Jamie's Pick: 08/17/12
EXTREME complacency is evident not just from recent volatility readings but also from recent ranges (one and the same). The red dots on the first chart indicate a 5 day range equal to or less than 1.1% (which was reached on 8/10). Since 2008, ranges this small have led to declines of at least 800 pips with lag of anywhere from 2 weeks to 2 months. In other words, respect the potential for several false starts. Adherence to proper strategy and risk management should enable us to catch the meat of the next drop. I am currently short from 10520. The drop below 10435 allows the stop to be moved to 10530 (originally 10590 then 10580). A review of the big picture wave pattern (triangle) and substructure of triangle wave c (or d) is included as well.
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