The JUN'10 Japanese Yen contract spun its wheels after Wednesday's negative signal stabilizing into a NEUTRAL DIGESTIVE trade. Key off the 11113 Inflection Pivot today. Below here the currency will remain vulnerable to the offer.
On the SELL side BREAKOUT strategies below the 11005 support pivot are aggressive and should be entered sooner [higher] than later [lower]. Expectations should be for the MKT to make its move early in the session and not look back, holding structure most of the day. If the MKT digests prior to making a negative move, it is more likely a squeeze on the longs to FADE. SELL FADE strategies against 11077 are aggressive as well and if they are going to work, should do so on the initial test of resistance. Repeated tests or "confirmation" are more likely to give way to a higher trade up to the 11113 Inflection Pivot. SELL REVERSAL strategies are recommended off either resistance level.
On the BUY side accept FADE, BREAKOUT and REVERSAL strategies off major inflection points. BUY BREAKOUT strategies above the 11077 resistance pivot should just "go" and not look back, so keep risk parameters tight. 11113 is the roll short target. Only above here does sentiment shift positive. FADE strategies off the 11041 Directional after positive breakout signals are good opportunities as well but expectation should be for the MKT to quickly move back above violated resistance. If the trade just "hangs around", it is likely a signal that more digestive action is coming and a retest of support should be expected. Be more aggressive with FADE and REVERSAL strategies at or above the previous session low point or the 11005 support level, targeting 11077.
Note: The MKT is in neutral so "sloppy" conditions with "false signals" should be anticipated. Have a plan for any squeeze. Don't get stubborn, however, if the MKT starts to hold structure and gets into trend mode as the contract may just be expanding its digestive parameters producing a one way trade into the close and new extreme.
JS
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For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/.The Inflection Pivot levels are available as a chart overlay on the following platforms; Ninja trader, Strategy Runner and eSignal. Sign up for a Complimentary FREE Trial.
