I appreciate the fact that I am able to present my market analysis on the ‘net.  My Chartology on the ‘net blog is new and I am really humbled and overwhelmed by the response I have received.  Thank you for reading — I hope to continue to present charts and ideas that benefit you all.

So I received a great comment regarding the EUR/USD break yesterday.  This comment had some interesting thoughts and I think it brings up some good points so let’s talk about it.

"the EURO now is overvalue the break yesterday was pure Manupilation by big hand and they moved it higher in thin illiquid market before the Easter break they just hunt for the stops ,I feel sorry for the euro because Euro currency isn’t free the last two week is big example for the set up ,they took the EURO higher with the bad and good news no one will know when they will stop and no one will have trust in trade like this ,Do you think that Europe’s economy will not suffer from overvalue currency ,EURO is not free like AUD and NZD all them control big hedge funds and the play with the chart to control our trade because they have power and money according to thier position and they will eat us ,big fish eat small fish ."

I don’t disagree with this comment.  I feel that manipulation, running stops, and more are an everyday occurrence in any market.  There are so many influences on how and why prices move — as long as they keep moving I am happy.  The only thing that "puts me out of business" is a sideways market.

I think of hedge funds, banks, institutions as elephants walking in the sand.  They are so large they are going to leave tracks.  It’s my job to recognize where they are heading.  That’s what charts do for me.

Whether the EUR/USD "should" be trading higher is irrelevant.  The politics of it are as well.  As a trader, my job is react to the movement.  If I feel I do not want to trade the move, that is certainly a decision I can make and longer time frames like the 180, 240 and daily were not setting up the buy that I outlined here.

If the market is too illiquid and a trader feels there is too much risk because of it — much like I feel after London closes each day — then I have the choice not to enter any trades that trigger during these illiquid hours.

As of this morning the EUR/USD is back down below 1.3400 so the psychological level is broken.

Prices have returned to approximately where they were before the rally.  Many of my fellow traders played the move up and down and are happily taking their profits and enjoying their weekend.  I played the move higher but did not play the move lower (see post "U.S. Dollar and the majors conflict this morning")  Either way, what the EUR/USD "should" be at nor the manipulation that ran it up and down didn’t enter my mind.

Trusting the market’s movement comes from trusting my charting set ups.  I don’t need to trust other traders’ motives.  I accept that some factors that move the markets may beyond my knowledge and understanding.  No trader understands nor knows of all the factors that effect a market.  But each trader find the tools that allow them to measure the moves and comprehend movement.  I remember a great quote from one of my favorite trader, natty gas legend, Eric Bolling:

"Players on the Street are opinionated. Quants think they hold all the keys…Value investors mock their growth stock counterparts…analysts deride traders. Technicians ignore fundamentalists. They meet every day in the markets and place their chips. It can get a little hairy."

The U.S. Dollar tells an interesting story as Friday’s trading is wrapping up for today.

Even with the strength of a stronger than expected NFP number, the U.S. Dollar has resistance at the "00" and 83.00 is a ceiling going into the weekend.  This tells me that as good as the data was, there is still a lot of hesitance to take the Dollar significantly higher.  Monday will offer another push as equities traders are able to to react to this data for the first time.  I am bullish on the Dow and Naz and this report will simply feed that charting analysis.

Hopefully this post will give you all a better idea of how I trade and analyze the market.  Special thanks to elc for the comment.

Have a Happy Easter!