This is the first time we have posted a currency on Chart of the Day and Cable is product we have chosen. In the short to medium term we have been recording lower consecutive peaks followed by lower consecutive troughs conforming to Charles Dow's definition of a Bear Trend. In the longer term the Bulls are just managing to keep control but a print below 195.92-95 would be a warning that this is faltering and a break below 193.31 would see us siding with the Bears over all time frames. As far as today goes, the Bulls will want to see us close above our Marabuzo line at 198.17 even though this poor start to the session has seen us dip below here already.
Indicators in Play
Charles Dow defined a bear market as a series of declining peaks and troughs. The opposite applies for a bull trend.
A Marabuzo line is the 50% point between the open and close on a large range day where these two points are at or close to the candles extremes. Holding above this line today on a closing basis is a positive sign and would be a relief for the Bulls.
Summary
We are selling strength here to our last peak at 200.53 but would be quick to exit should this be breached. Its looking like the Bulls may have stopped today’s rot just in time so the Marabuzo line at 198.17 still has a part to play. We are keeping things tight at the moment but will be watching closely should we get down to key levels at 195.92-95.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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