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  • #138,281
  • Dec 23, 2015 5:36am Dec 23, 2015 5:36am
Quoting sisse
{quote} {quote} ...and that was pretty much it for the week for the last update of the year. Well done to all who played the light bounce on air. 1.097x tested as expected in the Euro and we are ready for the doldrums of the last week of the year. ...1.097x only level in play until the yearly close. Here nothing to do except let it play out so same levels, same trades, same all... sisse
what is your expectation for the next level... next level to play ....?
Re-Incarnated
  • #138,282
  • Dec 23, 2015 10:06am Dec 23, 2015 10:06am
can't manage to get those last 3 entries in, well maybe got to play with what I've got, what do you think sisse?

BUND D1:
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Don't be a hero. Don't have an ego. Always question yourself
  • #138,283
  • Dec 24, 2015 10:25pm Dec 24, 2015 10:25pm
Merry Christmas everybody......& watch out for oil bull traps.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #138,284
  • Edited 9:51am Dec 28, 2015 9:27am | Edited 9:51am
...and we are pretty much done for the year. Thin air and minion's trading left for the rest of the week with today's close so a good time for a yearly wrap up.

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


+++++ Yearly review / overview +++++


1. Best Performing Currency Pairs

* liquid
Winner(s)

AUD, CAD and NZD (average +/- 20% moves for the year)

No discussion here easy and strong trends as expected since last year for all commodity related currencies against the dollar as they got hammered from both sides (commodities collapse and dollar strength via FED).

* low liquidity

Real, TRY, MXN

Emerging markets got hammered last year (and the worst still to come) with most of them entering in recession with huge devaluation against the dollar (+/-40% in some cases) for those very few trading those thin markets it was a superb year to ride the pigs across the currency board.

2. Worst Performing Currency Pairs

GBP and JPY

As widely expected GBP and JPY were stuck in chop zone all year long with contradictory strong Central BANK forces clashing to opposite directions. For those swinging short and long term it pay very well to delete GBP and JPY from the trading workspace as they caused more noise than quality for trading.

3. Best instrument to trade overall (from the majors discussed here during the year)

USDCAD

A super simple +20% trend this year with minimum risk on the flows on a textbook example of a clean trend. No discussion the easier and more user/newbie friendly instrument of the year

​4. Wildest instrument to trade.

OIL

By far, the story of the year. Wild swings early this year with an expected dead cat bounce (as discussed here before) of +45% and then a massive swing down -45% and counting (also discussed timely before it happened here)...

if you didn't even peak one OIL chart this year...you should seriously consider if trading is the right business for you ....

5. Best Performing commodity (from the majors discussed here during the year)

NG

Natural Gas pretty (- 50% and counting!!!) is completing a final long term leg and we are setting to go to bed at the 15 years low for the foreseeable future (probably for the next decade or so is my call)

6. Worst Performing commodity

Gold

In comparison with the rest of commodities (Silver/Copper, etc) Gold had a timid trendy year mainly subdue by ECB QE and low interest rates and emerging countries currencies collapsing.

7. Choppiest Market overall

US Equites

As widely expected since FED QE ended and with hikes in play, equites marked the top of the rally and have chopped all day long last 2 Quarters. We are ready to close the year flat as pancake.

8. Worst Central Bank

SNB

By a long shot and for second consecutive year SNB was the most wasteful, inefficient and poorly managed central bank. Strangely that a country like Swisterland has such a poor management of monetary policy. Maybe is not such a good idea to privatise a CB as the private interest will always prevail over the public interest ....

In any case, after one of the most costly defence of a band floor we have a major WTF moment that caused a major earthquake in FOREX (from bankruptcies, merging to consolidation in the industry) and few major funds losing even penny on the move. As expected from a poor policy decision, we are pretty much back to square one in CHF against the Dollar and artificially floating on air (we wont hold the next leg in euro ) on EURCHF.

9. Best Central Bank

ECB

Is still by a mile or two the most credible CB across the majors. One more time it held steady another chapter in the Greek Drama, it didn't chicken out on a massive QE neither on cutting rates further in negative territory. All clear policies and markets clearly believe Draghi and act accordingly as they are consistent between talks, policies, and macro targets.

However, the predictability of their policies has keep the Euro relatively constrain in a measured move (-10% for the year and counting). However the FED jitters that kept the Euro holding are gone now ...

....TBC

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #138,285
  • Dec 28, 2015 11:00am Dec 28, 2015 11:00am
Quoting sisse
...​4. Wildest instrument to trade. OIL By far, the story of the year. Wild swings early this year with an expected dead cat bounce (as discussed here before) of +45% and then a massive swing down -45% and counting (also discussed timely before it happened here)... if you didn't even peak one OIL chart this year...you should seriously consider if trading is the right business for you .... 5. Best Performing commodity (from the majors discussed here during the year) NG Natural Gas pretty (- 50% and counting!!!) is completing a final long term...
....agree with you on natgas, although I am making money atm w/ long UNG calls and a lucky guess about a turn in the weather. You have to wonder if oil could go the way of natgas? - with an entrenched supply glut and no coordinated cartel action to turn the trend? re: natgas, all of the revolutionary production techniques that are in full effect in the USA can and will be seen everywhere else. That will take years/decades to transpire but the effect will be lasting downward pressure on natgas price. One may wonder if new LNG plant capacity coming online in the US could swing the US price up pretty hard and that could happen but I bet it would only be a temporary rise. re: us equities and the Fed - well that soap opera is so old it is hard to imagine anything else. Prolly it will come back for another season: omg now how many hikes will there be this year? omg it will be another 25 bps in March! omg March comes and nothing? omg is that good news or bad news?!? etc....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #138,286
  • Dec 29, 2015 12:18am Dec 29, 2015 12:18am
I see OPEC next general meeting in Wien 6/2/16. I hope I will see ya'll there....

Inserted Video
"If The Fool persists in his Folly he will become wise." - William Blake
  • #138,287
  • Dec 29, 2015 12:40am Dec 29, 2015 12:40am
...Happy New Year to all here, the best for you all...
The Chonchy
  • #138,288
  • Dec 29, 2015 12:41am Dec 29, 2015 12:41am
Quoting sisse
...and we are pretty much done for the year. Thin air and minion's trading left for the rest of the week with today's close so a good time for a yearly wrap up. ------ ------- +++++ Yearly review / overview +++++ 1. Best Performing Currency Pairs * liquid Winner(s) AUD, CAD and NZD (average +/- 20% moves for the year) No discussion here easy and strong trends as expected since last year for all commodity related currencies against the dollar as they got hammered from both sides (commodities collapse and dollar strength via FED). * low liquidity...
...Best fundamental analyst...

...Sisse...
The Chonchy
  • #138,289
  • Dec 29, 2015 5:46am Dec 29, 2015 5:46am
Quoting chonchy
{quote} ...Best fundamental analyst... ...Sisse...
i have to agree that
  • #138,290
  • Dec 29, 2015 6:42am Dec 29, 2015 6:42am
Quoting chonchy
{quote} ...Best fundamental analyst... ...Sisse...
10000% ....
Re-Incarnated
  • #138,291
  • Dec 29, 2015 9:38pm Dec 29, 2015 9:38pm
Quoting sisse
...6. Worst Performing commodity Gold In comparison with the rest of commodities (Silver/Copper, etc) Gold had a timid trendy year mainly subdue by ECB QE and low interest rates and emerging countries currencies collapsing.
http://www.fool.com/investing/genera...mpaign=article

some rich traders think things are gonna change for gold in the coming year.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #138,292
  • Dec 30, 2015 1:55am Dec 30, 2015 1:55am
Quoting The Fool
{quote} http://www.fool.com/investing/genera...mpaign=article some rich traders think things are gonna change for gold in the coming year.
Hello Fool:

Gold is far from a bottom and will continue to go down.

Those rich traders will need some very wide stops and a lot of emotional capital to ride their long positions in gold down.

Borg
May the Forex be with you.
  • #138,293
  • Dec 30, 2015 5:42am Dec 30, 2015 5:42am
Quoting sisse
...and we are pretty much done for the year. Thin air and minion's trading left for the rest of the week with today's close so a good time for a yearly wrap up. ------ ------- +++++ Yearly review / overview +++++ 1. Best Performing Currency Pairs * liquid Winner(s) AUD, CAD and NZD (average +/- 20% moves for the year) No discussion here easy and strong trends as expected since last year for all commodity related currencies against the dollar as they got hammered from both sides (commodities collapse and dollar strength via FED). * low liquidity...

Happy New Year sisse,

And Thank You for making this thread the most misnamed thread on all of Forex Factory.

And what a great summary of the year.

Borg
May the Forex be with you.
  • #138,294
  • Dec 30, 2015 9:15am Dec 30, 2015 9:15am
Quoting Borg
{quote} Hello Fool: Gold is far from a bottom and will continue to go down.
Maybe so, Borg. I'm not touching any gold trades with anything more than small change. IMHO, Oil is swinging the markets these days, like a puppet on a string. There won't be any broad rallies in equities, high-yield credit, or maybe even gold until the oil rout is over. The oil storage number comes out in 20 minutes - watch if there is a short build, the US stock indices will rally. The problem is that there seems to be less & less of a chance that oil CAN rally in any persistent way. There is no longer any coordinated cartel action to force the price up through wide-ranging production control - everyone is just going to keep pumping to save their lives now.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #138,295
  • Edited 5:21pm Dec 30, 2015 12:16pm | Edited 5:21pm
Quoting The Fool
{quote} ... well that soap opera is so old it is hard to imagine anything else. Prolly it will come back for another season: omg now how many ....
FED ticked the first rate hike which was the most important signal to give the go ahead for normalisation. That's what markets and we traders needed it to break the vicious circle of soap opera speculation and rumours.

I agree that FED rates will stay central next year until late +/- Q3 where theoretically we should already have a few hikes already in place and pretty much on target for a sustainable path on the long term...

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


+++++ Yearly review / overview +++++


10. Scenarios and Macro Expectations 2016

--> Dollar ... the king

Although FED and in general CB will still be the central forces next year, I am expecting a different more direct (less gossipy) environment from this year after the FED finally broke the rate cycle.

The first 2 Quarters are set for dollar to rule markets far beyond the FX board. ECB, BOJ and to lesser extend BOE are far from starting to normalise rates. With a couple of hikes by June/July, the actual real (not expected) divergence between FED and the rest will be notorious.

I expect 2 macro moves in the first half of 2016. The first macro move for Q1/Q2 will definitively come from DOLLAR and it will create the best and smoother trading opportunities in currencies (EUR/USD especially) while the second will come from the exhaustion/capitulation move in OIL and commodities in general.

---> OIL & commodities...."winter has come"

After the sharp collapse in OIL and in commodities last year we are entering in major basic fundamental areas in most commodities. For those not familiar with commodities, there is always a floor set by the basic demand of a commodity so price can never reach 0 (a certain limit down) because there is always going to be somebody buying the commodity for REAL and not speculative reasons....

I expect exhaustion and/or capitulation moves across the commodities board. GOLD look especially 'al dente' for a final leg down (Reference 970.xx via FED rates) in Q1/Q2 to form a mid/long term bottom. Oil will keep leading the board at these nearly dramatic low levels. Either OPEC and OIL emerging economies will descend to chaos, or major earthquake panic leg (reference $26.xx)will force OPEC to take action and attract LOTS of buyers hunting the best buy bargain for the next 2 or 3 decades ...

Whatever the case, Oil and commodities look set to stay on the driver seat pushing for one more extensive leg in Q1/Q2 before forming a very long long long and choppy bottom ...


---> Europe Economy and European Equities...."Europe is coming back"

This is a bolder call. I am expecting the second part of the year late Q3/Q4 to be a radically different playing field. I expect Europe Economy to start picking up with strength (strength for European standard of course) at the end of 2016 for the first time in nearly a decade.

Markets are setting up for a super bullish year(s) in european equities (especially in the periphery) . Ireland, Spain and to lesser extend Portugal are starting to look as SCREAMING BUY.

ECB QE and negative rates will keep DAX, CAC and EZ equities in bid the first half of the year but the money in my view will come in Q3/Q4 where I expect Europe to take control and start marching up with strenght while the US plays politics until elections.

STRONG BUY in European equites for the end of next year.


---> US equites ...."End of Obama's happy years"

US equites are set for a rather dull and wide range year. In the first half, FED normalising will keep bulls at bay while the usual election calm will avoid US equites going anywhere outside the range.

Not expecting much on the election front. Markets only dislike uncertainty and extremes so as long Clinton or any of the mainstream Republicans win, elections will be uneventful.

The only wild card marketwise that can create a short term short-circuit will be if Americans decide to vote for Trump. Old fashion nationalism combined with populism and zero clear policies mixed with lots of dangerous politic usually don't get digested well (at least in the short term) by most of market participants that will prefer to stay aside until things go clear.

On the other hand, Trump winning can trigger a major rally in Defence and Security sectors (that have been on the losing side since US withdraw in Iraq and Afghanistan) as the US could be back in Warmonger Mode providing the best opportunity for a major corrective rally in commodities (especially OIL)

...TBC

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #138,296
  • Dec 30, 2015 12:30pm Dec 30, 2015 12:30pm
Quoting sisse
{quote} FED ticked the first rate hike which was the most important signal to give the go ahead for normalisation. That's what markets and we traders needed it to break the vicious circle of soap opera speculation and rumours. I agree that FED rates will stay central next year until late +/- Q3 where theoretically we should already have a few hikes already in place and pretty much on target for a sustainable path on the long term... ------ ------- +++++ Yearly review / overview +++++ 10. Scenarios and Macro Expectations 2016 --> Dollar ... the king...
great analysis.
feels like reading a thriller
Thank you!
As Above, So Below
  • #138,297
  • Dec 30, 2015 1:04pm Dec 30, 2015 1:04pm
Quoting sisse
{quote} FED ticked the first rate hike which was the most important signal to give the go ahead for normalisation. That's what markets and we traders needed it to break the vicious circle of soap opera speculation and rumours. I agree that FED rates will stay central next year until late +/- Q3 where theoretically we should already have a few hikes already in place and pretty much on target for a sustainable path on the long term... ------ ------- +++++ Yearly review / overview +++++ 10. Scenarios and Macro Expectations 2016 --> Dollar ... the king...
china collapse?
uj 2500/5000 drop?
unlikely, but Brent 14 handle?
those who can, do. those who cant, talk about those who can
  • #138,298
  • Dec 30, 2015 3:54pm Dec 30, 2015 3:54pm
Quoting The Fool
{quote} Maybe so, Borg. I'm not touching any gold trades with anything more than small change. IMHO, Oil is swinging the markets these days, like a puppet on a string. There won't be any broad rallies in equities, high-yield credit, or maybe even gold until the oil rout is over. The oil storage number comes out in 20 minutes - watch if there is a short build, the US stock indices will rally. The problem is that there seems to be less & less of a chance that oil CAN rally in any persistent way. There is no longer any coordinated cartel action to...
Thanks Fool,

The Crude Oil Inventories number was up so the stock market fell which makes sense.

Higher inventories means lower prices for oil and thus lowering the cost of business and also increasing consumer demand for
goods since consumers would have more disposable income which would be good for stocks.

Not sure what you meant when you said "if there is a short build, the US stock indices will rally." and "There won't be any
broad rallies in equities... until the oil rout is over." ?

How would the fundamentals work in that case ? Please explain.

Borg.
May the Forex be with you.
  • #138,299
  • Dec 30, 2015 4:33pm Dec 30, 2015 4:33pm
a "short build" is just a way of describing a smaller number for the amount of oil reported going into storage - i.e., storage is "built up"....they say the same thing about natgas sometimes. So, if there had been a smaller amount of oil into storage, the implication would be there was more demand for oil, or less supply of oil, or both, and that the oil price should therefore go up. But that was not the case, as we saw, and the oil price went down.

Regarding the consequential increase in consumers' disposable income and a bullish effect on equities, well that is much more of a stretch. The market, broadly speaking, has been, is, and will continue to be jittery about the collapse of the price of oil. There are a number of reasons for this and I invite you to discover them all, but one big one is the effect on overleveraged US marginal producers and, in turn, on the high-yield debt market broadly (which those producers are beholden to). This has been written about ad nauseam for much of 2015 in the financial press so read up, by all means, if you please.

We are in for some changes in the coming year, most generally the biggest gravitational force that will effect those changes is in the behemoth debt market (especially high-yield) and, as usual, the big players there are the Fed and the other CB's.

There was a kid on my son's soccer team named Borg - at least that's what his jersey said. When I saw him I would say, "We are Borg! You will be assimilated! Resistance is futile!" Until the third time or so and he burst into tears, so I had to stop. I am just a mean old man, I guess. Anyway, Happy New Year, Borg, and best of luck in 2016.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #138,300
  • Edited 8:05am Dec 31, 2015 7:35am | Edited 8:05am
Quoting gatorinla
{quote} china collapse? uj 2500/5000 drop? unlikely, but Brent 14 handle?

Don't have China in the cards. Quite the opposite I have China starting to find foot late 2016.

Oil $14 a bit a overstretch TA wise in my books ($26 will do the trick) but agree with the leg down.

UJ yes agree we are set for a major mid/long term pullback. However DOLLAR strength will keep things on check/wide chop early in the year.


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

+++++ Yearly review / overview +++++


11. Currencies Macro Expectations 2016

---> GBP ...".the beginning of the end in the old empire"

For the first time in nearly 6 years Sterling may leave the super noisy chop zone and become one of the best trading opportunities for late 2016 (and beyond). Among major currencies this is the only pair with Long Term levels in play for the yearly close.

We are set to lose the 1.53xx handle for the year on today's close unlocking the mid term leg to 1.436x with extension 1.380x and more importantly and impressive the long term to 1.210x with extension to parity (YES PARITY in the) and strong intermediate stop 1.052x.

There is only BOE hikes in play for Q2/Q3 but failure to hike with the massive self-inflicted uncertainty of the EU referendum next summer could mark the start of the end of Sterling as major currency in World markets.

For the first time since 2008, Greece may not be in the spotlight but the UK EU referendum will be the main geopolitical play in Europe for next year that will affect not only the Pound and Euro but it could extend as far as the CHF and the minors (SEC, NOK, etc).

Time to bring back Sterling on the trading workspace ...

---> EURO ... "may the force be with the Euro'

As long as ECB and FED are in full control and monetary policies are diverging there is no much to see, neither where to hide for the EURO. The Greek drama seems to be over for next year, and without risk in play, with the periphery recovering and with european equities more tempting than ever, the Euro is really a no brainer.

We are closing very bearish for the year and I am expecting dollar to rule the board in the first half of 2016. Expecting Euro to start flirting to find a solid bottom once ECB QE start fading away and inflation ticking up in Europe at the end of Q4 2016.


---> JPY...."A long term bottom confirmed"

JPY was the other with something in play for the yearly close. We are going to hold the 120.xx handle marking a confirmed LONG TERM bottom in UJ locking levels for decades to come as high as the 90.xx handle. However, on the mid term holding 120.xx for the Q close also will extend current chop zone for the next Quarter or so while DOLLAR takes control.

Expecting BOJ to start softening down late Q2 and yen start to fade down below 120.xx for a sharp momentum leg toward 100.xx that will leave us chopping around till the end 2016.

Same as GBP time to bring back YEN to the trading table.

---> AUD, CAD , NZD & commodities currencies ..."they will need a hand from OIL and risk to avoid a massacre early in the year"

Despite having one the best and easiest trading years, the 'meat' of the mid term moves in commodities is set to end rather early next year. As long as commodities keep falling, there will keep being heavily sold via both fronts (Commodities down and Dollar strength) . As long market don't find foot in correlated markets, there is nothing to stop the sharp momentum.

Gold forming a bottom Q1/Q2 will trigger a good early alerts for all commodities currencies. For the end of year (late Q3), I am expecting trading opportunities to shift from the pairs/usd to the crosses in these commodities currencies (especially AUD/JPY that looks super yummy to complete the mid and long term legs).

-->CHF ..."fear of the walking dead..."

After one of the worst mismanagement of a monetary policy from a CB, CHF looks set to continue be very far far far away from my trading workspace. Pretty much SNB kicked the can for a year, and CHF is set to bumpy and choppy keep moving as collateral of the EURO (especially) and Dollar with the never ending noise to avoid CHF going too fast...

CHF is a walking dead and is set to be worst currency for trading next year....

--> Emerging markets currencies ... "....you can run but cannot hide"

There are too many currencies to go in details plus I and most around here don't trade them at all because of the lack of liquidity but in general 2016 is aligning to be a dramatic year (even more than last) for most emergent economies. Dollar strength will be felt the most in these currencies added to political and risk tension we may have the perfect recipe for fast, sharp and nuclear moves.

Expecting risk to be back on the table and 2016 will complete the economic cycle marking the full recovery of the major west economies and the end of the 'happy years' emerging countries enjoyed during the financial crisis ...

...whats goes around comes around ....

+++++ The END +++++

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


All the best to all in 2016 !!! ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
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