&P 500 is flirting with 1,000 – A significant psychological support – resistance level.

My previous post of July 16^th showed the S&P 500 grinding towards the 956 neckline of a massive Inverse Head and Shoulder Pattern going back to January, and the Failed Head and Shoulder of the past few months.  That target was quickly achieved a few days later and promptly blasted up targeting the 1,000 mark.

S&P 500 4 Hour Chart (click to Enlarge)

This may indeed have been a significant short squeeze. If this 1,000 level is not significantly breached to the upside, then the weaker short positions that were just squeezed may have been removed – possibly clearing the way for a massive move down?

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US GDP Report This Friday 11:30GMT (7:30am Eastern) Click Here

The Week Ahead Every Monday at 16:00 GMT (12 Noon Eastern)- Click Here

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.

By Jerry Furst - Sr Analyst “1st on Forex”

Investors Education Network.com

Currencies at the Crossroads - S&P - VIX to Show the Way?

The correlations of the currency markets tied to the SP 500 seem to be holding quite well.

There seems to be a major media campaign scrutinizing the “Head and Shoulders”  patterns on the S&P 500. CNBC’s Mark Haines smirkly quizzed some technical analysts on Thursday asking, “so what happened to your head and shoulder pattern?”  -

Childish Patterns - Misunderstood

 John Authers writes in the The Financial Times on Friday that, “It is absurd to look at childish patterns when weighty issues afflict us. ”  Ahhhh…. Pitty the fundamental, long term,  buy and hold,  MBA  clinging to their PE Ratios to understand the valuations of their paper. If one thing is clear, mis statements and re-statements of sales, earnings, and future guidance (not to mention analysts recommendations) etc…. mean barely anything compared to….

The Charts Don’t Lie - Statistically Speaking

The point at which buyers and sellers agree are plotted on the charts for all to see… and these plot points form recurring patterns over time that have certain degrees of predictive accuracy - statistically speaking…

Head and Shoulders on the S&P 500 - correlated to the VIX

Daily Chart above on the S&P (click to enlarge) is showing a Inverse Head and Shoulders Pattern with a Neck Line of 956 - (At least that’s where I draw it) which coincides with the 200 period moving average. This denotes 200 SMA is a strong Support and Resistance zone - all on it’s own.

The 4 Hour Chart brings into focus the head and Shoulders of Great Debate

Lot’s of Technical Analysis naysayers (Haines,  Authers) are smug about the failure of the Head and Shoulder pattern to complete.  The issue I have with most of their commentary is that they are missing a key point regarding technical analysis - price will either “Bounce or Break” off of these neck lines. Once this “B or B” is confirmed, we have “potential” targets.

4 Hour S&P 500 chart (click to enlarge) Note that “the Bounce” off the neck line has targets of the top of the right shoulder (already exceeded) and now has a “double top” target that coincides with the “neck line”  of the “inverse Head and Shoulder of the Daily Chart.

So What…s Next???

Everyone’s talkin about these Head and Shoulder patterns…. As they will be triggering lots of technical trades in the next week or two.  So what can we use for correlation?

Enter the VIX - Volatility Index & Fibonacci

The Fear Index on the Weekly chart tapped a May 2006 support level just above 24 - which coincides with a 38.2 Fibonacci retracement - If the naysayers don’t like Head and Shoulder Patterns - I wonder what they say about Fibonaccis!

Weekly VIX Chart (Click to Enlarge) - Shows a strong support level - that if it starts to “Bounce Up” could be the “Heads Up” for the Head and Shoulder pattern to “Head Down” - Possibly making a Double Bottom to the March Lows - But…. Watch the VIx to Point the Way….

Happy Pippin…

Tune in to the “1^st on Forex” Webinars on FX Street

Every Monday - The Week Ahead at 16:00 GMT (12 Noon Eastern)- Click Here

Lots of Scheduled News On and Off the Calendar

FOMC Statement Awaits on Wednesday

Although no interest rate change is expected, the accompanying statement from Bernanke and the Fed will be scrutinized for signs of Future Policy Insights. Expectations for a Rate Hike by December and insights on the Quantitative Easing policy may have market moving consequences.

Live Coverage - 1st on Forex Webinar will be broadcast on FX Street - register below.

Economic Contraction Continues

On Thursday the US GDP will be report on the current economic status. The current consensus number is expected to show -5.7% growth.

Live Coverage - 1st on Forex Webinar will be broadcast on FX Street - register below.

Euro Under Pressure?

EURGBP - 60 Min Chart Above (click to enlarge) Sports a Head and Shoulder pattern in play and grinding towards completion of the pattern target of approx 0.842

Three “1^st on Forex” Webinars This Week - Register for free access

·         The Week Ahead - Every Monday 12 Noon EST (16:00 GMT) - Click Here to Register

·         FOMC Announcement - Wed 1:30pm EST (13:00 GMT)- Click Here to Register

·         US GDP Report - Thu 7:30am EST (13:00 GMT)  - 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.

Details Coming Soon….

 Meanwhile - Technically Speaking

EUR-GBP 15 Min Chart (click to enlarge) Shows a beautiful Technical Analysis Lesson

-  “High and Low Water Marks from 0.90 to 0.8925

- Consolidation

- Possible Inverse Head And Shoulder Forming Right Shoulder

- Fibonnaci Extensions and Retracement with “potential Price Targets

Tune in to the “1^st on Forex” Webinars on FX Street

Every Monday - The Week Ahead at 16:00 GMT (12 Noon Eastern)- Click Here

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.

Canadian Dollar Poised for a Move?

At the end of last year the Canadian Dollar Seemed ready to retake it’s ground.

It appears as if there may be another attempt as the current Daily chart I showing a very strong trend line ready to “Bounce or Break”

Triangles Past and Present - Second Try?

USD-CAD – (above)  Potential for a drop? Chart on the Right is previous Triangle from February that  (click to Enlarge)

Head and Shoulder Pattern Completed on EUR-GBP

The 4 hour charts above on the Euro-Sterling above shows the Head and Shoulder Pattern that “grinded” it’s way slowly to completion – dropping from 0.9150 to 0.8960.  Chart on the Right is the original chart posted on April 3, 2009 when price was initially testing support(click 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.

Lots of Scheduled News on the Calendar

Interest Rates Around the Globe Expected To Drop

Australia, Canada, The UK, and the Euro Zone are scheduled and expected to lower interest rates this week. The question is, are the moves already baked into the charts?

Non-Farm Payroll - Unemployment Data Due Friday

Employment data may come in at historically horrendous levels. Wednesday data from ADP and Challenger, and Thursday from Monster.com will lead up to Friday’s Non-Farm Payroll report. Wrapping up the week is the US consumer credit report at 15:00 Friday.

European Union? No Help for Eastern Europe. The Euro continues to slide against the US Dollar as witnessed by the chart below. Note the post from Febrauary 27th.

EUR-USD - 60 Min chart - Beautiful Triangle Pattern continues to play out.

Summarized Economic Calendar and Weekly Webinar

To see my filtered and concise list of selected scheduled news events I am following and to register for The Week Ahead Calendar and Webinar - Click Here

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.