Mr. Scott's Crayon Thread

large momentum, zoom not so bad....

Nice chart Bones. Think This Tuesday, Thursday and next Thursday will tell the story.

(Just my opinion on long term trade setup)
From what I see these 2 areas have been the strongest mid level. So could hold from here although there hasn't really been any strong bidding reaction at this level yet.

Think it all will depend on the rate decisions RBA (Tuesday), BOE (Thursday) and RBNZ (following Thursday).

A lot of capital has been flowing into the KIWI based on increased demand for higher-yielding sovereign bonds which has been pumping up strength in the New Zealand dollar with the declining expectation over the last few months that the RBNZ will not cut rates further. This isn't surprising being that the whole market has been chasing yield. I think that situation changed a few weeks ago with the Property Investor rule and the lower print on CPI. This frees up RBNZ to cut rates.

The KIWI has been trading well in both RISK on and RISK off environments but think that has to do with the irrational market at the moment, chasing yield at any cost. It seems strange seeing the Kiwi being traded like a safe haven, I can't see it lasting.

The whole New Zealand economy has inflated on the housing bubble, CPI (Non-trade-ables which includes housing), Migration (which has been largely fueled by inward migration, Kiwis returning from Australia for jobs in construction), Credit, Remaining Higher interest rates etc.

Credit - NZD Dept is half a trillion, Housing accounts for roughly half of that at 218 billion.

Inward Migration has ballooned - Kiwis returning home from Australia for jobs in construction, then also buying houses and investment houses as were price out of AUS market (housing boom)

CPI - Trade-able CPI is down around negative 2% while Non-trade-ables which includes housing inflation is around +2% (housing boom)

House Prices - House prices are still on the up whilst Australian prices have stabilized the last 12 months (housing boom)

BOND Yields - New Zealand still has the highest 10 year bond spread for yields increasing CAP flows into NZD seeking yield. (You can see in spread sheet attached the substantial increase in volume for spot and swaps in the NZD.

If this spread starts to close you can see short cap flows and long term investment flows leaving NZ.

The biggest change few weeks ago http://www.nzherald.co.nz/business/n...ectid=11677196
Followed by lower than expected CPI print.

Some inserts from last RBNZ statement.

The exchange rate is higher than appropriate given New Zealands low export commodity prices. Together with weak overseas inflation, this is holding down tradables inflation. A lower New Zealand dollar would raise tradables inflation and assist the tradables sector.House price inflation in Auckland and other regions is adding to financial stability concerns. Auckland house prices in particular are at very high levels, and additional housing supply is needed.

Monetary policy will continue to be accommodative. Further policy easing may be required to ensure that future average inflation settles near the middle of the target range. We will continue to watch closely the emerging flow of economic data.

Not ruling out another short term bullish move but long term bearish view holds for NZD

KIWI all time highs against many cross rate AUD, CAD, GBP

AUD/NZD, GBP/NZD,, At 10 year buying Zone.

NZD/USD running into strong resistance and reversal pattern setup.

Not that I'm a Dalai Lama follower but thought this was good and so true.

NC

Thanks Squawk, nice analysis.

Thanks :nerd::nerd: Nothing else to do at the moment Scott.

SPX is in the big Alt Bat zone.
Nothing would surprise me with equities anymore so using the paintbrush to help visualise a manic top.

​Also interested in fib expansion of that large move....

Dax is having a batish bounce atm. A typically psychotic bull move back to the cash open would tempt me short. I don't often draw trend lines, I'm not even sure if that's what they're called or if I'm drawing them correctly but...I know a cypher when I see one and here's where I would try a long.

​ Nice channel.

Channel, thanks.

Aiming for these on spx for starters. There's a doji on the daily at the 127 and 1.618ish could be the start of a large bat.

Holy Haberdashery!! Nice one Ben

Palladium is leaving other precious metals in the dust. Well for the last month anyway.

http://www.bloomberg.com/news/articl...itter-business

And then there was Industrials. Hard to see a sustained rotation into commodities without playing out more of a bottom. Steel a whopping 123% for the year.

Crazy spike on Japans 10 year.

Interesting now where we go from here. BOE and NZ up next.

Thanks squawk. It was a most dastardly move by Dax out of the blocks yesterday. A classic sting in the tail, I reckon, by the scorpion Queen.