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The Really Useless System 25 replies

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The Really Useless Thread

US Rates cut expectations keep rising

Probability at least 25 bp cut at Sept FOMC = 90.8%

Probability at least 25 bp cut in 2019 = 97.8%

Probability at least 50 bp cut in 2019 = 83.7%

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(from https://www.investing.com/central-ba...d-rate-monitor)
Uneventful Q ECB

- neutral changes in outlook :
Inflation outlook revised up by 0.1 for 2019, revised down by 0.1 for 2020.
GDP outlook outlook revised up by 0.1 for 2019, revised down by 0.2 for 2020.

- same threats to growth as before :
brexit uncertainty
protectionism, trade war

- same MT/LT forces supporting inflation
labour cost pressures via the tightening labour market

- ST inflation well under control for the foreseeable future (no deflation risk, no overheating risk). As a consequence :

- rates on hold until at least mid 2020 from previously end of 2019 = well inline with current market expectations (whose range extends as far as end of 2020)

who will ask the most stupid question was probably the hidden contest of the press conference
Quoting Replicant
{quote} Besides the MT swing in EU to 1.191x, betting now on a ST swing via smart money smelling the change and riding US Macro data flip expectations (all driven by WW slowdown triggered by DT trade war I (Jan 2018) and II (May 2019)) ==> 1.122x ==> 1.131x => 1.144x As said before, 1.144x is key on W1 (MT reversal up if taken) There is a nice stoch signal on D1 and something that looks like "a bar is a bar ..." on H4 taking 1.1188
Same bad luck as yesterday to clear TP2 1.131x.
Patient and confident though. Both ST and MT swings remain in play imo after last ECB, expected moves being 100% US Macro / FED driven.

Breaking up 1.132x will trigger a ST (D1) reversal up (first one since last summer 2018) and will unlock 1.144x, last target of the ST swing and first target of the MT swing to 1.191x.

BUT REAL DEAL imo will come with bulls breaking up 1.144x (or not) as it will trigger a major MT reversal up (last one was in June 2017 when Draghi hint end of ECB QE during his speech in Sintra).

After today's ECB, USD looks on the driver seat's ( you know who) for the rest of the year in EU.

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Quoting Replicant
{quote} Besides the MT swing in EU to 1.191x, betting now on a ST swing via smart money smelling the change and riding US Macro data flip expectations (all driven by WW slowdown triggered by DT trade war I (Jan 2018) and II (May 2019)) ==> 1.122x ==> 1.131x => 1.144x ...
Quoting Replicant
{quote} Same bad luck as yesterday to clear TP2 1.131x. Patient and confident though. Both ST and MT swings remain in play imo after last ECB, expected moves being 100% US Macro / FED driven. Breaking up 1.132x will trigger a ST (D1) reversal up (first one since last summer 2018) and will unlock 1.144x, last target of the ST swing and first target of the MT swing to 1.191x. BUT REAL DEAL imo will come with bulls breaking up 1.144x (or not) as it will trigger a major MT reversal up (last one was in June 2017 when Draghi hint end of ECB QE...
TP2 cleared finally.
on 1.132x for the close as expected (precisely 1.13239) to trigger the ST reversal.

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Quoting Replicant
{quote} {quote} Second target cleared in ES @ 272x {image} {image}
Refilling some of the unloaded shorts here in ES in the 288x

288x looks the obvious SH to fade on D1
2889 is the magic level on W1

Deep retrace but so far only a retrace. Bulls need to break up that SH to trigger a reversal up on D1 and aim 2916 and 293x

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Quoting Replicant
{quote} {quote} Final (imo) MT target 19x cleared in TSLA
I was missing the good old days with the MT swing in TSLA but I think I have found another stock that might be nice to ride : Netflix. There might be a MT swing cooking on this one.

Entering short here @ 364, aiming => 31x => 28x => 25x => 19x , a long way !


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(I wanted to share that after the close (week-end time, mod ) but I just saw odd has already moved from 8/1 to 6/1 this afternoon.
It's from very reliable sources. As weird as it may sound, De Ligt is heading to Paris Saint Germain. Trade of next week ?)
Quoting Replicant
{quote} {quote} TP2 cleared finally. on 1.132x for the close as expected (precisely 1.13239) to trigger the ST reversal. {image}
Done, bulls held 1.13239. TA is now aligned with FA changes : we have a reversal on D1

Meaning :

=> we have unlocked the range above, especially a test of 1.144x where Key MT reversal trigger sits (cf. W1 chart).

=> But more important, with this reversal, we have now a confirmed ST bottom. Meaning, we can buy serenely any retrace.

Retraces often happen after a reversal is triggered, but one should look for places where to load longs instead of trying to ride that potential retrace imo.

Ideas where to add/reload/load :

- Very generally, everything below 1.122x are now cheap tickets.

More precisely :
-> SL 1.122x, the last broken SL(on both D1 & W1)
-> SL 1.120x aka ECB's SL.
(Have you noticed, that ECB day, price found foot on the H4 reversal up (1.1199) triggered last monday ?)
-> Rejection points located as low as 1.118x and 1.114x (the latter being also the level where we sat after the release of the awful PMIs)

- Above 1.122x, only expensive tickets :

On D1, there in only one point of interest : 1.1309 (very expensive r:r wise) which is the break/rejection of ECB's SL.
On H4, at a quick glance, 1.127x.
I'm not looking to add longs above 1.122x as I still hold longs from 1.114x.
Waiting for a direct play or a zigzag play to 1.144x.
Target to be hit/solved probably by next FOMC


EU D1
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EU W1
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Quoting Replicant
{quote} Refilling some of the unloaded shorts here in ES in the 288x 288x looks the obvious SH to fade on D1 2889 is the magic level on W1 Deep retrace but so far only a retrace. Bulls need to break up that SH to trigger a reversal up on D1 and aim 2916 and 293x {image} {image}

Nothing else to do in ES than load shorts and sit tight here. DT triggering gangster-like negociations again ...
Quoting Replicant
{quote} I was missing the good old days with the MT swing in TSLA but I think I have found another stock that might be nice to ride : Netflix. There might be a MT swing cooking on this one. Entering short here @ 364, aiming => 31x => 28x => 25x => 19x , a long way ! {image}

I think there is also something nice cooking in AMZN. Retrace wave has just cleared last break point.

Entering short here too @1872 for 159x minimum

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Quoting Replicant
{quote} IT10Y quick FA Map : (last news on Italy's deficit had very soft impact ; that's why I'm more leaning towards "noise and posturing" here rather than any serious FA change for EUR) {image}
pschitt so far

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Quoting Replicant
{quote} Refilling some of the unloaded shorts here in ES in the 288x 288x looks the obvious SH to fade on D1 2889 is the magic level on W1 Deep retrace but so far only a retrace. Bulls need to break up that SH to trigger a reversal up on D1 and aim 2916 and 293x {image} {image}
Quoting Replicant
{quote} Nothing else to do in ES than load shorts and sit tight here. DT triggering gangster-like negociations again ...
Extension again in ES but no break. Bulls pushed as high as 2911 (they almost cleared 2916 without the help of a break up) but failed to take the SH.
It's going well so far, just need a little break down now ..
stochastic in synch

Aiming same targets as previous leg down's ones ie. 279x (st flip), 272x (w1 reversal) and 262x (st bottom).
Last SL's rejection is exactly at 2799.00.

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My thoughts for next FOMC

(couldn't make it as concise as sisse's ones used to be )


On the Fundamental side :

Inflation in the US remains low : YoY Core PCE Price Index (FED's preferred measure of inflation) is at 1.6%, well below FED's target (2%). As important, survey-based measures of LT inflation expectations keep falling, last release down to 2.45%. On the employment front, unemployment rate remains low. However last pay roll employment showed little changes and prior month's release was strongly revised down. Business indicators keep falling (Business confidence, Manufacturing PMI, Services PMI, Industrial Production ...) with some already on the edge. Economic activity raised at a strong rate at previous Q (yoy 3.2%) but GDP print was boosted by some technicalities to avoid the expected upcoming tariffs. On the international front, Trade wars, tariffs, protectionism, uncertainty are expected to weigh more and more on US economy.

=> Expecting no change in the rate decision but a very very dovish FED acknowledging the macro deterioration with plenty of revision downs in their economic projections and - the real deal - hinting a new shift in forward guidance (will be the second one in 6 months), opening the door for a rate cut this year.

Not sure how FED will hint this last point : in the statement or in the press conference ? in the dot plots ? At last shift (December 2018 : shift to neutral), they hint the shift clearly during the press conference, very slightly in the statement and not at all in the dot plots (dot plots were still showing 2 hikes but the conference was clear they were uncertain and data dependent). As a consequence, and because dot plots tend to be given too much emphasis (btw FED recently complained about it and claimed one should always nuance the dot plots with the released statement plus the press conference), markets didn't get it and a very sharp sell-off was triggered on equities. A few weeks later, FED had to fix that with a chit-chat between JP, BB and JY, and finally "stamped" the shift at January FOMC.

In any case, FED message I'm expecting (obviously 'hidden' behind the traditionnal CB's rhetorical figures) is the following : "if next US Macro data disappoint again, we will cut rates". Which will mean eyes on next macro releases as any flop will guarantee a rate cut as early as July 2019 ...


On the Technical side :

- In EURUSD, smart money has already started to preempt FED's shift with a ST reversal on D1 (cf. last week's post for the charts)

Current ST Map is now:

1.114x (Extrem) ==> 1.122x (ST Bottom) ==> 1.131x (ST Flip) ==> 1.144x (ST Top) ==> 1.148x (Extrem)

1.144x, final target of the ST Swing and first target of the MT swing, is already unlocked for a test.
It's either direct or zigzag play - Dot plots will probably decide - but that doesn't really matter (check last week's post for details ).

MT reversal will come with Bulls breaking up that 1.144x on W1 (they might need a done deal-rate cut to do that). That will unlock a new MT range with MT Top 1.191x, minimum final target for the MT swing and, 1.215x (MT extrem), maximum final target.

Nothing to update in EURUSD since last week's post. Super uneventful week so far, inside bar trading in NFP candle...


=====================================================================================================
=====================================================================================================

That was it for my time here . I failed to trigger any momentum here but that was nice to come back here after leaving OTM, closing the loop in a way, I enjoyed these last 6 months. Thanks to the few who were following, all the best.

I have one last update haha :
Quoting Replicant
{image} (I wanted to share that after the close (week-end time, mod ) but I just saw odd has already moved from 8/1 to 6/1 this afternoon. It's from very reliable sources. As weird as it may sound, De Ligt is heading to Paris Saint Germain. Trade of next week ?)
Full house now ...
Welkom Matthijs

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Quoting Replicant
That was it for my time here . I failed to trigger any momentum here

Good luck friend. Guess I'll miss your contributions to both places now. You still owe me a cake. But dont sweat it. I'll hit you up later.
Quoting Replicant
I failed to trigger any momentum here but that was nice to come back here after leaving OTM
HEY mon ami, I am sorry I couldn't pop in here sooner. Looks like you've made a valiant effort. I am still trading and will bullshit about it from time to time. Over time I have devolved into the laziest kind of trader = i.e., the "event-driven" trade watcher....sure, there are still events to watch for.....uh....do you know of any? No?.........dull markets are not worth trading imo, other things to do. I still work (can I get a witness?). In the last year have been getting into renewable energy project development work. The solar farm space (photovoltaics) has been especially lively...a gold rush with costs now dipping under 1$/watt. I have my finger in about 400 MW worth of new capacity, from Belize to Alberta. Oh, right.....trading.....well, I don't mind sitting on cash....sometimes the best trade is no trade.

I suppose if you want to gamble on ME unpleasantries then WTI back to $68 or $75 could be a fast run....USO and XLE options maybe how I would try to catch that
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"If The Fool persists in his Folly he will become wise." - William Blake
pop pop proxy pop

https://www.usnews.com/news/world/ar...pace-us-source

https://www.globalsecurity.org/milit...-sputnik02.htm
"If The Fool persists in his Folly he will become wise." - William Blake
there have been no stock splits on USO....a Superpower hot confrontation in the Strait would pop it back >$20 in a week or so
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"If The Fool persists in his Folly he will become wise." - William Blake
Uso july $13 long calls a nickel each, a 100 lot cost ya $550 or so, would pay over $20k on a bump above $15....
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"If The Fool persists in his Folly he will become wise." - William Blake
lol guys

I'm in "eurusd only thread" now to speak about fx, and in your thread, @thefool, to speak about the upcoming bloodbath
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