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  • #137,481
  • Oct 25, 2015 8:33am Oct 25, 2015 8:33am
Quoting Borg
{quote} ... What is W and what is M ? Does FA mean fundamental analysis ?
... weekly/monthly & yes
The spoken word is your master, the unspoken word your slave.
  • #137,482
  • Oct 25, 2015 8:36am Oct 25, 2015 8:36am
Quoting Hickson
{quote} you probably noticed that 23.6 % levels. It is roughly 1/4 ... what do you think?
I use 4ths instead of 23.6
  • #137,483
  • Oct 25, 2015 4:10pm Oct 25, 2015 4:10pm
Sisse I have a question in regards to correlation between instruments.

Let's say EurUsd, S&P, and DAX:

If EURO moves down --► EurUsd goes down and DAX up
If USD moves up --► EurUsd goes down and S&P down

So: DAX value is determined by EURO value, and
S&P value is determined by USD value

Does that mean that if EurUsd moves down 'ONLY' because USD appreciates in value, --► DAX moves up by default?
Or does haves other way to measure its value?

In other words, if DAX moves up, does it mean that it's because of EURO depreciation only, or can it also be affected by USD appreciation?

Thanks and I hope my question makes sense.
  • #137,484
  • Oct 26, 2015 6:00am Oct 26, 2015 6:00am
Quoting ws121
S --► EurUsd goes down and DAX up If USD moves up --► EurUsd goes down and S&P down So: DAX value is determined by EURO value, and S&P value is determined by USD value Does that mean that if EurUsd moves down 'ONLY' because USD appreciates in value, --► DAX moves up by default? Or does haves other way to measure its value? In other words, if DAX moves up, does it mean that it's because of EURO depreciation only, or can it also be affected by USD appreciation? Thanks and I hope my question makes sense.
I don't think you are on the right track with that analysis.

First and foremost, any instrument always moves because of the value of its components. Instruments don't have a life of its own. They represent the value of their underlying:

--> DAX, S&P, any index in equities/or else, move up/down because its components are moving up/down (e.g Apple, Caterpillar, Exxon, etc etc). Its components (individual stocks in this case) move up and down depending on their value/price of the stock.

Second there are some basic general principles in Macroeconomics that usually serve as base theoretical correlations for analysis:

--> If interest rates are low, people/investors don't want to hold cash in the bank but rather put it in stocks to get better returns. While the opposite is also valid, when interest rates are very high people/investors prefer to put in cash to get a decent return without having the risk of investing in equities.

Only when you are clear on those concepts you can define some very basic correlations between a currency pair and equities indexes:

--> The potential of Negative rates + more QE (As per the last ECB) makes expectation of interest rates VERY VERY LOW making people dump cash (euro in this case) and jump to equities (buy stocks --> therefore --> Dax for example). Meaning euro/usd goes down (euro going down so simple maths) and DAX going up ...

Obviously this is just the most simple case for explicative purposes. There are a lot more variables and interactions in the equations but understanding the basic concepts its a very good starting point to have a decent grasp of whats going on and how a particular policy/announcement will play out ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,485
  • Edited 6:32am Oct 26, 2015 6:02am | Edited 6:32am
sisse,

All I can say is thank you for your insight and kind response to teach, coach and inform. There are not enough words to express my thanks for taking time to share your knowledge with someone that is not as versed in this though I have traded for a long while now and have some of the FA and TA under my belt but not enough to produce consistency. I don't use indicators anymore except occasionally an MA. Otherwise, just S/R and FA.

I have read and re-read what you wrote. There are questions I have but others have asked as well and I will just observe your responses to them. I do know that I have an issue with finding the right trade in the noise. Last week was easy. I did manage over 300 pips on a very small account. It is not anything to boast about, as trades after the ECB announcement, were not to hard to manage. I lost on the 1350 handle in my BUYS. Kept the trades on to 1270 and then cut my losses. I managed to get in a FEW good SELLS to make up for this.

My issue was I was trying to play the levels of 1350, 1270, 1420. I was still looking for a BUY in all of this until the ECB news. You claim the levels are still in play. Are these the levels and trade the noise within these levels? This is my biggest confusion as I try to do this in my Day, 1HR TF using 15 min to micro-scale in.I do know I am looking to SELL. But how HIGH to let price go before positioning. I guess you are saying to scale in and get positions. All the way up to the .14xx handle which requires good MM.

I know Cloggie was awesome with pin-pointing levels and could call them out even in smaller TF. I still don't know how. He said to study the charts on a Monthly, Daily and 4 and 1 HR TF. He said the answers are there. I have yet to really understand it other than Support and Resistance.

Thanks again for sharing your insight and knowledge here! I wish you all the Best!
  • #137,486
  • Oct 26, 2015 6:43am Oct 26, 2015 6:43am
Quoting sisse
{quote} I don't think you are on the right track with that analysis. First and foremost, any instrument always moves because of the value of its components. Instruments don't have a life of its own. They represent the value of their underlying: --> DAX, S&P, any index in equities/or else, move up/down because its components are moving up/down (e.g Apple, Caterpillar, Exxon, etc etc). Its components (individual stocks in this case) move up and down depending on their value/price of the stock. Second there are some basic general principles in Macroeconomics...
Thank you Sisse for your kindness and generosity of sharing your knowledge.
I add my voice to IMARICH1 and wish you all te best
Quoting IMARICH1
sisse, All I can say is thank you for your insight and kind response to teach, coach and inform. There are not enough words to express my thanks for taking time to share your knowledge with someone that is not as versed in this
  • #137,487
  • Oct 26, 2015 8:03am Oct 26, 2015 8:03am
Quoting ws121
{quote} Thank you Sisse for your kindness and generosity of sharing your knowledge. I add my voice toIMARICH1 and wish you all te best {quote}
Lol I read "I sent the invoice to..."
  • #137,488
  • Oct 26, 2015 11:43am Oct 26, 2015 11:43am
Quoting IMARICH1
This is my biggest confusion as I try to do this in my Day, 1HR TF using 15 min to micro-scale in.I do know I am looking to SELL. But how HIGH to let price go before positioning. I guess you are saying to scale in and get positions. All the way up to the .14xx handle which requires good MM.

I know Cloggie was awesome with pin-pointing levels and could call them out even in smaller TF. I still don't know how. He said to study the charts on a Monthly, Daily and 4 and 1 HR TF. He said the answers are there. I have yet to really understand...
Thanks for your kind words.

--> Well I personally WONT advocate/recommend you Scaling IN while Averaging Up (if selling)!!! you are not a BANK, neither Soros that need to get filled in a large position. Nothing wrong with Scaling In while Averaging Down (if selling). You want to manage & minimise risk not increase size. That is the only reason why you would scale in.

--> If you are using the range of Daily Swings as main Tf I don't think is a good idea to look that closer to the market (M15 is an overkill ...you wont be in in synch guarantee).

--> More importantly if you plan to ride a daily swing, loading based on micro levels H1/M15 will be painful to trade and force you to have large drawdowns if we don't break down without retrace (e.g A dovish FED may bleed your account...) as you will need to sit for a while holding large drawdowns even if you are right at the end ...In simple words you are doing the opposite of proper trading: trying to maximise and outguess potential profits instead of managing measurable risk ...

---> My final 2 cents, instead of blindly trying to find which is the exact level to short why don't you try asking yourself at what point that level will be 'confirmed' according to your analysis as a turning point? ...it maybe worth sacrificing a few ticks for a late entry instead of trying to outguess a daily move with M15...

"You want to be the 'Sucker' who places your entries cautiously and with extreme patience sacrificing the perfect entry for less risk, while taking your profits fast and efficiently avoiding to be the 'Sucker' who buys at the dead highs and sell the ultimate lows ..."

I hope it helps

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,489
  • Oct 27, 2015 12:56am Oct 27, 2015 12:56am
trying to build a LT short position in Bunds

BUND D1:
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Don't be a hero. Don't have an ego. Always question yourself
  • #137,490
  • Oct 27, 2015 2:42am Oct 27, 2015 2:42am
Quoting ExForX
{quote} Lol I read "I sent the invoice to..."
lol, hopefully it's good omen
  • #137,491
  • Oct 28, 2015 2:08am Oct 28, 2015 2:08am
....and that was it for the session. We are ready to start the week in the euro, close the month across the board and more importantly for the 4th time this year (we failed June, July and Sep) we are ready for a new chance of a RMT play.

--> The odds for today hike are almost non existent and the odds for a DEC hike have deteriorated even further in the last few weeks opening first hikes as late as Mar 2016. From a strictly policy point of view IMO, the FED has already overstayed and we will have v. nasty consequences next year if we don't get a hike until December.

--> Despite the odds looking soft for a hike this year (as per today before FED) the general outlook for a RMT play for Dec is the same as has been since early this year (back in April when we unlocked the door of a RMT):

Quoting sisse
RATES mode trading (RMT ... this is my own acronym from now on) = Sell equities, sell commodities (especially gold) buy dollar and close your eyes until is over. There will be no other fundamental force, macro numbers or else that will prime over a CB about to hike.

​Basically, If you are long term buy and hold small investor is time to sleep and look somewhere else....
--> Technicals are also pretty much the same as they were in July when expectations were heavily aligned to a hike Sep.

--> I wouldn't be surprise bastards play it the same way, outsmarting the FED and preemptively taking profits in equities and go to sleep for the rest of the year leaving the FED scratching its head and looking as lost as it has been the last year.

--> Whatever the case, plenty of key areas in play for the FED, M/W combo. We have high of the Q in play in Equities, Oil and Euro (low of the Q in Dollar). Gold is the only one that is looking unsettle given the strong ECB comments on rates and QE that will keep it in check/bumpy road whatever the FED decision.

For the actual FED play and flows ...there will be plenty of time today to discuss ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,492
  • Oct 28, 2015 2:29am Oct 28, 2015 2:29am
Quoting sisse
--> Despite the odds looking soft for a hike this year (as per today before FED) the general outlook for a RMT play for Dec is the same as has been since early this year (back in April when we unlocked the door of a RMT): {quote} --> Technicals are also pretty much the same as they were in July when expectations were heavily aligned to a hike Sep. --> I wouldn't be surprise bastards play it the same way, outsmarting the FED and preemptively taking profits in equities ... sisse
Not quite sure how to interpret this... am I interpreting this right like this?
Those bastards may take profits as you say (sell equities equals buy dollars), so EURUSD should drop further. Dispite the idea that rates probably won't change, which should normally ignite a selloff in dollar (so EURUSD rally) but perhaps you presume that this never ending drama has already been priced in? Thus the effect of equities selling should be larger than the news about rates of the FED.

Thanks for your input.
  • #137,493
  • Oct 28, 2015 2:39am Oct 28, 2015 2:39am
Quoting ExForX
{quote} ....Dispite the idea that rates probably won't change, which should normally ignite a selloff in dollar (so EURUSD rally) but perhaps you presume that this never ending drama has already been priced in? Thus the effect of equities selling should be larger than the news about rates of the FED. Thanks for your input.
Yes, that will be one of the scenarios in play with a 'nothing new' but slightly hawkish (better say a 'less dovish') FED.

A potential sell off on US equites will easily carry the rest of the board. However, as you know the ECB put on the table more QE and negative rates for December meaning we will have strong support especially from European Equites making a bumpy/choppy trading environment [especially in equities short term] rather than a sharp leg...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,494
  • Edited 7:53am Oct 28, 2015 7:05am | Edited 7:53am
sisse,

Thanks again for your input. Perhaps, we have different definitions when we use the term "scaling in or out". Could you give me an example as I am more of a visual learner in this way. I agree that if I am Selling while averaging Up could be bad if the market goes against me as it did last week when I was in the BUY mode around .1350 and .1400 and price dropped 300 to 400 pips. I don't have that kind of leverage and took a loss. How would you scale in if you were looking for a BUY using the .1350 handle or if you had positions there? I know you indicated you had some positions in the .12XX area. Did you just scale in your profits when price lost the .1350 handle? Therefore, what do you mean by scaling in? Does that mean taking profit or cutting loss? Just would like more clarity if possible.

sisse writes: --> Well I personally WONT advocate/recommend you Scaling IN while Averaging Up (if selling)!!! you are not a BANK, neither Soros that need to get filled in a large position. Nothing wrong with Scaling In while Averaging Down (if selling). You want to manage & minimise risk not increase size. That is the only reason why you would scale in.


I do agree with all your points and have made some adjustments. I may be wrong but I believe price wants to stay close to the .1050 handle until the FED RMT is in play. I went in with a BUY at .1034 and TP at .1080 and then SOLD at .1080 looking for .1050 before the news.

The way I am reading your post is that the cap for Monthly is in for the remainder of the year at the .14xx handle and all levels in play before are the same such as .1350, .1270, 1240 ect.....scold me if I am incorrect. Thanks for your help and time. I think seeing an example is easier to understand for me; but, I don't want to drive you to drink as I did last Friday before the weekend! Lol
  • #137,495
  • Oct 28, 2015 7:40am Oct 28, 2015 7:40am
So here we are with FOMC coming up in a few hours. Here are my thoughts, but note that I am particularly in the dark as to what are the likely outcomes.

1. If 'hawkish' Fed, i.e. no hike today, but positive language on expecting rate rise &/or positive on US economy & less global risks. This is what I think is most likely, but I can't figure out what will happen. US equities presumably would go down out of concern for Dec hike, but Dec is a long way away (for short termers) & positive comments should provide support. So, EU should then also go down with USD strength from expectation of Dec hike.

2. If 'dovish' Fed, no hike & either no change to language or emphasis on downside risks. US equities will go up, perhaps a big jump & pull USD up along with them. EU will get down into the mid 1.09s at least.

So, what scenario would bring EU up? If anyone can provide their alternative scenarios, it would be appreciated.
defense wins championships
  • #137,496
  • Oct 28, 2015 7:47am Oct 28, 2015 7:47am
A good time for a quick overview and update of the key mid term flows from the last FED announcement

--> GOLD

Previous FOMC outlook BUY
Quote
$975.xx | $1020.xx (strong) | $1075.xx (momentum) | $1108.xx [check]..... $1128.xx (momentum) [check] | $1190.xx (strong)[check]

It was a perfect flow and very simple ride the last few weeks crashing as expected perfectly @1190.xx before today's FED. However this time the ECB game changer last week unlocked 1240.x and will weight heavier if FED is not very hawkish until the end of the year.

Current mid term Map before FED announcement for the rest of the year

______$970(Steel Support)______$1080(strong)______$1190(flip)______$1240(strong)______$1300(Steal Resistance)

--> Oil

Previous FOMC outlook NEUTRAL
[quote] $25.6x | $36.2x (momentum) [check] | $40.5x | $43.6x (momentum)[double check] ... $47.2x (strong) [double check] | $49.9x [check][/quote]

Another perfect and juicy zigzag as widely expected in Neutral outlooks after crashing at $49.9x. We are currently testing key $43.6x for today's FED and inventories as an extra). Oil is hanging on a very very feeble floor. A small wind from equities will unlock the exhaustion leg to $25.6 for the next few months. A hawkish FED/No rate cuts ECB will open the floodgates and change the mid term outlook to STRONG sell.

Current mid term Map before FED announcement for the rest of the year

______$25.6(Steel Support)______$39.03(strong)______$43.6(flip)______$49.9(strong)______$60.25(Soft <<Locked>>)

....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,497
  • Edited 7:56am Oct 28, 2015 7:48am | Edited 7:56am
--> S&P

Previous FOMC outlookNEUTRAL (but ended up in BUY)

Quote
S&P $1740.xx (Steel Support) | $1820.xx (FAILED) | $1940.xx (momentum)[check] $1985.xx [check] ...$2021.xx(soft) [check but broke unlocking the next]... $2070(strong support)[check]...

A decent swing that ended up cracking 2020.xx on ECB and China playing more free money and low interest rates. However, we are entering in danger zone. There is not much room fundamentally above 2100.xx with or without rates in play.

Any further break above the 2100 handle will only send STRONG 'bubble about to burst' signal for the next Quarter. For today, only an extreme dovish FED will take equities further up the initial knee jerk reaction...

Current mid term Map before FED announcement for the rest of the year

______$1790(Steel Support)______$1970(strong)______$2014(flip)______$2061(soft)______$2100(soft )______<<unsustainable levels>> (danger zone)

--> Euro
Previous FOMC outlook NEUTRAL
Quote
$1.057x | $1.081x (momentum) | $1,091x (strong) | $1.108x [check] $1.127x [check] ... $1.147x[check] ...1.184x (steel resistance)...

A very choppy euro as expected in the neutral range. ECB marked the top with Euro crashing 1.147x and about to lock 1.184x for the foreseeable future if FED stay with no changes/slightly less dovish. ECB was a game changer at least until December, so only a extreme Dovish FED will prolong the agony.

The cards are pretty much dealt with current mid term Outlook already in SELL since then so the only thing in play is a short term outlook (next couple of weeks) change from SELL to Neutral via a dovish FED.

Current mid term Map before FED announcement for the rest of the year

______$1.0161(Soft)______$1.073x(strong)______$1.097(flip)______$1.117x(soft)______$1.135x(strong )______$1.151x(Steel Support <<could be lock today>>)

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,498
  • Oct 28, 2015 7:56am Oct 28, 2015 7:56am
Quoting sisse
--> Euro

______$1.0161(Soft)______$1.173x(strong)______$1.097(flip)______$1.117x(soft)______$1.135x(strong )______$1.151x(Steel Support <<could be lock today>>) sisse
should it be 1.0161 ----- 1.073x ----- 1.097 ----- 1.1170 ---- 1.1350 ---- 1.151x steel resistance

hi Sisse I guess typo, am I right ?
  • #137,499
  • Oct 28, 2015 10:49am Oct 28, 2015 10:49am
Quoting edyraper
{quote} should it be 1.0161 ----- 1.073x ----- 1.097 ----- 1.1170 ---- 1.1350 ---- 1.151x steel resistance hi Sisse I guess typo, am I right ?
Yes ... I edited earlier ...

--- --- ---- ---

....and here we go for another FED decision....

--> On the fundamental side:

Not expecting much today. There is no macro outlook neither a conference later and the odds of a hike are 0 to none for today. Basically paying attention to the statement on any softening in inflation expectations and more importantly taking out the mention to the global slowdown and headwinds ....

Only a very clear hawkish intance will trigger some extensive moves making dollar break up and lead the board triggering profit taking in equities. Any other scenenario (nothing new to slightly less dovish FED) will just leave us on pure technical flows for the main events in December.

--> On the technical side:

  1. The initial plays will extend/delay as far as the monthly/ weekly close. For key levels see previous posts. In general, 2070.xx is the one to track in equities, 1.097x in Euro, 1190 in Gold and 43.6x in OIL (all for the M/W combo). The 3 main plays in order of probabilities:
  2. The most probable scenario is a non event/slight less dovish / no major changes FED that will put dollar in the driver sit for profit taking in equities and marking and early high of this Quarter in Equities, Gold, Oil and Euro.
  3. A very dovish FED (not expected). Will unlock a fast and wild leg in equites that can extend as high as the high of the year in a manic move but it will have very sever repercussion later as we will just be trading greed and not value. The leg will open sharp reaction in Gold (1240xx), Euro (1.147x) and Oil (49.9x) in just a few session. Leaving a very wide range in play until December where the ECB will be the first to show us if its going to put their money where their mouth is ...
  4. Finally, A shocking hike (not expected AT ALL) will send massive shockwaves and will caught the market in the wrong side. Dollar will swipe the board and we could see 1.073x as early as today...

--> For the Actual flows (only euro):

As usual in these events.... All micro levels raised for the announcement....

  1. Non event/slight less dovish / no major changes FED will open a Zigzag move with 1.101x as a rain maker for a soft test 1.094x to settle the M roll around 1.097x. For those not already holding from last week ECB. There is not much to see here until 1.114x.
  2. A very dovish FED, will unlock a short term retrace from the ECB last break out last week with a direct trade to 1.127x with intermediate stops at 1.114x and extension to 1.147x.
  3. An unexpected hike. Just close your eyes and sell if you can. Direct play to 1.073x with tiny support 1.094x with fast extension to the 1.05xx handle in a few sessions.

Good luck all...

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,500
  • Oct 28, 2015 10:56am Oct 28, 2015 10:56am
ATM I'm focused @2084
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