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Help Me Establish The GbpUsd After Dinner Club 40 replies

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  • #20,581
  • Jan 9, 2016 1:21pm Jan 9, 2016 1:21pm
Quoting janpec1000
{quote} By the way do you perhaps have some rought numbers of how many markets/instruments in terms of % correct when bull/bear ratio gets under 10% extreme? Would be interesting to get that info to get better grasp on it. Eventually ofcourse every market corrects, but what matters is once numbers hit extreme under 10%, it shouldnt take long to correct from there otherwise its a thing to count as fail of correction.

Hi Jan,

the sentiment extremes should work in every market. The herding behaviour is hard coded in our genes, sadly.......

I think it is very promising, when one can wait for the situations, where the sentiment is really extreme:
below 15, above 85

I do love especially the situations, where one can get in with values below 10 or above 90.

I had several chances to get positions, when sentiment was below 10% bulls. Sometimes I had a bit of drawdown, but not much.

But I have also experienced weeks and weeks, where I did not found a single instrument in such extreme positions. Lately we have such conditions very often.


BUT:

Be careful with sentiment data - from time to time it sucks. Like here

https://www.google.com/imgres?imgurl...A9wQMwgdKAAwAA


Look at the picture and in a chart to see what happened after EWI wrote/published that stuff.

Here is a Link to DSI on Gold over the course of 18 months or so:

http://www.elliottwave.com/freeupdat...n-Extreme.aspx

I have similar picture of EURUSD vs DSI. http://ic.pics.livejournal.com/ruh66...31945_1000.jpg


On the EURUSD vs DSI picture, which ranges from 20014 to Nov 2015 one can see, that the DSI was in fairly bearish territory since around 1,25. But the counterralleys were mostly weak over a long time.

There were counterrallyes when DSI was extreme bearish, but they did not last long.

Maybe you can remember, that I neutralized my short positions between 1,31 and 1,25 because of the bearish sentiment (mainly) and volume analysis. Retracements were only shallow and so it was hard for me to re-establish the short positions.

Prechter once wrote, that in a wave 3 the optimism/pessimisms can stay at extremes for a longer time. At the point of recognition (usually the 3rd of a 3rd wave) the retail crowd gets it suddenly right

Prechter unfortunately labelled this move as a wave 5. My main count has this move as a wave 3.

I wrote many pages about this move and laid down the case, that it most likely is a wave 3 because of mood and the astonishing perfect fib ratios on multiple degrees.

I have some more charts on my hard drive. If you like to have them for visual inspection, email me your email address
  • #20,582
  • Jan 9, 2016 2:30pm Jan 9, 2016 2:30pm
Quoting infinitus
{quote} Hi Jan, the sentiment extremes should work in every market. The herding behaviour is hard coded in our genes, sadly....... I think it is very promising, when one can wait for the situations, where the sentiment is really extreme: below 15, above 85 I do love especially the situations, where one can get in with values below 10 or above 90. I had several chances to get positions, when sentiment was below 10% bulls. Sometimes I had a bit of drawdown, but not much. But I have also experienced weeks and weeks, where I did not found a single instrument...
Yes i remember your positioning on EU, especially becouse that was the price i switched long term positions. I see your points all makes sense, for me personally the only thing i dont like much about is that with sentiment you only have mainly data from long term positioning h4+, which means that you will have very little historical examples to base your strategy/expectations on, unless you do really good digging and get info which probably is there since 1950s just needs digging.
If you do have over 30 charts then that would be in my interest: [email protected]
One important thing to note which effects moves of bull/bear positioning hugely are special or to say extreme economic conditions which will historically proven almost always offscale corrections even when ratios are in extreme, so its important to know if bull/bear ratio extremes are in normal conditions or outside of normal cycles. For example if you take 008 crisis, bear ratio trough whole markets went into insane numbers very early after Lehman pop up and yet it took whole year and QE announcement for markets to correct, meaning that there was additional 50% drop once ratios took extremes. Same goes for 2000 internet crysis if you look stocks. So that is one reason why current situation which i take as a crysis situation in regards to USD/EM/EUR positioning could be skewed for further DD. In the end its all about darn DD eh, if only there was enough capital on acc to be free like a bird heh.
  • #20,583
  • Jan 9, 2016 2:58pm Jan 9, 2016 2:58pm
Quoting janpec1000
{quote} Yes i remember your positioning on EU, especially becouse that was the price i switched long term positions. I see your points all makes sense, for me personally the only thing i dont like much about is that with sentiment you only have mainly data from long term positioning h4+, which means that you will have very little historical examples to base your strategy/expectations on, unless you do really good digging and get info which probably is there since 1950s just needs digging. If you do have over 30 charts then that would be in my interest:...

Will send you the files. Jake Bernstein (DSI) has historic data which goes back to 1987
  • #20,584
  • Jan 9, 2016 3:20pm Jan 9, 2016 3:20pm
Quoting infinitus
{quote} Will send you the files. Jake Bernstein (DSI) has historic data which goes back to 1987
Great. Thanks, looking forward to inspect the data


Here comes the next move:
http://www.zerohedge.com/news/2016-0...uid-conditions

Currently at ICM i have doubled spread already, quite large, and the movement on CNH is quite less than other EMs, so for now i still trade it on lower sizes, but it might just as well be cut off if situation worsens, especially with heavy callibrations from PBOC. RUB goarge increase on spread once it passed much larger movement compared to CNH, i guess it might be something due to size of currency not sure. One thing we do know when brokers give heads up warnings it usually isnt for nothing, it does usually leads to events, so perhaps scaling into other EM currencies instead of CNH might be better idea. Rather than that getting closed on your gains for nothing. At start of petrodollar war i though China will take it much better than Russia, now looking things trough its actually oposite. China did nothing to diversify, they drained massive reserves and still got hit, while Russia did diversify quite something with much less of FX reserve DD. But since China is main EM economy it seems likely those that pulled the trigger knew exactly where the main hit will take the place. That means short term yuan is taking large hit, while RUB is taking only long term hit.
  • #20,585
  • Jan 9, 2016 5:47pm Jan 9, 2016 5:47pm
Why It’s No Surprise that Payrolls Failed to Save USD/JPY ???
  • #20,586
  • Jan 10, 2016 3:48am Jan 10, 2016 3:48am
Quoting chess king
Why Its No Surprise that Payrolls Failed to Save USD/JPY ???
The main problem in the USA is, that the majority of jobs created over the course of the last years are mainly very low income jobs. So if any of such funnymentals count, one should also answer the question, how waiters and bartenders are aible to PRODUCE out of a debt-crisis.

On another note: did't the FED say, that from now on they are looking mainly at inflation data to justify any rate hikes?

In this light I could not understand the whole trouble about the jobs data at all. But as it is with funnymentals: analysts in desperate attempt to justify any market move with any number presented, without looking at the quality or the root of the problems.

BTW: since when is Kathy Lien with BK asset management?
  • #20,587
  • Jan 10, 2016 9:47am Jan 10, 2016 9:47am
BTW: since when is Kathy Lien with BK asset management?[/quote]

I do not know that ... maybe after GFT joining with FOREX.COM .
  • #20,588
  • Jan 10, 2016 1:26pm Jan 10, 2016 1:26pm
Markus thanks a lot for charts. Went trough all of them, defenetly good info. Its not 100% reliable like anything in trading, but it does very often produce solid signal. Especially when flip from extreme bull to extreme bear (or vice versa) happens it is usually going to work out as squeeze.
  • #20,589
  • Jan 10, 2016 1:28pm Jan 10, 2016 1:28pm
Quoting infinitus
{quote} The main problem in the USA is, that the majority of jobs created over the course of the last years are mainly very low income jobs. So if any of such funnymentals count, one should also answer the question, how waiters and bartenders are aible to PRODUCE out of a debt-crisis. On another note: did't the FED say, that from now on they are looking mainly at inflation data to justify any rate hikes? In this light I could not understand the whole trouble about the jobs data at all. But as it is with funnymentals: analysts in desperate attempt...
Last FED meeting confirmed that from now on FED is looking for participation rate/employment rather than actual NFP increase/decrease or inflation as main guide.
  • #20,590
  • Jan 10, 2016 3:45pm Jan 10, 2016 3:45pm
http://www.zerohedge.com/news/2016-0...an-buy-dollars

As i said before here is the reason why i believe BTC will have large surge in price in next 12-24 months. Unless the China bans it this will stand on. Additionally to that USD longs remain in place, China has massive stockpile of deposits if those start to convert in fear to USD this isnt going to be Russian situation in early previous year, but much larger peace of FX price impact. And if China does put large petrodollar capital controls on USD/assets that would have unpredictable impact on BTC, gold and yuan.
  • #20,591
  • Jan 11, 2016 4:14am Jan 11, 2016 4:14am
Quoting infinitus
{quote} The main problem in the USA is, that the majority of jobs created over the course of the last years are mainly very low income jobs. So if any of such funnymentals count, one should also answer the question, how waiters and bartenders are aible to PRODUCE out of a debt-crisis. On another note: did't the FED say, that from now on they are looking mainly at inflation data to justify any rate hikes? In this light I could not understand the whole trouble about the jobs data at all. But as it is with funnymentals: analysts in desperate attempt...
By the way do you perhaps have RUB chart of bull bear positioning for previous year? Would be very interesting to see that one. Or perhaps current EM charts.
  • #20,592
  • Jan 11, 2016 4:22am Jan 11, 2016 4:22am
Jesus crist on a sea saw. Was just up 1k pips this morning on UZAR trade, but missed it to close it down!
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There has been 600 pips selloff but they didnt hike. Or maybe they hiked repo rate, but i cant find any info on actual change.
Conference on 28th Jan, ill be most likely shorting USD then.
  • #20,593
  • Jan 11, 2016 5:39am Jan 11, 2016 5:39am
AUDJPY.... possible
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  • #20,594
  • Jan 11, 2016 7:28am Jan 11, 2016 7:28am
NZD/CHF

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  • #20,595
  • Jan 11, 2016 7:30am Jan 11, 2016 7:30am
EUR / GBP
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  • #20,596
  • Jan 11, 2016 8:55am Jan 11, 2016 8:55am
Quoting janpec1000
{quote} By the way do you perhaps have RUB chart of bull bear positioning for previous year? Would be very interesting to see that one. Or perhaps current EM charts.

Jake Bernstein surveys do not cover EM or the RUB, as far as I know.

I think we have to find another solution for those. We have to dig.....
  • #20,597
  • Jan 11, 2016 8:56am Jan 11, 2016 8:56am
Back-Testing The Daily Sentiment Index by Lee Ang

enjoy
  • #20,598
  • Jan 11, 2016 9:00am Jan 11, 2016 9:00am
Quoting janpec1000
Markus thanks a lot for charts. Went trough all of them, defenetly good info. Its not 100% reliable like anything in trading, but it does very often produce solid signal. Especially when flip from extreme bull to extreme bear (or vice versa) happens it is usually going to work out as squeeze.

Jake Bernstein states:

http://www.trade-futures.com/DsiReport.html

Daily Sentiment Index at Extremes: Typical Behavior

In gathering over 18 years of daily sentiment a number of clear patterns have emerged.
They are as follows:

• When the DSI rises to the 85% area or higher the odds of a top are significant
• When the DSI falls to the 15% area or lower, the odds of a bottom are significant
• The longer the DSI remains at a high level, the larger and longer the coming decline is likely to be
• The longer the DSI remains at a low level, the larger and longer the coming rally is likely to be
• The small trader is NOT always wrong at turning points they are USUALLY wrong at EXTREMES
• The DSI can be used as a timing indicator on its own
• The DSI can be used as a timing indicator when combined with other indicators and as part of an overall trading model.
  • #20,599
  • Jan 11, 2016 9:03am Jan 11, 2016 9:03am
Quoting janpec1000
Jesus crist on a sea saw. Was just up 1k pips this morning on UZAR trade, but missed it to close it down! {image} There has been 600 pips selloff but they didnt hike. Or maybe they hiked repo rate, but i cant find any info on actual change. Conference on 28th Jan, ill be most likely shorting USD then.

Holy Moly!!!!

What a rollercoaster. You do really like to trade those
  • #20,600
  • Jan 11, 2016 9:06am Jan 11, 2016 9:06am
Quoting infinitus
{quote} Jake Bernstein states: http://www.trade-futures.com/DsiReport.html Daily Sentiment Index at Extremes: Typical Behavior In gathering over 18 years of daily sentiment a number of clear patterns have emerged. They are as follows: • When the DSI rises to the 85% area or higher the odds of a top are significant • When the DSI falls to the 15% area or lower, the odds of a bottom are significant • The longer the DSI remains at a high level, the larger and longer the coming decline is likely to be • The longer the DSI remains...



and:

....…within the context of my trading model—setup, trigger and follow through—market sentiment is a setup. In other words, it is not a call to action but rather a leading indicator or a pattern that alerts traders to potential action—a timing trigger.
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