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  • #63,761
  • Edited 6:10am Dec 19, 2012 5:54am | Edited 6:10am
Quoting redteamgo
screwed? the prudent buyer waited for the retest of 3230 and didnt just jump in earlier. there is no shame in going with the trend as long as you do it with care.

there's nothing prudent in this environment...extreme irrationality wins. I say irrationality because right now it's a 100% technical market. And technical analysis holds a zero contribution to efficiency which is why the financial markets exist in the first place. Period.

In euro, 8 consecutive up days (well, pretty much) with 400 points and no retrace. Nothing to do with the fundamentals. Discretionary retail traders try to pick a top and use a buy stop loss 10-30 pips above into the new high which is the catalyst for short term algo buying and liqudating into them. In theory, this could last forever. IF, the stupid retail would collectively use low leverage, remove their stops and step away from the computer the market would immediately reverse course and start targeting the dip buyers. Fortunately or unfortunately this is not the case today nor will this mindset change in the foreseeable future.

This current extension of move is driven by NEW WEAK sellers at every new high who use close by stops. It takes fckton of money (a.k.a the fundamental traders) OR the lack of new weak sellers to reverse the short term higher high - higher low picture. Unless either of those happen, it can rally forever...It's not a rational market nor a rational rally but occasionally it keeps happening over and over again...for reference, look E/U chart on Oct 2011 (after the rally, market reversed course and dumped almost 600 points in 3 days), Feb 2012 and Sept 2012...If all those were rational movements then how could the market dump 400-500 pips on average only in a couple of days ?

Again, just because it's irrational, it is so only fundamentally, and it doesn't mean it must reverse course immediately...It could easily extend to 1.34 and above...at this current point it's all Greek to me!


PS. Some of the strength in the eur and gbp market can also be due to the awakening of the jpy carry trade which has increased demand for those currencies.
  • #63,762
  • Dec 19, 2012 6:04am Dec 19, 2012 6:04am
1.35?
  • #63,763
  • Dec 19, 2012 6:20am Dec 19, 2012 6:20am
Quoting rekon67
1.35?
1.36?
Those who say it cannot be done should not interrupt those who are doing it
  • #63,764
  • Dec 19, 2012 6:22am Dec 19, 2012 6:22am
Quoting PipTrapper
1.36?

aaahh...what the hell...2 ?
  • #63,765
  • Dec 19, 2012 6:26am Dec 19, 2012 6:26am
Hi PT, hallo everyone here.

Could anybody confirm this with me?
The bullish trend seems to be a bit exhausted, tempting me to short.
However my weekly chart tells me NO!

On my weekly chart I can’t see any other stronger support/resistance level then 1.3500
In 1.3500 zone we have:
1. Congestion Fibo level (50%, 38.2%) of two big legs
2. Plus round number of 1.3500
3. Plus previous strong support/resistance area
4. plus 127% Fibo extension level
5. plus building up nice reversed head and shoulders pattern…
6. plus candle stick patterns both on Daily and weekly charts but bulls in favour.
They all ideally fit to 1.35000 and this would be perfect level to take profit for bulls

Certainly some smaller or bigger corrections may happen on it’s way up, but I think we are still heading up to 1.3500 in term of next 3 or 4 weeks…
What do you think guys?
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  • #63,766
  • Dec 19, 2012 6:36am Dec 19, 2012 6:36am
"Spain has decided not to request an EU bailout according to the Spanish PM Rajoy; may yet request aid in the future"

2.1 ?
  • #63,767
  • Dec 19, 2012 6:44am Dec 19, 2012 6:44am
Quoting lumesh
there's nothing prudent in this environment...extreme irrationality wins. I say irrationality because right now it's a 100% technical market. And technical analysis holds a zero contribution to efficiency which is why the financial markets exist in the first place. Period.

In euro, 8 consecutive up days (well, pretty much) with 400 points and no retrace. Nothing to do with the fundamentals. Discretionary retail traders try to pick a top and use a buy stop loss 10-30 pips above into the new high which is the catalyst for short term algo buying...
So where's all this liquidity coming from (without a retrace for 8 days as you pointed out)? And wouldn't ECB be concerned with this appreciation (assuming undesired)? Wouldn't they want to intervene?
  • #63,768
  • Dec 19, 2012 6:51am Dec 19, 2012 6:51am
Quoting lumesh
there's nothing prudent in this environment...extreme irrationality wins. I say irrationality because right now it's a 100% technical market. And technical analysis holds a zero contribution to efficiency which is why the financial markets exist in the first place. Period.

In euro, 8 consecutive up days (well, pretty much) with 400 points and no retrace. Nothing to do with the fundamentals. Discretionary retail traders try to pick a top and use a buy stop loss 10-30 pips above into the new high which is the catalyst for short term algo buying...
fundamentals have changed, youre just not recognizing it. breakup/exit risk is nil in the short/mid term. that was not the case in 2011 which makes your comparison invalid. yes greeks are rioting, protesting and striking; yes, cyprus is going to collapse/default/implode, yes spain might ask for a bailout but right now, no one cares. nobody cares at all, it is old news. in fact, anything slightly to the contrary has and will continue to contribute to euro strength.

yes, its due for a pullback which will probably be a few cents but that doesn't mean you cant make money riding an algo or institutional trade. as far as i'm concerned, we are likely in a 10-12 cent range for the foreseeable future. in fact, the ONLY case I can see for a weak euro is in devaluation by the ECB to support the exports in member nations.

so, in summary, it is prudent to carefully trade (short/long) in any kind of market, irrational or rational. i emphasize how little I care about how normative the market should be. comparison of what should have been vs what is happening makes zero sense right now. as a trader, your goal should be to piggy back on institutional traders regardless of direction when a clear trend has presented itself. someone in here has the sig, "the market can stay irrational longer than you can stay solvent," or something to that effect. i measure my success by adaptively trading what the market presents not by detailing some diatribe about how the market SHOULD be trading. but, as always, this is just my opinion, you can trade as you see fit.


day trade: long 1 mar13 euro fx @ 13241, long 2 jan13 133 call @ 50.5 avg
Any prices quoted are futures
  • #63,769
  • Dec 19, 2012 7:14am Dec 19, 2012 7:14am
very good ducumentry movice about the 2008 crysis on banks sector



"INSIDE JOB" (via torrent )
Iam just A pips on the rode :nerd:
  • #63,770
  • Dec 19, 2012 7:14am Dec 19, 2012 7:14am
Quoting msood
So where's all this liquidity coming from (without a retrace for 8 days as you pointed out)? And wouldn't ECB be concerned with this appreciation (assuming undesired)? Wouldn't they want to intervene?

As i said, the liquidity is coming from never ending new weak sellers in the market and their acceptance of buying into new highs over and over again (with their stops). The counterparty to them are market makers and short term trend following algos and a few (in terms of liquidity) short term trend following retail buyers. But in the big picture, the retail is desperately trying to call a top. When retail runs into extreme positioning, usually, the big money (fundamental traders) should take the retail liquidity (stops) to step into the market. One never knows when that might happen. Maybe you have noticed PT saying that market never runs in a straight line. I want to add that this is more so in majors or simply most liquid pairs.

As far as ECB is concerned, i doubt they will engage in direct intervention any time soon. In the bigger picture, and as i've pointed out in the past, i believe that the fair value of E/U is 1.3...If sentiment turns negative it should trade below it and vise versa. If sentiment has a fundamental backing then the fair value of course will be adjusted. Right now, the price has deviated a few hundred pips from said level which is hardly alarming to ECB. It's just a 2+% in the grand picture. If the move (and the trend) is sustained and reaches close to 1.4 area then they might reconsider. Plus, indirect intervention might happen next month with the rate cut, anyway.
  • #63,771
  • Dec 19, 2012 7:21am Dec 19, 2012 7:21am
Hi guys,

Remember the trend is your friend and at least on the short term time frame the trend is up and very much looking like we are heading for 1.3450 till we get a retrace or a reversal, if a retrace and the euro continues higher then i can even see 1.38/1.40 in the horizon, being the 61.8% on monthly chart... then we will have to wait and see if this move is purely a correction from 1st May 2011 highs to 1st July 2012 lows. The aim now is to buy on the dips if any all the way to 1.3450

Having a long term view is one thing but making money in the Forex market is always about NOW!!! I too had short positions in this vicious uptrend but threw in the towel at 1.29 with many red pips (but that's the game, right?)and since then have been buying the dips. I will carry to do so till i see a failure swing on the Daily chart. I am yet to break even on my trades albeit i am very close but if we do get to 1.3450 and beyond then ill be a very happy chap indeed.

This will be final post for this year (i know i don't post many ) so i would like to take this opportunity to wish you all seasons greeting and Green pipped 2013!!!

Especially to PT for this great and inspiring thread but above all giving us all the chance to express our trading methods, techniques and open discussions about the FX market!

Take care all and happy trading!
Cheers!!
  • #63,772
  • Dec 19, 2012 7:22am Dec 19, 2012 7:22am
Quoting lumesh
As i said, the liquidity is coming from never ending new weak sellers in the market and their acceptance of buying into new highs over and over again (with their stops). The counterparty to them are market makers and short term trend following algos and a few (in terms of liquidity) short term trend following retail buyers. But in the big picture, the retail is desperately trying to call a top. When retail runs into extreme positioning, usually, the big money (fundamental traders) should take the retail liquidity (stops) to step into the market....
...just called Mr Draghi - he says he will take profit on his longs at 1.3348 and 1.3462

(hopefully the institutionals will read this and start selling now)
  • #63,773
  • Dec 19, 2012 7:30am Dec 19, 2012 7:30am
Quoting msood
...just called Mr Draghi - he says he will take profit on his longs at 1.3348 and 1.3462

(hopefully the institutionals will read this and start selling now)
Did you ask him if he is ready to cross over to the dark side yet?

http://static.cdn-seekingalpha.com/u...er-Collins.jpg
Those who say it cannot be done should not interrupt those who are doing it
  • #63,774
  • Dec 19, 2012 7:31am Dec 19, 2012 7:31am
Quoting lumesh
there's nothing prudent in this environment...extreme irrationality wins. I say irrationality because right now it's a 100% technical market. And technical analysis holds a zero contribution to efficiency which is why the financial markets exist in the first place. Period.

In euro, 8 consecutive up days (well, pretty much) with 400 points and no retrace. Nothing to do with the fundamentals.
I don't totally agree, Lumesh.

While market signals are a bit messed up due to constant intervention, I'm pretty sure the fundamentals are supportive of this move. Monetary policy is, in the current environment, one of the main factors (fundamentals) in play. Forget for a moment how messed up the Euro debt situation is - Bernanke just expanded QE by another 45 Billion per month (expanded because this is unsterilized) - which is quite a lot of money even in a 15 odd trillion economy. The Fed is to buy up over 1,000,000,000,000 dollars of MBS and Treasuries over the next year.

On that news, I think a rally is perfectly acceptable - just don't ask me at what price it will be 'priced in' because I have no idea, all I can say is I haven't been a Euro bear for a while now.
"Don't Panic..."
  • #63,775
  • Dec 19, 2012 7:33am Dec 19, 2012 7:33am
Quoting PipTrapper
Did you ask him if he is ready to cross over to the dark side yet?

http://static.cdn-seekingalpha.com/u...er-Collins.jpg


you might want to take profit on your long now...
  • #63,776
  • Dec 19, 2012 7:35am Dec 19, 2012 7:35am
I'm giggly like a schoolgirl, might this be it? Will USD/CAD see range in the 50-100 pips? Will it go to the moon?
http://supershy.files.wordpress.com/...895cdc37aa.jpg
(ok fine, like a hot schoolgirl)
  • #63,777
  • Dec 19, 2012 7:44am Dec 19, 2012 7:44am
Quoting D2tz
I'm giggly like a schoolgirl, might this be it? Will USD/CAD see range in the 50-100 pips? Will it go to the moon?
For a low Beta currency, it sure is moving ... despite a higher than expected Wholesale Sales report... although I suppose the US housing numbers would be more influential on the US Dollar which seems to be finding loads of bids against all non-European currencies.
Those who say it cannot be done should not interrupt those who are doing it
  • #63,778
  • Dec 19, 2012 7:45am Dec 19, 2012 7:45am
Quoting PipTrapper
For a low Beta currency, it sure is moving ... despite a higher than expected Wholesale Sales report... although I suppose the US housing numbers would be more influential on the US Dollar which seems to be finding loads of bids against all non-European currencies.
now if only euro caved, then it'll be a bull move, smooth as butter
  • #63,779
  • Dec 19, 2012 7:47am Dec 19, 2012 7:47am
Quoting redteamgo
fundamentals have changed, youre just not recognizing it. breakup/exit risk is nil in the short/mid term. that was not the case in 2011 which makes your comparison invalid. yes greeks are rioting, protesting and striking; yes, cyprus is going to collapse/default/implode, yes spain might ask for a bailout but right now, no one cares. nobody cares at all, it is old news. in fact, anything slightly to the contrary has and will continue to contribute to euro strength.

yes, its due for a pullback which will probably be a few cents but...
Nicely put Red - and I for one totally agree - although I have just closed some intra day longs at 3305 and am looking to buy again on any pull back.

The only thing I disagree with is buying Jan Calls - the time decay is horrific and I would be in Feb Calls or writing Jan Puts

IF this weekly rally equals the last weekly rally, then we are heading for the 3700 area by the end of this year.....IF its an Elliot W3, then even higher......and so far VSA is not saying that this is over.....TWT
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  • #63,780
  • Dec 19, 2012 7:47am Dec 19, 2012 7:47am
Quoting D2tz
now if only euro caved, then it'll be a bull move, smooth as butter
by the way. what's behind the calculation of the USD index algorithm?
Did it take into account currency in circulation of "back in the day"?
Should it be adjusted to weigh properly according to the importance and stability of currencies?
Is it time for a new USD index? Or shall we just create our own
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