VeriteFX.com Weekly Market Outlook  

February 1^st to February 6^th 2009

This week’s market environment will present additional challenges for traders, namely an ECB rate decision and Trichet press conference on Thursday and of course the beloved Non-Farm Payrolls and Unemployment Rate event on Friday. It’s not likely the markets will hear much if anything from Trichet prior to Thursday’s ECB event and this will lead to the usual speculation and positioning that goes on prior to major interest rate announcements where there is room for doubt. Expect chaos.  

Over the weekend I saw a lawn sign for a company called Tour of Nashville Foreclosed Homes and I thought that was a really brilliant idea for a company. That’s one thing I can appreciate about America is that spirit to make something out of nothing. In this case we have a real estate agent capitalizing on the fresh crop of foreclosed homes in order to keep his business rolling. God bless him, I hope he does well. I look at the mess in the financial markets the same way as this guy is looking at the mess in the real estate market – there are plenty of money-making opportunities out there when we go about it the smart way.

We’re going to get grim fundamental data this week but let’s keep in mind it’s not the end of the world. For example, Chick-Fil-A (www.chick-fil-a.com), which probably my favorite fast food restaurant, just reported their sales are up 12% and they plan on opening 83 new Chick-Fil-A’s in 2009. A fast food restaurant like Chick-Fil-A does well during a recession because the quality of their food far exceeds that of McDonald’s and Taco Bell for just a little more money.

Chick-Fil-A also offers benefits like putting their employees through 4-years of college. In these dark times of recession a young person may do well choosing a career path with a growing fast food chain like Chick-Fil-A. Other job opportunities that are not recession-proof will continue to evaporate at an alarming right I’m afraid. At any given Chick-Fil-A, especially here in the South, it’s common to see a 72-year old retired homemaker working next a 16-year old high school kid making money to go on a class trip to Europe. It’s an interesting culture.  

Yesterday I was at AutoZone and I asked the dude helping me which team he had for the Super Bowl. He said he didn’t care because his boss was making him work Sunday night and he’d miss the game. My response back to him was, “dude you should be thankful you even have a job right now”. He said nothing back.

Times are tough and will only get worse in my opinion. More job losses are coming, the recession is ready to take the next leg down and global equities markets are on the brink, but as traders in this market we need to stay balanced and focused on the good and the bad to gain a better overall view.

Politics and the markets:

Based on current poling data only 45% of Americans actually think the newest stimulus plan offered by the Obama administration will improve the economy. Obama promised the markets a stimulus package this week. In my opinion there will be no new stimulus package that passes Congress this week. The Republicans have declared war on the Democrats and the fight is on. The political grandstanding will be nasty in the short-term. The political fight over this stimulus package will likely cause more fear and speculation on Wall St.

The Republican’s stimulus plan provides government-backed home loans fixed at a rate of 4.00% for those deemed “credit worthy”. What the Republicans haven’t said are who would qualify for these loans and which type of credit scoring would be considered. If the government uses FICO scoring they can forget about the majority of current homeowners, who are struggling to stay out of foreclosure, from being worthy enough to qualify for these loans.

As much as I can’t stand the Republicans and the Democrats, I can see the Republicans are making fast and strategic moves. They took a beating last November but they are learning quickly and making provisions to battle the Democrats during this next round of the US recession and global economic crisis.

Last week the Republicans appointed Michael Steele as their leader. Steele is the first black man to lead the party and is known as a centrist with the ability to bridge the gap between conservative and liberal. In my view this was a good move.

Steele is a fiery character and a smarter choice then the female version of Georg Bush i.e. Sarah Palin. Steele’s already taken the opportunity to tell Republican leaders on Capitol Hill to “stick to their guns” and vote down Obama’s stimulus plan.

Any plan that involves a balance of tax cuts, reductions in government programs that will not directly impact the US economy, and direct consumer and housing sector stimulus may have the potential to make a positive impact. Any plan that does not make strong provisions against government-backed intervention to bailout publically-traded or privately-held banking/financial institutions is a plan that is destined to ultimately fail. We have thrown over USD$2 trillion at Wall St. in the attempts to supposedly save Main St. and safely guide the world’s economic system through the global recession.

The only thing the $2 trillion worth of freshly printed USD has accomplished is prolonging the global recession and keeping Wall St. from a total implosion. The central banks and governments of the world keep coming up with new plans knowing none of them will work. They realize any government-backed handout gives US and Asian equities markets and the European bourses something to be hopeful for and a reason to throw liquidity into stocks.

Maybe they are buying time or maybe they really believe they can print their way out of this mess. If the central banks and politicians actually believe they can stop the global markets from further destruction by continuing to create debt out of thin air and by flooding the money markets with cheap USD, they are flat wrong.   

What does all this have to do with the EUR/USD? Everything… if the global markets remain in a state of fear and panic it means currencies like the USD and JPY will likely continue to beat up majors like the EUR and GBP. I won’t take the time going through the laundry list of all the possible implications heavy government intervention will have on the EUR/USD but most of the reasons should be fairly obvious.

We’re already seeing civil unrest in Europe and I know it stems from the growing tide of negative sentiment towards every day life and living. The French and Russians are rioting over economic and political issues. In what I consider to be one of the most civilized nations on the globe, Switzerland, there are riots in response to the leaders attending the World Economic Forum. Riots in Europe are not likely going to do much to help support the euro…

This is purely my own speculation but I think one place this could eventually go is toward the formation of a centralized or globalized type of world government system. If the government bailouts continue being ineffective it will open the door towards nationalization in the major world banking systems. When banks become nationalized a shift in wealth control occurs giving politicians more power and leverage.

For example, last Friday UK Prime Minister Gordon Brown said:  “The world must unite to confront the financial crisis; urgent solutions are needed”. Thanks but no thanks, I don’t want the goons running the Fed and Treasury taking orders from the equally brain-dead idiots at the ECB, BOE, BOJ, SNB, and whatever other central bank you care to throw in there.    

In the January 12, 2009 edition of the International Herald Tribune, so-called political genius Henry Kissinger wrote a commentary calling for the formation of the dreaded “New World Order”. You can read his commentary here: http://www.iht.com/articles/2009/01/12/opinion/edkissinger.php

It might not happen during my lifetime but I think Kissinger will likely get his New World Order or One World Government. In the meantime you can expect the politicians and bankers to keep the markets exactly where they want them in order to keep the manipulation going. Fear is a powerful way to control people…

Risk warning:

Especially during this week where we have back-to-back ECB and NFP events, I need to remind traders you’re trading a “market” created by your broker. Your broker, who makes your market, accomplishes this through buying/selling currency contracts on the interbank system, so no matter how you slice it, your tiny retail FX account goes up against:

·         Central banks like the Fed, ECB, BOJ, and BOE

·         The top 450+ global financial and brokerage institutions who bypass the bucket shop retail FX brokers to more directly access the FX market. In addition, they have the combined liquidity of $1 trillion+ to move in and out of the FX markets on a daily basis

·         Some of the most brilliant and sought-after fundamental and technical traders on the planet who have way more liquidity at their disposal than you do (brilliant doesn’t necessarily mean consistently profitable)

·         Fellow retail FX traders who are clueless, chronic over-leveragers that get chased around by the brokers all day long

Those are a few ways we can explain the fact over 90% of all retail FX traders consistently lose money in this game even though they are all using indicators claimed to be “self-fulfilling prophecies”. Trading a price-action based system is about finding repeated patterns that will show you a high probability opportunity to capitalize on fluctuations in price.

On Sunday evening take a few minutes to develop your risk plan for the week based on the overall risk of the market, the fundamental events on the economic calendar, and what your personal risk appetite is knowing this week will bring more volatility and sharp price swings.

VeriteFX.com:

In just a few weeks we’ll be ready to officially launch our new trading community called VeriteFX – www.veritefx.com.

After two years I’ll finally have a world of my own to trade the way I want to and put out the kind of information I believe will best help traders. I don’t want to use this forum to promote anything but I want to take a few lines to explain the point of starting a new community and what our goals are.

All the features are 100% free from any subscription fees. My vision for the community is to make it a place where traders from all walks of life, ethnic and social backgrounds, and levels of experience can come together with the common mindset of wanting to learn how to use the market to make consistent profit.

Our primary focus is on trading. It’s nice that people enjoy reading my market commentary but at the end of the day commentaries don’t put money in our pockets. Our ability to make money is all that matters. It’s not going to make any difference to me if I get 30-seconds on Bloomberg or CNBC; all I want is ROI that beat’s the best Wall St. has to offer. If you decide to join our community, go in knowing we are serious about trading and developing our skills to make consistent profit.

Right now we’re about 90% completed and we’ll begin testing the full functionality of the site this week. One of our Admins is responsible for hitting social networking sites like Facebook and Twitter with our message. If you participate on those sites be sure to find us and help spread the word.

A considerable amount of energy and money have gone into making this community possible and all those that are helping me wouldn’t be involved if they didn’t share the same vision. You can come back here to check for updates on how the site is coming along. If you have any questions you can send me an email or you can call VeriteFX.com at (615) 589-6663. 

ECB rate decision:

February is an exciting month for me as I’ll finally get a much-needed vacation from America, so I’m happy to go to the Netherlands in a few weeks… maybe while I’m in Europe I can join a good riot in France, flip some Peugeots or something.

Seriously though, it will be good spending time in the Europe to see firsthand what kind of economic struggles are facing the EMU. It’ll be especially good talking with Europeans to listen to their views and opinions on economic issues in Europe. I should be back in America by the ECBs next rate decision in March and I’ll have a much better gauge for how the ECB is going to handle rates.

As far as the February decision is concerned, my forecast is for no change in rates. I believe Trichet will hold the ECBs key interest rate at 2.00% and he’ll tell the markets the ECB will take new data released in February into consideration for a possible reduction of rates in March.

If Trichet pulls a surprise move and cuts rates even 25bps on Thursday this will come as such a shock to the global markets I believe the euro could sell-off violently. A surprise rate cut at the last minute would signal some potential new information the ECB is looking at that will negatively impact the Eurozone economy in the short-term. A surprise rate cut would likely cause panic, fear, and speculation with market participants and I think confidence in the euro would erode and market participants would pile into the dollar.  

In Thursday’s EUR/USD update we will cover the ECB rate decision in more detail and look at the possible implications for the euro.

EUR/USD:

I’m entering this week with no bias. I don’t have to be a euro bull or dollar bear as my trading plan calls for finding higher-probability trades based on price action in order to capitalize on fluctuations in price. There are a few key areas I’m focusing on this week in order to help my view on general market direction. Specifically, I’m watching the following closely:

·         USD/Gold correlation

·         Yields and prices on US Treasuries

·         USD Index

·         Crude

At the end of last week we had a situation where gold and the USD both gained simultaneously, a completely disjointed move. That is a rare occurrence and something I will be closely monitoring as we get the new week started. If this trend continues it shows market participants are still stuck in a state of fear and panic as they send money flows into “safe havens”.

Overall the 1.4700 and 1.2800 levels that I’ve been talking about for the past three months are still my most important topside and bottomside levels. For most of the afternoon last Friday the market made repeated runs at 1.2800, briefly breaking, but managing to close right on that level. 

As far as more real-time levels are concerned, on Sunday/Monday we need to keep a close eye on the 1.2764 / 1.2752 / 1.2722 levels on the downside in the event the market wants to test lower. A break below the 1.2700 level would likely open the door to then test: 1.2684 / 1.2658 / 1.2624. The euro remains at risk at the start of the week but I would caution taking any new euro shorts right as the market is opening as that too could present risk.

The economic data on the books for the EUR/USD this week is heavy on manufacturing, consumer, growth, and jobs. Traders also need to beware of surprise comments and rhetoric from central bankers, especially ECB officials. If the S&P 500 and Dow struggle this week and break through support levels we could have a simultaneous situation where the USD Index is breaking through resistance levels if the euro and pound take a beating and the dollar is able to hammer the Swiss franc. Risk aversion based on an equities sell-off would almost likely lead to strong gains by the USD and JPY.

I see the EUR/USD maintaining a rather strong correlation to the S&P 500 futures and gold this week, so I’ll pay close attention to how those correlations are responding and how their price action is affecting moves in the EUR/USD. That’s all I’ve got for now. Check back for more updates as market conditions warrant.

Even though it’s probably not going to happen, I would love to see the Arizona Cardinals brutalize the Pittsburg Steelers in the Super Bowl. No matter what, it should be an interesting game.

-VeriteFX

ProFXI EUR/USD Daily Update

Friday, January 30^th 2009

Some markets came back to earth Thursday while others went to Mars… Obama scared the crap out the world which sent US equities plummeting, the euro freefalling, and gold and the dollar soaring.

The EUR/Gold correlation was completely disjointed on Thursday. Never before in my brief trading career have I witnessed gold make a strong upside gain while the euro simultaneously sold-off against the dollar. To see gold and the USD rising rapidly at the same time is a rare occurrence and something that is almost an impossibility under almost any other market conditions.

If this type of trend continues it’s a seriously ominous sign for the euro and any trader bullish on the EUR/USD. When you have a situation where market participants are piling into gold and the USD at the same time this is a clear sign of risk aversion and downright panic as the old “safe-havens” of gold and the USD become highly sought after.

 This rhetoric from Obama spooked the markets pretty good:

“We need to begin the process of regulating Wall St.” and “Now is not the time for Wall St. to get bonuses, and that’s the message I want to send to them”

I’m not sure there’s ever been another president in history that’s come straight out with such strong rhetoric against the somewhat free market capitalist set-up otherwise known as Wall St. This is pretty shocking rhetoric to me and not what I expected from a man who claims he wants to restore confidence to the markets.

Obama might already be campaigning for 2012 by taking up an offense for Main St. against Wall St. but those tones combined with the coming battle in Congress over the $900 billion economic stimulus bill is going to keep US equities on a rollercoaster ride in the short-term.

EUR/USD:

As we forecasted all USD data printed worse than expected and at record low levels. Initial Claims printed at the worst levels in the 40-years the Labor Department has been keeping those records. Initial Claims are up by 159K from the prior week and the total number of unemployed job seekers is at the highest levels since 1983. I maintain my view that the US job sector will get even worse before the numbers start to turn around and get better.

New Home Sales have eroded by 14.7% in the month of December which is the worst decline since 1963. Housing has not seen a bottom and will decline further. Median home prices will fall below the $172,000 level and inventories will continue to pile up in my opinion.

The Durables data was abysmal, printing well worse than expected to the tune of -2.6% last month and Durables Orders are -5.7% y/y which is the second worst decline in history. The consumer’s not done contracting and the retail sector will remain hostage to the non-existent US consumer.   

This morning we’ll deal with Advanced GDP and if we don’t get the worst GDP print in 26-years I will have to believe the numbers are fudged. All I have to do is look at the slaughter and mayhem in the US retail and consumer sectors and that’s enough to tell me GDP should have contracted at least -5.1% in Q4 2008.   

I think Wall St. may struggle with tomorrow’s data if they are already panicked in addition to the fact it’s the last trade day of the week and the month. That means market participants will be squaring their books which will translate into sharp price swings and exaggerated price action especially between 0730 EST and 1500 EST today.

I’ll certainly be in front of the market on Friday looking for trades but my risk appetite will be extremely low and I will not add any new positions after noon EST. I do not want to go into this weekend with any new open positions, so I will be flat by market close today. The risks of a surprise geo-political event or central bank rhetoric that could come out over the weekend are high right now. All traders should practice smart risk and money management tomorrow.

I’ve been doing a ton of writing for the new site the past 48-hours and I’m all wrote out right now… if you plan on trading tomorrow realize the conditions will be choppy and potentially violent especially if money flows move out of Treasuries in a weird way on Friday.

These may be some of the last levels I post before we close out the week, they are important overall upside and downside levels to watch as there could be some testing around these price zones:

Upside: 1.2972 / 1.2999 / 1.3034 / 1.3067 / 1.3142

Downside: 1.2905 / 1.2880 / 1.2823 / 1.2797 / 1.2754

-ProFXI

 

 

 

 Hi. I wanted to give you an update on the progress we’re making with the new VeriteFX trading community.Right now we’re about 85% completed on the entire site which puts us significantly ahead of schedule. I had an original target launch date of March 1^st but a few days ago Idecided to scale my trading back so I could knock out writing responsibilities I have for the new site and to spend time working with our site designer and programmer. I’d like to see the site launched at least a week ahead of schedule. That’s the goal we’re shooting for.

On Tuesday of next week we’ll have ten traders from different parts of the globe testing out the entire site. They will be testing our new chat room, SMS service, blog, and the other features of the community. After we complete the testing phase I should have another progress report and then we should be close to an official launch.

As far as my relationship with Forex Justice is concerned, I will continue posting market updates on the FJ blog even after we launch the VeriteFX community. I support what Forex Justice is doing and they are supporting us.

One new feature we’ll be doing is regular podcasts (mp3). That’s something totally new to me but I’m willing to giving it a shot to see how it goes. I haven’t decided how I’ll use the podcasts but I was thinking of using them to record Q and A’s and for market commentary. If you have any ideas on how we could best utilize that technology send me an email at moderator@veritefx.com.

VeriteFX also has a page on Twitter. I have no clue what Twitter is or does but apparently people are using it and it’s popular so we’re on it. The link is: https://twitter.com/VeriteFX

One last thing, I still plan on being in the Netherlands on February 22^nd to the 24^th to meet with traders. So far there are a dozen traders planning on meeting up with us. If you’re interested on getting the details you can send me an email.

That’s it for now. Take care. 

-David

 

 

Before we get into the weekly outlook, a few personal notes... as far as my travel schedule is concerned right now I'm sitting in the Denver airport writing this week's update, waiting for my plane. I'll be back at home very late this evening as I have one stop off to make before I get home to Nashville. Between now and February 21^st I'll be at home with the number focuson trading and offering good analysis on the EUR/USD for traders as we enter the next phase in the markets after the start of the new year.

This past week I realized that I've been sitting in an FX trading chat room since the end of February 2007 until the present without so much as a total of two week's worth of vacation. All those who were freaking out this week because I took some personal time can get over it, I've paid my dues and put in the time, but now I'm back and ready to roll strong very the next couple of weeks until I go to Europe.

This is my last full week at ProFXI and my solemn promise is to put in an honest effort to find higher probability trades from Monday until Friday and close out this phase on a positive note. If there are times when I'm quiet in the chat it just means I'm focusing on the markets and the task at hand.

As far as the markets go, I have no clue what they did last week for the most part. The euro remained bearish, the yen remained bullish, and equities remained bearish just as we forecasted accordingly and traders who followed our advice to just simply short the euro on the rises and buy the yen on the dips have reported good gains for last week. Last week I was very clear on two things: don't short the euro below 1.2850 and don't buy it above 1.2950...

EUR/USD Fundamentals:

I'm writing this week's outlook having done limited research so far, however, at this point I'm not seeing anything fundamentally or geo-politically that could be a catalyst to cause a sustainable trend change for the EUR/USD for the 24-hours.

We do have quite a bit of critical data on the books this week for both the US and Eurozone. At least at the start of the week the biggest event by far is the FOMC rate decision and FOMC rate policy statement which happens at 1415 EST/1915 GMT on Wednesday.

Technically the Fed could move interest rates a few basis points lower as the so-called "trading band" for the Fed Funds rates floats between 0.25% and 0.00%. It's possible the Fed could drop the interest rate to an effective 0.00% and just open the floodgates for what is virtually free money hot off the printing presses.

I'm forecasting we see the Fed not make any moves on the Fed Funds rate but rather I see the FOMC voting on some sort of new measures or plan to make for the easier flow of credit in the money markets. The FOMC statement will likely sound as if Stephen King wrote it... the US economy is that horrific at this point.

As we head into Wednesday's FOMC policy decision it will be important to watch Treasury yields for signs the markets are becoming increasingly wary of the Fed and Treasury's ability to guide the markets through the next round of market turbulence.

I was just looking at how Treasuries traded on Friday and I see within the moves of Treasury yields that the markets may have little or lessening faith in Obama's ability to pull the US economy off life support. A friend of mine made a great point the other day... when Obama was running for office he promised a plan to create 2 million new jobs, then when he got elected he promised to create 3 million new jobs, and now the latest promise is that he will either create and or save a total of 4 million jobs.

If the Obama administration wants to keep hitting the markets with that kind of flip-flopping on one of the biggest issues facing the global economic system (jobs) it's going to erode whatever confidence Wall St. is trying to build up. The real question is, how can anybody actually quantify a saved job? If the economy continues the trend of shedding 500,000 jobs a month instead of 600,000 a month does that mean Obama saved 100,000 jobs? I didn't expect Obama to act like an idiot a week into the White House but I guess I was wrong.

On Monday and Tuesday I will be watching Treasury yields for clues on how the markets are feeling this week because if Treasury yields continue to rise while the Dow and S&P 500 continue to decline, we have a divergence there that could trigger the next leg down in this financial turmoil. There are several reasons why it could turn ugly if Treasuries go bearish along with equities...

First of all, if market participants pull money flows out of Treasuries and are too scared to buy equities this could be a sign of not just intense risk-aversion and outright fear but it could be the market's way of saying the supply of Treasuries exceeds the demand. The reason the market would think that way is because of all the debt the Treasury has to create to not only keep funding the TARP program but to do things like bailout Bank of America, send another $3 billion to Fannie Mae and Freddie Mac this week, and then of course to fund all of Obama's messiah programs in the coming weeks.

The other problem with a tag-team combo of bearish Treasuries and equities is that it would show more signs of credit freezing up again. It's no secret the credit markets remain mostly frozen but if market participants cannot get credit to buy what's considered the "safest" asset-class (US Treasuries) then we'll have a major problem on our hands.

All of those potential problems that are legitimately looming would translate into intense volatility in the FX markets, specifically with the EUR/USD, EUR/JPY, USD/JPY, GBP/USD, USD/CHF, and GBP/JPY. I stand by the belief the overall bullish Treasuries market is a bubble that is soon due to burst. I've personally never witnessed or traded through a bullish bubble burst in the Treasury market, so should we encounter that situation it'll all be new to me.

In August of 2007 the yield on the 10-year was trading around 5.25% and just a few weeks ago we almost hit the 2.00% level on the 10-year. In my view a decline of about 320bps in a matter of 17-months is a sign of a bullish bubble that's ready to pop because at some point the supply has to outpace demand and I think we're seeing the signs of this now. There's going to be a lot of Treasury supply on the market the next few months...

GDP-

On Friday we get the Advanced GDP for Q4. My forecast is that we get an absolutely abysmal number compared to the fudged number we saw for Q3. The decline in Advanced GDP should exceed the -5.00% level in my view. A print showing economic contraction of -4.00% or better is going to be a fudged number.

The markets should be rather prepared for nasty data this week, including a terrible GDP number. About 75% of GDP is derived purely on the activities of the US consumer, so without taking the time to explain the state of the consumer, which is obvious, all I have to do is use US retail, PCE, import/export, Durables, and jobs data to arrive at my extremely bearish forecast for GDP.

I realize Obama wants to pump $825 billion into the US economy by the end of February but the positive effects this will have on GDP will last a quarter or two at best and then we'll be back on train to Crapsville when that round of free money evaporates out of the economy.

So overall, I'm remaining extremely bearish on this week's US and Eurozone data. We do get a ton of it this week and it's all geared around some of the most beat-up sectors like housing, growth, employment, manufacturing, the consumer, and market sentiment. The data itself will give the markets little to work, so expect confusion to reign while some of the bigger numbers hit the markets.

EUR/USD:  

I'm entering the start of the week with no bias on the EUR/USD as I still have quite a bit of research to do for the week in addition to needing to see how the market reacts after we get Frankfurt and London's liquidity first thing Monday morning. That being said, I would urge caution against shorting the EUR/USD between market open and the open of London. I see a potential for the euro to make an upside attempt during the Asian session on Sunday/Monday.

Downside key levels to be mindful of this week:  1.2904 / 1.2855 / 1.2552 / 1.2467 / 1.2358

Upside key levels to be mindful of this week: 1.2998 / 1.3054 / 1.3177 / 1.3242 / 1.3328

Although I still have an overall bias against equities I believe the euro may be due for another upside attempt as long as we can sustain above the 1.2855 level, according to what I'm seeing in the markets. I would not short the euro below 1.2855 currently. If we do move back down for a 1.2855 test, a sustained break there should take the euro straight through the 1.2800 level and down to test the 1.2760 - 1.2740 levels.

The other market correlated variable I'll be closely watching this week is the USD Index. I noticed towards the end of last week the USD Index was back testing my key 86 levels again... going through my email this afternoon I see a few questions from traders asking me why I said not to short the euro below the 1.2850 level and the answer is because of where 1.2850 would have put the USD Index which was back up to what I see as a decent resistance zone at 86 on the USD Index.

A solid upside failure of the USD Index in addition to downside failures on the euro, gold, and crude can only mean one thing and it's not rocket science to figure out... speaking of commodities, I really have no clue what they did on Friday so I'll also be watching to see how crude and gold respond after London gets rolling. My overall bullish bias on gold remains after seeing it also fail to break below downside resistance levels.

That's all I've got for now, I need to jump on a plane in the next few minutes. I will be in the chat after London opens and before 0730 EST on Monday. I have one goal this week and that is to trade for profits and show a good return on Friday. I'll also try to spend as much time in the chat as possible this week. Key levels will be released no later than 0730 EST tomorrow.  

Don't expect any of the volatility and erratic price swings to magically disappear this week. All markets will remain severely ill-liquid which will give us the sharp price moves we've become accustomed to. That means all traders need to keep their emotions in check and not let the chaos of the markets win the mental battle. Risk and money management disciplines are imperative for trading this week and all traders should practice smart risk management.

-ProFXI