Rob Booker Market Notes, March 3, 2011

// March 03, 2011 // EUR/USD Gets a Jolt – Is 1.4040 Next?
QuickView of What’s Happening The Wallaby Book i s Coming Soon
Risk Disclaimer (read first) …………..……… Page 2
EUR/USD at new highs (4HR) ………………… Page 3
EUR/USD buys on dips (15M) …………….… Page 4
NZD/USD on sale? (4HR) ………………….… Page 5
GBP/JPY plans for a buy (4HR) ……… ……… Page 6
GBP/CHF downtrend in question (4HR) ………Page 7
AUD/NZD Krazy Time (4HR) ……………..…… Page 8

What is the Wallaby?
As my friend @JPClaverie brilliantly observed today:

“Who needs QE3 or even the rest of QE2 when Trichet Wallaby Trading is counter-t rend trading. For trend-traders, that
is doing all the heavy lifting of the EUR/USD himself?” means that the Wallaby is a method for watching for a pullback on a
The Federal Reserve intended for QE2 to cause inflation, short-term chart to trade wit h the longer-term trend. For straight-up
which would send the US Dollar lower as a co nsequence . contrarians, the Wallaby trade is a step-by -step guide through the
Now they’ve got an inflated stock market and a depressed world of trading divergence and looking for peaks and valleys in price
movement. The book is at the printer. It’s coming soon.
US Dollar. In the words of our 43rd president: MISSION
ACCOMPLISHED.
Page | 1
Rob Booker’s Market Notes | March 3, 2011 | Rob.bz (blog), RobBooker.com (fr ee ebooks + managed accounts), @robbiebooker
Trading involves substantial risk of loss. Past performance is not necessarily indicative of future results.
This is not a trade recommendation and is provided for informational purposes only.
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Risk Disclosure
Hypothetical Resul ts:

Trading foreign exchange on margin carries a high level
of risk, and may not be suitable for all investors. The high HYPOTHE TICAL PERFORMANCE RES ULTS HAVE MANY
INHE RENT LIMITA TIONS, SOME OF WHICH A RE DESCRIBED
degree of leverage can work against you as well as for BELOW. NO REPRESE NTA TION IS BEING MADE THA T ANY
you. Before deciding to trade foreign exchange you ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR
should carefully consider your investment objectives, LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE
FREQUENTLY SHARP DIFFERE NCES BE TWEEN
level of experience, and risk appetite. The possibility HYPOTHE TICAL PERFORMANCE RES ULTS AND THE ACTUA L
exists that you could sustain a loss of some or all of your RESULTS SUBSEQUE NTLY ACHIEVED BY ANY PARTICULAR
TRADING PROGRAM.
initial investment and therefore you should not invest
money that you cannot afford to lose. You should be ONE OF THE LIMITA TIONS OF HYPOTHE TICAL PERFORMANCE
aware of all the risks associated with foreign exchange RESULTS IS THA T THEY ARE GENE RALLY PREPARE D WITH
THE BENEFIT OF HINDS IGHT. IN ADDITION, HYPOTHE TICAL
trading, and seek advice from an independent financial TRADING DOES NOT INV OLVE FINA NCIAL RISK, AND NO
advisor if you have any doubts. HYPOTHE TICAL TRADING RE CORD CAN COMP LE TELY
ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL
TRADING. FOR E XAMPLE, THE ABILITY TO WITHS TAND
LOSSES OR TO A DHE RE TO A PARTICULA R TRA DING
Not A Trade Recommendation PROGRAM IN SPITE OF TRADING LOSSES ARE MATE RIAL
POINTS WHICH CAN ALS O ADVERSE LY AFFECT ACTUAL
Nothing in this document should be int erpreted as a trade TRADING RES ULTS. THE RE ARE NUME ROUS OTHE R
recommendation. It should not be relied upon for the purpose of making FACTORS RELA TE D TO THE MARKE TS IN GENE RAL OR TO
an investment decision for your own account, or to invest in for Rob’s THE IMP LEMENTA TION OF ANY SPECIFIC TRA DING P ROGRAM
managed account service. You must read and sign a full (regulat ed) WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE
disclosure document before investing. Any results listed in this morning PREPARA TION OF HYPOTHE TICAL PERFORMA NCE RESULTS
notes document are hypothetical in nat ure, unless specifically noted AND ALL OF WHICH CA N ADVERSELY AFFE CT ACTUAL
otherwise, and Rob does not take every trade idea that is listed herein. TRADING RES ULTS.
These notes are part of Rob’s daily preparation for trading and are
provided to you for informational purposes only.
Page | 2
This is not a trade recommendation and is provided for informational purposes only.  Previous Page | Next Page 
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EUR/USD
: LT Daily: New Highs, Now 1.4040 in View
We’re at the 800 Simple Moving Average
on the Daily chart – something we
covered earlier in the week. That moving
average is a magnet: no matter how far
a pair strays, it always comes back.
Now the question is: What next?
Rarely does the EUR/USD stop and turn

around at the big round numbers –
1.4000, 1.3000, and so forth. So if this
pair reaches 1.4000, it’s likely to shoot as
high as 1.4270. 1.4040 is the first area of
resistance.
If the pair turns now, and starts down

again, 1.3900 is immediate support (see
next chart) and then 1.3750 could come
into view very quickly again. But that’s
totally anti-trend now.
What’s driving this move? Trichet, the

leader of the European Central Bank,
made comments seen as bullish for the
currency. That’s all it took.
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EUR/USD 15M: US Dollar, You Got Served!
The trending phase took over and the
pair entered rocket-ship mode. Such a
violent jump upward is not uncommon
after comments from the European
Central Bank. Can it last?
Trends always last longer and go farther

than we think they will. The current
upward climb is no exception. Many
people called for 1.3000 and lower back
when the pair was at 1.3300.
700 pips later the bears have mostly

retreated and it’s hard to find a US Dollar
bull in the building. But these trends do
end, and you’ll see me posting lots of
charts to talk about warning signs as the
days proceed.
A break above 1.3980 could bring 1.4000

– but it’s not a sure bet. If this trend is
over now, it’s over before 1.4000. For
now, long trades on pullbacks seem very
reasonable.
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NZD/USD 4 HR: Kiwi Bulls Offered a Gift as Pair Retreats
If you want to buy the NZD/USD, it
appears to have gone on sale. Buying on
a dip can be as enjoyable as pulling out
your nose hairs. Makes you cry a little
bit. And wince.
Who in their right mind would buy this

pair right now? The trend points lower.
The pair never reached its missed pivot of
.7487, even though it seemed like it was
on the way to that mark.
At left, I show a 5 minute view of the pair.

I may start looking for bullish divergence
on this short time frame chart, and keep
a very tight stop.
If the pair breaks below the recent lows

of .7380, then the whole downtrend
party resumes. Seems likely that we’d see
.7350 and I’d prepare some new charts
from there.
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GBP/JPY 4 HR: Resistance is Futile! 134.90 Coming Into View.
I’m now looking for the pair to break
above the highs for today. If that
happens, it puts the missed daily pivot
at 134.90 into view. Can we get there? A
strong jobs report could do it.
But why wait for the jobs report? There’s

no reason why we can’t have a 500 pip
day on this pair. I’m not predicting that,
but I am not going to be surprised if it
happens.
My favorite idea for this pair is for it to

fall like a mother and give me a chance to
buy it down in the 132.50 area. But that
seems less and less likely now.
As a side note, and I’ll say this 1,000 more

times in the next 365 days:
When a currency pair misses its daily

pivot but does not hit R3 or S3, that’s
indicative of the beginning of a strong
trend away from that missed pivot.
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GBP/CHF 4 HR: Are We On the Way to 1.5450?
If this pair misses its weekly pivot – as it
did last week – it has about 4 weeks to
get back to that area. If it doesn’t do
that, then it can take months or years to
return. 1.5450 is the next target for me.
This corrective move has interrupted the

downward trend. We need to see the
pair fall below 1.4880 in order to resume
bearishness.
I’d be very surprised to see this pair

Chart from 3/1 break below 1.4880 before Friday’s job
report.
As the pair passes through fib levels on

the way toward 1.5450, I’d like to buy
small amounts each time. If the pair can
fall back down to 1.5000, I’d take a larger
sized position with a tight stop.
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AUD/NZD 1 Hour: Overbought Nightmare
Remember what I said on page 6 about a
pair missing its daily pivots but not hitting
R3 or S3? This is a perfect example of that
phenomenon. Now it’s crunch time: does
the pair break higher again? Or retreat?
There are all sorts of excellent targets for

bears right now. There’s also a savage
upward trend for the bulls.
I’m short this pair at the moment, and

targeting 1.3450 – above the missed
weekly pivot you can see on the chart at
left.
The 4 hour chart has been overbought for

more than 20 consecutive candles.
If the pair can pierce the 1.3700 area,

then we might just see it continue
upward forever. I know that I’ll be out of
the trade and looking for a better
opportunity. Wish me luck. I’ll need it.
Page | 8
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// March 03, 2011 // EUR/USD Gets a Jolt – Is 1.4040 Next?

QuickView of What’s Happening The Wallaby Book i s Coming Soon

Risk Disclaimer (read first) …………..……… Page 2

EUR/USD at new highs (4HR) ………………… Page 3

EUR/USD buys on dips (15M) …………….… Page 4

NZD/USD on sale? (4HR) ………………….… Page 5

GBP/JPY plans for a buy (4HR) ……… ……… Page 6

GBP/CHF downtrend in question (4HR) ………Page 7

AUD/NZD Krazy Time (4HR) ……………..…… Page 8

As my friend @JPClaverie brilliantly observed today:

Hypothetical Resul ts:

Now the question is: What next?

Rarely does the EUR/USD stop and turn

If the pair turns now, and starts down

What’s driving this move? Trichet, the

Trends always last longer and go farther

700 pips later the bears have mostly

A break above 1.3980 could bring 1.4000

Who in their right mind would buy this

At left, I show a 5 minute view of the pair.

If the pair breaks below the recent lows

But why wait for the jobs report? There’s

My favorite idea for this pair is for it to

As a side note, and I’ll say this 1,000 more

When a currency pair misses its daily

This corrective move has interrupted the

I’d be very surprised to see this pair

As the pair passes through fib levels on

There are all sorts of excellent targets for

I’m short this pair at the moment, and

The 4 hour chart has been overbought for

If the pair can pierce the 1.3700 area,

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