The Really Useless Thread | Page 6838 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

The Really Useless System 25 replies

Bloomberg: VIX Indicator useless for forecasting the direction of equity prices 0 replies

The Really Really Boring Forex System 97 replies

Attachments: The Really Useless Thread
Exit Attachments

The Really Useless Thread

  • #136,741
  • Aug 25, 2015 12:23pm Aug 25, 2015 12:23pm
Quoting sisse
{quote} Nicely done!!!. Perfect news(highest consumer confidence in the year? ...hikes sep??? jejeje).. Easy goes easy comes in the Euro. Very yummy retrace and pretty much a 100% retrace to break out... Chop zone in the making until tomorrow GDP #s that will settle the M roll...sisse
GDP historically is inline or better during August even a full point miss would be the highest of the year...

An engulfing daily would certainly be the cherry on top for the day.
  • #136,742
  • Aug 25, 2015 12:39pm Aug 25, 2015 12:39pm
Quoting Pharm0r
{quote} GDP historically is inline or better during August even a full point miss would be the highest of the year... An engulfing daily would certainly be the cherry on top for the day.
I doubt for today.... Main problem is that last move cleaned the highs (shorts were cleaned so most big shorts bears are not longer holding positions).Basically we are only a few weeks from hikes announcement and at these levels we will keep both sides unlocked. I still expect hikes sep but a slight miss in Gdp and NFP next week will reduce the odds to 0 opening a in and out exhaustion leg to 1.186x till the Q close ....Tracking 1.142x x the roll ...sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,743
  • Aug 25, 2015 1:15pm Aug 25, 2015 1:15pm
Quoting sisse
{quote} I doubt for today.... Main problem is that last move cleaned the highs (shorts were cleaned so most big shorts bears are not longer holding positions).Basically we are only a few weeks from hikes announcement and at these levels we will keep both sides unlocked. I still expect hikes sep but a slight miss in Gdp and NFP next week will reduce the odds to 0 opening a in and out exhaustion leg to 1.186x till the Q close ....Tracking 1.142x x the roll ...sisse
I see your point about macro bears being cleared but don't you think the nature of the move (collateral panic leg.) precludes a further test of these ultimate highs if , for example, 1.143x is taken back with this monthly close let's say even via a par or slight miss in GDP.

Even a NFP miss next month and a shift in expectations for a December hike could still see the move well contained below the highs as long as the stock markets hold steady. Maybe some macro players used the move to step in at a better price (it was a significant price-point on the pair and DXY.) even as it cleared others out.

Either way, a historic day yesterday so it's definitely tricky to tell which way the wind will blow.
  • #136,744
  • Aug 25, 2015 1:50pm Aug 25, 2015 1:50pm
Quoting ClinicalEx
{quote} I see your point about macro bears being cleared but don't you think the nature of the move (collateral panic leg.) precludes a further test of these ultimate highs if , for example, 1.143x is taken back with this monthly close let's say even via a par or slight miss in GDP. Even a NFP miss next month and a shift in expectations for a December hike could still see the move well contained below the highs as long as the stock markets hold steady. Maybe some macro players used the move to step in at a better price (it was a significant price-point...
I agree with your comments. The question for me its about timing more than what is the ultimate high (as u said what is left above is just tiny crumbs if any tradable tickz). Getting stuck with shorts (mid term) at these levels with no hikes it will be noisy mistake that would unnecessary capital for months in a wide range...In simple words, shorts mid term with sep hikes to parity yes yes. yes. Longs short term swing with no hikes to the highs yes.... Any other combination is no no no and look some where else as its nothing to see until more data (mid Nov/Dec)...sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,745
  • Aug 25, 2015 2:55pm Aug 25, 2015 2:55pm
Quoting Pharm0r
{quote} GDP historically is inline or better during August even a full point miss would be the highest of the year... An engulfing daily would certainly be the cherry on top for the day.
Hmmm, Thursday's GDP is the first revision to the initial preliminary number for Q2 (a second prelim number) & expectations are pretty high. Personally, I'm pretty wary of the impact at this stage absent a clear miss or hit in excess, as it is pretty backward looking. 3Q numbers are not looking good on the Atlanta Fed model so the higher 2Q we get will just make 3Q even worse. Not hard for me to envision an inline number going USD bear.

Perhaps I'm getting a little too USD bearish after having such high hopes just weeks ago for 2 hikes this year. Just looking to keep daytrading this EU pair for now.
defense wins championships
  • #136,746
  • Aug 26, 2015 3:34am Aug 26, 2015 3:34am
Jitters in the US stock market toward the end of the day with a serious reversal so 1.1425 held with momentum before we could get the 1.1374 test.

Quoting ClinicalEx
{quote} All eyes on breaking back 1.1550 -> 1.1480 in my case. GL, I think we've set the extremes.
We held the top of the smallish range overnight and we're testing the floor, but not much breathing room, trading in narrow corridors as long as DAX is coiled below 10094. Nothing much to see until the stock markets start shaking these major levels and all attention on S&P later.
  • #136,747
  • Aug 26, 2015 3:52am Aug 26, 2015 3:52am
Difficult to call, still holding longs EU.. monetary policy still tightening in US. Why hike rates now with all this uncertainty, its a world dilemma after all... not just China.. Seasonal declines happening early maybe lol... Just going sideways in s&p, bonds will continue to rally... And gold and silver will begin there strong rally before the years out... Oil nearly at $34 dollar target...

So when will we see the start of QE4!!!
Attached Image (click to enlarge)
Click to Enlarge Name: monetary base.png Size: 63 KB
  • #136,748
  • Aug 26, 2015 4:37am Aug 26, 2015 4:37am
Quoting buttons
Difficult to call, still holding longs EU.. monetary policy still tightening in US. Why hike rates now with all this uncertainty, its a world dilemma after all... not just China.. Seasonal declines happening early maybe lol... Just going sideways in s&p, bonds will continue to rally... And gold and silver will begin there strong rally before the years out... Oil nearly at $34 dollar target... So when will we see the start of QE4!!! {image}
Congrats on those nice longs.

If they don't hike by December it's just going to make a huge mess of their communications and all the messages they've tried to convey getting the market onside for normalization.

Price stability may be the side of their mandate coming under pressure now through China which is the bellwether for deflation shockwaves and all the other nasty stuff going down at the moment; but I think liftoff is a done deal by December as long as data reasonably holds. It'll still be extremely accommodative policy but I feel the path of least resistance is looking on the inflation side for determining the pace at which they adjust after liftoff this year.

Only If domestic data strongly dissapoints can they legitimately save face and maybe not even consider hiking this year- even then...
  • #136,749
  • Aug 26, 2015 6:02am Aug 26, 2015 6:02am
Quoting sisse
{quote} ... Realistically (as for today) the odds of FED hiking in Sep went to the floor (I expect to go under 25% chances by the end of the week when we start getting the latest "polls" of the impact in these massive wave down).

So you don't think any more that Equities market is/was pricing a rate liftoff ?

I agree completely with this idea. What an opportunity for The Fat Finger to use and hide behind the China's growth decelaration and the chinese stocks free fall headlines (btw only a reset of a 9 months old insane bubble ; US Equities felt by far more than Chinese ones if you look at their levels one year ago) to do what he is anticipating. US are not Thailand, Malaysia or Vietnam : their economy is not so dependent from the Chinese economy. From a rational point of view, it's totally absurd to justify what is happening to US Equities with the growth decelaration in China. And moreover, we can't even speak about a China crisis so far from a fundamental point of view !! So, something else may be happening... And Gold, gold hasn't moved at all during this organised(?) panic, it's now even back on his way down...

Hikes in September, the crime will be perfect. All the small hands, f*cked in the summer, will be f*cked again with the rate liftoff statement, selling equities again under panic (not the newspapers expectations) whereas everything has already been priced and it's time to start to buy, to end the year with a limited rally.

As you well underlined it (thanks btw for all your clear and didactic posts), US economy is ready for a rate liftoff, it's a question of months (and nuts) : Sep, Dec or March. September is by far the best month : the sooner is the better, markets like clear perspectives. And hiking in September give the markets 3 months and a half to digest (Hiking rates shows your confidence and improves economy self-confidence) and keep December vacant (no hike) for the year-end rally. Any other choice is bad : For which reason will they push back ? What can they expect more from their own economy that will justify to "wait" (the worst thing for the markets!!) 3 or 6 more months ? China Crisis ? There is none so far ! China deceleration ? There is one but what consequences for US ? Few... And anyway will it be over in Dec or March ? No..

Moreover, pushing back again the rate liftoff will be a very bad message sent to the markets. No Hike = We, FED Members, are not confident. The consequences may be worst.
  • #136,750
  • Aug 26, 2015 7:00am Aug 26, 2015 7:00am
For any of you not following on Twitter, Lacker has been promoting his upcoming speech for about the last week (during the equities fall):
Richmond Fed ‏@RichmondFed 14m14 minutes ago
Jeffrey Lacker to speak on "The Case Against Further Delay" on September 4 in Richmond. Media registration open. http://ow.ly/Rodzr


So, still sending the rate hike message.
defense wins championships
  • #136,751
  • Aug 26, 2015 7:03am Aug 26, 2015 7:03am
Sisse, do you think Euro will set a new high above 1.1714 before going to parity? Maybe 1.18?
  • #136,752
  • Aug 26, 2015 7:19am Aug 26, 2015 7:19am
Quoting Replicant
{quote}As you well underlined it (thanks btw for all your clear and didactic posts), US economy is ready for a rate liftoff, it's a question of months (and nuts) : Sep, Dec or March. September is by far the best month : the sooner is the better, markets like clear perspectives. And hiking in September give the markets 3 months and a half to digest (Hiking rates shows your confidence and improves economy self-confidence) and keep December vacant (no hike) for the year-end rally. Any other choice is bad : For which reason will they push back ? What...
I am undecided on this, but am going to take a contrarian opinion to see if I can clarify my thinking on this.

It seems the Feds message in the last minutes was pretty clear: wait and see. Obviously rock climbing without safety ropes is a bad idea, but tell that to a rock climber who has successfully climbing without ropes for the better part of a decade. They probably discount the possible dangers to the certainty of the problems a strong dollar will bring.

The key question is: "How is the current Chinese crisis going to affect the global economy? " There are two basic scenarios. It might be a summer hiccup or it might the onset of a global bear market in commodities and equities. I am pretty sure the Fed formula is If A then hike sooner, if B wait until problem unwinds. Bear markets usually last 1-2 years which would push back the rates hike by a year or more.

As I see it, keeping rates low serves the Feds dual mandate of employment and inflation because it weakens the dollar.

They have a second problem. If they tighten now, they will be pretty much the only major Central bank tightening. This will drive up the dollar is a disproportionate fashion which in turn will hurt both employment and the dollar.
Kill the ego, or it will kill the mission.
  • #136,753
  • Aug 26, 2015 8:27am Aug 26, 2015 8:27am
Quoting ClinicalEx
{quote} Congrats on those nice longs. If they don't hike by December it's just going to make a huge mess of their communications and all the messages they've tried to convey getting the market onside for normalization. Price stability may be the side of their mandate coming under pressure now through China which is the bellwether for deflation shockwaves and all the other nasty stuff going down at the moment; but I think liftoff is a done deal by December as long as data reasonably holds. It'll still be extremely accommodative policy but I feel...
Hi Clinical Ex,
Decisions decisions... as you can guess I trade the D tf more focused on technical s than fundamentals... longs in play until system calls time.. Market structure also agreeing longs with higher highs lows etc recent break of the structure on Monday with prev resistance now support all to play for... Yesterdays close inside candle, giving rise to pause for decision making on the next push up.. (just me being hopeful lol) Hard to be objective while your in...
the fear we have seen in the past few days will not go easy...
  • #136,754
  • Aug 26, 2015 10:16am Aug 26, 2015 10:16am
Gold retest of 1120/16 area is important. Notable bounces could happen but returning here already shows bearish intentions towards LL.
H1:
Attached Image (click to enlarge)
Click to Enlarge Name: XAU_USD_H1.png Size: 35 KB
69
  • #136,755
  • Aug 26, 2015 10:30am Aug 26, 2015 10:30am
Quoting buttons
{quote} Hi Clinical Ex, Decisions decisions... as you can guess I trade the D tf more focused on technical s than fundamentals... longs in play until system calls time.. Market structure also agreeing longs with higher highs lows etc recent break of the structure on Monday with prev resistance now support all to play for... Yesterdays close inside candle, giving rise to pause for decision making on the next push up.. (just me being hopeful lol) Hard to be objective while your in... the fear we have seen in the past few days will not go easy...
Agree with your daily analysis of course. At least you're in the driving seat for the big GDP news and can make an informed decision after. Like you say, all to play for at these levels.

Quoting ClinicalEx
Jitters in the US stock market toward the end of the day with a serious reversal so 1.1425 held with momentum before we could get the 1.1374 test. {quote} We held the top of the smallish range overnight and we're testing the floor, but not much breathing room, trading in narrow corridors as long as DAX is coiled below 10094. Nothing much to see until the stock markets start shaking these major levels and all attention on S&P later.
1.1374 tested (and overshot.) with the good US news and the first major test for the bears who are trying to take back key levels.

Looks like it may come down to the GDP print. A strong number will bring equities onto strong footing everywhere (it looks like S&P needs it, it's treading water.) , slamming the carry currencies, supporting the dollar and creating a very bullish monthly close. Anything else will be harder to trade; it needs to be really bad for the bears to come in with dangerous volatility we saw earlier.
  • #136,756
  • Aug 26, 2015 11:17am Aug 26, 2015 11:17am
Quoting AaronWard
...
They have a second problem. If they tighten now, they will be pretty much the only major Central bank tightening. This will drive up the dollar is a disproportionate fashion which in turn will hurt both employment and the dollar.
Yes that was a valid argument until last month. However, if you put that reasoning in context of the current markets levels, you can see that it wont be that crazy.

What I mean is for example in the Euro, table turned around exactly on the last FOMC when the FED pretty much gave up on leading the policy and let markets overrun the Sep hikes. Since then we have rallied (dollar weakness) a staggering nearly 1000 ticks !!! to the highs this week leaving pretty much just the crumbs left on the highs if FED doesn't hike SEP.

So even if FED hikes sep we already have a huge buffer in the dollar that will offset a lot of the disparities (there will be for sure especially with emergent market currencies that will get destroy) and if they hike DEC or next year, not only the buffer will we larger but Euro (the most important one) for example will start feeling the impact of QE in the real economy and more importantly the END of ECB QE will be around the corner creating a more balance playing field for the dollar ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #136,757
  • Aug 26, 2015 12:26pm Aug 26, 2015 12:26pm
Hey Sisse, I'm a real big fan of yours and read everything you write. I really appreciate all you do here.

That spike to 1.1700 was really something to see. Didn't quite make it to the 38% retracement of the fall from 1.40 of April of last year though. It is not clear to me what "fair value" is but I am guess it is still higher than the 1.1360 it is currently trading at. If I had to guess a strong dollar is why the Empire State Manufacturing came in at -14.9 last week. That and whatever is happening in the black box known as China.

Like everybody, I am unclear of what the ECB and the Fed will do next. However I do know that zero interest rates and QE are the equivalent of financial heroin, and central bankers are addicted. I also know that you should never trust an addict when they discuss their plans to give up their addiction.

What I don't get is why commodities are crashing. All the major central banks have been creating money hand over fist for the better part of a decade and yet "real stuff" continues to get cheaper. This was supposed to be the age of inflation and yet, to date, nothing...
Kill the ego, or it will kill the mission.
  • #136,758
  • Aug 26, 2015 1:10pm Aug 26, 2015 1:10pm
Quoting AaronWard
What I don't get is why commodities are crashing. All the major central banks have been creating money hand over fist for the better part of a decade and yet "real stuff" continues to get cheaper. This was supposed to be the age of inflation and yet, to date, nothing...
cause of oil crash is easy to see: SA has abdicated and decided to let the open market decide what the price of crude should be - PLUS - the revolution in fracking/directional drilling has brought on large new supply vectors, most notably from N. America. Marginal, over-leveraged suppliers have to keep pumping to service debt, stay afloat, etc - and the more they produce, the larger the supply glut gets, the lower the price goes, the more they have to produce to stay alive - a vicious circle.

All that could change if SA/OPEC would cut production. Maybe also the N. American weak hands get shaken out, effecting supply reduction there. Low prices won't last too long, though...

In the case of other commodities: natgas is the same story as oil - a supply glut brought on by revolutionary production techniques. Ag commodities are swung by oil, but affected by drought, complicated to generalize. re: gold - I never have understood it. Usually described as an inflation hedge, the enemy of gold price is deflation.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #136,759
  • Aug 26, 2015 1:23pm Aug 26, 2015 1:23pm
Been a while. So basically the deflationary effect of new production techniques are outstripping the inflationary effects central bankers creating money? That and the general contrariness of markets?

I remember looking at a chart showing the decline in the price of sugar (was that you who posted it?) and scratching my head.
Kill the ego, or it will kill the mission.
  • #136,760
  • Aug 26, 2015 1:28pm Aug 26, 2015 1:28pm
AW, this is a big topic and one we might take up elsewhere - or not. Many believe tighter money will run (mal)investment out of speculative equities and derivatives and back into the real economy. Holy smokes, why not try it? When what you've been doing does not work (for decades, Japan) why not try something different?
"If The Fool persists in his Folly he will become wise." - William Blake
47 traders viewing now