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Mr. Scott's Crayon Thread

  • #2,681
  • Jul 31, 2015 9:13pm Jul 31, 2015 9:13pm
Quoting Mr. Scott
{quote} Hi Davit, Yes, CAD bad, oil, and talk of recession...Was looking for CAD cypher today that never offered. Don't usually follow but took a look. AU bouncy 786 monthly(cypher) deep crab close by. {image}
Thnks Scott for your input.
Interesting how market reacts Monday.Looks like Oil is heading monthly lows 42 with OPEC not cutting production and possible Iranian oil hitting market once senate ok's Nuke deal
Unless Yellen steps up some verbal intervention we can say goodbye to thousands of jobs lost on Oil,Manufacturing,Heavy equipment sending us back collecting unemployment and cycle back to recession.
Too bad we got no real leadership in Washington now.Despite of popular belief cheap oil is bad for business and economy.
Regards
In trading, you have to be defensive and aggressive at the same time
  • #2,682
  • Jul 31, 2015 9:17pm Jul 31, 2015 9:17pm
Quoting Davit
{quote} Thnks Scott for your input. Interesting how market reacts Monday.Looks like Oil is heading monthly lows 42 with OPEC not cutting production and possible Iranian oil hitting market once senate ok's Nuke deal Unless Yellen steps up some verbal intervention we can say goodbye to thousands of jobs lost on Oil,Manufacturing,Heavy equipment sending us back collecting unemployment and cycle back to recession. Too bad we got no real leadership in Washington now.Despite of popular belief cheap oil is bad for business and economy. Regards
Yes Davit, I have article on just that...see if I can find it. Moral of story is cheap oil does not lead to consumption in US and is bad for income and employment due to changes in structure of US economy. Oil has target even below that right now.....unless....

See if other level is exhausted have level slightly above although it is monthly so need room....
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  • #2,683
  • Jul 31, 2015 9:29pm Jul 31, 2015 9:29pm
Quoting Davit
{quote} Thnks Scott for your input. Interesting how market reacts Monday.Looks like Oil is heading monthly lows 42 with OPEC not cutting production and possible Iranian oil hitting market once senate ok's Nuke deal Unless Yellen steps up some verbal intervention we can say goodbye to thousands of jobs lost on Oil,Manufacturing,Heavy equipment sending us back collecting unemployment and cycle back to recession. Too bad we got no real leadership in Washington now.Despite of popular belief cheap oil is bad for business and economy. Regards
Ok from Raoul Pal:



1. Oil
–
the lagged consumption effect
I find the arguments for a consumption-based pick-up one of the weaker arguments and it seems to be based more on hope than reality. It is also very widely held as a view. Models have flaws too There are just too many assumptions made based on economic models and not enough of an understanding of the overall picture or indeed of the behavioural aspects of economics. Strict economic models basically suggest that a fall in input costs always equals a rise in consumption due to extra disposable income. This makes the dangerous assumption that
people are "econo-people” and not real life people. It also makes
dangerous assumptions about global supply and demand being a zero sum game.

The fall in oil prices does not lead to a boost in overall GDP, as any pick-up in finished goods is offset by the fall in gas sales and other energy products. At best, it is GDP neutral. However, once you understand that the loss of oil revenues and oil production are drags on GDP, especially considering the US’s new-found oil renaissance (due to the double hit of loss of energy sales revenues plus the compounded effect of loss of economic production due to closing of rigs etc.), then you can see that people are looking at the oil price cut in EXACTLY the opposite way to reality.
The fall in the oil price will kill consumption and will not give it an overall boost. I see it no other way.

Europe just lags the US In countries that are not big oil producers, there is no loss of economic growth from the loss of oil production. Thus Europe saw a pick-up in overall consumption, but this again is misleading because as US growth slows, then so will EU growth in due course and that consumption spike will be short-lasting. We also must then throw in the behavioural economics element, and that is the changing consumption patterns of the US.

Changing consumption patterns The two biggest cohorts of the demographics of consumers are the Baby Boomers and the Millennials. The Baby Boomers have suffered two busts in recent years and are thus less amenable to spend any increase in disposable income
–
hence the pick-up in savings over the period of lower oil prices (and the falling in the savings rate as oil bounced).
Their marginal propensity to consume has fallen versus their marginal propensity to save.
This makes complete sense. Baby Boomers have changed their behaviour at the margin and economists, with rigid models,
don’t capture this.
The Millennials on the other hand, just do not spend. They need any extra income they have to pay off student debts.
Their marginal propensity to save is higher than their marginal propensity to consume.
Debt damage In a nutshell, there is too much debt and too much psychological damage from the last two crises and that has changed consumption patterns. So, with a change in consumption patterns and the shift in the US from oil consumer to oil producer, there is almost zero chance that a consumption spike is coming. Job losses and a fall in consumption is likely In fact, the most likely economic impact from the fall in the oil price is the lagged loss of consumption and the lagged loss of jobs. Those numbers are going to start to appear in the coming months and add to my view that the
economic event on the horizon is a recession and not an expansion.
I think the whole consumption-is-going-to-increase argument is groupthink and is not borne out by evidence or rigorous analysis. It sounds appealing at first hearing, but that is it.
I’m still very
bearish on oil and that is going to have an even bigger effect if it starts to fall again. More on this
later…
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  • #2,684
  • Jul 31, 2015 9:45pm Jul 31, 2015 9:45pm
Ok before everyone falls asleep, one more in light of today's data....

I see absolutely zero evidence that wage growth is going higher and will lead inflation higher.
The entire basis for the bond market sell-off is wrong. The entire basis for the
Fed’s
future increase in rates is wrong too.
This is a big concern. This is groupthink at its worst.
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  • #2,685
  • Jul 31, 2015 9:57pm Jul 31, 2015 9:57pm
Quoting Mr. Scott
Ok before everyone falls asleep, one more in light of today's data.... I see absolutely zero evidence that wage growth is going higher and will lead inflation higher. The entire basis for the bond market sell-off is wrong. The entire basis for the Feds future increase in rates is wrong too. This is a big concern. This is groupthink at its worst. {image} {image}
I watched Yellen Senate testimony and it was interesting.
Her argument for IR hike is that better doing early then later arguing later hike carries bigger risks...
This just does not make sense to me.So Feds are hyping the USD dragging oil lower then threaten IR hike sending oil even lower...
This in overall environment that just about everyone is cutting rates and cheapening their currencies.
We may become the biggest idiot holding the brown bag.
Carney like a lapdog following Yellen while UK is in ZERO inflation massively in debt.I am anticipating some kind of meltdown in coming months.
Regards
In trading, you have to be defensive and aggressive at the same time
  • #2,686
  • Jul 31, 2015 10:26pm Jul 31, 2015 10:26pm
Quoting Davit
{quote} I watched Yellen Senate testimony and it was interesting. Her argument for IR hike is that better doing early then later arguing later hike carries bigger risks... This just does not make sense to me.So Feds are hyping the USD dragging oil lower then threaten IR hike sending oil even lower... This in overall environment that just about everyone is cutting rates and cheapening their currencies. We may become the biggest idiot holding the brown bag. Carney like a lapdog following Yellen while UK is in ZERO inflation massively in debt.I am...
it'll be funny if yellen or carney raises rate to .1 only
btw it yellen following carney's movement as he's the expert and more experience on ir deception
Wooooohooooo or Boooooohooooo
  • #2,687
  • Jul 31, 2015 10:26pm Jul 31, 2015 10:26pm
Quoting Davit
{quote} I watched Yellen Senate testimony and it was interesting. Her argument for IR hike is that better doing early then later arguing later hike carries bigger risks... This just does not make sense to me.So Feds are hyping the USD dragging oil lower then threaten IR hike sending oil even lower... This in overall environment that just about everyone is cutting rates and cheapening their currencies. We may become the biggest idiot holding the brown bag. Carney like a lapdog following Yellen while UK is in ZERO inflation massively in debt.I am...
They seem to be missing a lot, we will see, but they are stuck, as mentioned before, little fun with EU. They are afraid to raise rates, they are afraid to not raise rates. So, they will raise rates. Funny thing is, crisis leads to stronger USD and lower rates.....
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  • #2,688
  • Aug 1, 2015 9:17am Aug 1, 2015 9:17am
Quoting Mr. Scott
{quote} They seem to be missing a lot, we will see, but they are stuck, as mentioned before, little fun with EU. They are afraid to raise rates, they are afraid to not raise rates. So, they will raise rates. Funny thing is, crisis leads to stronger USD and lower rates..... {image}
Ok one more....None of those yellow circles appear in a random place. ( I can not show you why or this chart would be a mess.) This one is no different as per above. There are different ways to draw it, I drew it as I prefer it, does not make it right. I know, I know but chart is chart and you have to at least see the other side even if you want the infamous leg to parity and beyond....Remember failure is as important, if not more important, than success. Tells us trend is unusually strong. There are more here anyway....
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  • #2,689
  • Aug 2, 2015 10:57am Aug 2, 2015 10:57am
http://www.marctomarket.com/2015/08/...nd-dollar.html

Yellen is plain spoken, and she could not have spoken more plain: "I have argued that a pick-up in neither wages nor price inflation is indispensable for me to achieve reasonable confidence" that inflation will reach the Fed's target in the medium term.

Underlying Yellen's (and appears most economists') views is the acceptance of the Phillips Curve, which illustrates the historic trade-off between unemployment and inflation. Of all people, Alan Greenspan questioned this relationship, and part of the reason, he had kept interest rates low was that inflation had remained lower than the unemployment rate would have suggested. However, on this side of the Great Financial Crisis, the Phillips Curve has come back into fashion.

Ok it does not matter whether they are right or wrong, and they are certainly wrong. It will matter but not yet. What does matter is how they are thinking and what they want and intend to do....
The world you desire can be won. It exists.. it is real.. it is possible..
  • #2,690
  • Aug 2, 2015 2:04pm Aug 2, 2015 2:04pm
Quoting Mr. Scott
{quote} Yes Davit, I have article on just that...see if I can find it. Moral of story is cheap oil does not lead to consumption in US and is bad for income and employment due to changes in structure of US economy. Oil has target even below that right now.....unless.... See if other level is exhausted have level slightly above although it is monthly so need room.... {image}
USDCAD
Hi Scott!
This is my monthly chart, atm I am focusing on the smaller as posted, (http://www.forexfactory.com/showthre...15#post8413615) but we can get confluence with this one.
I am keeping your charts, good to have someone's work to compare.
Do you have anything on AUD, I posted one last week here: http://www.forexfactory.com/showthre...372&page=50663
Thank you and have a great week
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We watch the charts from every angle so you don't have to!!
  • #2,691
  • Edited 9:20pm Aug 2, 2015 6:04pm | Edited 9:20pm
Quoting pedro319
{quote} USDCAD Hi Scott! This is my monthly chart, atm I am focusing on the smaller as posted, (http://www.forexfactory.com/showthre...15#post8413615) but we can get confluence with this one. I am keeping your charts, good to have someone's work to compare. Do you have anything on AUD, I posted one last week here: http://www.forexfactory.com/showthre...372&page=50663 Thank you and have a great week {image}
Hey Pedro,

I posted response to you in Eur thread, think we mostly agree. I know everyone AU bearish but I have cypher and potential deep crab?

PS: Tin hat, mucho confluence around 1.53.(Geez, that's not clear at all, referring to CAD.)
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  • #2,692
  • Aug 2, 2015 7:12pm Aug 2, 2015 7:12pm
Quoting Mr. Scott
{quote} Hey Pedro, I posted response to you in Eur thread, think we mostly agree. I know everyone AU bearish but I have cypher and potential deep crab? PS: Tin hat, mucho confluence around 1.53. {image}
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ignore wackos and psychos, including myself. But I can't add myself to iggy
  • #2,693
  • Aug 2, 2015 9:22pm Aug 2, 2015 9:22pm
Quoting ffleo
{quote} {image}
Thanks ffleo, that is alternative, and LTTL, I knew was there but did not post or refer to.
The world you desire can be won. It exists.. it is real.. it is possible..
  • #2,694
  • Aug 2, 2015 9:35pm Aug 2, 2015 9:35pm
Goldman stop stealing my charts... I always hated you b2stards anyway......

http://www.forexfactory.com/showthre...72#post8413672

http://www.efxnews.com/story/29903/e...-goldman-sachs

Turning to USD/CAD, GS thinks that the next likely upside target is ~1.3168-1.3171 as this includes an extension from the ‘11 low and 1.618 from May ‘15
"A break above 1.3168-80 would open potential for 1.3414-1.3650. This next level includes 61.8% retrace of the ‘02/’07 decline, a very large ABC/1.00 target from Nov. ’07 and a 1.618 extension from Jul. ’11. The fact that the market is on track to breaking its ‘08/’09 highs (1.3017-1.3065) adds some confidence to this longer-term bullish setup," GS projects.
The world you desire can be won. It exists.. it is real.. it is possible..
  • #2,695
  • Aug 3, 2015 7:20am Aug 3, 2015 7:20am
Quoting Mr. Scott
http://www.marctomarket.com/2015/08/...nd-dollar.html Yellen is plain spoken, and she could not have spoken more plain: "I have argued that a pick-up in neither wages nor price inflation is indispensable for me to achieve reasonable confidence" that inflation will reach the Fed's target in the medium term. Underlying Yellen's (and appears most economists') views is the acceptance of the Phillips Curve, which illustrates the historic trade-off between unemployment and inflation. Of all people, Alan Greenspan...
Now you know why I pull my hair out....

http://blogs.wsj.com/economics/2015/...interest-rate/
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The world you desire can be won. It exists.. it is real.. it is possible..
  • #2,696
  • Aug 3, 2015 7:54am Aug 3, 2015 7:54am
Quoting Mr. Scott
{quote} Now you know why I pull my hair out.... http://blogs.wsj.com/economics/2015/...interest-rate/ {image}
good day Scott and all,

at least you have hair to pull out, I'm bald now.....
Wooooohooooo or Boooooohooooo
  • #2,697
  • Aug 4, 2015 6:33am Aug 4, 2015 6:33am
Some fun with EU....
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  • #2,698
  • Aug 4, 2015 7:35am Aug 4, 2015 7:35am
Some EA
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  • #2,699
  • Aug 4, 2015 4:20pm Aug 4, 2015 4:20pm
perhaps a daily deep crab on UCAD

I've got a target 1.3206, should pull back there- or soon after. 600 pips away is a bullish norm, with a monthly cup and handle (saw you guys already post the c/h along with others). Betting I can get 200 first..maybe the full 600. Will cost me 25 pips to find out
  • #2,700
  • Aug 4, 2015 9:49pm Aug 4, 2015 9:49pm
Quoting Pharm0r
perhaps a daily deep crab on UCAD I've got a target 1.3206, should pull back there- or soon after. 600 pips away is a bullish norm, with a monthly cup and handle (saw you guys already post the c/h along with others). Betting I can get 200 first..maybe the full 600. Will cost me 25 pips to find out

Hi Pharmor,

Had the daily, got the monthly that is nice and valid but needs room, lots of confluence around 1.34. Couple of interest nearby, this is one that fits.
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