August 22, 2013 - MDT - Morning Addendum

While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.

Emerging market currencies...

The Mexican Peso, Brazilian Real and the Indian Rupee are all extremely oversold.

This leads us to their respective Stock etf's which look to be good candidates for an oversold bounce.

Pay attention to the opening range trade in these. A break out to the upside in these ETF's (EWW,EWZ,PIN) coupled with the S&P 500?holding after the NYC opening would provide a low risk short term trading opportunity.

 

The emerging markets in general look horrific but investors love to bottom fish in these oversold dogs.

AUD/JPY...88.50 is today's ORH #. This will act as the near term pivot in the cross.

AUD/CAD...94.59 is the ORH #. Maintaining over this level keeps the Aussie bid against everything.

 

EURO...133.00 +- 10 ticks brings us back to unchanged on the year.

 

Do not sell into this zone. Adept scalpers will be lifting this short side of the cross (buying Euro) and waiting to sell rallies.

We stated 2 weeks ago that we thought 88.50 was it for the Aussie on the downside. The crosses are now trying to corroborate this view.

Aussie strength will put the spotlight back on the miners.

 

The Aussie crosses are telegraphing a "Risk On" scenario if the patterns confirm.

Knowing where to focus your attention is half the battle.

For Glossary of terms and abbreviations click here.