USDCHF Bear Flag!

"Iran is moving its foreign currency reserves out of European banks as a pre-emptive measure against any possible U.N. sanctions over its nuclear program, the Central Bank Governor said Friday," the AP reported.

We have a bear flag setup in the Swiss franc. And the Swiss could be beneficiary of global turmoil.

USDCHF Chart:
chf%20daily%20bf.png

Trade Recommendation: Issue #53 Swiss franc

Black Swan Letter
Recommendation Issue #53
Currency: Swiss franc


Forex:
Sell USDCHF @ 12739 STP / SL 12890 / PT1/ 12630 / PT2/ 12500

Futures:
Buy Mar SF @ 7888 STP / SL 7796 / PT1/ 7955 / PT2/ 8038

STP – Stop order entry
SL – Stop-loss point
PT1 – Profit target #1
PT2 – Profit target #2

Risk Disclosure: There is substantial risk involved in trading in the forex or futures market on a highly leveraged basis. No trader who is unfamiliar, either himself or together with his financial advisers, with such risks should consider trading in the forex or futures markets. Neither Black Swan Capital LLC nor Jack Crooks accept liability for any losses that may directly or indirectly result from any advice or opinion or information provided in this service, whether negligent or otherwise.

Recommendation Summary 19 Jan '06

011906%20Reco%20Summary%2010p.pdf

US Stocks: Danger for the shorts!

If you are short US stocks, especially the Nasdaq, you need to be very careful here. We have an abandoned baby pattern in the Nasdaq.

This is usually a very bullish pattern!

We don't see it very often, which makes it a higher than normal probability indicator.

Chart Nasdaq Daily:
nas%20abandoned%20baby.png

Recommendation Summary 19 Jan 2006

011906%20Reco%20Summary.pdf

Stop-loss Adjustment: Issue #51 Australian $

We achieved our first profit target (PT1) on the futures side—open position—per Issue #51 Australian dollar and came within a few ticks on the spot forex side (officially closed for scorekeeping purposes).

We recommend you adjust your stop-loss levels to the following on any remaining open positions from Issue 51:

Forex: 7515

Futures: 7510

Risk Disclosure: There is substantial risk involved in trading in the forex or futures market on a highly leveraged basis. No trader who is unfamiliar, either himself or together with his financial advisers, with such risks should consider trading in the forex or futures markets. Neither Black Swan Capital LLC nor Jack Crooks accept liability for any losses that may directly or indirectly result from any advice or opinion or information provided in this service, whether negligent or otherwise.

Stop-loss Adjustment: Issue #52 British pound

Stop-loss Adjustment:
Issue #52 – British pound

Our first profit target (PT1) was achieved; we recommend you make the following stop-loss adjustment to breakeven entry on any remaining lots open per Issue #52, short British pounds:

Forex: 17635

Futures: 17637


Risk Disclosure: There is substantial risk involved in trading in the forex or futures market on a highly leveraged basis. No trader who is unfamiliar, either himself or together with his financial advisers, with such risks should consider trading in the forex or futures markets. Neither Black Swan Capital LLC nor Jack Crooks accept liability for any losses that may directly or indirectly result from any advice or opinion or information provided in this service, whether negligent or otherwise.

Gold: Plummer Price Pulse Points--Topping?

011806%20plummer%20gold%20chart.doc

Trade Recommendation: Issue #52 Selling British pound

Black Swan Letter
Recommendation Issue #52
Currency: British pound - Selling on a stop!

Forex:
Sell GBPUSD @ 17635 STP / SL 17708 / PT1/ 17535 / PT2/ 17410

Futures:
Sell Mar BP @ 17637 STP / SL 17710 / PT1/ 17537 / PT2/ 17412

STP – Stop order entry
SL – Stop-loss point
PT1 – Profit target #1
PT2 – Profit target #2

Risk Disclosure: There is substantial risk involved in trading in the forex or futures market on a highly leveraged basis. No trader who is unfamiliar, either himself or together with his financial advisers, with such risks should consider trading in the forex or futures markets. Neither Black Swan Capital LLC nor Jack Crooks accept liability for any losses that may directly or indirectly result from any advice or opinion or information provided in this service, whether negligent or otherwise.

Comments on Nikkei and potential volatility...

The action in the Nikkei has the potential to create some major volatility across all asset markets.

The key question becomes: If there is some type of run, what is the dollar impact?

No easy answer, of course, and we don’t pretend to know. But one of our background themes, for some time, has related to hot money invested in Asia. The idea being that any dislocation there will lead to a lot of funds running “back into” the US dollar for safe haven. This we think is especially true if the metals breakdown. So stay tuned.

We are seeing the Australian dollar acting poorly today against the rest of the pack…not sure if this is “metals related” or not.

Nikkei, yen, and gold chart...

011808%20yen%20nikkei%20gold.pdf

Stop-Loss Adjustment: Issue #51 Australian $

Stop-loss Adjustment:
Issue #51 – Australian $

We recommend you make the following stop-loss adjustment on any remaining lots open per Issue #51, short Australian dollar:


Forex: 7537

Futures: 7527


Risk Disclosure: There is substantial risk involved in trading in the forex or futures market on a highly leveraged basis. No trader who is unfamiliar, either himself or together with his financial advisers, with such risks should consider trading in the forex or futures markets. Neither Black Swan Capital LLC nor Jack Crooks accept liability for any losses that may directly or indirectly result from any advice or opinion or information provided in this service, whether negligent or otherwise.

AUDUSD Weekly

AUDUSD Weekly
Last: 7491
Key Resistance: 7579, 7768
Key Support: 7400, 7367, 7235
Trend: Down – Ranging lower

Chart:
011706%20AUD%20Weekly.pdf

GBPUSD Weekly

GBPUSD Weekly
Last: 17643
Key Resistance: 17809, 18000
Key Support: 17525, 17343, 17131
Trend: Down – Testing downtrend

Chart:
011706%20GBP%20Weekly.pdf

USDCHF Weekly

USDCHF Weekly
Last: 12811
Key Resistance: 13201
Key Support: 12676
Trend: Down

Chart:
011706%20CHF%20Weekly.pdf

USDCAD Weekly

USDCAD Weekly
Last: 11628
Key Resistance: 11748, 11976
Key Support: 11428
Trend: Down - Consolidating

Chart:
011706%20CAD%20Weekly.pdf

USDJPY Weekly

USDJPY Weekly
Last: 11569
Key Resistance: 11646, 11740
Key Support: 11342
Trend: Down, but correcting higher

Chart:
011706%20JPY%20Weekly.pdf

EURUSD Weekly

EURUSD Weekly
Key Resistance: 12181
Key Support: 11850
Trend: Up

Chart:
011706%20EUR%20Weekly.pdf

Exchange Rate Clustering!

A very interesting, though highly mathematical at times, bit of information regarding exchange rate volatility and behavioural finance from Prof. Paul De Grauwe, as he provides chapters of his upcoming book at his website:

“It can clearly be seen that periods of low and high changes in the exchange rate tend to cluster. If one adheres to the REEM-model (rational-expectations-efficient-market model) the only way one can explain this volatility clustering is to assume that the volatility in the news about fundamental variables is clustered, so that the volatility clustering in the exchange rate just reflects volatility clustering in the news. Explaining volatility clustering in the exchange rate by volatility clustering in the news, however, is a "Deus ex machina" explanation that shifts the need to explain these phenomena to a higher level. Put differently, the REEM-model has no explanation for the widespread empirical observation that the volatility of asset prices, including the exchange rate, tends to be clustered.”

Comments...

Despite grumblings of ECB aggressiveness and US dollar structural problems coming to the fore in 2006, the euro is still having trouble near 1.22…the pound has been stymied at its daily downtrend, as can be seen in the chart posted recently to the site…the yen hasn’t been helped by news that Chinese reserves swell to over $800 billion and an Asian alternative currency may be in the works…and though the Aussie hasn’t followed through with move in metals.

What does all this tell us? Someone is still buying the dollar. Maybe the rising tension in the Middle East…or maybe the US economy isn’t going to be as weak as expected. Maybe…maybe…maybe…we could go on and on…

For a range bet, we still like the Aussie short here from a risk-reward standpoint. But in general, it is an extremely choppy market (as in one can get very chopped up with tight stops playing).

Maybe it changes today…we are watching. We will be adding the weekly charts for the currency pairs and posting today…hopefully this will shed some light at least on the orientation of the trend.

Aussie $ Daily: We still like the short-side here...

...it is a decent risk-reward setup we think.

Aussie Daily:
011606%20aussie.pdf

British pound resistance at daily downtend...

GBP%20A0-FX%2CD%20-%20AdvCh.pdf

Recommendation Summary 16 Jan 06

011606%20Reco%20Summary.pdf