Today was pretty crazy, with EURJPY dropping by more than 120 pips over the course of the day. PA played the 100 EMA from the open until around 3:35 AM EST, when PA broke the 300 EMA.

Remeber, the moving averages (13,100,300 EMAs) aren't some sort of magical prognosticator, predicting where PA is going to go. They are visual representations of price movements over time, and effectively show trends. The higher the moving average, the more price bars the equation takes into account when coming up with the average. Where the actual price is in regard to the moving average is critical, and the larger the moving average, the more important it is to account for it being the main trend indicator.

The 300 EMA is the largest MA on the chart. PA above it (the green line) is indicative of a bullish trend. Vice versa, PA moving below it indicates a bearish trend. You could get even more technical, and measure the slops of the MAs, but for our purposes it isn't necessary. All we are looking for is WHERE the PA (price) is RIGHT NOW in relation to a particular MA.

After we have accounted for MAs and PA, we can look at pivot points, but I'm going to leave that for a future post by itself.

Right now, PA is playing the 100 EMA again, with the 13,100,300 EMAs converging on one another. The downtrend is still in effect until PA breaks the 300 EMA.

Summary:

- PA broke the 300 EMA, signaling a return to the downtrend.
- Watch the pivot levels, PA won't much further than a few S-levels, today it stopped out @ S3.
- PA is playing the 100 EMA at the moment, hold your shorts until PA legitimately breaks the 300 EMA.

Thanks for the tips!

ReplyDeleteInteresting stuff.

ReplyDeletewell time to move my stock

ReplyDeletelooks like it dropped quite a bit hope it goes back up soon

ReplyDeleteI'm taking Econ as a major.. Finding you blog very interesting. Keep it up!

ReplyDeleteso....panic?

ReplyDeletegood to know

ReplyDelete:)

WTF does this mean

ReplyDeleteYeah, I was having trouble understanding it all too... I mean, I'm learning little by little, but its going to take awhile (Like your old blog posts btw)

ReplyDelete