I’m just getting back on my feet after a particularly nasty fight with the flu.  I’m sad to say the flu won.  It has now run it’s course and I am just now getting a good picture of the price action that has transpired.

I will get back to my regular schedule but I wanted to share a single idea today.  One I think that most traders learn early on in their studies and slowly forget as time passes. 

Don’t sell new 52 week highs and don’t by new 52 week lows.

There is a strange desire to pick tops and bottoms.  It’s the glory trade.  I never do it.  This does not mean I don’t trade new highs and new lows.  There are certainly ways to trade new highs and new lows.  Simply put, a trader waits for the next set up.  Usually when there is a new high or low it accompanies a trend which means there is a 12 to 2 o’clock or 4 to 6 o’clock Wave. 

If you take a look at the Wave here, there is little reason to look to short this move.  Irrelevant of any fundamentals, political or economic opinion, the EUR/USD has made it’s trend clear.  One of the most common questions I get when a market reaches a new high is whether I would short it since it is "overbought".  Rubbish.  Who says this is overbought?  Overbought to whom?

Bottom line is that my own entry strategies do not set up a short in this scenario.  It keeps me trading with the trend.

If there is a opportunity to play some sort of correction or reversal then it will first appear on the 30 minute chart.  The GBP/USD has been extremely strong these past weeks.  The 30 minute chart set up a momentum play this morning which — as all momentum plays do — could have broken either way.

There should be no bias to which way this chart could break.  Simply confirm any break with the MACD Histogram.  This consolidation below the huge 2.0000 resistance level is not viewed to be an opportunity to short.  Did you look at the Histogram?  It’s about the zero line which means the only break that could be confirmed would be the break up through resistance.

Here’s the view at the 2:00am EST break.

So my point and lesson here is not to fight the trend.  Do not ever believe a market is too high or too low…well, you can think it but don’t act on it. 

How many traders thought the U.S. Dollar was too low at 82.00?  As of the 13th the Dollar made a new 52 week low.

I have opinions rolling around in my head but I put them aside when it comes time to trade.  The chart holds the only opinion I need.  And if I didn’t say it clearly enough before.

Don’t sell new 52 week highs and don’t by new 52 week lows.