Sultans of Swing

Good Luck, PT.

You're doing this for the team - I know many traders who, like me, harbour seriously negative sentiments toward the indexes and you taking some profits off this raahted S&P will give us all joy!

Hahaha haaa! AUDUSD is now coming down to my "double top" shorts

1.6070 was fine for part of my shorts
Who's bet for 1.6000 at NYS today?

I'm betting on it. I'm heavily short cable on the premise that the H4 H/S pattern will play out.
Measured target is 1.5970, but there is strong support at 1.6002

I am also anticipating an eventual breach of the 1.6002 support with a subsequent move to test the daily double top neckline at 1.5895. Fingers crossed that the FOMC statement is less dovish than the market has already priced in (which is a lot).

...and of course my SPX500 short is also based on the same premise.

Can I get a "Ka-Ching!!!" Mr. Market?

I'm trying buddy. trying

some confirmation:
E-Mini SP500 Daily Chart And The Impending Bear Attack!

Short EUR/AUD at 1.4489
Target 1.4210
SL 1.4575
RR: 3.25:1

EURAUDCALL

Moved SL down to 1.4535
New RR = 6.07:1

EURAUDCALL

I'm all set for FOMC to go either way.

I have covered all my "in the money" E/U & G/U positions as well as a couple of U/W ones which still avg me out in the green.
I have set my numerous AUD/NZD longs at BE+50 except for the one at 1.1515 which is set to SL at 1.1385
My EUR/AUD short from 1.4489 has an SL at 1.4535
The only ones floating without SL are my SPX500 shorts which are 1766.6, 1692.4, 1660.0 & 1642.9 with an avg at 1690.3

Now if the market goes all apeshit on risk appetite and send the Dollar to hell, I'll suffer some losses but come out unscathed.
If on the other hand the market does not think that the Fed is any more dovish than last time, or if they are less dovish, then all my existing positions move clearly into profit and I laugh all the way to the bank.

Some may call this a gamble, but I assure you it is not.

Why?
Because all risk currencies and equity indices are overbought and the dollar is oversold. So, unless the FOMC makes it very clear that they will keep their pedal to the metal for a specified period of time past March 2014, upside in risk will be very limited if there is any upside at all.

The alternative possibilities (out of the most probable) are as follows...
1. Fed announces that any future taper will be tied to data on a month by month basis. In that case there is still a chance for taper to start in December. (USD Bullish)
2. Fed announces that they will make an economic assessment regarding tapering when they release new projections in December (USD neutral to slightly bullish)
3. Fed announces that they may start tapering anywhere between January and March 2014 (USD neutral)
4. Fed announces that tapering will not even be considered until the fiscal issues in DC are fully resolved. (USD Bearish)
5. Fed makes absolutely no mention of taper and basically issue the same standard statement that they will increase/decrease asset purchases as required (USD neutral to bearish)
6. If the Fed changes the goal posts, as in that they introduce new or modified data targets, then that could throw a wrench in the works as the market digests the consequences of such change. At that point it's anybody's guess.

The above is based on the following assumptions.
1. The market has already mostly priced in the expectation that the Fed will not start tapering until April 2014.
2. The market has already priced in the current underperformance of EZ and UK econ data.
3. The Fed statement does not make any extremely dovish or hawkish statements regarding the US economy as compared to previous statements.

In case the above assumptions are off, then the projected outcomes of each scenario I mentioned above has to be adjusted up or down accordingly.

I don't have a crystal ball, so anything can happen. However, this is how I see it. This analysis is not meant as a signal on how to trade the FOMC release. It is only my opinion and I am sharing it as an opinion only.

Keep in mind also that tomorrow is month end, and the way the USD has been bashed in the last 40 days may actually produce month end flows back into USD. However, come Friday, month end won't play into the equation any more and it's back to business as usual with flows according to the outcome/contents of the FOMC statement. It could also be argued that month end flows too place yesterday and today in order to get them all squared off before the FOMC statement.

So buckle up your seatbelts. This could be a rough ride, but then again it could turn out to be a non-event. Only Benny and the boys know for sure at this time.

Best of luck.

Thanks for your analysis PT.

I see the S&P has 5 waves sticking in the air like a sore thumb... and a thin red line dangling off the end. a 4th wave perhaps? Or is it the beginnings of an A wave?

At least it happened today
Good week, better to wait another..

That's the key Venzen. We won't know until Friday when the new month starts. For now, month end adjustment flows will dominate.

Nice shot dude, I hope you put some weight behind that call and picked up more than lunch money. I didn't find the FOMC statement hawkish either - just reiterating yet again its stated unemployment and inflation targets. A strict policy of "buy the rumour, sell the fact" regarding fed policy in the last few months would have made a killing.

What made you deduce that risk assets are overbought across the board? The only tangible indication I had of this was a possible overextension of SPX's latest rally, but with decreasing volatility and continued QE it seemed to be supported well enough. I usually rely on COT data to judge real overbought/oversold conditions.

Morning NN. Yes I did in fact have some weight behind it and already cashed in some.

As for my statement regarding overbought conditions, it's all chart based with MacD, RSX EW and Fibo extensions. Also based on the assumption that the COT report (if it was available) would show a stretched positioning of large specs based on a phantom projection when comparing price from the 1st Oct COT to yesterday's price. Seemed quite obvious to me and when supported by all the techs, it seemed like a no brainer to me.

You're right that the Fed statement was not hawkish on QE, but it was certainly more hawkish than the last statement in the areas of "Financial Conditions" and "Employment sector" improvements. So, regardless of whether or not prices were stretched, there was still scope for the move we saw.

Anyway, risk bulls are certainly not dead yet, but they have certainly suffered a few casualties. Let's see what happens tomorrow. I think the Euro is nicely lined up to take a shit kicking and to be honest, I am looking forward to it. It's time for the real economic data in the EZ to show it's true colours.

Hello all,

You may remember I was very bearish 2 weeks ago on the dollar, just so you know I have now made a U turn on that bias and have be long the dollar for the last few days. It's not about being right, it's about making money

Regards,

true that

It's been rather quiet in this thread, so I thought I would add some spice. Enjoy