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Dear Futures Trader,
What follows is the second issue of FutureSource's newest service, "FAST BREAK." Each weekly issue contains a discussion of the markets between two well known analysts and contributors to FutureSource, Jim Wyckoff and Dave Hightower. David Hightower is editor of the "Hightower Report", available on FutureSource Professional and ProNet. Call 800-621-2628 for more information, or click below: http://pronet.futuresource.com. Jim Wyckoff is a regular contributor to FutureSource.com. You are receiving this because you are a customer of Futuresource. HOWEVER, if you are no longer interested in the markets, and don't want to receive this free service, we respect that! Just scroll to the end, and click on the link. You will removed from the "FAST BREAK" list immediately. ________________________________________________________________ F U T U R E S O U R C E ' S F A S T B R E A K Volume I December 28, 2001 Issue #2 ________________________________________________________________ The past couple weeks have witnessed higher volatility in the currency markets, in the wake of a political and economic meltdown in Argentina, and as two nuclear-armed nations (India and Pakistan) step up their war rhetoric. Let's get the opinions of two seasoned and respected market analysts: David Hightower, editor of the Hightower Report (http://www.futures-research.com) and Jim Wyckoff, proprietor of "Jim Wyckoff on the Markets." FUTURESOURCE.COM: Dave, give us a basic fundamental perspective on the U.S. dollar and its major counterparts. HIGHTOWER: The U.S. dollar appears to have an entrenched bullish sentiment over the Euro and we would expect interest in the dollar to increase into the kick-off of the physical Euro currency implementation. However, it would seem that the dollar was quickly shut off from further buying this past week when it reached above 118. This is **************MESSAGE FROM A "FAST BREAK" SPONSOR*************** Optimize your short-term trading results with tips from the hot new trading manual, "Trader's Guide to Day-Trading." Features tips from three of the nation's top trading gurus, Jake Bernstein, Dr. Alexander Elder and Neil Weintraub. No cost or obligation. It will be snail-mailed to you ASAP. http://www.futuresource.com/ads/manfinancial.htm **************************************************************** the second time that the dollar has been quickly repelled from that level. We have been suggesting for weeks that the US dollar is holding an extreme premium versus most of the world's currencies. Therefore, a leveling out of economic conditions would seem to pressure the dollar. We also think that the U.S. dollar has seen an unsustainable windfall off of Japanese yen weakness. Therefore, it is possible that the dollar will see a blow-off top in the coming week and that a major top could be formed. Historically, it would seem that several major turns in the currency markets have come in close proximity to the beginning of a new year. In the event that the dollar does turn down, we have to think that the Canadian and the Swiss will see the most significant recovery capacity. FUTURESOURCE.COM: Jim, give us more of a technical view on the U.S. dollar index and the major IMM currency futures. WYCKOFF: The past two weeks have seen the March U.S. dollar index spring sharply higher, after prices had been trending lower during late November and the first have of December. Last week, the March dollar index hit a high of 118.85, and has since seen some healthy consolidation of the recent strong gains. The dollar index bulls indeed have the near term edge, and the longer-term charts are also friendlier to the bulls. If the bulls can push the March dollar index above the 119.00 level, **************MESSAGE FROM A "FAST BREAK" SPONSOR*************** Today's trading tools for New Millennium trading success. Receive a FREE investor's package containing an insightful Special Market Report, "Turn of the Century", and your choice of an interactive CD-ROM tutorial, video or audiocassette on options investing in a volatile 2002. http://www.futuresource.com/ads/barkleyad.htm **************************************************************** that will give them the momentum to challenge the July high of 121.29. A drop below 114.75 means the market will likely languish in more of a choppy and sideways trading range in the near term. Bulls should be warned that if prices do sell off from here, a big head-and-shoulders top reversal pattern could develop on the weekly continuation chart for nearby dollar index futures. But right now, the bulls are enjoying the technical advantage. As for the Euro currency, the weekly continuation chart for nearby Euro futures should give the bulls some encouragement, as well as throw a scare into U.S. dollar index bulls. A longer- term downtrend line drawn off the 1998 high was penetrated on the upside and negated just about a year ago. Since that time, prices have been trading sideways in a choppy pattern. This choppy trading has also formed a coiling pattern--whereby the sideways trading range has become more compacted the past several weeks. This is suggestive of a bigger "breakout-type" price move in the not-too-distant future. Given the recent lowly price levels in the Euro, odds do favor that potential breakout being to the upside. There is also potential for a big double-bottom reversal pattern on the weekly chart. Indeed, there are clues on this chart that suggest the Euro currency bulls will enjoy more success in the coming year than they did in the past year. From a shorter-term perspective, if March Euro currency futures prices drop down below the November low of .8708, then the door is opened to much more downside. If that low can hold and prices work higher, then a big double-bottom reversal could be in the works. Finally, the Japanese yen has been in a nosedive for nearly two months. This steep decline appears to be a "washout" or exhaustion-type selling phase that many times precedes a major change in trend. But bottom-pickers should beware. Right now, would-be long-side traders do not want to stand in front of a steaming locomotive. They should first let the market show them some solid signals of strength before attempting to board the bullish train. FUTURESOURCE.COM: Thanks for the comments, Dave and Jim. We'll look forward to more of your insight in the coming weeks. ---------------------------------------------------------------- DISCLAIMER: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this newsletter or on these web sites. The past performance of any trading system or methodology is not necessarily indicative of future results. _______________________________________________________________________ Powered by List Builder To unsubscribe follow the link: http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=17884&;subid=77A29D9A888A1B4C&msgnum=5
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