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  • #841
  • Feb 26, 2014 2:54pm Feb 26, 2014 2:54pm
Quoting stewrigh
Buy the dips?
  • #842
  • Feb 27, 2014 8:32pm Feb 27, 2014 8:32pm
Hi MPB,

Thanks to your reply regarding SP500 in Olu's thread (a late thanks for sharing your view btw), I found my way into your house, and let myself in. Hope you don't mind. Nice place you've got here! Special for the objective simple elegant way you analyse the markets. I'll be sure to visit again.

Cheers,
vox
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #843
  • Feb 28, 2014 8:40pm Feb 28, 2014 8:40pm
Quoting vox dei
Hi MPB, Thanks to your reply regarding SP500 in Olu's thread (a late thanks for sharing your view btw), I found my way into your house, and let myself in. Hope you don't mind. Nice place you've got here! Special for the objective simple elegant way you analyse the markets. I'll be sure to visit again. Cheers, vox
Thanks and welcome Vox!
Olu has a great thread going there too for sure. Feel free to contribute should you feel the need.
  • #844
  • Feb 28, 2014 8:45pm Feb 28, 2014 8:45pm
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  • #845
  • Feb 28, 2014 8:47pm Feb 28, 2014 8:47pm
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  • #846
  • Feb 28, 2014 8:48pm Feb 28, 2014 8:48pm
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  • #847
  • Feb 28, 2014 9:38pm Feb 28, 2014 9:38pm
Quoting mypipbull
{quote} Thanks and welcome Vox! Olu has a great thread going there too for sure. Feel free to contribute should you feel the need.
Thanks MPB. Will do.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #848
  • Mar 1, 2014 2:27pm Mar 1, 2014 2:27pm
SPX and DOW are currently bull markets. Both price and CoT data support the idea. So please bear in mind at all times that the possible bearish scenarios I'm presenting below are countertrend by definition.

If SPX gaped below support next week due to the divergences I would consider it first serious sign of incoming weakness.

DOW looks more bullish, yet price is just below big round number resistance, and descending trendline. Also, of more significance note that SPX HH is yet to be confirmed by a HH in DOW. Summing it up, while stock indexes remain in a bull market, exhaustion signs keep adding up, making either buy or sell a dangerous proposition for the time being imho.

Regarding currencies, next week I'll looking into buying GBP and NZD, selling CAD and AUD, and don't have a strong bias for the rest at the moment. From these possible trades, I expect the most upside potential from GBPCAD.

I'll be staying out of CHF next week. Too much risk. On the surface EURCHF looks like a nice buy, because price is currently below SNB's 1.22 peg floor, hovering above support @ 1.2130, and SNB has recently expressed it would like to see it trading @ 1.23 and higher. Yet, Oanda's postioning ratios shown everyone and their dogs are long EURCHF. EURUSD and USDCHF extreme positioning reinforce this idea. This alone might be reason enough for large specs to drive price lower testing SNB's resolve. Even SNB might join them momentarily driving the price lower in order to stop/margin call as many as possible creating the liquidity to fill their longs when they intervene. SNB is not some little central bank. Should it intervene, and it will soon, it is certain that EURCHF will fly high above 1.23, and very likely that the increased CHF volatility will spill over to other currencies, especially EUR and USD. What is not clear and makes it risky is where's EURCHF bottom.
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"To hold, you must first open your hand. Let go." - Lao Tzu
  • #849
  • Mar 2, 2014 11:09am Mar 2, 2014 11:09am
Quoting vox dei
Even SNB might join them momentarily driving the price lower in order to stop/margin call as many as possible creating the liquidity to fill their longs when they intervene....
Vox Dei

Does this really happen? Will the SNB will strengthen its currency as a precursor to weakening it?

Olu
If you think you can or cannot do it you are correct
  • #850
  • Edited 1:22pm Mar 2, 2014 11:41am | Edited 1:22pm
Quoting Olu
{quote} Vox Dei Does this really happen? Will the SNB will strengthen its currency as a precursor to weakening it? Olu
Its a very good question Olu.... The best place to take the battle to the opposition is when they are at their weakest. Lull the bears in
ready for profit taking before the SNB use the liquidity to fill their flow... But will the SNB cope with the safe-haven WAR flow ?
Memories caught in time but never forgotten
  • #851
  • Mar 2, 2014 1:20pm Mar 2, 2014 1:20pm
Quoting Olu
{quote} Vox Dei Does this really happen? Will the SNB will strengthen its currency as a precursor to weakening it? Olu
Vox...apologies my friend i didn't mean to jump in on your question...
Memories caught in time but never forgotten
  • #852
  • Mar 2, 2014 1:33pm Mar 2, 2014 1:33pm
Hi Olu and J,

Quoting Olu
{quote} Vox Dei Does this really happen? Will the SNB will strengthen its currency as a precursor to weakening it? Olu
That's a very good question indeed. At the moment I don't have a clear cut answer as to how will SNB create the liquidity it needs, and that's the whole point. As long as lower EURCHF remains a possibility, I'd rather stay out watching.

Quoting j4d
{quote} Its a very good question Olu.... The best place to take the battle to the opposition is when they are at their weakest. Lull the bears in ready for profit taking before using the liquidity to fill their flow... But will the SNB cope with the safe-haven WAR flow ?
Excellent point and question J. Large speculators were bound to sell EURCHF against SNB wishes sooner or later. So far this year, the safe-haven war flow theme you've mentioned has provided them a favorable context to do just that. SNB surely isn't pleased with the prospect of being forced to act at this time. It might just shock and awe us all again right before moving EURCHF above 1.23.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #853
  • Mar 2, 2014 1:35pm Mar 2, 2014 1:35pm
Quoting j4d
{quote} Vox...apologies my friend i didn't mean to jump in on your question...
There's nothing to apologize for. Thank you for sharing your view.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #854
  • Mar 2, 2014 1:49pm Mar 2, 2014 1:49pm
Quoting vox dei
Hi Olu and J, {quote} That's a very good question indeed. At the moment I don't have a clear cut answer as to how will SNB create the liquidity it needs, and that's the whole point. As long as lower EURCHF remains a possibility, I'd rather stay out watching. {quote} Excellent point and question J. Large speculators were bound to sell EURCHF against SNB wishes sooner or later. So far this year, the safe-haven war flow theme you've mentioned has provided them a favorable context to do just that. SNB surely isn't pleased with the prospect of being...
I believe SNB has set the floor at 1.20 (instead of 1.22) and since they set the floor, eurchf has come close but has not breached it yet. it is certainly possible mkt tries SNB's mettle again but i think SNB will protect it fiercely.

Also SNB is not a p&l center so they dont need to look for liquidity. Central banks task is to manage their currency (and economy) so they dont care if they have to suck up liquidity and move mkt by a lot. In fact they would rather not have to do trading and just jaw bone the price up. So this argument that they need liquidity isnt applicable as if there is less liquidity, it is even easier for the to move EURCHF back up with small intervention.
Think : Trade : Live Life
  • #855
  • Mar 2, 2014 3:04pm Mar 2, 2014 3:04pm
Quoting stt
{quote} I believe SNB has set the floor at 1.20 (instead of 1.22) and since they set the floor, eurchf has come close but has not breached it yet. it is certainly possible mkt tries SNB's mettle again but i think SNB will protect it fiercely. Also SNB is not a p&l center so they dont need to look for liquidity. Central banks task is to manage their currency (and economy) so they dont care if they have to suck up liquidity and move mkt by a lot. In fact they would rather not have to do trading and just jaw bone the price up. So this argument that...
Doh. You are right! EURCHF peg floor remains @ 1.20. 1.22 floor was rumoured but never made official by SNB. Memory playing tricks on me. Many thanks for that and for clarifying central bank and liquidity relation as well. You clarification implies there's still reasonable room for CHF to appreciate for now. Meaning my concerns were unfounded bringing CHF back to the menu. I really appreciate your correction. Thanks
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #856
  • Mar 2, 2014 10:24pm Mar 2, 2014 10:24pm
Quoting vox dei
If SPX gaped below support next week due to the divergences I would consider it first serious sign of incoming weakness. DOW looks more bullish, yet price is just below big round number resistance, and descending trendline. Also, of more significance note that SPX HH is yet to be confirmed by a HH in DOW. Summing it up, while stock indexes remain in a bull market, exhaustion signs keep adding up, making either buy or sell a dangerous proposition for the time being imho.
Agree, however I would lean on a long if push came to shove.....

Quoting vox dei
next week I'll looking into buying GBP and NZD, selling CAD and AUD, and don't have a strong bias for the rest at the moment. From these possible trades, I expect the most upside potential from GBPCAD.
Fair enough.....follow the trend...

Quoting vox dei
SNB's 1.22 peg floor....
I have not traded this pair since the 1.2 floor was declared by the SNB.......

Thanks for you thoughts again...
  • #857
  • Mar 2, 2014 10:36pm Mar 2, 2014 10:36pm
Quoting j4d
{quote} ... But will the SNB cope with the safe-haven WAR flow ?
That is an interesting question. In saying that central banks can be quite inventive and creative when cornered.
The fact that anyone still seeks a safe haven in a fiat currency is still astounding to me.
  • #858
  • Mar 2, 2014 11:20pm Mar 2, 2014 11:20pm
Quoting stt
{quote} I believe SNB has set the floor at 1.20 (instead of 1.22) and since they set the floor, eurchf has come close but has not breached it yet. it is certainly possible mkt tries SNB's mettle again but i think SNB will protect it fiercely. Also SNB is not a p&l center so they dont need to look for liquidity. Central banks task is to manage their currency (and economy) so they dont care if they have to suck up liquidity and move mkt by a lot. In fact they would rather not have to do trading and just jaw bone the price up. So this argument...
In reality how do they do this? Would the SNB really want to sell CHF reserves and buy dud foreign currencies and/or bonds from the US or Euro in order to weaken its currency? By doing this are they not adding 'problems' to their balance sheets? (assuming that we all agree that the EUR and USD are not too sound)

I honestly don't know how it works and I'm sure I have simplified it way too much above.
  • #859
  • Mar 3, 2014 3:52am Mar 3, 2014 3:52am
Quoting mypipbull
{quote} Agree, however I would lean on a long if push came to shove..... {quote} Fair enough.....follow the trend... {quote} I have not traded this pair since the 1.2 floor was declared by the SNB....... Thanks for you thoughts again...
Hi MPB,

Agreed on SPX. As it remains in uptrend, between buy and sell, buy is preferred. Follow the trend. That's exactly what I try to do with currencies. Btw, the fact that I've mentioned EURCHF pair doesn't necessarily mean intention to trade it. I 'saw' CHF strengthening, yet EURCHF was below what I incorrectly recalled being SNB floor peg (1.22). This scenario of a strong CHF without room to strengthen further was hard for me to conceive, hence the comments trying to understand/explain it. The actual floor is 1.20 as Stt kindly pointed out, meaning CHF still has room to strengthen. So, my previous comments regarding the pair/CHF are void. This week I'm buying.

Lots of green pips,
vox
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #860
  • Mar 3, 2014 4:46am Mar 3, 2014 4:46am
Quoting mypipbull
{quote} That is an interesting question. In saying that central banks can be quite inventive and creative when cornered. The fact that anyone still seeks a safe haven in a fiat currency is still astounding to me.
I must admit it surprises me too... the SNB reputation for neutrality along with its secure Swiss banking system must be very attractive at times like this..
Memories caught in time but never forgotten
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