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  • #139,061
  • Feb 9, 2016 2:45am Feb 9, 2016 2:45am
Nasty DAX sell-off yesterday with no hard references in sight contrary to S&P and Nikkei which are still holding strong levels right at the lows.

Dollar strength from core levels is keeping the pair capped despite treasuries breaching 131 and gold 1182 on risk. Watching those levels to gauge risk (should have tracked the Jan close more closely.) and the remaining levels on S&P, Nikkei. We're right at the limits on bonds and dollar, imo, but the real uncertainty is oil/equities where its hard to find a reference on DAX or tell where China is heading and how that impacts the rest. As long as that plays out it's a case Euro strength negating/beating dollar strength on the pair at these overshot levels.

Unconventional policy measures have failed miserably so far in putting a dent in the sell-off (Draghi jawboning QE, Kuroda negative interest rates.) making normalision look pretty good in the process. Ie when you lose control after a while you really do- in Draghi's case the bastards just wanted/want him to keep escalating and this fire-sale is the result when he doesn't? and BOJ boldly surprised markets and still got taken to the cleaners a few days later.
  • #139,062
  • Feb 9, 2016 3:16am Feb 9, 2016 3:16am
Quoting gatorinla
{quote} i think started well before the fed raise .. oil has been on posted schedule long before that (even a 14 handle indicated on brent before fed rate hike). equities also before fed raise since july misstep. uj being 5 thousand pips above norm was a key along with copper. the gold of china (copper) slipping for 5 plus years. china is the number 1 user of #2 copper. my buddy with a very large scrap business told me that his #2 shipments to china were slipping 5 years ago. the fed raise is about the same as ecb or japan or world cutting. the...
Well agree in the macro implications but not in some views:

 

  1. I don't have Oil $14 unlocked yet. I have a steel Support @ $25.9x and below a very Strong Fundamental support in the $17.xx (still locked).

     

    1. FA wise Oil triggered the major selloff (break down $78.xx) when the US went overboard in the shale revolution with over investment, with zero interest rate projects with myopic and greedy profits evaluate at OIL >$100.xx while emergent markets (especially China) already started the wave down...
    2. TA wise, the break $78.xx put us on mid and long term SELL mode and we have been there until we crashed into $45.xx triggering the dead cat bounce (call it 'live' in this same thread with some other fellow traders) with the FED flopping March / Q combo.
    3. Finally, Chinese hard landing ($61.xx) and then FED confirming the High in equities via rates (break down $45), triggered the last mid term wave (both also call it 'live' in here)


  2. The US on the supply side as much as China hard landing in the demand side double whammy has ruled Oil ...

​

  1. On the FED, I disagree with you view. Dollar has gain a staggering +26% since QE ended and rates hikes. The FED policy affect the Dollar not the Eur or the YEN as much as the ECB affects primarily the EUR and BOJ the YEN.
  2. I agree that among the pairs, the Eur/USD has been the least affected so far from the FED hikes (only -4%) from the highs on the FED rate flop last year but there are a lot of other factors (RISK primarily) that are largely offsetting the initial reaction and creating the current chop/range in the Eur/USD. However, and as you probably agree ...its just a matter of time ...

In any case, nothing new for today we have a soft week ahead on the report front until key German numbers on Friday so nothing new with same levels, same trades, same all prolly until China wakes up for a New Year after a long and nasty week of Holidays in the markets worldwide ...

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #139,063
  • Feb 9, 2016 4:21am Feb 9, 2016 4:21am
Quoting Likerty
USD/JPY - last bets for bear reversal in 121.20/60 area
Movement is finished. Now the correction towards 119.40 or/and 122.0x starts to gather pace..
Intraday 114.90's or 114.60's for bullish rejections and 115.20 is a sneaky line in the sand for bull continuation
69
  • #139,064
  • Feb 9, 2016 5:19am Feb 9, 2016 5:19am
Quoting gatorinla
{quote} i think started well before the fed raise ... equities also before fed raise since july misstep. uj being 5 thousand pips above norm was a key along with copper. the gold of china (copper) slipping for 5 plus years. china is the number 1 user of #2 copper. my buddy with a very large scrap business told me that his #2 shipments to china were slipping 5 years ago. the fed raise is about the same as ecb or japan or world cutting. the fed raised and the eu has risen...
[/color]
DXY was at 98.02 at 2100 the day of the hike and has since dropped to 96.25 or about 175 pips. From Jan 1 it's down about 300 pips, or about 30% of an expected yearly range of of 908 (3 year average).
  • #139,065
  • Edited Feb 10, 2016 2:10am Feb 9, 2016 5:27am | Edited Feb 10, 2016 2:10am
Quoting hathor
Viewer Discretion Is Advised. With my current higher time frame signals, the map is the following for me (until opposite direction signals arrives): {image} In case of falling back, the closer I can buy to point 'C' (might even under it...), the happier I will be: {image}
Hi everyone! Hope you are all fine and could catch the wave as we planned! Myself didn't, exams distracted my focus...:/

Quoting hathor
{quote} Hi Likerty! I'm not into Gold much, but buying under 1120 looks good deal to me. The lower, the better as usual. I have buying signals on nearly every time frames. (Important: the signal system is fine tuned to EurUsd, so it might not works with 'Au'...time will tell...as usual).
Wow, beautyful weekly candles, played out nicely, hope it also helped.
f(z)=z2+c
  • #139,066
  • Feb 9, 2016 5:58am Feb 9, 2016 5:58am
Quoting MissPips
{quote}[/color] DXY was at 98.02 at 2100 the day of the hike and has since dropped to 96.25 or about 175 pips. From Jan 1 it's down about 300 pips, or about 30% of an expected yearly range of of 908 (3 year average).
I think we have had this discussion a few times with you and I always make the same point. Rates are not Binary events on and off for trading.

We trade expectations not facts!!! ​especially with interest rates.

Only the latecomers will jump on the facts at the end of the legs especially in hikes.... If you want to isolate only the last hike (not the end of FED QE) you need to go back to the summer when FED confirmed hikes for DEC after the bounce from the Chinese selloff ....thats where smart money ride the leg not on the confirmation announcement when 90% of the leg was already digested ...

...and if you are sharp enough you can see that we are trading FED no hikes MARCH since last month ....so when March comes and the announcement confirm the outlook ....guess what ...

---- -----

European equities trading air and markets looks extremely heavy. Session over but we are setting for a deep leg down and take the yearly lows in US equities and OIL as early as today.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #139,067
  • Feb 9, 2016 6:13am Feb 9, 2016 6:13am
Quoting sisse
{quote} I think we have had this discussion a few times with you and I always make the same point. Rates are not Binary events on and off for trading. We trade expectations not facts!!! ​especially with interest rates. Only the latecomers will jump on the facts at the end of the legs especially in hikes.... If you want to isolate only the last hike (not the end of FED QE) you need to go back to the summer when FED confirmed hikes for DEC after the bounce from the Chinese selloff ....thats where smart money ride the leg not on the confirmation...
I agree. The markets look perfectly "al dante" all across the board!!! I bet its gonna be pretty violent - therefore expect E/U to even shoot to 1,128x due to carry trade. However, that is pretty much untradable at least to me
  • #139,068
  • Feb 9, 2016 6:22am Feb 9, 2016 6:22am
Quoting chester123
{quote} I agree. The markets look perfectly "al dante" all across the board!!! I bet its gonna be pretty violent - therefore expect E/U to even shoot to 1,128x due to carry trade. However, that is pretty much untradable at least to me
There are still tickets available in US equities and OIL but not cheap ones so agree if you are not already in or you have a lot experience and know exactly what you are doing is probably best to just track the moves.... there will be better bang for the buck and risk in GOLD and EURO for the next short term legs ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #139,069
  • Edited 6:44am Feb 9, 2016 6:33am | Edited 6:44am
Quoting sisse
{quote} There are still tickets available in US equities and OIL but not cheap ones so agree if you are not already in or you have a lot experience and know exactly what you are doing is probably best to just track the moves.... there will be better bang for the buck and risk in GOLD and EURO for the next short term legs ... sisse
Actually, January and the "mayhem" kind of forced me aside as I prefered to just observe due to lack of experience in this enviroment but.... its kind of good now.... I catched DAX on the 9237 break + have some remaining small shorts from January SP500 sell-off and took a very risky/not-smart short on the oil bounce this morning. Well see... as u say now is time to let equities and oil rool this short term scary legs before there is time to turn back to gold and euro
  • #139,070
  • Edited 6:49am Feb 9, 2016 6:37am | Edited 6:49am
Quoting MissPips
{quote}[/color] DXY was at 98.02 at 2100 the day of the hike and has since dropped to 96.25 or about 175 pips. From Jan 1 it's down about 300 pips, or about 30% of an expected yearly range of of 908 (3 year average).
96.70 or deeper was expected in the normal pullback range .92.52/96.70.. 109.0x has made the possible stance.. i wasn't shorting eu till 1086 or 1115 or higher. usdx took a little longer to reach 96.70 both are met now. the better chance of a drop in eu was met after.the window is wide to 1.17xx and usdx 92.52.. plus the funding redemptions and china selling usd, saving its equity market isn't fueling usd strength lately. but its still in the tech window atm.

the uj at any market spoke can be at 106.xx w/o much effort, it's probably going there or 1/2 normal at 100.50 anyway. tech wise it has rung all the bells before a normal drop// that's only 2500 pips, 1/2 of what is normal.. normal is 5000 pips at 75.xx
those who can, do. those who cant, talk about those who can
  • #139,071
  • Edited 7:10am Feb 9, 2016 6:50am | Edited 7:10am
Quoting sisse
{quote} I think we have had this discussion a few times with you and I always make the same point. Rates are not Binary events on and off for trading. We trade expectations not facts!!! ​especially with interest rates. Only the latecomers will jump on the facts at the end of the legs especially in hikes.... If you want to isolate only the last hike (not the end of FED QE) you need to go back to the summer when FED confirmed hikes for DEC after the bounce from the Chinese selloff ....thats where smart money ride the leg not on the confirmation...
EurUSD was at 1.1065 when the Fed said at the end of October that it would consider hikes and at 1.1220 when Yellen hinted in September that the Fed might consider hikes, which was the first substantial hint. Unless you consider the dropping of the 'patient' wording in March a substantial hint, but then it was trading at 1.0740ish and that was clobbered by the poor non-farm payroll in April anyway. So I think that we can say that September is probably the earliest the market could have been reasonably trading the expectation of a rate rise because in August they said it would be 'data dependent' and the US data between May and August was pretty mixed.

We've now been nearly 200 pips above the October rate and are back to the September rate.

If you believe that the market is trading expectations, surely that should be because these expectations should relate to some fundamental value the EURUSD has or will have when the Fed/ECB rate spread is x or y (all the more so if it is reacting to a major turning point from which, going forward the Fed has hiked/will be hiking while the ECB is still easing).

Even if there's no hike in March (which I strongly agree with you will be the case, and even longer) unless the market thinks the Fed is going to backpedal and lower the rate again, I fail to see, from a fundamental value point of view (based on the direct effect of interest rate differentials anyway), why we should now be above, not only the area where the hike happened but also the area where they first hinted they were going to do it, when we can expect months more of the same rate spread. Because, if the market is trading the idea that the EURUSD has some (undefined) value when the EURUSD rate spread is x or y, or even expectations that it will have this value in the future, surely this value should last more than a month or two (end of October to mid-December), once that rate spread is confirmed, as long as the Fed doesn't backpedal.

To put it simply, I don't think the rate increase is (or was) affecting the EURUSD, at least not directly. I think what is affecting it is the effects of the rate hike on equities , which, since it is currently inversely correlated, is causing it to rise and not fall because of the hike.
  • #139,072
  • Feb 9, 2016 6:58am Feb 9, 2016 6:58am
Quoting gatorinla
{quote} 96.70 or deeper was expected
I have 96.74 to 96. 31 for that but close enough. That is why I think we are going to range here (in the 1.17 to 1.04 wide range) a good bit. Redemptions pulling one way, techs and theoretical fundies pulling the other. And there also Iran demanding that the billions it is owed/will be owed for oil be returned in Euros.
  • #139,073
  • Feb 9, 2016 7:19am Feb 9, 2016 7:19am
Eyes on NY. Euro testing the highs but the real deal will come from US Equities on the opening range ...

Quoting MissPips
{quote} ...I think what is affecting it is the effects of the rate hike on equities , which, since it is currently inversely correlated, is causing it to rise and not fall because of the hike.
I see your points but IMO you are making a mistake I mentioned in the previous post.

A FED hike affect the DOLLAR. You need to see the impact in the DXY not in the EUR/USD alone because as any pair in has 2 sides!!!!. You cant just isolate the impact on one side and ignore the other. Agree on the equities impact. Hikes impact the whole board and the component in equities will also affect the underlying currency.

If you try to just translate facts in one side of a pair after the fact without putting context on expectations and ignoring the other side of the equations you are NEVER EVER going to get the right picture even if its after the fact.

Let me quickly just show you some backpost as reference ...take it or leave it but I hope they trigger something on the idea behind expectations ...


------- ----------- DXY --------- ---------

Attached Image (click to enlarge)
Click to Enlarge Name: Screen Shot 2016-02-09 at 13.10.01.png Size: 166 KB


---> From Sep 24 / 2015 Live before digesting the news


Quoting sisse

  1. Odds for hikes in Dec will make a huge jump after this (now were @ +/-55% chances) but Yellen pretty much guaranteed hikes DEC with these comments. Very hawkish for dollar short and mid term.

Quote

  1. its the first time we have a clear path on the hikes speed. They are going to be VERY VERY GRADUAL. These comments are BEARISH dollar for the long ter...


--> From Oct 1 ...after digesting FED/Yellen ...

Quoting sisse
Equities pretty much have digested the first min hike Dec. My mid/long term map is a lot clearer ...What is clear up to now:
Quote
-->We have the high of year set(since June FOMC) [check].
--> After Sep FOMC, we have mid/long term high set (at least till late Q2 /Q3 2016)[check so far]
--> Gradual hikes means a comatose choppy bottom (we haven't found that bottom yet)[check] to build a wide platform for the extended fundamental rally after normalisation is complete (nothing to see till Election....

Quote
What we don't know clearly now:

---> If we are going to extend the lows to test below 1800.xx (1790.xx) [check in MAJOR PLAY RIGHT NOW]
---> If the short term bottom was going to be dollar/commodities/inflation driven or not (in simple words sharp or choppy)[in play]

...and I can walk you though till JAN on the dovish FED expectations ....etc etc

I hope it helps....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #139,074
  • Feb 9, 2016 7:25am Feb 9, 2016 7:25am
Quoting MissPips
{quote} I have 96.74 to 96. 31 for that but close enough. That is why I think we are going to range here (in the 1.17 to 1.04 wide range) a good bit. Redemptions pulling one way, techs and theoretical fundies pulling the other. And there also Iran demanding that the billions it is owed/will be owed for oil be returned in Euros.
dax med term targets hit.. possible bounce soon. eu pullback 1161 normally expected before 1374/99+.. atm high 1249.. atm level 1237
Attached Image
those who can, do. those who cant, talk about those who can
  • #139,075
  • Feb 9, 2016 7:45am Feb 9, 2016 7:45am
Quoting sisse
Eyes on NY. Euro testing the highs but the real deal will come from US Equities on the opening range ... {quote} I see your points but IMO you are making a mistake I mentioned in the previous post. A FED hike affect the DOLLAR. You need to see the impact in the DXY not in the EUR/USD alone because as any pair in has 2 sides!!!!. You cant just isolate the impact on one side and ignore the other. Agree on the equities impact. Hikes impact the whole board and the component in equities will also affect the underlying currency. If you try to just translate...
Thanks for the chart! I have for my notation that the Sept Fed was no hikes and mildly dovish, so I don't have the expectations as concrete until the end of October meeting (which price we are now below, even on the DXY).

You are definitely right about the two sides. I only trade EURUSD and don't care about the rate effects on anything else, except as the other instruments effect it.

What is interesting is about EURUSD is that on the other side we have the ECB committed to QE through 2016, but we are caught between 1.133x which was where it was when the ECB said it would extend QE, and 1.054x where words didn't match deeds and they didn't raise the amount in December. When it gets to 1.13 I think we are going to find out if this PA is more about equities impact or more about whether the market believes Draghi's words or deeds.
  • #139,076
  • Feb 9, 2016 7:51am Feb 9, 2016 7:51am
Here we go for NY. Another sharp move down in equities on the making... Like the last few sessions. Europe already lost floor. US playing ball will unlock a massacre in world equities....

Lows of the year are naked in US equities and OIL is sitting at UBER important @29.5.x for the opening.... A break down unlocks clean sweep and today we may not see real money buying at the lows until further data and China is back on the the table...

Key sessions in play across the board with Euro clearing soft stops at the high and as usually in all the latest risk legs giving the heads up off whats about to come. Here flat in the Euro and tracking very closely after the test 1.128x for a change in Outlook short term on equities finding any floor this week....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #139,077
  • Feb 9, 2016 7:52am Feb 9, 2016 7:52am
1161/64 may offer a long later.. std bbl
those who can, do. those who cant, talk about those who can
  • #139,078
  • Feb 9, 2016 7:54am Feb 9, 2016 7:54am
Just WOW, where do you thin is the top of this EU move?
  • #139,079
  • Feb 9, 2016 8:08am Feb 9, 2016 8:08am
sisse,

If OIL tanks along with Equities, where do see EU going for a top?

I am still in my SHORTS (.093X, .1080 and .1140).
I am not real excited I was not able to release my SHORTS due to me being in at the .093X handle and those trades have to go first. Only looking to release them as it appears better seats above. Your MAP led the way to at least .108X with possible ext to .097X from the News Flows.

Needing to see how long I should remain in these SHORTS if you see new SHORT LEGS developing now opposed to the MID TERM LEG starting due to OIL and EQUITIES under fire. Thanks
  • #139,080
  • Feb 9, 2016 8:19am Feb 9, 2016 8:19am
Quoting IMARICH1
...093X handle and those trades have to go first. Your MAP led the way to at least .108X with possible ext to .097X from the New Flows. Needing to see how long I should remain in these SHORTS if you see new SHORT LEGS developing now opposed to the MID TERM LEG starting due to OIL and EQUITIES under fire. Thanks
ufff sounds nasty ...don't like recommending trade management when you are already so deep in a position... My only 2 cents, you are trading for a mid term leg so as long as there is not a macro reason in play just sit tight and exit (stop out) only wherever you calculate your risk before entering the trade and not a tick more ....

On the actual question about the Euro. As long as the legs in Equities are measured and controlled and without further data, Gold and Euro will stay in BID on risk. However if we get a full blown risk panic /massacre leg Lehman style Dollar and Treasuries will prevail as ultimate haven and everything else will be dump until the storm pass...

For now eyes on the Open for US equities losing the floor and carrying OIL with it....

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