GBP 5 Oct 09aGBP 5 Oct 09b
Fans of Eliott Wave analysis know that a trader has to be alert to correctly interpret new signals as they emerge. This is the ONLY way one has a chance to make money in any market, particularly in the forex market. The latest puzzle that faces us is actually in the big picture. The decline from 1.6742 does not have the personality of a third wave. Sure, we made lots of money trading both sides of the market. We accurately predicted the decline to 1.5800 area twice, as well as the recovery to 1.6125. But in the big picture, there is something wrong. When I get this feeling, I tell my friends in the forex market to take a break. Yes, we could still see some moderate weakness. But the end point of that weakness is less clear. More importantly, when we get a bounce, it could be sharp. On balance, it is time to step back and wait for more clues. Maybe we should turn our attention to the EUR/YEN and USD/YEN now!