The USD index turns firmly bearish

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The USD index turns firmly bearish

dollar index daily chart using Hawkeye
USD index daily chart – September futures contract

Whatever the market you are trading, either as an investor or as a speculator, having a view on the US dollar is key to longer term trading success, which is where the USD index steps in. The US dollar is the currency of first reserve and underpins all the principle capital markets, and the dollar index gives us a clear view of dollar strength or weakness against a basket of major currencies. As a result the daily dollar index chart gives us powerful signals as to the future direction for all the major markets, since all are interrelated by the associated currency flows both from and to the US dollar.

Over the last few months, the USD index has traded in a relatively narrow range, testing the 85 price point to the upside and the 81 region to the downside on the September futures contract. Much of this sideways price action was as a result of the markets waiting for some clear signals from the Federal Reserve, and Ben Bernanke in particular on any future stimulus for the US economy, which is still struggling to recover, with stagnant growth and a mountain of debt, coupled with insufficient new jobs. Indeed, whilst the headline unemployment rate is quoted at around 9%, the true figure is far more shocking, and believed to be well into double figures. Conservative estimates put the figure nearer 20% rather than 10%. It is against this backdrop that the FED has been waiting to act, hinting at a further round of quantitative easing, or QE3 – printing money which are then converted to bonds.

Friday’s long awaited statement from Mr Bernanke failed to deliver any clear statements, but merely hinted at further stimulus, and that the Federal Reserve was ‘ready to pull the rigger’. This was sufficient to weaken the US dollar on the daily chart, with the USD index closing the session at 81.21, it’s lowest level for three months, as the index now tests this key support region which is now a critical price level.

Hawkeye has been giving us strong signals of this bearish sentiment as far back as the second week in August when an aggressive Roadkill signal appeared on the chart. Since then the daily trend has continued to remain red, with the three day trend now moving into white congestion and likely to follow suit shortly. With bearish volume in both timeframes and further confirming Roadkill signals, the outlook is bearish for the US dollar, and this is likely to be reflected in gains for all the major commodities, as well as strength in the related currency majors, bullish equity markets and outflows from bonds.

If the index breaks and holds below the 80.00 level on the daily chart, then we can expect to see the dollar index move to test the 78.50 lows of earlier this year in due course.

If you would like to see Hawkeye in action, simply click the link below to join one of our Free Live Training Rooms where we trade using the full suite of tools and indicators across all the markets.

Gold bullish following recent breakout

gold futures daily chart
Gold futures – daily chart

Gold bugs are once again happy this week, and the recent breakout for gold continues to signal further bullish momentum, with spot gold just failing to touch a high of $1700 per ounce this week for the first time since March, and finally closing the week at $1691.18. Gold futures ofcourse reflected this bullish momentum, and indeed Hawkeye gave us an early entry signal on the daily chart, with a conservative trend Roadkill. This upwards momentum was almost inevitable following the extended period of sideways congestion, and in particular with the strong platform of support in the $1550 per ounce region, clearly defined by the Hawkeye pivots, a level that was never tested.

The other contributory factor is of course the short term weakness in the US dollar which is likely as a result of the FED’s clear signal of further stimulus to the economy, and should this weaken the US dollar further, then gold prices are likely to extend the recent breakout into a longer term trend. As mentioned above, Hawkeye has already given us an initial entry signal, and with the Hawkeye Heatmap now bright green and coupled with buying volume in both timeframes, we can now expect to see gold prices breach the $1700 per ounce level next week, and extend gains further, with a bullish trend which could see the precious metal test the $1800 per ounce level in due course.

If you would like to see Hawkeye in action, simply click the link below to join one of our Free Live Training Rooms where we trade using the full suite of tools and indicators across all the markets.

Bearish tone for the AUD/USD

aud/usd daily forex chart
AUD/USD daily Forex chart

The recent bullish sentiment for the AUD/USD on the daily chart, appears to have run out of steam in the last few days, with the Hawkeye trend dots flattening in the 1.0600 region, and subsequently moving into a short period of sideways consolidation. The bearish tone that is now evident was also firmly signaled with the Hawkeye isolated pivot highs to this price area, adding further weight to the downside momentum. In the last 6 days, the Hawkeye trend has finally turned red on the daily chart, but the longer term 3 day trend remains bullish for the time being. However, on Wednesday this week, Hawkeye delivered an aggressive volume roadkill signal, the cyan dot, which coincided with selling volume in both timeframes and a change in the Hawkeye Heatmap to bright red.

The key support level is now clearly defined in the 1.0200 area, and if this is breached then we can expect to see a re-test of parity in due course.

If you would like to see Hawkeye in action, simply click the link below to join one of our Free Live Training Rooms where we trade using the full suite of tools and indicators across all the markets.

GBP/USD bullish on the daily chart

gbp/usd daily Forex chart
GBP/USD daily chart

Following several weeks of sideways consolidation the GBP/USD has now finally broken out this area of price congestion on the daily chart, and now looks set to move firmly higher in the next few weeks. To the downside, the support level was clearly defined at the 1.5400 region whilst to the up side, 1.5700 region had been tested on several occasions. The breakout finally occurred last week with the GBP/USD now moving towards the 1.5850 region and beyond, and with this strong platform of support now below, cable looks set to test the 1.6000 region, and if this breached then we should see a test of the 1.6250 region in due course.

The bullish tone for the GBP/USD was signaled by Hawkeye as early as the 14th August with a volume Roadkill signal signalling an aggressive entry, with the two day trend, still remaining in consolidation, confirmed with the white trend dots. Should this follow through, then this will add further momentum to the bullish picture, and with the USD looking set to weaken on the dollar index, as a further round of quantitative easing is announced, expect to see further strength for sterling in the  next few months.

If you would like to see Hawkeye in action, simply click the link below to join one of our Free Live Training Rooms where we trade using the full suite of tools and indicators across all the markets.

Scalp trade on the EUR/USD

eur/usd 2 minute chart
Hawkeye – EUR/USD 2 minute chart

Trading success in the Forex market depends on several factors, but staying in the trend to maximize the profit available is perhaps the most important, and this is where most traders fail. Staying in a trend requires discipline and the ability to manage the fear that we all have when a potential profit is on the table. Markets never move higher or lower in a straight line, and the key to success is to continue holding during these minor pullbacks and reversals, and this is where Hawkeye is so powerful, and the EUR/USD on Friday, gave us another excellent example, this time on scalping 2 minute chart for the pair. Indeed this was a trade we were watching during the London open, and just after 9am UK time, Hawkeye duly delivered a Roadkill signal for a bullish move higher.

This trade continued almost unbroken throughout the morning, with further roadkill signals confirming the trend, coupled with the Hawkeye Heatmap, and buying volume in both timeframes. The move finally ran out of steam almost three hours later ahead of the speech by Ben Bernanke, an eagerly awaited event with the markets expecting an announcement on a further round of quantitative easing.

If you would like to see Hawkeye in action, simply click the link below to join one of our Free Live Training Rooms where we trade using the full suite of tools and indicators across all the markets.

This Week’s Market Forecast – Risk On Returns!

Last week was the worst Thanksgiving week on Wall Street since 1941. Traders and investors reeled from the problems in Europe, as well as the collapse of the US budget deficit talks. The S&P 500 fell almost 5% on the week, closing just below the key 1160 level. The Dow was also down almost 5% over the week, and the Nasdaq was down by 5.1%.

The selloff really took place following the disastrous German bond auction which saw demand for the 10 year Bund at its lowest since the euro was created. Investors rushed to safety but redefined safety to exclude Bunds, moving instead into US Treasuries, UK Gilts, and Nordic Bonds.

With investors shunning German Bunds, the euro duly collapsed, particularly against the US dollar as the EURUSD tested the 1.32 level before moving back higher. As one commentator has said, this now appears to be the “apocalypse” trade – if German bonds cannot attract investors, and are no longer considered a safe haven, surely it’s now all over for the euro?

As always, nothing is quite as it seems and this may be a hasty conclusion – at least for this week!! The German 10 year bond auction may have gone badly but short dated German debt, known as Bubills, have never been in such high demand even with yields turning negative. In other words, if investors are willing to PAY to lend to the German government, it is hardly a sign of deep fear about Germany or even the euro.

Germany is not under threat – yet – but traders and investors are increasingly trading the euro and Germany together. Since September, the value of the euro against the US dollar has moved almost inversely to German credit default swaps. For those of you who may not know, a credit default swap is a measure of how likely a country is to default on its debt. In other words, traders and investors now care far more about whether they will get their money back than how much they can earn. This also makes them super-sensitive to any hint of danger which leads to much greater market volatility.

The start to this week’s trading has seen the market determined to shake off last week’s doom and gloom by seizing on record Black Friday retail sales and reports that French officials are pushing for a deal on Eurozone fiscal union. This has helped to reverse some of last week’s heavy losses with the US markets having their best days so far in November, with the S&P moving almost 3% higher, while on Monday all the DOW 30 stocks ended higher too.

It remains to be seen whether this swing higher will be maintained, not least because the $VIX – although managed to close lower on Monday – which is positive for equities, is still above 30. If the $VIX does manage to breakdown and move back towards the mid-20s then we could see a rally moving forward into December.

What is also interesting is that according to the latest CFTC data, net euro shorts have also fallen to 85k from last week’s 100k plus. In other words, we could be seeing a short term bounce higher for markets and even the start of a “Santa Claus” rally.

However, with this week’s fundamental news focusing on employment with the non-farm payroll (NFP) release, due on Friday, traders and investors need to take care. The first big number traders (and investors) should watch is the ADP release on Wednesday, a precursor to the NFP. Over a few months this once reliable release, which is based on payroll figures, has become a little less accurate in forecasting the NFP data two days later. Previously, it had always given traders a “heads up” on the Friday data but recently has become increasingly inaccurate in these volatile markets.

Wednesday’s forecast is for a number at 131k, up slightly from last month’s 110k. This is followed by Canadian GDP which is forecast to come in flat at 0.3%.

Thursday’s big number comes from China with the PMI, which is forecast to show a decline from last month’s 50.4 down to 49.8. So expect to see this reflected overnight in the Asian trading session should this number come in wildly at the odds with the forecast.

Thursday sees the unemployment figures in the US, which are forecast to come in flat but we also have the ISM data – an equivalent of the Chinese PMI. Traders and investors watch the ISM as it is considered a leading indicator of the economy because it is based on a large survey of purchasing managers of major companies. Any number above 50 indicates an economy that is expanding and below 50 suggests an economy that is contracting – so this is a very important number.

The week ends, of course, with the general razzamatazz of the NFP – a release which will affect all markets. The forecast is for an increase from 80k last time to 119k this time. This release always causes markets to over-react and traders should wait for any volatility to die down before entering any trade.

Hawkeye users can, of course, trade these markets with confidence because Hawkeye has been designed:

  1. To give traders the edge needed to succeed, as it gets them onto the right side of the market time and time again.
  2. To help traders control their emotions by giving them the confidence to stay in.
  3. To help traders control their risk by giving them clear signals of when to stay in and when to get out, thereby protecting your equity.

All of these things are vital in difficult and turbulent markets such as these! But how is Hawkeye able to do this?

Because Hawkeye has been created to exploit the power of the only leading indicator that traders and investors need, which is VOLUME. This is the foundation stone of Hawkeye on which all the indicators are built. So regardless of whether you are a day trader, position trader, swing trader, scalper, or any other kind of trader, VOLUME should lie at the heart of your trading.

As an example of why volume is such a powerful indicator, Nigel was discussing the gold price in Friday’s trading room. As many of you know, gold has recently had a significant pullback with many questioning whether the recent bull run has now ended for the precious metal.

Indeed in last week’s trading room, the monthly chart was showing some significant resistance as the volume has started to change from green to white (or neutral). In addition, the Hawkeye Heatmap on the weekly chart is also turning dark red – all signals suggesting we can expect to see a further pullback for gold. The daily chart also confirms this view with the short term trend now also turning red, selling volume clearly evident over the last week and any break and hold below the $1600 per ounce level could see a further decline for the metal in due course.

If you would like to see Hawkeye in action and how we use these tools ourselves, then simply sign up for one of the FREE Live Training Rooms! Become the trader you deserve to be!

Nigel Hawkes’ training room covers the commodity markets, where he explains his latest trades and how to select low risk, high probability trades before moving onto the day trader’s favorite instrument – the e-mini. Here you will be able to see the genius that is Hawkeye as Nigel uses the Hawkeye GearBox and GearChanger, two unique indicators to Hawkeye, which ensure we trade at the right speed and in harmony with the market.

To register for our Free Live Training Room each Thursday, Register Here! Forex begins at 8:00am, and Futures/Equities begins at 9:30am, Eastern US time.

FEAR: It’s Only a Four Letter Word – Don’t Let the Markets Spook You!

If there is one thing to say about the markets at the present, it is that they are deeply unpredictable. They swing dramatically from hope to fear and back again, catching both professional and retail traders alike. This type of market behavior inevitably leads to fear, frustration, and bad trading decisions which in turn can undermine a trader’s confidence and decimate his or her equity.

The good news is that this does not need to happen to you! The Hawkeye suite of tools and indicators will give you the confidence to not only get into a trade, but keep you in and hold that position as it develops for the longer term.

Our users certainly understand this power and beauty. Chris recently wrote to Nigel saying:

Dear Nigel,
Having traded your Hawkeye Package for the last two months, I write to inform you that I have doubled my equity from my Forex trading since using your system…………
Many Thanks
P.S. If any of your users wish to verify directly with me please feel free to contact me by email.

In fact, in order to succeed as a trader we only need three things:


  • We need an edge – Hawkeye gives us this edge, getting us on the right side of the market, time and time again.
  • We need to be able to control emotion – Hawkeye does this by giving us the confidence to stay in.
  • We need to be able to control risk – Hawkeye does this by giving us clear signals of when to stay in and when to stay out, therefore protecting our equity.

Just last week, we experienced a classic example of the power of Hawkeye! In the Friday morning training room, Nigel demonstrated all three of these principals.

Earlier in the week, equities had sold off sharply and everyone was expecting the week to end on a negative tone. Friday’s open on the S&P gapped up, but Hawkeye gave us the confidence to buy the market. Nigel captured his trade on the ES.D 5484 tick chart. The ES.D had opened, gapped up in anticipation of the ISM (which incidentally came in far better than expected) before carrying on up and ending the trading session on a very positive note.

Interesting Image

While Nigel was trading this market, I was simultaneously looking to take a trade on the Eurodollar. Once in, I too was rewarded with a fantastic trade, which I’ve captured in this week’s video for you:

Hawkeye Training Room Summary.

For those of you new to trading, the Euro is considered a “risk on” currency;  therefore as equity markets rise, we expect to see the Euro rising as well. This is exactly what we saw on Friday.

Needless to say, overnight in Asia and this morning in London, markets have returned to their more usual febrile state. At the time of writing this newsletter, the woes in the Eurozone are once again taking center stage with contagion now appearing to spread from the periphery to more solid countries such as France, Netherlands, and Belgium.

The fear is almost always reflected in the price of gold, which having moved sideways in the last two weeks, now looks set to re-test the $1800 per ounce region. Should this be breached, we may see a further run back towards the $1865 area and beyond.

There are other interesting markets and instruments to watch…In silver, the market has also been in sideways consolidation, which is strongly suggestive of an imminent breakout to the upside. The key price level here is in the $35.35 per region which would then provide a platform of support for a further leg up in the move. Meanwhile, the WTI contract has been in a fantastic uptrend since early October as it now begins to test the psychological $100 per barrel level where the sell-off in the summer was initially triggered.

All these instruments and markets can be traded with confidence using Hawkeye ChartTools. Not only does Hawkeye tell us when to get in, but it keeps us in and helps us ride out these difficult and volatile periods and finally gets us out at a profit, safely.

To register for our Free Live Training Room each Thursday, Register Here!  Forex begins at 8:00am, and Futures/Equities begins at 9:30am, Eastern US time.

Good trading and see you in the training room!

Minimize Risk Trading with the Hawkeye Fatman

In this week’s video, Nigel Hawkes shows setups that he looks for in the Forex market.  He shows how to take trades on a Forex pair with the least amount of risk while using the Hawkeye Fatman as a filter. 

Click on the image below to view this week’s video update:

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We demonstrate the same methods live in our Free Training Room. Come join the fun every week. To see the current schedule and register to attend, Register Here.

If You Are Serious About Being Profitable in FX, This Video is a Must

In this must-see video, Nigel Hawkes demonstrates an invaluable setup for daily FX trading, showing how to apply the Hawkeye Fatman and Gearbox in the best way.  Nigel also shows the course of the EMD trade after last Friday’s webinar closed.

Click on the image below to view this week’s video update:

We demonstrate the same methods live in our Free Training Room. Come join the fun every week. Learn more now.

Patience – A Key for Success

Nigel Hawkes warns against missing correct timing on trades and how to use the Hawkeye ChartTools, GearBox and GearChanger, at their full potential.  Be sure to have the patience to wait for perfect setups.  Think like a hunter and you will be trading for success.

Click on the image below to view this week’s video update:

We demonstrate the same methods live in our Free Training Room. Come join the fun every week. To see the current schedule and register to attend, Register Here.

Making Profits in Swing Trading – See How VSA Does It!

Continuing the Hawkeye Traders Education Series

Nigel Hawkes is a market leader and expert in volume spread analysis. Over the past 20 plus years he has studied and applied volume analysis to every market in every timeframe. What he has found is that when using volume and price together with the desired timeframe he can successfully interpret market direction. He took his findings and created a group of ChartTools that provide consistency to his analysis within the framework of an easy to follow methodology.

The Hawkeye Traders Methodology is designed to get traders and investors on the right side of the market. The important word in that previous statement is methodology. At Hawkeye we do not simply provide indicators to traders. We provide education and teach traders how to interpret the market through volume and price and how to trade it. This training includes how to read the signals, where to enter, where to exit for both profit targets and stops and what timeframes to use based off your style of trading. It does not matter if you are a scalper, day-trader, swing-trader or investor. The Hawkeye Methodology can be used to interpret the markets of your choice. Over the next few weeks we are going to show you through charts and our analysis how this is done.

In Series 1,
we covered BP. In Series 2, we covered Jim Cramer’s Picks. In that analysis there were multiple stocks currently trading in congestion. In Series 3, we had analyzed several stocks in congestion and showed how to avoid trades when congestion is present. This week, we will show how Volume Spread Analysis (VSA) will give you the edge in Swing Trading.  Join Nigel Hawkes, the world’s leading authority on VSA, as he teaches students all about VSA at the Hawkeye Seminar (27-28 Sep 10) in sunny West Palm Beach, FL. You do not want to miss out on this opportunity to learn directly from Nigel about the power of Volume Spread Analysis.

SERIES 4: Swing Trading Indices.

Making Profits in Swing Trading Using Volume Spread Analysis.

Time is a crucial element to trading. The smoother we make price and volume the easier it is to trade it. If we look at current Nasdaq and Russell 2000 charts we can see that on June 23, 2010, we have increasing selling volume on a bar that closed near its mid range. Volume Spread Analysis tells us that on this bar sellers came in strong and we should be expecting decreasing price movement.



When the June 24, 2010 bar opened Hawkeye gave us a short signal on the Russell 2000 and the Nasdaq. Here at Hawkeye Traders we like to wait for both indices to confirm market direction increasing the probabilities for trend continuation.



Towards the end of the downward push level 3 was triggered in both markets on July 1, 2010. On this bar the Russell closed near the midrange of the bar on increasing green volume and the Nasdaq closed in the upper quadrant of the bar on increasing green volume. This tells us that buyers are present in the market and a pullback should be expected. During this market condition we want to see sellers come back in the market to increase probabilities of downward trend continuation. On July 2, 2010, red volume came back in the market confirming sellers reentry. The bar closed near its low in both markets on increasing selling volume. In terms of Volume Spread Analysis this is a bearish signal.

To learn more about the power of Volume Spread Analysis, attend one of our 2 or 3-day seminars as we explain in detail how to interpret volume in terms of price spread. Do not miss out on the opportunity to learn this powerful trading technique.


Good Trading Everyone,

Hawkeye Traders
Understanding Price and Volume: Now that’s trading!!!