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  • #63,421
  • Dec 14, 2012 9:58am Dec 14, 2012 9:58am
Quoting Ken A
It doesn't have to be today and further there're more buy stops above.
Agreed...big moves
  • #63,422
  • Dec 14, 2012 9:58am Dec 14, 2012 9:58am
Quoting PipTrapper
I'm quite confident that it will not happen under current macro conditions, but things could change and if they changed for the better for Europe, or if there were some major repatriation flows or other such transactions, it could very well break QE3 highs. However, even in that situation, I still maintain that any rallies will be capped or faked out before we hit 1.32... at least on a daily close basis anyway.

Remember that the point just before a reversal almost always overshoots the high. Remember 3rd May 2011 and 4th Nov 2010?
This doesnīt add up to a risk rally to me. The S&P isnīt following along, in fact it is down today. Also, the Yen is up today. I donīt believe this rally.
Observation is the path to discovery.
  • #63,423
  • Dec 14, 2012 10:01am Dec 14, 2012 10:01am
Quoting Alorente
This doesnīt add up to a risk rally to me. The S&P isnīt following along, in fact it is down today. Also, the Yen is up today. I donīt believe this rally.
Risk-On and Risk-Off paradigms are pretty screwed post QE3 and with BOJ easing, it will be very misleading to make trade execution based on that.
  • #63,424
  • Dec 14, 2012 10:10am Dec 14, 2012 10:10am
Quoting Ken A
Risk-On and Risk-Off paradigms are pretty screwed post QE3 and with BOJ easing, it will be very misleading to make trade execution based on that.
There are distortions, to be sure, but since Q4 was announced, the S&P has been dropping. Risk currencies will need the stock market if the move is to thrive. I believe, like PT that we get a reversal before 1.32.

Of course, as we all know, anything can happen in Forex.
Observation is the path to discovery.
  • #63,425
  • Dec 14, 2012 10:10am Dec 14, 2012 10:10am
Last 5 months it is bull rally only.
  • #63,426
  • Dec 14, 2012 10:14am Dec 14, 2012 10:14am
Quoting Alorente
There are distortions, to be sure, but since Q4 was announced, the S&P has been dropping. Risk currencies will need the stock market if the move is to thrive. I believe, like PT that we get a reversal before 1.32.

Of course, as we all know, anything can happen in Forex.
Yes anything can happen but I won't be calling it a top before the fact.
  • #63,427
  • Dec 14, 2012 10:15am Dec 14, 2012 10:15am
Quoting Alorente
This doesnīt add up to a risk rally to me. The S&P isnīt following along, in fact it is down today. Also, the Yen is up today. I donīt believe this rally.
Well Al, S&P is holding the break. True that it didn't move today but don't forget that we are in a very steep move up in equities (>+11% in Europe and +7% in the US) since Mid November. More and most important is that we inside of last resistance before ALL TIME HIGHS !!!! which as you know means a lot. I don't think will break such strong R with the fiscal cliff around the corner.

As mentioned before I think window dressing will cap the move down this month and fiscal cliff will cap (until cleared ..whatever the resolution) to the top side. Those are very powerful TA and FA forces to just dismiss why the ES hasn't follow. It hasn't follow because the next stop is the moon and we are ending the year with a important FA (fiscal cliff in play).

While on the dollar, is just collateral of the QE4. Any QE is very bearish for a currency. A good chunk of the move was already digested but the natural impact until it finds equilibrium is not yet digested. Plus currencies can flow more easily than equities, without counting some major bear options (most already expired) that were holding down the euro.

On the Yen is just pure speculation pre election on the very very very vocal call for more aggressive BOJ intervention...but as you know is politics and political BS is always BS everywhere until they get elected ...so let it settle down first...

In simple words and IMO, thin market, pre yearly close so let the "correlations" align only with the the real moves and with the real FA triggers (US fiscal cliff and Japan elections).

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #63,428
  • Dec 14, 2012 10:19am Dec 14, 2012 10:19am
What is with the shootings especially in elementary school this is disgusting I am completely appalled
  • #63,429
  • Dec 14, 2012 10:26am Dec 14, 2012 10:26am
Quoting Alorente
This doesnīt add up to a risk rally to me. The S&P isnīt following along, in fact it is down today. Also, the Yen is up today. I donīt believe this rally.
Take the risk-on/risk-off paradigm and throw it out the window. We have recently entered a market phase where correlations are highly distorted. There are far too many political, fiscal and monetary question marks out there and this is causing a frantic re-shuffling from an exposure and safety perspective. I really cannot tell you what will happen next from a fundamental perspective and neither can anyone else. However, from a technical perspective it is quite clear to me that if we continue on the current course, 1.34/1.36 area can come into play quite easily. It still would make absolutely no sense from a fundamental perspective, but you and I both know that it has happened before.

Remember 27th October 2011? It was a massive short squeeze in one day equal to the height of the trading box that preceded it just before the reversal.

ADD: I have to add, just so nobody misunderstands my sentiment, that I am still very much bearish this pair and I would be utterly shocked if we were to rally another 400 pips. I'm just pointing out the possibilities which we must always keep in mind. This is why I always advocate proper money management. Leverage kills, or as I always put it; "Pigs get slaughtered, don't be one"

Attached Image (click to enlarge)
Click to Enlarge Name: 2011oct.gif Size: 25 KB
Those who say it cannot be done should not interrupt those who are doing it
  • #63,430
  • Dec 14, 2012 10:37am Dec 14, 2012 10:37am
Quoting PipTrapper
Take the risk-on/risk-off paradigm and throw it out the window. We have recently entered a market phase where correlations are highly distorted. There are far too many political, fiscal and monetary question marks out there and this is causing a frantic re-shuffling from an exposure and safety perspective. I really cannot tell you what will happen next from a fundamental perspective and neither can anyone else. However, from a technical perspective it is quite clear to me that if we continue on the current course, 1.34/1.36 area can come into...
i remember that day VIVIDLY. a friend of mine was short from 139 and rode it out all the way up and sold more at 142 when all of the IBs were putting out client notices to sell, sell, sell .... then rode it all the way back to low 130s. a tougher outright contract trader than I. i would have pooped my pants after 141 if i were short 3 cents down w that much leverage.
Any prices quoted are futures
  • #63,431
  • Dec 14, 2012 10:38am Dec 14, 2012 10:38am
Quoting sisse
Well Al, S&P is holding the break. True that it didn't move today but don't forget that we are in a very steep move up in equities (>+11% in Europe and +7% in the US) since Mid November. More and most important is that we inside of last resistance before ALL TIME HIGHS !!!! which as you know means a lot. I don't think will break such strong R with the fiscal cliff around the corner.

As mentioned before I think window dressing will cap the move down this month and fiscal cliff will cap (until cleared ..whatever the resolution) to the top side....
Good analysis. Yes, normally QE will weaken a currency, but USD is the premier safe haven. Maybe the only one.

Regardless of the fiscal cliff situation, which clearly entails risk, there is the reality settling in that the Fed is rapidly running out of effective bullets.

One of two things can happen. 1- The new round of QE works and quickly generates economic activity, which lowers unemployment and initiates a big selloff in the bond market. 2- QE does not work, unemployment and economic activity remains in the doldrums. Few invest in business expansion and all you have accomplished is making a bad situation much worse by expanding the balance sheet drastically. This is what I think will happen.

Would you invest in the stock market under these conditions? It sounds like a game of musical chairs to me. At some point soon, the music may stop and the dollar may again excel as a safe haven. Remember 2008?
Observation is the path to discovery.
  • #63,432
  • Dec 14, 2012 10:40am Dec 14, 2012 10:40am
Quoting sisse
Well Al, S&P is holding the break. True that it didn't move today but don't forget that we are in a very steep move up in equities (>+11% in Europe and +7% in the US) since Mid November. More and most important is that we inside of last resistance before ALL TIME HIGHS !!!! which as you know means a lot. I don't think will break such strong R with the fiscal cliff around the corner.

In simple words and IMO, thin market, pre yearly close so let the "correlations" align only with the the real moves and with the real FA triggers (US fiscal...
in all fairness, s&p has come down 30 handles since QE highs on wednesday, which certainly implies risk off. the bolded part of your last sentence really says it all.

i really should know better at this point. next year, i'm quitting after thanksgiving and going skiing for 2 months.
Any prices quoted are futures
  • #63,433
  • Dec 14, 2012 10:41am Dec 14, 2012 10:41am
Quoting PipTrapper
Take the risk-on/risk-off paradigm and throw it out the window. We have recently entered a market phase where correlations are highly distorted. There are far too many political, fiscal and monetary question marks out there and this is causing a frantic re-shuffling from an exposure and safety perspective
Well the risk on/off has been long gone since coordinated action in September (started breaking correlation on July when it was imply the intervention). As you well pointed out mostly newbies have keep talking about risk on and off correlations.

On the 2nd I don't really share you view. IMO and as mentioned somewhere else, we are entering back in normal stability mode for trading. We have the fiscal cliff Bs in the next few days, will have the typical couple panic hiccups from the debt crisis next year but in general my call is get ready for reduced volatility and back to business as usual and that includes all the usual macroeconomic interrelation first, risk second correlations...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #63,434
  • Dec 14, 2012 10:42am Dec 14, 2012 10:42am
Quoting redteamgo
i remember that day VIVIDLY. a friend of mine was short from 139 and rode it out all the way up and sold more at 142 when all of the IBs were putting out client notices to sell, sell, sell .... then rode it all the way back to low 130s. a tougher outright contract trader than I. i would have pooped my pants after 141 if i were short 3 cents down w that much leverage.
I was also very short that day and I too rode it out. Who would have thought that we would be in for a 400 pip move in one day. Anyway, I did exactly the same as your friend. I re shorted the top and rode the sucker all the way down to the January 2012 lows. What a ride
Those who say it cannot be done should not interrupt those who are doing it
  • #63,435
  • Dec 14, 2012 10:43am Dec 14, 2012 10:43am
Quoting Ken A
Graphical illustration


Pigs get slaughtered, don't be one

http://image.shutterstock.com/displa...d-96056756.jpg

honestly, what is this even supposed to mean? yes, i know youre long and i am happy for you. however, no amount of aggregate FA, BS supports these market movements. CBs and governments are propping up markets from grains to fx to stocks and it has literally nothing, zero, zilch, nada, bupkis to do with reaching in a piggish manner.
Any prices quoted are futures
  • #63,436
  • Dec 14, 2012 10:46am Dec 14, 2012 10:46am
Quoting PipTrapper
Take the risk-on/risk-off paradigm and throw it out the window. We have recently entered a market phase where correlations are highly distorted. There are far too many political, fiscal and monetary question marks out there and this is causing a frantic re-shuffling from an exposure and safety perspective. I really cannot tell you what will happen next from a fundamental perspective and neither can anyone else. However, from a technical perspective it is quite clear to me that if we continue on the current course, 1.34/1.36 area can come into...
Yes sir. Thatīs why low leverage and small percentage positions are key. They not only keep you out of trouble, they also allow you to profit from days like October 27th, 2011.
Observation is the path to discovery.
  • #63,437
  • Dec 14, 2012 10:46am Dec 14, 2012 10:46am
Quoting redteamgo
honestly, what is this even supposed to mean? yes, i know youre long and i am happy for you. however, no amount of aggregate FA, BS supports market movements. CBs and governments are propping up markets from grains to fx to stocks and it has literally nothing, zero, zilch, nada, bupkis to do with reaching in a piggish manner.
Sorry Red, it wasn't directed to you.
  • #63,438
  • Dec 14, 2012 10:47am Dec 14, 2012 10:47am
Quoting Ken A
Sorry Red, it wasn't directed to you.
gotcha, my apologies. i am a little crabby.
Any prices quoted are futures
  • #63,439
  • Dec 14, 2012 10:47am Dec 14, 2012 10:47am
Quoting Alorente
Yes sir. Thatīs why low leverage and small percentage positions are key. They not only keep you out of trouble, they also allow you to profit from days like October 27th, 2011.
Those who say it cannot be done should not interrupt those who are doing it
  • #63,440
  • Dec 14, 2012 10:49am Dec 14, 2012 10:49am
Quoting Ken A
Sorry Red, it wasn't directed to you.
That's right. It was directed at anyone who is bearish the Euro... hence the bear trap and the US Dollar as bait.
Those who say it cannot be done should not interrupt those who are doing it
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