WARNING: This text is a word-for-word transcription of Mac’s daily forex trading video. That means the writing will reflect the way he speaks, if anything seems out of place, please refer to the forex video on the page.
All right, everyone. I posted the weekly wrap a little bit late. You can hear my comments and the weekly analysis there. And in that weekly wrap, in the beginning of the weekly wrap rather, I talked about making comments about Monday’s analysis. I did eventually get to that. In fact, the weekly wrap, I hoping that came out at, at least in the end, fairly lucid. But I was recording it while the market was open, so I was at the same time distracted. So let’s talk a little bit about what’s going on right now. You can see I have a four‑hour chart up here with the British pound poking its nose at this prior resistance. We’ve got quite a bit of resistance up here.
You can see one, two, three, four, five, six bars were pushing up or had the opportunity to rally back into these old highs, and were unable to do so. And in fact back on the 12th, wound up collapsing very, very quickly. And in fact there wasn’t even a whole ‑ sorry about that, I had to sneeze.
So we’re rallying right back into that area. It’s going to be critical that the market follows through at this juncture. If you were following me on Twitter, what I was talking about had to do with the Forex Deal Butler; here’s the software.
And what happened, as the market was trading into this area ‑ which is where I was making my comments ‑ we had basically nothing going on these two lower timeframes. And on this particular bar right here where the British pound pushed up ‑ now granted, this is happening fairly late in the day. You can see here we’re getting really close to 5:00 London time.
Anyway, what I was talking about was that as the market was pushing up we got energy on the lower timeframes, the five minutes were green. 15 Christmas trees were green. But the market still was not able to push through.
And so what this means, as far as trading, is that we’ve got to see follow‑through. We eventually did. Let me zoom back here. It was right there.
We eventually did see the market following through, but as short‑term traders, you can see this is actually where confirmation failed. Here’s a 15‑minute bar that closed just above our prior high, but then the market didn’t trade above that high until right as the sweet spot was ending.
So again, confirmation was non‑existent, the market failed to follow through. This is very, very typical of failed rallies and failed sell‑offs. This is why I have confirmation in the kit. So if you were wondering what I was talking about when I was referring to the energy in my Twitter comments, there it was.
Coming into tomorrow, let’s go to the hourly bars. Whoops ‑ come on now. There we go.
We do not have much of a pattern here, other than our double‑top. So if I zoom way out here, you can see, based on the hourly, we are right here at the decision point, of course very, very late in the day.
So what we’re going to need to look for in the European session is if the market does manage to stay high, near this 53‑60 area, and it’s right near the European open, then that’s an ideal time to take a move to the upside. Because you’ve got the open of a market and you’ve got the potential for the market to push along with you.
The short side, I’m not really looking for much at this point, because our nearest area of support is way down here and there’s no real pattern that’s indicating that we’ve got a compression pattern building.
What I’d like to see at this point is some sort of pennant pattern develop, or a flag pattern, where we’ve got that compression building over time, indicating that we can get a breakout one way or the other.
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