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Just Another A/U Thread...

  • #641
  • Apr 21, 2016 11:07pm Apr 21, 2016 11:07pm
[quote=Aussi;8886853]{quote} sorry mate didnt see this untill now am ok trading well how you doing Good thanks Aussi, keeping my head down and trying to keep out of trouble.
  • #642
  • Apr 21, 2016 11:12pm Apr 21, 2016 11:12pm
Quoting Aussi
{quote} ouch

Yeah. Fundamentals... Generally accepted consensus oil rose from $28 to $40 plus due to expected production freeze. Freeze failure =oil rises again. Kuwait strikes deemed partially responsible for rise in oil price....Kuwait strikes end =oil hits new high.

Lots of negatives against Australia's economy (too many to list here and all previously canvassed anyhow)= AUD rises. Oil production freeze talks break down=Commodity currencies gap down, Kuwait strike= commodity currencies and oil rise to new short term peaks. = Fundamental analysts Burned.

Conclusion... Possible manipulation, market makers frying shorters, pocketing contracts before impending reversal? I couldn't afford to hold mine. What other explanation for oil rising with Iran, Saudia Arabia preparing to flood market, drillers bankrupt in America, Banks calling in loans to oil companies? Go with the charts.

I've got scorched fingers, but far from out of the game. More lessons taken on board. Taking a few deep breaths. More caution and consideration required before entering again. Holding nothing. Would absolutely love to be holding a lot of shorts on oil, but some assholes somewhere with a lot of capital are playing games, and they make the rules. The only chance we have in their game is to read the charts.
  • #643
  • Apr 21, 2016 11:19pm Apr 21, 2016 11:19pm
Quoting Blackopal
{quote} Yeah. Fundamentals... Generally accepted consensus oil rose from $28 to $40 plus due to expected production freeze. Freeze failure =oil rises again. Kuwait strikes deemed partially responsible for rise in oil price....Kuwait strikes end =oil hits new high. Lots of negatives against Australia's economy (too many to list here and all previously canvassed anyhow)= AUD rises. Oil production freeze talks break down=Commodity currencies gap down, Kuwait strike= commodity currencies and oil rise to new short term peaks. = Fundamental analysts Burned....
There is 2 things i have learned.

Two ways of MM.

Very small position sizes or
lager sizes with tight stops.
20 Pips a day keeps centerlink away
  • #644
  • Apr 21, 2016 11:33pm Apr 21, 2016 11:33pm
Quoting PaulDaemon
{quote} There is 2 things i have learned. Two ways of MM. Very small position sizes or lager sizes with tight stops.

Thanks Paul. I knew those rules when I broke them. And i knew the rule to stick to them no matter how tempting a trade might look. Spur of the moment decision making caused me to think I could see a reversal coming with the oil summit falling in a heap. I also have a rule about spur of the moment decisions. Going back to review those rules.
  • #645
  • Apr 21, 2016 11:45pm Apr 21, 2016 11:45pm
Quoting Blackopal
{quote} oil has had a big influence on this pair


Extremely high correlation currently, although they can and do break down.

I agree with your appraisal of the Aus economic situation. This up move probably had more to do with speculative plays on commodities / interest rates than future prospects of the nation (or china). Regarding China, their recent lending figures are just crazy and I suspect that might be in part supporting our exports both in terms of volume and price. Once the default cycle begins, I would expect exports (or their imports) to slow pretty dramatically and probably take the AUD down with it. Largest industry over there that's well over-capacity is steel. Lots of anti-dumping talk now in UK/US even in Aus... So, when they bite the bullet and finally stop producing as much as they are, I'd imagine iron ore would take a permanent hit...

Just my armchair theory.

Lots of hedge funds betting on another large Yuan devaluation, however what has come to light recently is that the Yuan has, in fact, been devalued against currencies other than USD (¥ and € primarily). So raw material importers and producers over in china haven't really been impacted. Had they devalued against the USD, I think the story would be very different.

Anyway won't clog up PA's thread with too much dribble.

Kept a few shorts from 7810 and looking for more. Was a pretty violent down move yesterday so maybe it'll have legs to 77...
Corripe Cervisiam!
  • #646
  • Apr 21, 2016 11:48pm Apr 21, 2016 11:48pm
Quoting Blackopal
{quote} Thanks Paul. I knew those rules when I broke them. And i knew the rule to stick to them no matter how tempting a trade might look. Spur of the moment decision making caused me to think I could see a reversal coming with the oil summit falling in a heap. I also have a rule about spur of the moment decisions. Going back to review those rules.
I think we all get over confident at times including myself when I break my own rules im surely to loose.

Next week CPI Data will be interesting.

To date CPI has increased .9% and this is mostly go to do with an increase in alcohol and smokes and would be a lot less otherwise.
A 3% y/y target is forecast but looks like it will fall short.

Reading between the lines on Stevens speech I think further rate cuts are out even if inflation don't meet expectations. (or he may want traders to think there will be no more rate cuts) but believe he is waiting for the Feds to do his work for him.

Whether this causes the aud to be bought or sold I dont really know, but Im still bias short, long term.
20 Pips a day keeps centerlink away
  • #647
  • Apr 21, 2016 11:54pm Apr 21, 2016 11:54pm
Quoting paddlepip
{quote} Extremely high correlation currently, although they can and do break down. I agree with your appraisal of the Aus economic situation. This up move probably had more to do with speculative plays on commodities / interest rates than future prospects of the nation (or china). Regarding China, their recent lending figures are just crazy and I suspect that might be in part supporting our exports both in terms of volume and price. Once the default cycle begins, I would expect exports (or their imports) to slow pretty dramatically and...
Iron ore 25 year chart.

This clearly shows what a massive boom we have just come out of, never before have we had such a boom.
Attached Image (click to enlarge)
Click to Enlarge Name: screenshot-www.indexmundi.com 2016-04-22 14-22-28.png Size: 46 KB
20 Pips a day keeps centerlink away
  • #648
  • Apr 22, 2016 12:07am Apr 22, 2016 12:07am
Quoting PaulDaemon
{quote} I think we all get over confident at times including myself when I break my own rules im surely to loose. Next week CPI Data will be interesting. To date CPI has increased .9% and this is mostly go to do with an increase in alcohol and smokes and would be a lot less otherwise. A 3% y/y target is forecast but looks like it will fall short. Reading between the lines on Stevens speech I think further rate cuts are out even if inflation don't meet expectations. (or he may want traders to think there will be no more rate cuts) but believe he...
IF further RBA interest rates were off the table it would be A/U bullish.

I'm not convinced there won't be any more. My read on RBA statement was that there is a line toward the end that means he's keeping the option for cuts on the table. I do agree that RBA preference is for FED to lower the exchange rate because RBA don't have enough bullets on their own to work against FED.
Hope for the best, prepare for the worst.
  • #649
  • Apr 22, 2016 12:36am Apr 22, 2016 12:36am
As I believe PA would say, daily chart still making higher highs and higher lows so price should be bullish in medium term. 4hr chart looks to have plenty of room left in this pullback and 1hr and 15 min charts are not conclusive but also have room for more down. Last decent retrace (7737 to 7632) was on the relatively small side so in my book that makes it less likely that this one is done at 7733.

As always I've planned my trades for whichever direction price takes us but maintain a longer term (may take some months) bearish view.

Worth noting with May almost upon us that 5 of the last 6 months of May have been large bears.
Hope for the best, prepare for the worst.
  • #650
  • Apr 22, 2016 1:21am Apr 22, 2016 1:21am
Quoting dab
{quote} IF further RBA interest rates were off the table it would be A/U bullish. I'm not convinced there won't be any more. My read on RBA statement was that there is a line toward the end that means he's keeping the option for cuts on the table. I do agree that RBA preference is for FED to lower the exchange rate because RBA don't have enough bullets on their own to work against FED.
Thats why it has been bullish.

Im sure the institutional traders out there know information way before the retail trader.

Please read the speech

Quote

"
What is undeniable, though, is that "monetary policy alone hasn't been, and isn't, able to generate sustained growth to the extent people desire". Maybe this is simply the inevitable outcome after a period of excessive optimism and over‑leverage – an essentially cyclical explanation, where the cycle is a low‑frequency, financial one. Or maybe it is something "more deep-seated and structural." That can all be debated. Either way, though, "policies that encourage growth through means other than just ultra-cheap borrowing costs are surely needed."
It is often said, rightly, that policymakers should try to avoid unnecessary policy uncertainty. For central banks, this has meant trying to be clear about our objectives and our reaction functions – and what we will, or might, do in various states of the world. "Maybe we need to be clearer about what we can't do". Monetary solutions are for monetary problems. If there are other problems in the underlying working of the economy, central banks won't be able to solve those."

There are quotes like these all through out his speech. It points to holding the rate as is.

http://www.rba.gov.au/speeches/2016/...016-04-19.html
20 Pips a day keeps centerlink away
  • #651
  • Apr 22, 2016 1:44am Apr 22, 2016 1:44am
Quoting PaulDaemon
{quote} Thats why it has been bullish. Im sure the institutional traders out there know information way before the retail trader. Please read the speech Quote " What is undeniable, though, is that "monetary policy alone hasn't been, and isn't, able to generate sustained growth to the extent people desire". Maybe this is simply the inevitable outcome after a period of excessive optimism and over‑leverage an essentially cyclical explanation, where the cycle is a low‑frequency, financial one. Or maybe it is something "more deep-seated and...
Anyway thats my opinion.
20 Pips a day keeps centerlink away
  • #652
  • Apr 22, 2016 5:28am Apr 22, 2016 5:28am
Quoting PaulDaemon
{quote} Thats why it has been bullish. Im sure the institutional traders out there know information way before the retail trader. Please read the speech Quote " What is undeniable, though, is that "monetary policy alone hasn't been, and isn't, able to generate sustained growth to the extent people desire". Maybe this is simply the inevitable outcome after a period of excessive optimism and over‑leverage an essentially cyclical explanation, where the cycle is a low‑frequency, financial one. Or maybe it is something "more deep-seated and...
All good points but I think it's been more the FED lowering expectations of US rate rise that have led to a drop in USD strength leading to A/U bullishness.

Extract I'm thinking of is a little more subtle "Members noted that an appreciating exchange rate could complicate progress in activity rebalancing towards the non-mining sectors of the economy." from minutes of last RBA meeting. http://www.rba.gov.au/monetary-policy/rba-board-minutes/2016/2016-04-05.html

I interpret that to mean 'we want a lower exchange rate and if needed we will do what we can to achieve it' but also without overcooking the housing market which is their balancing act and why they are hinting to government that they need to do a better job. That RBA need to hint to government to do a better job is as good a summation of Aussie economic health as anything. We aren't in recession but are a long way from thriving / boom.
Hope for the best, prepare for the worst.
  • #653
  • Apr 22, 2016 5:35am Apr 22, 2016 5:35am
Quoting dab
{quote} All good points but I think it's been more the FED lowering expectations of US rate rise that have led to a drop in USD strength leading to A/U bullishness. Extract I'm thinking of is a little more subtle "Members noted that an appreciating exchange rate could complicate progress in activity rebalancing towards the non-mining sectors of the economy." from minutes of last RBA meeting. http://www.rba.gov.au/monetary-polic...016-04-05.html I interpret that to mean 'we want a lower exchange rate and if needed we will do...
Yes agreed on both points.
20 Pips a day keeps centerlink away
  • #654
  • Apr 22, 2016 6:50am Apr 22, 2016 6:50am
Quoting dab
{quote} All good points but I think it's been more the FED lowering expectations of US rate rise that have led to a drop in USD strength leading to A/U bullishness. Extract I'm thinking of is a little more subtle "Members noted that an appreciating exchange rate could complicate progress in activity rebalancing towards the non-mining sectors of the economy." from minutes of last RBA meeting. http://www.rba.gov.au/monetary-polic...016-04-05.html I interpret that to mean 'we want a lower exchange rate and if needed we will do...
If they are afraid of overheating the property market, they shouldn't let banks give CHEAP credit in residential mortgages. They should have put some regulations on the subject. The should have CHEAP lending ONLY on business loans. That's all to it. Residential mortgage - 8%, business loan - 4% as an example. But they are doing the opposite and then get surprised when a median house price in Sydney is over a million.
  • #655
  • Apr 22, 2016 8:14am Apr 22, 2016 8:14am
Quoting cold chisel
{quote} If they are afraid of overheating the property market, they shouldn't let banks give CHEAP credit in residential mortgages. They should have put some regulations on the subject. The should have CHEAP lending ONLY on business loans. That's all to it. Residential mortgage - 8%, business loan - 4% as an example. But they are doing the opposite and then get surprised when a median house price in Sydney is over a million.
Not my area of expertise so genuine question, do RBA have the power to regulate the banks in that way?
Hope for the best, prepare for the worst.
  • #656
  • Apr 22, 2016 8:25am Apr 22, 2016 8:25am
Quoting dab
{quote} Not my area of expertise so genuine question, do RBA have the power to regulate the banks in that way?
I have used the term THEY in a broader sense. I have meant regulators. It can be RBA, APRA, Federal authorities etc.
  • #657
  • Apr 22, 2016 8:32am Apr 22, 2016 8:32am
Quoting PaulDaemon
Yes true oil does influence the AUD To PA I Im not trying to be negative and if you remember I did point out how impressed I am with your PA skills. Take note of the weekly chart you will see why its been rejected. Priced bounced off weekly trend line and also 100 ma {image}{image}
Good charts Paul. Keep them coming.

On a side note, while I agree the fundamentals aren't great for Australia, I don't trade fundamentals. Just my personal experience that the market follows technicals more often than fundamentals. And one of my top 3 quotes "The market can remain irrational far longer than you can remain solvent. " we all know the Aussie shouldn't have risen 1,000 pips since mid-January, but by following price action and ignoring fundamentals one could be long and making pips during this irrational time. Just my humble opinion.
  • #658
  • Apr 22, 2016 8:48am Apr 22, 2016 8:48am
Quoting cold chisel
{quote} I have used the term THEY in a broader sense. I have meant regulators. It can be RBA, APRA, Federal authorities etc.
Thanks for explanation in your use of THEY. Makes a big difference though if the ones not wanting property market overheated don't have the power to do so by the most efficient method.

Can't believe I'm talking about govt bodies and efficiency in same sentence. Shame on me. (not all of them are bad but my general opinion of them is low).
Hope for the best, prepare for the worst.
  • #659
  • Apr 22, 2016 8:55am Apr 22, 2016 8:55am
Quoting PA is King
{quote} Good charts Paul. Keep them coming. On a side note, while I agree the fundamentals aren't great for Australia, I don't trade fundamentals. Just my personal experience that the market follows technicals more often than fundamentals. And one of my top 3 quotes "The market can remain irrational far longer than you can remain solvent. " we all know the Aussie shouldn't have risen 1,000 pips since mid-January, but by following price action and ignoring fundamentals one could be long and making pips during this irrational time. Just my humble...

Right on cue PA time for the irrational again...Oil and the AUD rising in sync again
  • #660
  • Apr 22, 2016 9:03am Apr 22, 2016 9:03am
Quoting Blackopal
{quote} Right on cue PA time for the irrational again...Oil and the AUD rising in sync again
Timing was never my strong suit. But with Aussie negatives and excess oil supplies, neither should be going up(irrational).
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