Asian Open/European Preview
11.01.2011 9:10 PM EDT
Good morning!.The risk trade was sold again today, and we are suspecting the cycle is coming to the end , we believe Risk in general have one more low, before a recovery in risk will take place . We mention today at Forum that , if the Risk aversion move is real it should be traded in a more active way, because it will not be presented as easy as a normal is ,meaning that any correction will not take the regular sizes and will be made to left traders out of the market . The USDX is in our principal count at wave 4 of either wave 1/A and a minimum 3 waves move favoring the USDX will happen either in both sides of the market , so the EW hedging is favoring the downside .The Eurusd same situation when either a new low and 3 backs or bigger recovery and lower , Either way we believe lower prices will come in the next days , that if this is the real move need to be seen .The rest of the market looks to be in sync and it is either ending a wave 3 or ending a cycle . We like metals pairs like ending either a extended wave 5 of wave 1 /A or ending wave 3 , either way they will enter the risk recovery when this should start sometimes tomorrow . Talking about tomorrow , we have a FOMC rate decision and seeing at the waves we see like the news can either created the recovery or developed into a wave C depending of the timing , we are suspecting many traders will take profit before the news creating s short squeeze and a possible wave 2/B . Oil is the only risk pair not taking part in the sell off in risk , Oil look corrective from top and maybe either has one more high and drop or will enter a WXY structure in which case the high we saw last week in risk was wave W into a WXY structure from the Beginning of the month. Any ways , we need the new low to confirmed a 3 waves move minimum in risk aversion.In our view the move so far is a 3 waves move. In general, another low should happen in risk off and a recovery after .Thanks
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