GU, GJ and EU Analysis Thread

Agreed -

I like to retire in the evening and converse with my wife, or just sit in the garden with a glass or two and watch summer roll by... not be constantly worrying about open positions.

Speculation abounds as to the cause. Dutch trader? Hmm, maybe. Other possibilities include rash move by bank based on foreknowledge of MPC meeting. Has the board been told to tow the line and return a 0-0-8 figure? I think they are a member down, at present, and so no 0-0-9. Alternatively, is the figure now going to be 2-0-6? Fact is, none of us retailers know. Of course, we will know soon enough.

Other conjecture suggests a wipe out of stops. Well, the buggers didn’t get me – was still staring into my tea leaves this morning in order to predict market direction when the drop happened – and glad, too, as I favour the long side up to the high 1.54 region. No, I’m telling you, the leaves never lie.

I’m looking for a break of the high from the overlap of Frankfurt and London, a retest back to this breakout, and then will take a long.

And of course, anyone wanting to play the break north or south of the range the past hour, has to consider the moves needed for such breakouts. The spike today has made the range rather large.

Seem to recall saying something yesterday about rediculous situation in the market not making it worthwhile to trade. I hate to think who just got carted out, 115 pips or 0.75% of total contract value or just under 80% of ATR14 in 2 minutes flat followed by a 1%tcv reversal to close the hourly well above 15320.



http://forexrobot.fanayah.com/image/...man-trader.jpg

Puts are pretty much where I left them yesterday, although I've caught a cold!

Time to suck them in Gents, the next few days are going to see some fighting.

USD bounced successfully off support. Who's game to sell dollars today?

May have a channel for Cable

Always good to postulate...

I will be very interested to see if we close as per the comments on my earlier submissions. Yes, hindsight prediction would have seen me in large, but alas, caution stifled bravado. Hey, I still have the pennies in the account.

http://www.forexfactory.com/showpost...&postcount=222

Hope everyone is well.....Had a week away from trading whilst price works round these major levels...given we have had the prelim GDP figure I think we may make some progression next week past 5471....

Two main levels I am watching here are 5471 monthly resistance and 5315 the resistance level for the monthly inside bar setup. This monthly bar close will be very important if we close above 5315 as it confirms a break of the monthly inside bar setup. That coupled with the positive Prelim GDP figures makes it likely we will target 5830 and 1.60 medium term providing we can break through 5471.

Today

Upper profile distribution from the 16th July has stalled price this morning. Point of control from the 16th is at 5424 which gave us a small bounce earlier....price bounced of 5436 to be exact and is again trying to make new day highs ...Few things to note..looks like we are forming a upper distribution in the same area as the profile distribution from the 16/07. Therefore expect us to range around here for a while. I would expect us to test 5471 again given how close we are and there is a small group of single prints just below that level from the 15th.

Today’s Prelim GDP volatility has left a 70 pip trail of single prints between our current position and the lower distribution formed through Asia and early this morning. If you are shorting up here them bottom of them prints would be a good TP. 5321 zone.

Thought I would share for perusal and comment.

Christine Lagarde described the recent bank stress tests as "the last stone in the building". I recently watched her in an interview, poised and reassured with her hands neatly interlocked as they held each other’s wrist. I’m sure she was constantly checking her pulse; firstly for signs of sentience, and then once confirmed, for signs of perspiration, as surely, even she could not believe what she was saying. As Charles de Gaulle once stated: “In politics it is necessary either to betray one's country or the electorate. I prefer to betray the electorate”.

Well, Chrissy, baby, you certainly met my expectations.

My main problem with these tests is that they are trying to tell the people of Europe that all is now in order, and the next fall is not coming. Yes, we are going to have to tighten our belts, and taxes will go up whilst services go down, but we will all be okay in the end.

Bullshit.

As we know, Merk the berk and Sarko the barko were twisting the arms of those clutching at the foundations of the Basel II accord. We then learn that a reclassification of foreign debt has been executed by the banks from trading to held to maturity. Please, can someone explain to me why this is allowed? If it is legal, I may very well twist the arm of my bank manager to do something similar with my holdings – assuming my bank manager would choose to face the vituperation.

Regarding the stress tests; yes, nothing less than a positive sentiment could have been presented – dear me, could you imagine the whipsaw on Friday had the case been different? That said, the nice rises gave the game away, really. However, I have to ask why serious money would place funds with banks holding, at a struggle, a 6 percent tier one capital ratio… set by the Committee of European Banking Supervisors for this exercise in how to try to make a silk purse out of a sow’s ear, when serious money looks for something much better. Berk and barko may have got their way with the CEBS, but if fresh feed does not enter into the system, a stale pork will you reap.

Considering Cable, the bank stress tests conducted specifically in the UK earlier this year demanded an 8 percent tier one capitol ratio. Yes, the banks passed, and so questions could be raised as to how the deck of presented cash cards was dealt, but ostensibly, market is not interested in organization, but presentation. So, I would question why the CEBS set the level so low – well, maybe I already know the answer, and so will choose British beef over Continental canard after a weekend of digesting what has emerged from Europe.

To keep this essay within reasonable brevity, I will not regurgitate all the specifics related to the stress tests. Suffice to say, it is with disgust that I view what has been served as a reasonable standard of quality.

Even if the banks and politicians keep their system together – for it surely is not ours - Joe on the street is now condemned to a lower standard of living, whilst those that caused this drop, have not been affected. No, I do not agree that with bankers taking less of a bonus or salary they are also affected. They are inconvenienced in the gains that they make set against the average cost of living. They will still be able to afford the trips to Tuscany and cruise in the Caribbean. Joe is going to be lucky if he can drag the kids to the seaside for an ice cream and donkey ride. Meanwhile, whilst politicians reassure all about low interest rates being good for homeowners, the costs associated with holding a bank account are increasing – almost unbelievable given that the public helped them out of the first mess.


Other current thoughts are focusing on the recent slump/manipulation of the value of Gold, and the manifestation of effect from the real intentions/implications of the latest Chinese purchase of EuroLand debt. We learn that Chinese banks are dabbling in markets in order to offset debt caused by Bejing’s incursion into the property bubble.
Basically, Beijing’s banks are ‘apparently’ running very close to being broke if they fail to get back the ludicrous amounts lent out recently as money has poured into the country. History seems to be repeating itself, and just like in the US, UK and Europe, Chinese banks have been falling over themselves to give money out to whoever requested a loan. Of course, with the rest of the world stepping back from pouring money into China, so the debtors within China cannot pay their creditors. Oh dear, parcel passing all over again. Of course, Beijing’s Ace is the amount of Gold held in reserve.

Could it be a case of China dabbling in international markets as a way to offload the large amount of Dollars that they hold, and then once this is gone, they can allow Gold to shoot up to the values that many analysts argue it should be at? And I’m not talking $1500, but more like double this, and more.

China is one of the, if not the most sophisticated CB FX players in the world. In the last 12 months they have definitely increased their exposure to the major and even some minor currencies and you can bet it is at a price 10 pips ahead of whatever the current market price is. Basically, anything with a USD price tag that can take the bid without breaking the market is a "reserve diversification" target.

But as they say, nobody is bigger than the market.

From Galapagos by Kurt Vonnegut (set in the 70's):
The national currencies of all six guests at the El Dorado, the four Americans, one claiming to be a Canadian, and the two Japanese, were still as good as gold everywhere on the planet. Again: The value of their money was imaginary. Like the nature of the universe itself, the desirability of their American dollars and yen was all in people's heads.
And if Wait, who did not even know that there was a financial crisis going on, had carried out his masquerade as a Canadian to the extent of bringing Canadian dollars into Ecuador, he would not have been as well received as he was. Although Canada had not gone bankrupt, people's imaginations in more and more places, including Canada itself, were making them unhappy about trading anything really useful for Canadian dollars anymore.
A similar decay in imagined value was happening to the British pound and the French and Swiss francs and the West German mark. The Ecuadorian sucre, meanwhile, named in honor of Antonio José de Sucre (1795-1830), a national hero, had come to be worth less than a banana peel.

For any fans of Gann.

Good morning Stocky,

Could you clarify if PA is building a ledge this morning, and which can be used as a base from which to rise?

Thanks.

Hi 45Condor,

Sorry for the delay...didnt see your Q come in....Todays profile has formed a small ledge around 5471 and at 5465.....Given 5471 is monthly support and we have had a 4hr candle close over it i would see this current selling as a pull back to test old resistance as support.

This is being done as I type...looks like we have traded through 5471 on the 5min....more than a valid place to open a long with a tight stop...If it fails then reverse and I see price trading to the bottom of todays profile range at 5420 area.

Stocky

15 min channel broken and 5471 has not held.....5432/ 5420 area next target (bottom of 4hr channel).

VSA reversal signal were given around 3pm also....climax bar followed by high vol churn.

Stocky

...got to get this volume and print stuff nailed.

All the best.

Hinted at this a few days ago...apparently there is a toxic debt issue in China. I cannot cut and paste from the FT website - copyright and all that - but it will be interesting to see what happens from here.

Also coverage in the FT of apportion of culpability of weak bank governance against the Germans. Pff, same old Frankfurt fallacies.

Ain't no Fokker gonna make this commentator retreat to the trenches of passivity. Sorry, could not resist, and not helped by AC/DC in the background. Yeah, I may be ageing, but that don't mean I listen to Radio 4 all the time.

EDIT:

Amusing read of the reaction, so far, to the bank stress tests.

http://www.telegraph.co.uk/finance/n...ny-flunks.html

It's all the same, trust me. There is nothing special about "market profile" trading - in fact if you believe the market is a chaotic system then it is actually an incorrect method of trading as it uses parametric techniques to model a non-parametric system. Stick to what you know works. In the end (and I can mostly prove this empirically now) it is all the same. There is a tradeoff between reliability and profitability that is all, don't get fooled into thinking there is some secret you aren't aware of. If you are searching for those 1:3-1:5-1:20 trades then your reliability will be way down and vice versa.

Anyone else watching the euro? Took to short at 1.3 with a 50 pip stop. The high of the day is a "squat bar" + AO divergence testing resistance from the 20th.

On a micro at 10 cents a pip, after 9am GMT, flipped a coin, and had a roughly 50/50 success rate in determination of trend. Unbelievable, to say the least.

Of course, cannot do that with real money, and most know, I rely on Fibonacci studies and Guppy profiles.

Regardless, that coin fallacy may have something in it. Right, back to the tea leaves.