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The Really Useless Thread

  • #138,041
  • Dec 10, 2015 1:53pm Dec 10, 2015 1:53pm
Quoting edyraper
{quote} hi Sisse if equities break down ... Dax , nikkei , etc ... break down too ? if Dax break down = EU up (it's working at least right now) ? if Nikkei Break down = UJ down(~~~~~~~~~~~~~~~~) ? over all may pull USDX down ... ?
Well in general yes. If there is a major breakdown in the US it will obviously carry the board...the US is too big to not affect the rest of the world.

On the rest, you seem to be assuming that is a perfect 100% 1 to 1 inverse correlation between equites and currencies which is absolutely not true. What makes you say that?

Quoting The Fool
{quote} Load up on the popcorn and tequila for next week amigo, FOMC & Dec OpEx, the end of the week gonna be da bomb.
Ufff what i fight for the close .... all eyes on 206x.xx. The rest of the board is pretty much flat in STANDBY until US equites gives the go ahead .... Key couple of sessions in play for US equites that will definitively mark the path until Q2 2016 ....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #138,042
  • Dec 10, 2015 2:32pm Dec 10, 2015 2:32pm
Quoting sisse
{quote} Well in general yes. If there is a major breakdown in the US it will obviously carry the board...the US is too big to not affect the rest of the world. On the rest, you seem to be assuming that is a perfect 100% 1 to 1 inverse correlation between equites and currencies which is absolutely not true. What makes you say that? {quote} Ufff what i fight for the close .... all eyes on 206x.xx. The rest of the board is pretty much flat in STANDBY until US equites gives the go ahead .... Key couple of sessions in play for US equites that will definitively...
Well dax and eu , nikkei and uj collerated not 1=1 for sure . Yen and euro(lately) been funding currencies may us equities crash cause yen and eur rise ...

However if FED hike will mean things going well with US , market may don't crash ?! Maybe ?
  • #138,043
  • Dec 10, 2015 2:53pm Dec 10, 2015 2:53pm
[quote=sisse;8638334]{quote} Well in general yes. If there is a major breakdown in the US it will obviously carry the board...the US is too big to not affect the rest of the world. On the rest, you seem to be assuming that is a perfect 100% 1 to 1 inverse correlation between equites and currencies which is absolutely not true. What makes you say that?

The correlation with DAX/equities and the pair has been pretty direct though? Accomodative policy has made it so directly weighing on the Euro for a long time and causing extreme flows the other way when those positions unwound ie. China risk off and recently Draghi's epic dissapointment. Although, as you alude to in your post, not seeing direct, tradeable correlation on S&P (yet...) or dollar flows taking the front seat as yet.

Again, a bounce on Euro Equities makes it a case of Euro weakness more than anything else (dollar strength late in the session.) so if those Euro equities continue to weaken that correlation will need to decouple going forward or Fiber won't be the best place to play Dollar strength and if they remain rangebound at these levels, dollar flows will have to enter the drivers seat from a deeper US equities selloff/spreads.

That aside, Euro equities still not in bad shape imo and less likely to feel the pinch than other equities so I don't really see a large sell-off in comparison with S&P.
  • #138,044
  • Edited 3:42pm Dec 10, 2015 3:25pm | Edited 3:42pm
Quoting ClinicalEx
... so if those Euro equities continue to weaken that correlation will need to decouple going forward or Fiber won't be the best place to play Dollar strength and if they remain rangebound at these levels, dollar flows will have to enter the drivers seat from a deeper US equities selloff/spreads. That aside, Euro equities still not in bad shape imo and less likely to feel the pinch than other equities so I don't really see a large sell-off in comparison with S&P.
Yes in general but don't forget that market correlations: (this part is especially for the OP)

  1. They are NOT most of the time the primary reasons for an underlying to move.
  2. The OP is making the mistake of assuming that equities and currency always follow the same correlation (indirect in this case) and stay static in time which is absolutely NOT TRUE at all.
  3. Right now is a very particular circumstance which is RATES and QE (or RATE HIKES in the case of dollar) that it has been making the case for the indirect correlation for a while both in euro and dollar ...
  4. However, now we are days away to start diverging and there is a lot of factors that will enter in play for each underlying directly (equites and currencies) and also between them that will create the usual short-circuit in the main correlations (across most markets ...such is the power of rates...).

As example and in very very rough terms and bastardising macroeconomics:

  1. FED Rates will strengthen the dollar and also subdue US equites for a while --> which at the same time will pull money from equites to cash --> strengthening the dollar even further --> which translate in Softer Eur /USD... ​
  2. After 8 year of 0 rates and QE the initial impact of normalisation will affect the whole WORLD...meaning European Equites will pullback as collateral ---> pulling money from european equites to cash --> strengthening the EURO but because the impact is indirect it will only offset some of the strength in dollar of the same move --> meaning 'a less' weaker eur/usd ...
  3. However ECB is deep in negative rates and QE may back on the table any minute if inflation flop --> meaning is good for European Equities which will pull cash to European Equities (nobody want to lose money on the bank with negative rates) --> making the EURO softer which will translate in an even WEAKER EUR/USD but not necessarily a lot lower European equities after the initial collateral impact of FED rates ...etc etc etc.

First point is you can not just expect correlation to stay static in time when you have major fundamentals in play... what today is the norm, tomorrow can be the exception (or you don't remember when we were EURO 1.6 and DAX in all time highs ...)

...and the second point as you can see the perfect storm is on top the EUR/USD as it will be hit from all fronts ...

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #138,045
  • Dec 10, 2015 3:59pm Dec 10, 2015 3:59pm
...and we are rolling in currencies for the last close but more importantly the US Equities close earlier that gave the go ahead...got ALL what i need it from everywhere so nothing to see here until inflation reports tomorrow ...so

Same levels, same trades , same all ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #138,046
  • Dec 10, 2015 4:57pm Dec 10, 2015 4:57pm
Thanks Sisse for explaing step by step
  • #138,047
  • Dec 10, 2015 5:25pm Dec 10, 2015 5:25pm
Hello Sisse
thanks for the detailed analysis

Could you elaborate on the following point:
Quoting sisse
{quote} which at the same time will pull money from equites to cash --> strengthening the dollar even further -
Why selling the US equities would cause the dollar to rise?
I would expect the dollar to rise when the equities are bought (due to conversion of foreign assests to dollars necessary to buy US equities)

Thanks
  • #138,048
  • Dec 10, 2015 7:37pm Dec 10, 2015 7:37pm
Shorting the hell out of Gold
  • #138,049
  • Dec 11, 2015 3:38am Dec 11, 2015 3:38am
Hi!

Would be harmonic:
Attached Image (click to enlarge)
Click to Enlarge Name: 2015_12_11_EurUsd_H4.png Size: 16 KB

(...and would be nice to short.)
Time will tell.

On the other hand:
under orange 0.0 Fib will look for buy signals.
f(z)=z2+c
  • #138,050
  • Dec 11, 2015 3:49am Dec 11, 2015 3:49am
Quoting hathor
Hi! Would be harmonic: {image} (...and would be nice to short.) Time will tell. On the other hand: under orange 0.0 Fib will look for buy signals.
If I would be a gambler, I would put a small buy here at 1.093xx.
And a bit I am...
f(z)=z2+c
  • #138,051
  • Dec 11, 2015 4:54am Dec 11, 2015 4:54am
Quoting Likerty
Gold indicated 1064 as min bear target.

M15
Attached Image (click to enlarge)
Click to Enlarge Name: Chart_XAU_USD_15 Min-breakfast.png Size: 28 KB
69
  • #138,052
  • Dec 11, 2015 6:50am Dec 11, 2015 6:50am
And here we go for the last round of news in the US for this year. Leaving just the FOMC left as main and only dish before the Holidays.

--> None of the numbers has major implications on the macro side as neither a flop or overshoot will change the solid macroeconomic trends (consumer, retail and inflation). However, we have FED next week and obviously this is the prefect chance to position and reposition for those not already in.

--> Eyes on US equites as they are in full control (and they will be until the FED when DOLLAR will be the king across the board till year's end) with more importance to the inflation side of the numbers. Inline or higher (not expected) will be more than enough to trigger more momentum on the RATES play any miss # combination will just generate chop across and will kill the week rather early today.

--> Lots of trading opp. across the board with EURO and to lesser extend GOLD in key areas for the mid and short term swings (also 1.097x --> 1.074x with intern. stop 1.083x in Euro and 1080.xx--> 1030.xx in GOLD for the soft and news flow legs till the FED) while Equites and especially OIL are well on track on the main legs....

A Santa early gift will be fantastic today but not in a hurry for the plays to pan out either with FED next week .... so not much to do here except to track reports with same levels, same trades, same all...

GL all

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #138,053
  • Dec 11, 2015 7:32am Dec 11, 2015 7:32am
Overshoots in all fronts...Welcome on board hikes!!! ... reconfirmed the already confirmed ...only FED to stamp the signature next week...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #138,054
  • Dec 11, 2015 8:01am Dec 11, 2015 8:01am
Quoting sisse
Overshoots in all fronts...Welcome on board hikes!!! ... reconfirmed the already confirmed ...only FED to stamp the signature next week... sisse
Obvious things stinks in FX.
f(z)=z2+c
  • #138,055
  • Dec 11, 2015 8:09am Dec 11, 2015 8:09am
I would think with overshoots on news data that PA would show price in EU heading south for .0830/.0750 with Rate increases being a definite now. Perhaps, I am not understanding this correctly unless this is just positioning for NY.

I know numbers were slightly better for NFP last week which allowed the flows for that news to send EU south within the first 10 minutes or so before changing and going North. I am not understanding with Rate Hikes being more of a definite that the good US data doesn't drive EU down more or make it softer unless it is dependent on US equities unraveling first.
  • #138,056
  • Dec 11, 2015 8:24am Dec 11, 2015 8:24am
risk off across the board !!
Get Rich or Die Tryin
  • #138,057
  • Dec 11, 2015 8:26am Dec 11, 2015 8:26am
Quoting IMARICH1
I would think with overshoots on news data that PA would show price in EU heading south for .0830/.0750 with Rates increases being a definite now. Perhaps, I am not understanding this correctly unless this is just positioning prior to NY open.
Again don't get me wrong ...for the last time I mention this as is getting repeative and don't want to go over the top....you are makig a royal mess with timings and you are awfully naive in how swing works. We have a leg for the next week after the news (upto 1 week!!!!!), we have a short term leg in play (for the initial hike ...+/- 2 weeks.) And we have a mid term leg to parity and beyond (+/- 1 quarter)....all in play at these levels....You are drowning before ny even open after some soft news with euro moving a dozen ticks from a 1200 ticks potential trade area!!!....again close your tiny charts and see how it goes ...sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #138,058
  • Dec 11, 2015 8:49am Dec 11, 2015 8:49am
sisse,

Thanks. I can take a scolding here as I concur that it is obvious that I don't understand swings as I should. I realize diff swings have diff time stamps. I am understanding that part. I was just looking at .097x area to become more solid with closes below and inevitable rate hikes to soften EU as we are already 1000 pips above parity.

I have closed my smaller TF charts. I just looked at the news to be the momentum to start the roll now perhaps because I didn't understand the swings. I have been SHORT since .0810. Thanks for taking time to respond.
  • #138,059
  • Dec 11, 2015 9:07am Dec 11, 2015 9:07am
Quoting sisse
{quote} ECB flop tomorrow (and inline/uneventful NFP) may see SANTA having to come back for Eastern ... .... got 2100.xx [check] --->1978.xx [in play]potential early alerts trigger for today's close holding that level for the rate hikes play...tracking closely equities today... sisse
Quoting sisse
Important update with Europe going home...early alerts triggered!!! for as early as today US afternoon session this time coming from the US. S&P losing 2062.xx [check] will unlock imminent break down to 1987.xx [in play] in US equites for the hikes play starting as early as tomorrow inflation numbers and it will 100% sure carry the rest of the board worldwide.
For those on the equites play if you didnt loaded 2100.xx or 2160x you have missed the rates play its maybe an understatement , right on time clearing main target on the test 2020.xx in a flawless trade and just leaving the rest for the actual rate play.

As widely exacted US equities in full control since last week but now we are ready to hand in the lead to the DOLLAR for the hikes play. All eyes back on the Euro and GOLD starting from the European close.

GL all and well done those riding the superb leg in equities...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #138,060
  • Dec 11, 2015 9:10am Dec 11, 2015 9:10am
Its amazing to see how the equities rule everything right now. I just hope they take the beat now and do the preemptive pre-FED leg and stay calm once the hike comes so dollar can appreciate cuz right now EUR is just colateral of DAX. Still I would say DAX has reached its low around 1028 and is not gonna appreciate EUR more - dont think DAX can go much lower - 1028 approx. is also the OCT ECB level.
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