It's been awhile since I've done a long term Euro outlook. As one would expect, the Euro has been on a steady climb against the US Dollar, which has sloped downward for most of the year with the US markets climbing. The Gann levels have been giving us trading points all along the way. I thought it might be interesting to take a look at how it has helped with some key turning points. Now, before anyone says it out loud, yes...these are ALL in hindsight. However, seeing how something has behaved in hindsight can give us more CONFIDENCE to use it in the futures as well. That is to say, if something has been behaving predictably in the past, we should continue to expect predictability until it proves otherwise. We like to trade predictable markets!
For most of the year I was operating with a Gann box drawn from the July 08 high to the Oct 08 low. It gave a GREAT turn around at the 1X1 rate line in December, which carried us all the way down until March of this year. Since March, we have had several turning points at Gann angles, including a turn up in April, the resistance seen at 50% of the box in June, and the climb right along the upward 1X2 from mid June into September. These are all shown on the weekly chart below.
In September, however, we exited the box drawn on that weekly chart. There are choices at that point on what to do. One can simply copy and paste the old box into the new territory, or you can simply build a bigger box! The bigger box has been giving us out good support at resistance since our exodus from the smaller one, showing the turning points both at the recent highs and lows of the market, shown on this daily chart.
I will continue to monitor these levels to see if we break out and in what direction. Until we can breach either the upward angle or the downward angle, we are simply in an expanding range, pivoting between two key levels. Time will tell, and we are now prepared either way!
Be Prepared
nate mccartney
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