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 apologize if it’s coming through that I have some kind of lack of energy, because I do. Just started feeling really rundown towards the end of the day, so I apologize for that. Not my usual chipper self. On the plus side, you probably won’t hear me go off on one of my usual rants at this point, because I feel more like taking a nap. So let’s very quickly run through these charts. This is actually, I think, take number two or three from an earlier try. I was just rambling and going on and on. So let me get focused, knock this out, and go into the next room and lay down. One of the benefits of, of course, working near your bed.
This is a weekly chart here. You can see that right up there, on the tab. And yes, this is HerculesFX. It does exist. See? HerculesFX. I feel like one of those kids. We all knew that kid at school. He’d have the cool toys, and he never shared. We all knew a guy like that, didn’t we? Or a gal like that. OK, I promise not to be that guy for very much longer.
The bearishness started right there. The market pushed up and wound up closing down. In fact, this is one of the most bearish things that the market can do because, in order to get up here, people had to buy. In order to get down here, people had to sell. I think more importantly, everyone who bought above that is now losing money. It is a common tactic of professional traders, then, to push price very quickly back up, again, without following through.
It’s important to realize that this is all dependent on the relative position of the market. Now, what the heck does that mean? What that means is we have to know where the market came from. And so if we’re looking at the past few weeks of trading, we can see that the market came from this base here, started into an up trend here for several weeks, and then formed a flat trading across many, many weeks.
Again, the relative nature of this is important. It’s important that price was in an up‑trend. It’s important that price is coming from a multi‑month base.
And then it does this. It pushes up, comes down, comes back up, goes sideways. This means more right there than it does right here, because if you look at the two patterns, they’re virtually the same. You have the market pushing up and then going sideways. Over here, we had the market pushing up and then going sideways.
And in fact, if you go back to my daily videos back then, what you would have seen and what you will see if you review those is that I was talking about the market was at a decision point. But it’s at a decision point because of what came immediately before that. So, again, it’s all relative to the preceding market.
So because we have this bearish bar up here, because we have this resistance in, that’s why I was bearish, or was leaning towards the downside, once this week was completed. That was the week of May 31st.
So what can the market do from here, or what do I expect? Well, first of all, I’ve got this little blue box here. And let me zoom out on these, or make the weekly a little bit bigger. What you see here is a basic support zone. What I’m keying in on is the close of this week, May 31st, and the close of the prior week, which is the week of May 24th. You can see the price has come just down and kissed, if you will, the top end of that support zone. That may wind up being where the market decides to end up.
So, let’s go head down to the four‑hour bars, and we’ll focus on just this last part of trading. In other words, the top of the support zone was right about here. The bottom of the support zone is right about there. So we need to see how the market reacts to this level. Ideally, what we’ll see is that the market actually comes down into our box. Remember, it’s back up here. It’ll come down into our box and start trading sideways.
In fact, ideally, it’ll have something that looks like this. And that’s sort of the market building a base. You have the constant up and down of the market, indicating that buyers and sellers are lining up on one side or the other. But until that happens, we want to acknowledge that the market is in a short‑term down trend while, at the same time, it’s in a longer‑term up trend, which, again, means we’ve got to focus on more of the counter‑trend trading tactics.
Not a lot going on as far as patterns, though. Let’s go over here to the hourly bars. The hourly bars are just showing this down trend, no flags, pennants, double‑bottoms really occurring. Although we do have, from the lows of today ‑‑ there we go ‑‑ right here, the low being 59.85. We have a point where the market found some support, managed to start pushing back up. We may be seeing this as a little dipper, retesting the area from back here.
So, going short is going to be a little bit easier because we can key in on the low over here of 59.85. Going long, really, we’ve got to clear the highs back here. The high is 61.30 over here, and the high is 61.38 back there.
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