Channukah Candlestick Charts are very much like regular candlestick charts, just that they occur during Channukah.
Notice that large down move on 12/5 at around 1 a.m. In roughly 3 hours, the GBP/JPY went from the lower 2.2700s to the mid 2.2400s, a move of over 250 pips. It has taken all week to make that move back. Those 2 or 3 large red candlesticks were as strong, or stronger than the next 70 candlesticks!!! That says something about that downward pressure and we have to use the upper level of those 3 red candlesticks as our ceiling.
As you can see, resistance at the 22700 lever was held for about 4 days from the 7th to the 10th, trying many times to close above that level and failing. Finally, at 10pm on Sunday night (Arizona time) the hourly chart closed above this ceiling level for the first time since the drop on the 5th of December. This was a notice to all shorts to get out, and a notice to all bulls, that this might be the time to get long.
I have drawn a small bullish channel from the low of the move to where we are now. It seems that to get short here would be moronic. Never step in front of a moving bus! A good place to join the longs COULD be at the new support level of 22700. However, as you can see in the new channel, if that support is broken, we are still within the bullish channel I have drawn.
What does this mean for taking a trade. Go ahead, get long at 22700 if you wish. Just know, that it can go against you, and you can still be right. What I will do...I will pass up this buying opportunity for now. I DO think it's time to get long, or at least get out of shorts, but I hate being right and losing money. After all, trading isn't about being right and making money...it's about making money.
A better entry point for me would be when the market gets close to, yet still above the 22700 level, ANDat the same time, close to and above my channel support line. It seems that that entry might not happen for a day or so, so I will wait it out. At that point, I will be watching volume, and the stochastic to see what other indicators confirm or dis-confirm my thoughts.
As alwasy, I am just posting my thoughts. Please do not email me asking for a refund to your trading account!
Good luck and happy trading...and reading.
Andy
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