New voice message: Why are you calling me? If I need you, I'll call you!
- #529,221
- Aug 22, 2011 12:01pm Aug 22, 2011 12:01pm
- Joined Jul 2007 | Status: Short on USD/MXN, Long on legs | 16,578 Posts
- #529,222
- Aug 22, 2011 12:02pm Aug 22, 2011 12:02pm
- Joined Jul 2007 | Status: Trader | 17,796 Posts
COT: The precious data ignored
- #529,227
- Aug 22, 2011 12:26pm Aug 22, 2011 12:26pm
- Joined Jul 2007 | Status: Trader | 17,796 Posts
COT: The precious data ignored
- #529,228
- Aug 22, 2011 12:27pm Aug 22, 2011 12:27pm
- Joined Mar 2010 | Status: Technical Fundamentalist | 11,563 Posts
Pending conversations? PM for a chat...I am mainly in OTM now
- #529,229
- Aug 22, 2011 12:31pm Aug 22, 2011 12:31pm
- Joined May 2011 | Status: [Forex]X-Ray | 4,835 Posts
From Bloomberg:
EURUSD at the beginning of 2011 = ~1.3-1.33
EURUSD current price = ~1.43
FAIL!!!!111
But seriously, this tells us that no matter where the trend is going the analysts' "predictions" are evenly distributed around the current price.
- #529,230
- Aug 22, 2011 12:32pm Aug 22, 2011 12:32pm
- Joined Jun 2010 | Status: zero | 20,603 Posts
sisse;4887760]Infinitus excellent post.
"Lehman is only a bump in the road of an Elliott-wave". I cherry picked the extreme Lehman case on purpose to show how the FA value of underlying is always more important than any TA long term.
How can Lehman by a bump in the road of and EW or any trading system when you can't trade the instrument. When you take the fundamental value from the picture, TA automatically disappears from the equation. Once stock price reached 0 there is no EW wave count or any TA applicable, the instrument is gone and all TA is useless because there is not fundamental value behind it.
***That is right. But the point was, that the Lehman case was only a bump in the EW-road of stock-indices. Sorry, should have mentioned it.
EW deals with the mood of masses. So Elliot waves represent themselves best in indices.
"Remember some nice Central Bank interventions...." I agree that is exactly my point. When a CB intervene and artificially affect the market price of a a currency, is always ineffective in the long term real value of a pair.
WHY? not because an intervention is made on EW xxx wave or whatever other TA, is because the real value of a currency is the reflexion of rates, inflation and risk in the long run not from artificial factors (like an intervention), The case of Japan exemplifies this clearly not a wave count or any other TA.
*** That is like the question of chicken and egg. Is the mood first bad, then the economy or is it vice versa?
To get a grip on that we have to ask? Do we see and accept Elliott Waves in the markets?
If the answer is yes, yes there can be EW seen, than we have to conclude, that movements in markets are not driven by news or fundamentals, but be driven by a "higher force". Would the be driven by fundamentals, the news and factors (multifactorial) had all to align, that these EW could be build. That is far to deterministic. The solution of this is, that Elliott waves are a function of human mood.
I do not rule out that fundamental reasons can influence social mood, but it is clearly not the sole or first driver.
But if your answer is no, no there are no EW in the markets, well then I have no ground to battle on. Then we are on different planets. :-)
"The exogenous-cause model fools investors exquisitely. One reason is that rationalization follows upon mood change. Mood change comes first, and attempts at reasoning come afterward...."
Let me ask you why and what cause a long term "mood change"? Is certainly not a hormonal investor reaction but is BECAUSE of a change in the perceived FUNDAMENTAL VALUE, given by either rates, expectations, inflation or risk not by a random reaction to a predefined TA (i.e RSI oversold or a EW wave 5 endinng).
***Why and what? In socioeconomic there is a strong believe that a change in social mood does not need an exogenous event. It happens (when the time is ripe (so to say).
Surely can do some fundamentals push the mood in one or the other direction,
but it is not necessary.
Currencies may be another story. Maybe they are reacting to a greater extent to fundamentals. Maybe that is the reason that we only have very difficult EW patterns in currencies. But the EW patterns are there, they are only harder to count.
I agree with you that short term knee jerk reaction has a lot more to do with human reactions and herd mentality. However, the long term value of a currency always goes back to the same basic Fundamentals (check any knee jerk reaction that sooner rather than later get tested back before the real move starts).
Mathematical and algorithmic models in the markets are a LOT more important than you think and we see in FF. From option pricing and positioning to HFT the human subjective factor is a lot less important than you think.
*** Yes, HFT might be an issue, or other algos. But keep in mind: all this models are programmed by human beings. They are part of the herd, they do not stay outside. Maybe HFT amplifies mood in the end. We saw it at the reckless move up over the last two years, and we saw it when markets dropped at a few times now. In the end, another bumb in the road of the EW?
The other "big players", the ones who set the real price value of a currency, base their decisions a lot more in technical monetary factors (CB for example in M1, M2, M3, rates, inflation expectation, reserves, etc, etc) and FA arguments (rate differentials, futures contracts, hedging positions, etc).
Look, there is not EW or any TA without FA. The price of a currency is the reflexion of its FA underlying factors. The current price of the euro 1.44, and we traders are the one that try to rationalize the moves using charts and TA tools to profit from the moves not the other way around. A currency won't and can't never ignore it's underlying FA in the long term.
*** Well, some points have been answered already in above remarks (or in my previous message). But let me ask a question regarding EURUSD at 1.44
What was the trigger for the EURUSD to drop down to 1.18 (post Lehman), and in the situation, where it got more and more obvious, that European countries may "default" it started climbing. Mood is not rational.
Today everyone and his dog is negative on USD because "they are printing, and printing and printing". Are there no reasons to think, that the Euro is doomed as well? Are there no reasons to say, that European banks are in a far more worth situation than the US-banks. Are there no reasons to think, that, when most of the world debt is denominated in USD, it is pretty good for the USD, when this IOU's will default (the remaining dollars get more worth automatically)?
And another question: maybe my brain capacity is too limited (LOL), but how do you put together dozens of dailies fundamental information, to get a clear picture of the situation. Maybe we can put together a decision matrix for one single day, when a lot of information from all over the world come in. Can you imagine the eventualities, when you get 30 news from 5 countries or economic unions? Can you imagine the eventualities of this over one week, over one month? How can someone keep track of all this? It must be very time consuming. But each to his own :-)
"To succeed in the market, you must learn initially to embrace irony and paradox". I disagree, there is not irony and paradox in trading, is just traders perspective. We traders and our tools are the one who try to tame and rationalize price movements in "logical" frameworks (EW, etc), but the FA value of currency is only given by its FA factors and not by our perspective.
If the Lehman example wasn't enough what about these examples. 1st Euro 5 years charts including all the history of the pair and the second a custom chart of filtered 8 range tick chart on Friday US session.... can you count the EW (or any other TA) in the 1st chart?, what about the 2nd.....?
****
Sisse, Sisse, how can you be so mean?
Why should I try to EW count a chart, that contains only two candles, when I am able to have all the information.
Second chart: that is an Heikin ashi chart. I chart EW either with line charts or candle sticks. Sorry. But when I scalp on 1min TF (certain EW patern), I normaly have an 10-30sec chart open, because EW-pattern can be seen here, too. Sometimes, especially in impulse waves, the patterns even on a 10 sec chart are astonishing clear.
That's my point the current value of the euro is 1.44, only we and in our perspective can analyze it from a EW or any other TA. We want to tame the pair in a wave framework but the intrinsic value is the same and the final destination will be set by the FA behind not by the next wave 3 or stochastic crossover or test of Support in the second chart....
*** Was answered above with the question about fundamentals at 1.18 and 1.44
Sisse, may I ask you if you believe too, that stock markets are driven too only by fundamentals? I am eager to hear the answer :-)
In any case, I think we agree on the trading part but not in the FA part but thats nice for a weekend conversation and for our swing trades not that much for our next intraday trade so best of good luck next week and enjoy the rest of the weekend.
*** Hell, Sisse, I welcome every fundamental aspect I can get from you or a few others here. Keep on the good work and the very interesting opinions :-)
And as always: everytime a nice opportunity to defend EW against FA traders
Hehe, like I said above: in currencies maybe sometimes the question of egg and chicken.
sisse
Hi Sisse,
sorry for answering such late. Had a weekend without internet. Hope you had a nice weekend too. Mine was very nice :-)
I put my answeres in red in your text.
Nice discussion. I am on the search for a little underlaying studies etc. but need more time. I will come back to that shortly.
Have a nice evening,
Markus
"Lehman is only a bump in the road of an Elliott-wave". I cherry picked the extreme Lehman case on purpose to show how the FA value of underlying is always more important than any TA long term.
How can Lehman by a bump in the road of and EW or any trading system when you can't trade the instrument. When you take the fundamental value from the picture, TA automatically disappears from the equation. Once stock price reached 0 there is no EW wave count or any TA applicable, the instrument is gone and all TA is useless because there is not fundamental value behind it.
***That is right. But the point was, that the Lehman case was only a bump in the EW-road of stock-indices. Sorry, should have mentioned it.
EW deals with the mood of masses. So Elliot waves represent themselves best in indices.
"Remember some nice Central Bank interventions...." I agree that is exactly my point. When a CB intervene and artificially affect the market price of a a currency, is always ineffective in the long term real value of a pair.
WHY? not because an intervention is made on EW xxx wave or whatever other TA, is because the real value of a currency is the reflexion of rates, inflation and risk in the long run not from artificial factors (like an intervention), The case of Japan exemplifies this clearly not a wave count or any other TA.
*** That is like the question of chicken and egg. Is the mood first bad, then the economy or is it vice versa?
To get a grip on that we have to ask? Do we see and accept Elliott Waves in the markets?
If the answer is yes, yes there can be EW seen, than we have to conclude, that movements in markets are not driven by news or fundamentals, but be driven by a "higher force". Would the be driven by fundamentals, the news and factors (multifactorial) had all to align, that these EW could be build. That is far to deterministic. The solution of this is, that Elliott waves are a function of human mood.
I do not rule out that fundamental reasons can influence social mood, but it is clearly not the sole or first driver.
But if your answer is no, no there are no EW in the markets, well then I have no ground to battle on. Then we are on different planets. :-)
"The exogenous-cause model fools investors exquisitely. One reason is that rationalization follows upon mood change. Mood change comes first, and attempts at reasoning come afterward...."
Let me ask you why and what cause a long term "mood change"? Is certainly not a hormonal investor reaction but is BECAUSE of a change in the perceived FUNDAMENTAL VALUE, given by either rates, expectations, inflation or risk not by a random reaction to a predefined TA (i.e RSI oversold or a EW wave 5 endinng).
***Why and what? In socioeconomic there is a strong believe that a change in social mood does not need an exogenous event. It happens (when the time is ripe (so to say).
Surely can do some fundamentals push the mood in one or the other direction,
but it is not necessary.
Currencies may be another story. Maybe they are reacting to a greater extent to fundamentals. Maybe that is the reason that we only have very difficult EW patterns in currencies. But the EW patterns are there, they are only harder to count.
I agree with you that short term knee jerk reaction has a lot more to do with human reactions and herd mentality. However, the long term value of a currency always goes back to the same basic Fundamentals (check any knee jerk reaction that sooner rather than later get tested back before the real move starts).
Mathematical and algorithmic models in the markets are a LOT more important than you think and we see in FF. From option pricing and positioning to HFT the human subjective factor is a lot less important than you think.
*** Yes, HFT might be an issue, or other algos. But keep in mind: all this models are programmed by human beings. They are part of the herd, they do not stay outside. Maybe HFT amplifies mood in the end. We saw it at the reckless move up over the last two years, and we saw it when markets dropped at a few times now. In the end, another bumb in the road of the EW?
The other "big players", the ones who set the real price value of a currency, base their decisions a lot more in technical monetary factors (CB for example in M1, M2, M3, rates, inflation expectation, reserves, etc, etc) and FA arguments (rate differentials, futures contracts, hedging positions, etc).
Look, there is not EW or any TA without FA. The price of a currency is the reflexion of its FA underlying factors. The current price of the euro 1.44, and we traders are the one that try to rationalize the moves using charts and TA tools to profit from the moves not the other way around. A currency won't and can't never ignore it's underlying FA in the long term.
*** Well, some points have been answered already in above remarks (or in my previous message). But let me ask a question regarding EURUSD at 1.44
What was the trigger for the EURUSD to drop down to 1.18 (post Lehman), and in the situation, where it got more and more obvious, that European countries may "default" it started climbing. Mood is not rational.
Today everyone and his dog is negative on USD because "they are printing, and printing and printing". Are there no reasons to think, that the Euro is doomed as well? Are there no reasons to say, that European banks are in a far more worth situation than the US-banks. Are there no reasons to think, that, when most of the world debt is denominated in USD, it is pretty good for the USD, when this IOU's will default (the remaining dollars get more worth automatically)?
And another question: maybe my brain capacity is too limited (LOL), but how do you put together dozens of dailies fundamental information, to get a clear picture of the situation. Maybe we can put together a decision matrix for one single day, when a lot of information from all over the world come in. Can you imagine the eventualities, when you get 30 news from 5 countries or economic unions? Can you imagine the eventualities of this over one week, over one month? How can someone keep track of all this? It must be very time consuming. But each to his own :-)
"To succeed in the market, you must learn initially to embrace irony and paradox". I disagree, there is not irony and paradox in trading, is just traders perspective. We traders and our tools are the one who try to tame and rationalize price movements in "logical" frameworks (EW, etc), but the FA value of currency is only given by its FA factors and not by our perspective.
If the Lehman example wasn't enough what about these examples. 1st Euro 5 years charts including all the history of the pair and the second a custom chart of filtered 8 range tick chart on Friday US session.... can you count the EW (or any other TA) in the 1st chart?, what about the 2nd.....?
****
Sisse, Sisse, how can you be so mean?Why should I try to EW count a chart, that contains only two candles, when I am able to have all the information.
Second chart: that is an Heikin ashi chart. I chart EW either with line charts or candle sticks. Sorry. But when I scalp on 1min TF (certain EW patern), I normaly have an 10-30sec chart open, because EW-pattern can be seen here, too. Sometimes, especially in impulse waves, the patterns even on a 10 sec chart are astonishing clear.
That's my point the current value of the euro is 1.44, only we and in our perspective can analyze it from a EW or any other TA. We want to tame the pair in a wave framework but the intrinsic value is the same and the final destination will be set by the FA behind not by the next wave 3 or stochastic crossover or test of Support in the second chart....
*** Was answered above with the question about fundamentals at 1.18 and 1.44
Sisse, may I ask you if you believe too, that stock markets are driven too only by fundamentals? I am eager to hear the answer :-)
In any case, I think we agree on the trading part but not in the FA part but thats nice for a weekend conversation and for our swing trades not that much for our next intraday trade so best of good luck next week and enjoy the rest of the weekend.
*** Hell, Sisse, I welcome every fundamental aspect I can get from you or a few others here. Keep on the good work and the very interesting opinions :-)
And as always: everytime a nice opportunity to defend EW against FA traders
Hehe, like I said above: in currencies maybe sometimes the question of egg and chicken.
sisse
Hi Sisse,
sorry for answering such late. Had a weekend without internet. Hope you had a nice weekend too. Mine was very nice :-)
I put my answeres in red in your text.
Nice discussion. I am on the search for a little underlaying studies etc. but need more time. I will come back to that shortly.
Have a nice evening,
Markus
- #529,232
- Aug 22, 2011 12:45pm Aug 22, 2011 12:45pm
- | Joined Aug 2009 | Status: I support AC Milan and Arsenal | 1,009 Posts
- #529,239
- Aug 22, 2011 1:12pm Aug 22, 2011 1:12pm
- | Membership Revoked | Joined Mar 2011 | 1,831 Posts
Trade responsiblypatience is the key/Swing trader