Research Division   

Strategy of the Day

Strategy of the Day

 Highlights
Thursday, September 9, 2010 - New York Update - 10:20 AM EST After repeated attempts to trigger our 1.2770 offers and the subsequent failure by a few pips, I went ahead and sold 2 units of EURUSD at 1.2743. Strong economic data this morning including trade balance and weekly jobless claims sparked the risk on rally. An important foot note on the jobless claims. Caution should be taken before reading too much into these numbers as 9 states did not report, thus their results were estimated and figured into the report. Also, this is a shortened holiday week so I am more than willing to fade this economic data with a long USD position.

Following the pre-equity open economic data the S&P cash index opened at around 1107 and immediately traded into our focus 1110 resistance level. The 10 year bond yield featured yesterday remained below the top of a possible C-wave correction at 2.768% following the data as the S&P poked above the equivalent high, directly into that key 1110 level.

EURUSD has likely completed the 3rd leg of a corrective flat pattern, which subdivides into a 3-3-5 structure. The final 5-wave effort in wave Y is likely complete, and if not will likely do so at slightly higher prices, but still below 1.2800. I am short 2 units at 1.2743 with stops at 1.2865 for now. My short position is highly contingent on the S&P cash staying below the 1110-1115 level. If the S&P gets too far above that level, I will most likely cut the EURUSD position and not allow the 1.2865 stops to trigger. On the downside I am more the willing to add to the position on any S&P weakness to exploit EURUSD's relative weakness. I am a stop entry seller for 1 unit at 1.2650 with a 1.2730 stop loss on that entry and a 1.2500 take profit. If that stop entry is triggered, I will also trail the stop loss on my existing short position down to 1.2730 to lock in profits. Please stay tuned to Twitter at www.twitter.com/toddgordonforex and www.twitter.com/toddgordontrade for specific and timely instructions. TG.
Wednesday, September 08, 2010 - New York Update - 11:42 AM EST Yields on the Portuguese and Irish bonds relative to the benchmark German bonds narrowed from record highs of 372 bps and 377 bps, to 350 and 372 bps respectively, offering a short term reprieve in fear of default. EURUSD is rallying in response to slightly better than expected bond auctions, but restructuring appears to be in near future and the corrective wave structure in the hourly EURUSD confirms this outlook. A look at the S&P futures and EURUSD overlay supports this outlook as EURUSD is significantly lagging equity advances. I have significant resistance in the S&P 60 Min Cash at 1110.
Bringing the yield focus back to the US, the advance from the 2.4% low in the 10 yr maturity is also taking the distinctive shape of a 3-wave corrective structure. Yields failed at the 2.72%-area Fib resistance zone, and have since backed off. While yields remain below this level, the demand for the safety of US treasuries should continue, which supports the USD rally.
As mentioned above, EURUSD is rallying in 3 corrective waves facing resistance at the 1.2770 level. I have adjusted the offers in EURUSD to 1.2770 and 1.2805 with stops at 1.2905 from yesterday's trade parameters. True the stops are wide, but know that it's unlikely I allow the market to go that far against us before cutting the potion. They are in place strictly to mitigate risk in the event of a complete market eruption, and will be quickly adjusted lower as the trade progresses. TG.

Traders, spots are filling up for the 4-hour intensive seminar in Las Vegas. I am very excited for this and will be unveiling a brand new presentation packed with a ton of material, plenty of hands-on trading analysis, and lots of in-depth conceptual content. There is even an informal golf outing in the mix, along with an early evening plan to meet for drinks after the event. I hope you can join us. For details please read below.

Thursday, September 23 8:30 am � 12:30 pm Trading Strategies of a Professional FX Trader

In this session paid 4 hour intensive seminar, Todd will explain the underlying principles of his three-dimensional approach to professional trading: intermarket analysis, trade Identification, and account management. He will begin this intensive session with a candid look at how to identify which of the four major asset classes he believes most directly impacts your traded market. Then once these relationships are identified, Todd goes right to work using his specialty�Elliott Wave and Fibonacci analysis�to identify potential trade setups. Once the trade is executed, Todd will share the position management tactics he used in relation to the trade. Prepare for a candid look into the daily trading life of a professional foreign exchange trader. A basic knowledge of Elliott Wave Theory is recommended. Purchase Event: Trading Strategies of a Professional FX Trader
Tuesday, September 7, 2010 - New York Update - 9:02 AM EST Traders, we left the orders to sell EURUSD in place over the weekend despite a risk positive and fairly eventful Non-Farm Payrolls on Friday. The first offer at 1.2900 was triggered on the Sydney Open last night and dollar strength quickly emerged to begin the new month. The intermarket analysis exercise of pair selection via relative strength I showed you last week was perfectly illustrated in this trade. EURUSD is clearly the weakest risk trade of the 3 I showed you on the daily time frame. On Friday it was acting extremely sluggish as the relatively stronger AUDUSD was powering ahead. Then, today's outsized down move in EURUSD on the first sign of a risk trade rollover perfectly accents this concept. As I type, EURUSD is lower by 0.86% on the session as AUDUSD is trading -0.35%.

I issued the take profit on Twitter at 1.2785 to capture 115 pips on the single unit to begin September. I am now re-offering with larger size at 1.2805 and 1.2845 with stops at 1.2905 for now. Please see the SOTD Position Tracker below for full details. TG.

ABOUT STRATEGY OF THE DAY

Todd Gordon Bio
Todd Gordon is the senior technical strategist for FOREX.com, author of the widely read Strategy of the Day research report, and trader for GAIN Capital Asset Management. He was previously a frequent guest on financial news channels such as Bloomberg, CNBC, and BNN, but has recently become a regular contributor to CNBC's Fast Money show. Affectionately known as “Flash” on Fast Money, he is regularly called on to share his technical observations and trading ideas in the currency markets. He has given seminars in regions around the world including the Far East, the Middle East, Eastern Europe, and the US. He also provides regular commentary and analysis to publications such as Technical Analysis of Stocks and Commodities and Futures. Prior to joining GAIN in 2004, Mr. Gordon was a director with Connors Capital, LLC, a hedge fund in Los Angeles. He began his professional trading career at Aspen Trading in San Diego, CA with David Floyd. Todd was a also a division I alpine ski racer in college.

Mr. Gordon's popularity stems not only from his accuracy as a trader, but also from his straightforward, highly transparent, and candid approach to his daily research report. In his report, Strategy of the Day, Mr. Gordon shares with clients of FOREX.com his technical, fundamental, and inter-market analysis, as well as his full trade plan including entry, exit, and stop loss parameters well before he initiates the trade in GAIN's managed accounts. The real appeal to SOTD is that along with analysis of the FX and related markets, readers get a behind the scenes look at the day-to-day life of a professional FX trader.

Todd has gained a significant and loyal following of traders by preaching and demonstrating the qualities required to be a successful trader- patience, discipline, analysis, and execution.

Todd lives by the mantra- Plan Your Trade, Trade Your Plan

TWITTER

As Strategy of the Day has grown and evolved, the need to more quickly communicate market commentary and position updates to a vast audience became very apparent. In the past year, I have come to heavily rely on Twitter to more efficiently communicate time-sensitive market commentaries to clients. I have setup two accounts. The first, ToddGordonForex is for general market commentaries, position-related updates, Strategy of the Day update notifications, and the occasional off-topic commentary. The second, ToddGordonTrade is designated for just position-related updates and Strategy of the Day update notifications.

The real benefit of Twitter is that aside from being updated to our moves when not logged into the FOREX.com platform, you can receive SMS text message alerts to your phone when you're away from your trading computer. Most clients follow both twitter accounts, but set the SMS alerts for only ToddgordonTrade.

To receive my updates you must first open an account at Twitter Sign Up Once you are signed up, proceed to my two accounts and click “follow“. Once you are following me, you can go into your Twitter settings and choose to receive my tweets via SMS messaging on your handheld for one account, or both if you choose. To set it up, go to your settings and select the devices tab. Enter your mobile number and check the box granting permission. Once you hit “save“ you are ready to get a daily dose of Todd Gordon right on your mobile device.

MEDIA APPERANCES

CNBC Fast Money Interview 6.4.10 CNBC Fast Money - NASDAQ.

CNBC Fast Money Interview 5.14.10 CNBC Fast Money - NASDAQ.

CNBC Fast Money Interview 5.11.10 CNBC Fast Money - NASDAQ.

FUTURE SEMINARS, TRADE SHOWS

*September 23-25, 2010 Las Vegas Traders Expo

Thursday, September 23 8:30 am � 12:30 pm Trading Strategies of a Professional FX Trader

In this session paid 4 hour intensive seminar, Todd will explain the underlying principles of his three-dimensional approach to professional trading: intermarket analysis, trade Identification, and account management. He will begin this intensive session with a candid look at how to identify which of the four major asset classes he believes most directly impacts your traded market. Then once these relationships are identified, Todd goes right to work using his specialty�Elliott Wave and Fibonacci analysis�to identify potential trade setups. Once the trade is executed, Todd will share the position management tactics he used in relation to the trade. Prepare for a candid look into the daily trading life of a professional foreign exchange trader. A basic knowledge of Elliott Wave Theory is recommended. Purchase Event: Trading Strategies of a Professional FX Trader

Sep. 25, 2:30 pm-3:15 pm Successful Strategies for Profiting from Forex Trading

In this panel discussion, you'll learn how successful currency traders watch charts, economic announcements, and global news to forecast short-term movements in the major currency pairs. You'll learn when to avoid trading entirely and when to scale in quickly to maximize gains. You'll also learn how consistent currency traders minimize their risk. Finally, panelists will discuss their overall views of the markets and which currencies are presenting trading opportunities now.

*October 11-14, 2010 Sydney, Australia - Conquering Today's Markets - 4 Days with Todd Gordon and Dave Floyd

In this seminar, you will have the opportunity to learn from two of the most trusted names in the game. Reuniting after five years apart, Todd Gordon and David Floyd have officially re-joined forces to bring traders some of the best analysis, research, and commentary on the global markets. Nearly ten years ago, Todd began his trading career under the guidance of Dave at Aspen Trading Group in San Diego, California. For several years, Dave served as Todd's mentor, advisor, and friend, all the while helping him learn the intricacies of the market and the strategies and qualities needed to become a successful trader. Given an opportunity to return to the East Coast, Todd left Aspen Trading to join FOREX.com, one of the largest FX dealers in the United States. Though apart, Todd and Dave continued to communicate daily, both refining and evolving their quite similar trading styles. Now, with nearly a decade after their first go around, they have decided to team up once more to deliver traders some of the most extensive forex research and training available anywhere. There has never been a better chance to learn the secrets of successful trading from proven and respected professional traders. Spend 4 days learning the intricacies of professional trading from some of the industry's best. *Friday, October 15-17, 2010 Brisbane, Australia. Australian Technical Analysts Association 2010 National Conference. The Art Of Market Warfare Todd Gordon - Contra-trend Trading With Elliott Wave and Fibonacci Levels Are the old adages “Trade with trend” or “The trend is your friend” ALWAYS true? Hardly! Markets only trend about 20 percent of the time, so what about the other 80 percent? In a candid look at how a professional trader navigates the markets using the razor tight levels defined by Elliott Wave and Fibonacci analysis, Todd will show you how the pros consistently contra-trend trade, while at the same time maintaining tight risk management. He will then share three strategies for identifying market tops and bottoms hours before they develop, and lay out how to move in and attack with expert trading tactics. *Friday, October 20-22, 2010 Barcelona, Spain. FXStreet.com International Traders Conference.

DVD RELEASE Chicago January 2009 Chicago Presentation. FOREX Trading Using Fibonacci and Elliott Wave. The new DVD for 2010 is scheduled to be released soon. Stay tuned!

WHAT'S NEW IN STRATEGY OF THE DAY

POSITION TRACKER In 2010 I introduced a new feature to SOTD called the SOTD POSITION TRACKER. At the bottom of most editions of SOTD,you will see all of my pending orders waiting to be executed, all open positions with associated stops and limits, and all closed trades for that particular month. In addition to closed trades you will all trade statistics for that month including number of winners and losers, average size of winners and losers, and total pip profit or loss for the month.

WAVE ANNOTATIONS Much like the original wave annotations introduced by Ralph Nelson Elliott in the early 20th century, I am going to introduce a standardized labeling procedure custom to SOTD. This will allow you the reader to quickly identify the location and degree of my Elliott wave counts on the charts. As you can see on the chart below, I have listed 9 possible degrees of wave counts and the corresponding chart time frame that is likely to use a particular annotation. Now obviously you will not see just one degree of wave annotations on any chart. My purpose within this framework is to align a certain degree wave annotation with the primary price trend on a given chart. For example, if you see a blue underlined roman numeral labeling, the price move I am studying is probably best viewed on either a 30 or 45 min timeframe. Once you see black Arabic numeral labels, the move is probably best seen on either a 60 or 90 min chart.

Questions or comments? tgordon@gaincapital.com

Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.