Last week we had some news from the US Fed’s Monetary Policy Statement and the subsequent press conference.  The basic news was that the Fed was further reducing its bond purchases by a total of $10 billion a month.  Mortgage backed securities would be reduced by $5 billion and longer-term Treasury securities would also be reduced by $5 billion per month.  This news caused Treasury prices to fall sharply.  As prices fell, yields on Treasury notes began to surge.  Federal Reserve Chairwoman Janet Yellen also indicated that interest rate hikes […]

The Average True Range indicator (ATR) gives us an indication of volatility for the market.  Initially, traders might use this indicator to get an idea of how much movement occurs typically over a period of time.  The suggested time frame would be a 14 period which would be 14 weeks on a weekly chart, 14 days on a daily chart, or 14 hours on an hourly chart, etc.  This can be helpful when determining stop losses – making sure to set a stop that gives room for movement. The range […]

Taking a look at the major pairs today (2/25), we can see that patience is a virtue. EURUSD looks to be showing a resistance level that started last fall and still seems to be having an impact. It has been stuck at this for the last week. Look for a drop from resistance. GBPUSD has been in a long term uptrend over several months but has been showing some weakness over the last week. Waiting for some more clear signals would be suggested. USDCHF is in a long term downtrend […]

Different people will use terms to mean different things.  The definition of a bounce trade can vary depending on who is doing the talking.  The definition, here, is an intra-day trade based on an overbought or oversold condition, meant to represent an extreme condition, and expecting that it will return to a more normal condition. The time frames typically used would be looking at an hourly, 30 minute, or 15 minute chart.  Sometimes, a 5 minute chart may work, but there would have to be enough volatility to justify it.  […]