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  • #137,741
  • Nov 20, 2015 2:28pm Nov 20, 2015 2:28pm
Quoting The Fool
I think the Dec FOMC NOT HIKING would be the only thing that could break the US equity melt-up......
....although the continued commod rout will not help.....as I see WTI dipping $39.xx today..
"If The Fool persists in his Folly he will become wise." - William Blake
  • #137,742
  • Nov 20, 2015 2:29pm Nov 20, 2015 2:29pm
Quoting The Fool
{quote} based on what was seen post-FOMC-minutes, the markets love "certainty" and at this point, I think the Dec FOMC NOT HIKING would be the only thing that could break the US equity melt-up......
The longer the FED delay hiking the more I will become BEARISH. I even dare to say if FED don't hike this year I will become a PERMA-BEAR (very unconventional in my case as I don't like strong bias) for the mid term.

I honestly think failure to start normalising will short-circuit the system and we are going for more than a 'correction' but a full blown crisis next year ...

Starting hikes will send the right signal to the market and the economy. The initial natural reaction will affect the bastards in the short term(but not too much cause ECB QE plus since they got bailed out we are in +250% !!!! rally based on QE and 0 rates) until companies, business and the REAL economy adapt and digest living with normal levels rates ...and those are the ones that will create the real sustainable wave up in the mid and long term ...not just hot air, greed and cheap money ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,743
  • Nov 20, 2015 2:32pm Nov 20, 2015 2:32pm
Thanks sisse,

But, why the .0690 level? Teach me. I am ignorant on why that level is more impt now. I did go back and look at March 18, 2015 to see why the .061X level was impt! This is what I lack in my trading and you offer great TA and FA. I really respect your analysis and any info to make us all better traders!

I know a once upon a time member named cloggie, that some liked and some didn't due to his tone and scolding, could nail these levels like you. He always said he would look over his charts for the weekend to plan his course for the Week. I never found the holy grail he did. He said it was all in the charts L-Term. All I could find is S and R. But, some worked and some did not.

Is that .0690 represent a close on a D, W, or Monthly chart? I am ok with sounding more clueless than perhaps I am. I just like to learn!

You explanation to the other member was very informative and know I constantly search to read your viewpoint and take eon the market and especially the EU. Thanks so much!
  • #137,744
  • Nov 20, 2015 2:39pm Nov 20, 2015 2:39pm
Thanks for the warnings about next week: US holidays, possible confusing price behaviour or traps, SELL to NEUTRAL. Thanks for the very nice reminder of 18/3, this was an eye opener! I only trade EURUSD so this info is golden. Still I'm confused by the term "perfect storm" though. I assume this means QE extension and/or ECB rate cuts together with FED rate hike? Or are you rather referring to the contrary: a failure to do either (or both!) -- wouldn't that also be a nasty storm in the other direction?

Something else that bothers me: USD rate hikes have usually triggered selloffs of the USD, lasting months after the hike, instead of massive buying. Why would this time be any different? Also, low liquidity usually adds fuel to the priceaction, but is low liquidity really an issue yet half december or does this happen more the last week of dec?
  • #137,745
  • Nov 20, 2015 2:43pm Nov 20, 2015 2:43pm
Quoting sisse
{quote} The longer the FED delay hiking the more I will become BEARISH. ... Starting hikes will send the right signal to the market and the economy. The initial natural reaction will affect the bastards in the short term(but not too much ....
d'accord, ....I am positioning for a ^VIX spike into late Dec/early Jan, but I doubt it will be epic - I would love to see even something close to the late August China panic hiccup...as said above I'd bet the markets will react to no hike even more than to the first baby steps....not risking much on fickle long vol trades & also set up for near new ath's for SPY before the Dec FOMC....good times
"If The Fool persists in his Folly he will become wise." - William Blake
  • #137,746
  • Edited 3:23pm Nov 20, 2015 2:47pm | Edited 3:23pm
Quoting The Fool
{quote} d'accord, ....I am positioning for a ^VIX spike into late Dec/early Jan, but I doubt it will be epic - I would love to see even something close to the late August China panic hiccup...as said above I'd bet the markets will react to no hike even more than to the first baby steps....not risking much on fickle long vol trades & also set up for near new ath's for SPY before the Dec FOMC....good times
In a nutshell ...if everyting goes as expected: Extended chop zone until +/- US elections ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,747
  • Nov 20, 2015 2:57pm Nov 20, 2015 2:57pm
Quoting IMARICH1
Thanks sisse, But, why the .0690 level? ..
Last break down (from US inflation / German numbers play ) ..check backpost for more detailed reference in the timing...

Quoting ExForX
... "perfect storm" though. I assume this means QE extension and/or ECB rate cuts together with FED rate hike?
Well perfect storm will be to the downside only but the opposite will also provide a super massive leg too as market will be caught on the wrong side. This one will be limited and short term lived as FED will hike one way or another so...

Quote
USD rate hikes have usually triggered selloffs of the USD, lasting months after the hike, instead of massive buying. Why would this time be any different?

Hmm. What make you say this?

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,748
  • Nov 20, 2015 2:59pm Nov 20, 2015 2:59pm
sisse,

cloggie told me to use a 267MA and see what that revealed. I see that .0690/.0686 falls on this MA on a 5min and 1hr chart. I have never seen really why this MA is beneficial as a trader friend of mine said to use 20MA on Daily and that would be your guide for the Day/Week. Just trying to figure out if this has anything to do with your .0690 level.

It appears we are going to close under it and not looking for it to retrace much before opening the ext to .0540

Have a good weekend and hopefully am not the cause if you partake in a drink this weekend! Cheers!
  • #137,749
  • Nov 20, 2015 3:05pm Nov 20, 2015 3:05pm
I know you state it might be chop zone before US election....but, usually when a Democrat is in office Stock Market rallies and USD is weaker. And, the opposite for a Republican in office. I believe we will see a Republican this go around. If so, this may really throw a wrench into things. The USD may need to remain weaker for the World Economy to catch-up. Next year will be FA and TA tuff in my books!

All the best sisse!
  • #137,750
  • Nov 20, 2015 3:22pm Nov 20, 2015 3:22pm
Quoting IMARICH1
sisse, cloggie told me to use a 267MA and see what that revealed. I see that .0690/.0686 falls on this MA on a 5min and 1hr chart. I have never seen really why this MA is beneficial as a trader friend of mine said to use 20MA on Daily and that would be your guide for the Day/Week. Just trying to figure out if this has anything to do with your .0690 level. It appears we are going to close under it and not looking for it to retrace much before opening the ext to .0540 Have a good weekend and hopefully am not the cause if you partake in a drink this...
I don't really use MAs but such large MA in smaller TFs is roughly equivalent of tracking a daily and a 2 weeks charts... you may be better off for the sake of clarity and sanity just tracking the larger charts instead as it will be easier to identify key areas instead of having to zoom out a lot and draining your brain filtering micro legs ....

In any case, have a good weekend ....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,751
  • Nov 20, 2015 3:58pm Nov 20, 2015 3:58pm
Quoting sisse
{quote} Hmm. What make you say this? sisse

well, one can see such things in the charts, or read here:

http://www.fxstreet.com/analysis/ind...2015/08/17/06/


sometimes the USD goes up, sometimes down, and sometimes sideways as it seems (when the FED is in hiking mode)

http://www.investopedia.com/articles...-even-more.asp
Attached Image (click to enlarge)
Click to Enlarge Name: rates and usd.png Size: 41 KB
  • #137,752
  • Nov 20, 2015 4:20pm Nov 20, 2015 4:20pm
Quoting infinitus
{quote} well, one can see such things in the charts, or read here: http://www.fxstreet.com/analysis/ind...2015/08/17/06/ sometimes the USD goes up, sometimes down, and sometimes sideways as it seems (when the FED is in hiking mode) http://www.investopedia.com/articles...-even-more.asp {image}

rate differentials and the EURUSD

https://research.stlouisfed.org/fred2/graph/?g=15Zi
  • #137,753
  • Nov 20, 2015 5:12pm Nov 20, 2015 5:12pm
Quoting infinitus
{quote} well, one can see such things in the charts, or read here: http://www.fxstreet.com/analysis/ind...2015/08/17/06/ sometimes the USD goes up, sometimes down, and sometimes sideways as it seems (when the FED is in hiking mode) http://www.investopedia.com/articles...-even-more.asp {image}
Well first not sure about the validity of the charts in those sources as they are taking rates out of context but more importantly and for trading purposes:

 

  1. YOU CANNOT !!!! under any terms treat hikes as a one-off binary events. We PRIMARILY trade EXPECTATIONS (in any market) before news (in stocks from p/e to supply/weather in orange juice futures) so you will need to go a bit further than marking the day of the announcement. Imagine the world of investment just buying/selling facts !!!... ufff
  2. Second and super importantly we haven't have in the HISTORY of the USA nearly 8 years with 0 interest rates and printing money ...you know that is playing in a nuclear !!! environment if mismanage it!!!.
  3. Third, the Dollar index is a correlated to the weights in it !!!. Sure Dollar is the king (no doubt about it) but the weight of euro factors (in the last 2 decades) and the YEN to lesser extend MUST be included in the analysis !!!....meaning the FED may decided not to hike in the next year but if the ECB cut rates or print money the DOLLAR index will have a sharp rally as collateral !!!, etc etc ...or the other way around. In simple words making hikes BINARY events is NOT AS SIMPLE as pointing and arrow in a date and time !!!

In any case, here is a quick STATIC FED rates marks I made the other day in a discussion with a fellow trader covering the latest cycles ....Point in the chart is marking CYCLES (cuts, normalisation, hikes) rather one off events

It may be a good starting point for the discussion ...

sisse

Attached Image (click to enlarge)
Click to Enlarge Name: dxhikes.png Size: 147 KB
Pending conversations? PM for a chat...I am mainly in OTM now
  • #137,754
  • Nov 20, 2015 5:49pm Nov 20, 2015 5:49pm
Thanks for the charts guys, the one infinitus referred to, is also one I studied and found it remarkable, that's why I mentioned it. Sisse's reply is also very instructive. Have a great weekend.
  • #137,755
  • Nov 20, 2015 6:48pm Nov 20, 2015 6:48pm
Ugh. Silver was on the road to one hell of a trade, kicked out of the tunnel at the last minute with this Monday shenanigans.

Looks to me that both gold and silver are in big trouble now. Exited everything with a few crumbs, which I'm happy is more than I started with....but a lot less than could have been.

Onto the next
  • #137,756
  • Nov 20, 2015 11:26pm Nov 20, 2015 11:26pm
Quoting sisse
YOU CANNOT !!!! under any terms treat hikes as a one-off binary events. We PRIMARILY trade EXPECTATIONS (in any market) before news (in stocks from p/e to supply/weather in orange juice futures) so you will need to go a bit further than marking the day of the announcement.
you can catch that one day move (if it comes and you're set up for it), a day can make or break a trader for life....but I hear ya, the expectation is for continuing CB policy divergence - the Fed vs. all the rest, a strengthening USD, resultant weight on commods, etc, ....it just remains to be seen how risk assets will react in near- and mid-term aspects....I'm just trying to bring all kinds of shells for the shotgun at this point
"If The Fool persists in his Folly he will become wise." - William Blake
  • #137,757
  • Nov 20, 2015 11:35pm Nov 20, 2015 11:35pm
any thoughts? hft rules the game now, I guess....

http://www.marketwatch.com/story/nys...ers-2015-11-18
"If The Fool persists in his Folly he will become wise." - William Blake
  • #137,758
  • Nov 20, 2015 11:56pm Nov 20, 2015 11:56pm
Quoting Goldflake
None talking here?? let me talk atleast.. This is very much interesting guyss!! Could the Fed Hike the Discount Rate on Monday? What do you think sisse? Do we see some action packed monday?

http://nypost.com/2015/11/20/feds-ex...h-wall-street/

yeah, good eye, GFlake. How phun would that be? They get the skids greased early with a quickie 10bps ffr hike on a dull Monday? And at 1130 NY time, so you can get in & load up a shitton of otm VXX weekly calls b4 they announce. Well that would give the US equity markets a chance to freak out then calm back down with plenty time for Santa to deliver a juicy rally for Christmas.

Anyway, we can hope n dream....such a boring year for the markets, be nice to see some batshit moves for a change...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #137,759
  • Nov 21, 2015 12:09am Nov 21, 2015 12:09am
Quoting sisse
{quote} Well first not sure about the validity of the charts in those sources as they are taking rates out of context {image}
Pardon, can not follow here.......

The first chart simply shows, where the first hike in a cycle took place.

The second chart from the FRED shows the rate differentials between the 3-month Libor in Euro and USD


where is the out of context, compared to your chart?
  • #137,760
  • Nov 21, 2015 12:14am Nov 21, 2015 12:14am
Quoting sisse
{quote}Third, the Dollar index is a correlated to the weights in it !!!. Sure Dollar is the king (no doubt about it) but the weight of euro factors (in the last 2 decades) and the YEN to lesser extend MUST be included in the analysis !!!....meaning the FED may decided not to hike in the next year but if the ECB cut rates or print money the DOLLAR index will have a sharp rally as collateral !!!, etc etc ...or the other way around. In simple words making hikes BINARY events is NOT AS SIMPLE as pointing and arrow in a date and time !!! In any case,...

Pardon again, but no one talked about the USD-Index

It was all about EURUSD

The chart I showed marked the begin of a rate hike cycle, and everyone can easily see how market reacted.

As Investopedia pointed out:

sometimes up, sometimes down. There seems to be a trend, that the price follows often the trend established before the hike
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