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-   -   US and Euro stocks mounting one more rally before crashing? (https://www.forexfactory.com/thread/787890-us-and-euro-stocks-mounting-one-more-rally)

cat Feb 15, 2019 10:10am | Post# 621

just wait for the china announcement....you guy.... short sellers will be on suicide watch
No one is denying that the main US indecis are not super bullish right now avibe, the Russell 2000, the S&P, the Dow, are all looking very strong, but markets always do until the turn and start coming back the other way, and that is the purpose behind this thread, to try to predict where these levels might be. So far it's been pretty successful, and now, with the markets rising again off of the big December falls, we are trying to determine how high they are likely to go this time around. You may be right, they could go a lot higher, or, they can fall short at key technical levels and come down again.

ijltf Feb 15, 2019 10:25am | Post# 622

I think longer term indices are short, today's announcements around US/China have pushed US Indices upwards, and the Euro's have followed. I trade the Dax a lot, and have been watching it from the gap this morning waiting for a short opportunity to present itself and it's currently not forthcoming. As has been said earlier there's a head and shoulders on H4, resistance levels on D1, sat on 20ema on W1 with the 200ema just above, these are all short indicators to me.

I'm still waiting for the short, anyone have any thoughts on this?

By the way, Hi guys! I'm new to the forums, been using Forex Factory for years, just never signed up for the forum till today, I've been trading for 7 years, and been in banking for 11, I'm currently a fund manager for a small fund in London.

avibe Feb 15, 2019 10:55am | Post# 623

{quote} What China announcement are you referring to exactly?
This market is trading on expectation of good news coming out of the trade talks...inital reaction from Xi seems positive

there is a March 1st deadline they are rushing to beat...

i expect alot of concessions and Trump (DayTrader-in-Chief) hungry and addicted to winning ...will fold fast..

cat Feb 15, 2019 11:05am | Post# 624

{quote} This market is trading on expectation of good news coming out of the trade talks...inital reaction from Xi seems positive there is a March 1st deadline they are rushing to beat... i expect alot of concessions and Trump (DayTrader-in-Chief) hungry and addicted to winning ...will fold fast..
And once that expectation no longer exists, whatever the result, what expected good news is the market going to be trading on then?

Islander Feb 15, 2019 11:14am | Post# 625

These markets are ballistic today. Can one of you fundi experts please tell me what's going on?
Hi Cat - my view is that the SM used yesterday's out of line data to drop price to the hourly 200 SMA allowing them to buy for the next leg up which has at present stalled at two fib expansions from different swings.

Above we have the December high, then the November high and finally the ATH last October at 26,960 which was not much above the prior ATH from January 2018. The current bullish daily channel reaches this level around the end of this month.

TWT

This afternoon's high just above the 25,800 BRN was immediatly sold in an aggressive WR M1 bearish engulfing candle, suggesting some profit taking - volume-wise on the lower TFs not yet IMO indicating a halt to this rally.

cat Feb 15, 2019 11:43am | Post# 626

{quote} Hi Cat - my view is that the SM used yesterday's out of line data to drop price to the hourly 200 SMA allowing them to buy for the next leg up which has at present stalled at two fib expansions from different swings. Above we have the December high, then the November high and finally the ATH last October at 26,960 which was not much above the prior ATH from January 2018. The current bullish daily channel reaches this level around the end of this month. TWT This afternoon's high just above the 25,800 BRN was immediatly sold in an aggressive...
Hi Islander.

Yes, the H1 200 sma/ema ( I use both ) certainly got bought that's for sure. I had the Dax lifting early on where it did, but didn't trade it despite a nice opp because I didn't think it would go far...how wrong I was. So, reassessment time on Dow, with the trend line conclusively broken. 26,000 now beckons, and then really for me, anywhere up to 27,000 and then a potential triple top is in play. I was just chatting to one of my trader buddies who's very strong on fundies, and he reckons with further Fed rate hikes now off the table investors are piling back into US stocks, but, any break down in the trade talks with China, and these markets will tank, because if that happens, what else is there to rally on? No more rate hikes? Which of course, whether the Fed admits it or not, is an implicit admission that the US economy is as weak as we know it to be.

Have a grand weekend everyone!

ps - Dax sits at a critical level, up on monthly resistance, with the weekly 200ema looking rock solid as resistance just above.

cat Feb 16, 2019 6:10pm | Post# 627

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Dax is showing a rather nice looking head and shoulders pattern atm, best seen on H4. The two left shoulders have a combined pip total to the top of the head of 100, so to get a potential level for the right shoulder divide that by two. This means that we are at or just below to be exact the potential maximum reach for the right shoulder. If the level breaks, then a continuation of the trend line bring up to the next potential level should a double top with the 5th Feb high be broken.

I have my next potential high on the Dow around 230-300. If that breaks, then Dow will move towards a triple top @ 27,000, and every trader in the world will be watching that scenario to see what happens, and I for one think the chances of the Dow triple topping are pretty high, and if it does get up there, even a bit higher, before stalling, i think we could see a wave of selling hit the markets to send it down fast and hard.

All pure speculation at this point, so we'll just have to wait and see.
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dispersion Feb 17, 2019 2:52pm | Post# 628

{quote} I was referring to the Dow Jones Index. And my humble opinion is that news matters not much at all.
Sure your opinion deserves to exist. If you believe that everything important is priced in the market, then yes, technical analysis is the only working tool

cat Feb 17, 2019 3:44pm | Post# 629

I think longer term indices are short, today's announcements around US/China have pushed US Indices upwards, and the Euro's have followed. I trade the Dax a lot, and have been watching it from the gap this morning waiting for a short opportunity to present itself and it's currently not forthcoming. As has been said earlier there's a head and shoulders on H4, resistance levels on D1, sat on 20ema on W1 with the 200ema just above, these are all short indicators to me. I'm still waiting for the short, anyone have any thoughts on this? By the way, Hi...
Welcome friend, good to have any new members on the thread, especially those with as much experience as you have. My current thoughts on Dax are in my last post.

ijltf Feb 18, 2019 12:54am | Post# 630

{quote} Welcome friend, good to have any new members on the thread, especially those with as much experience as you have. My current thoughts on Dax are in my last post.
Thank you for the welcome, your thoughts echo mine. I feel there may be a last leg up, but I'm sat waiting to short global markets this week.

PariCovek Feb 18, 2019 3:17am | Post# 631

Dax is showing a rather nice looking head and shoulders pattern atm, best seen on H4. The two left shoulders have a combined pip total to the top of the head of 100, so to get a potential level for the right shoulder divide that by two. This means that we are at or just below to be exact the potential maximum reach for the right shoulder. If the level breaks, then a continuation of the trend line bring up to the next potential level should a double top with the 5th Feb high be broken. I have my next potential high on the Dow around 230-300. If that...
Dow is showing a similar Head and Shoulder's pattern forming but on extended Higher TFs.

29 Jan 18 - Left Shoulder 26,705pts

4 Oct 18 - Head 26,951pts

which, is -> 248 calendar days...

Add 248 calendar days using basic time series from the date of the peak (Eg head), and we have Right Shoulder around 26,680-26,730pts (giving a 50pts spread) potentially on 9 June 2019?

Just some rough thoughts, nothing concrete.

cat Feb 18, 2019 3:42am | Post# 632

Dax can definitely fall from here, but plenty of support to get through on the shorter tfs, the first of which I am eyeing is the 15m 100sma @ 261. The way this market has been of late, with these aggressive ramp ups following a bit of selling, one has to be wary, so it's just a question of trying to pick a good entry and moving to BE asap. Definitely, that unexpected rally on Friday, or at least the strength of it back up to the Weekly 200ema on the Dax, could have brought alot of sellers in to this market today.

medici Feb 18, 2019 4:03am | Post# 633

{quote} Sure your opinion deserves to exist. If you believe that everything important is priced in the market, then yes, technical analysis is the only working tool
Thank you for allowing my opinion to exist

Yes, that's the conventional Efficient Market Hypothesis garble that the market mechanism is about valuation based on available information.

Then there's Andy Lo's Adaptive Market Hypothesis, which tries to bring human psychology and behaviour into the picture. One step in the right direction, but still academic waffle in my view.

I don't think the objective of market participants is to agree about fair value. People participate in the financial markets for the good old reasons of money and power - to make money or to exert power and influence.

For the CBs the ZIRP+QE policies (that exist to keep the growth driven economy from sinking) require two things. First, austerity in fiscal policies in order to avoid hyper-inflation. The lower and middle classes will have to tighten the belt a bit. Second, they (the CBs) participate in financial markets to keep asset prices up, so that hope about the economy is not lost.

That about exercising power. The rest of us are in the markets to make money, and not to make balanced and well considered judgements about the state of the US economy, or the prospects of individual companies. For the latter, it's better to become an analyst, journalist, or academic.

In money-making most people get in the grip of the emotions of fear and greed. In the inevitable presence of uncertainty, the feelings of fear (greed is fear in disguise - fear of scarcity) tend to lead to collective behaviour. Even the CBs are not immune to it, as the market is too large for any one player to control it. That collective behaviour is what moves the markets.

Now that's the bigger picture. On an intraday level, the game is slightly different. There, market makers do control the market to quite some extent, and the intraday patterns are evidence of it. And, back to your post, the news releases have an impact, but not in setting the direction for the longer term. Rather, they become tools and tricks for the MMs to move the market around and execute whatever order flow that is on the agenda for the day.

That's a bit more about what I believe. Still ok to exist?

cat Feb 18, 2019 4:25am | Post# 634

{quote} Dow is showing a similar Head and Shoulder's pattern forming but on extended Higher TFs. 29 Jan 18 - Left Shoulder 26,705pts 4 Oct 18 - Head 26,951pts which, is -> 248 calendar days... Add 248 calendar days using basic time series from the date of the peak (Eg head), and we have Right Shoulder around 26,680-26,730pts (giving a 50pts spread) potentially on 9 June 2019? Just some rough thoughts, nothing concrete.
Yes, it'll be a beauty if it holds. I agree with those levels, and I think there should be more upside on Dow, but June 9th? I think we'll reach them before that.

cat Feb 18, 2019 4:27am | Post# 635

I believe the next rate move by the Fed, will be a cut. Does anyone have any thoughts on that and how it may move the markets?

PariCovek Feb 18, 2019 5:09am | Post# 636

{quote} Yes, it'll be a beauty if it holds. I agree with those levels, and I think there should be more upside on Dow, but June 9th? I think we'll reach them before that.
Yeah, at the current trajectory, we should hit that shoulder level well earlier... unless we get some turbulence and delays with the US-China trade talks ofc.

medici Feb 18, 2019 5:25am | Post# 637

I believe the next rate move by the Fed, will be a cut. Does anyone have any thoughts on that and how it may move the markets?
Agreed. Whether it's at the next FOMC meeting, I'm not sure, but a cut will come.

Traditionally, the CB mandates were to provide price stability by controlling inflation, and to smooth the economic cycle by providing monetary stimulus when the economy was contracting.

In the aftermath of the 2007-08 financial crisis, the CBs found it necessary to provide extraordinary monetary stimulus in order to avoid a 1930s style depression. The new element is that these stimuli have continued to be injected into the economy during a growth cycle.

Now the economy is slowing - at a time when traditionally CBs would increase the monetary stimulus from a zero level - but after only a short period of reduced stimuli.

Retail sales drives the US economy, and Thursday's data raises the prospect of a recession. The only way out is to put more money in the pockets of consumers. Rates have to be cut, bonds purchased, and so forth. And the austerity policies will have to be eased.

The net total of this is that they will have to choose between inflation and growth on the one hand, or stable prices and contraction on the other. The first option will lead to hyperinflation, the second to world-wide depression. So they will chose growth and inflation.

The endgame will be hyper-inflation and and an economic system out of control. It will not be pretty.

cat Feb 18, 2019 12:37pm | Post# 638

{quote} Agreed. Whether it's at the next FOMC meeting, I'm not sure, but a cut will come. Traditionally, the CB mandates were to provide price stability by controlling inflation, and to smooth the economic cycle by providing monetary stimulus when the economy was contracting. In the aftermath of the 2007-08 financial crisis, the CBs found it necessary to provide extraordinary monetary stimulus in order to avoid a 1930s style depression. The new element is that these stimuli have continued to be injected into the economy during a growth cycle. Now...
Yes, that's my take on it too. As for the markets, it means another fix for the junkie, so we may see US stocks move higher, and I think we will know soon, but ultimately, there can only be one ending, and as you say, it will be ugly, very ugly.

medici Feb 18, 2019 5:52pm | Post# 639

{quote} Yes, that's my take on it too. As for the markets, it means another fix for the junkie, so we may see US stocks move higher, and I think we will know soon, but ultimately, there can only be one ending, and as you say, it will be ugly, very ugly.
Yes, from the narrow perspective of the stock market only, this is bullish, and we are likely to see impressive strength in the US indices for some time.

But an inflationary recession is not going to be good for stocks. And the trigger for the crash is likely to come from inflation-related factors exogenous to the stock market, such as sovereign debt and currency crises.

When? Give it a year or two. Maybe around next US presidential election, maybe earlier.

Old junkies die hard, and this is the beginning of the end:

Inserted Video


Up until 22 minutes, it's background information on how it got so bad. If you are only interested in the future scenarios, start watching at 22 minutes.

ijltf Feb 19, 2019 3:30am | Post# 640

Morning guys, so the DAX gapped short this morning on open, but reached the high of the gap open long from yesterday at 11351, it eventually got to 11359 and rejected it completely and has dropped straight back down, I'm watching it on the H1 time frame, but I feel this is a good sign for the short sellers out there that this second rejection could be the start of the selling.


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