Tuesday, May 18, 2010

Day Trading Tendency In The Euro

Above is a 10 minute chart of the Euro (FXE) over the past 13 days. What I've noticed is that lately there has been a strong tendency for the Euro to sell off from 9:30am until 12:00 (eastern time). I highlighted this time period in yellow and green. Yellow means the Euro sold off from 9:30 to 12:00 while green would mean there was no sell off. As you can see, over the past 13 days, the Euro has sold off 10 of those days. I consider that to be significant especially with the S&P tracking the Euro's movements.

I''ve been watching the above pattern since last week and actually put it into use today which is why I decided to write this post. Today the stock market as well as the Euro gapped higher. As you know I am short and wasn't too thrilled to see such a higher open across the board. Knowing that there has been a tendency for early morning weakness, I shorted the higher open and fortunately it worked out well.

Whether or not this pattern will continue to work remains to be seen and I can guarantee you at some point this pattern will stop working. But for now, it might be helpful to be aware of this early morning selling that has been coming into the market from 9:30 to about 12:00.


Anonymous said...

Early morning selling would be dumb money, right? I have a feeling euro selling is overdone and it will surge soon (the only problem is when?). Long term, is a different story IMHO.

Anonymous said...


Nice analysis. You come up with these great technical indicators.


Anonymous said...

Wow, this selling in AM and buying in PM rule worked again today. That helped me time the day bottom.
I wonder how much longer it is going to last.

Anonymous said...

I meant the rule for selling stocks in AM, did not work for euro though today.


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