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The Really Useless Thread

  • #143,981
  • Oct 7, 2016 11:43am Oct 7, 2016 11:43am
Quoting Pharm0r
{quote} I agree 100%, and I'm trading for November / December, however; I think the market is split (when looked at through options/futures for dollar/euro/spx)
I think is less split than you would expect. More interesting than 'if' hikes this year is the increase chance for a hike .50 in DEC meaning the FED '2 hikes' from January will be actually completed in one go.

Markets are a bit hesitant (especially in the FX board) not in terms of direction itself but rather baffled by the [stupidity] of the UK government attitude this week.

They don't really know (who can really?) how to digest or how deep to digest (especially in the US) what is going in Europe and how much it will be something contained to the Pound itself or if this is the tip of the iceberg of a monster storm coming from Europe.

In a more practical sense, the Euro has become the referee and buffer from the UK to the rest of the board. If Euro gives up (btw for today Europe is going home but markets are a notch tired and US look rather indifferent after the inline NFP so odds for some more action today will plummet at the top of next hour) it will serve as contagion agent across the board ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #143,982
  • Oct 7, 2016 11:51am Oct 7, 2016 11:51am
Quoting sisse
{quote} I think is less split than you would expect. More interesting than 'if' hikes this year is the increase chance for a hike .50 in DEC meaning the FED '2 hikes' from January will be actually completed in one go. Markets are a bit hesitant (especially in the FX board) not in terms of direction itself but rather baffled by the [stupidity] of the UK government attitude this week. They don't really know (who can really?) how to digest or how deep to digest (especially in the US) what is going in Europe and how much it will be something contained...
But EU/Brexit turmoil is the big IF with rate hikes and is part of the considerations! The possibility of a no hike due to EU issues while minute- is still a possibility. That's the only thing I can think of that the market would be fixated on for a no rate hike

Essentially- as far as EU goes in general, rate hikes are "whatever" and just a speed bump compared to brexit issues. In two months this conversation will be stale

I don't care what .50 changes are- nothing is a given but the chances for that are SLIM. But why doesn't the market think that?

Maybe I'm on the wrong side, but a .50 is one extreme as much as no hike is the other extreme
  • #143,983
  • Oct 7, 2016 11:55am Oct 7, 2016 11:55am
Sorry I'll stop editing
  • #143,984
  • Oct 7, 2016 12:00pm Oct 7, 2016 12:00pm
Quoting Pharm0r
{quote} But EU/Brexit turmoil is the big IF with rate hikes and is part of the considerations! The possibility of a no hike due to EU issues while minute- is still a possibility. That's the only thing I can think of that the market would be fixated on for a no rate hike Essentially- as far as EU goes in general, rate hikes are "whatever" and just a speed bump compared to brexit issues. In two months this conversation will be stale
Well markets were expecting to play the EU/Brexit drama next year. Expectations were that the British government will announce the date around January 2017 with a clear plan and all banks on board ..... but it triggered out of the blue over the weekend in a chat show without a plan and making clear that banks can fck off... and after that went in a rampage announcing that the even considering losing access to the single market ....etc etc etc

Basically Brexit/EU were never really a variable for FED hikes this year ...however when you listen the announcement and see the capitulation of Sterling .... you have to take precautions and think twice before going all in...

I still think it's not a decisive factor for hikes (yet) but FX markets were fck scare and extremely glad NFP was soft inline as the empty and dangerous levels in Sterling after the crash could have detonated a nuclear reaction on thin liquidity ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #143,985
  • Oct 7, 2016 12:24pm Oct 7, 2016 12:24pm
What I feel about hike is that it's a done deal but will be very much priced in before they trigger and no effects will be seen ... They will pull the trigger just to normalize the situation ... the us election will be triggered in a normal way but hikes expectations will be carried out in between ...as said by sisse Europe is playing as a referee and will be a referee until brexit flow is over or almost over... Simple thought ...
Re-Incarnated
  • #143,986
  • Edited 12:53pm Oct 7, 2016 12:34pm | Edited 12:53pm
Quoting Pharm0r
{quote} I don't care what .50 changes are- nothing is a given but the chances for that are SLIM. But why doesn't the market think that?
hmmm ...well that is a very tricky question and you are right on the money to ask that question.

Simplifying and bastardizing the concept:

-> Markets trade expectations as you know. Expectations were set by Yellen to track NFP back in August.
-> The moment we get the report inline with expectations (its a inline with trend report = strong uptrend in employment), the odds (calculated by a variety of complex factors and measure in many ways) of hikes jump accordingly.
-> So even though a .50 hikes are still very tiny (they just jumped to double digits for the 1st time since March) the pricing of expectations adapts to the new value.
-> This is not an exact science (you will have a more mathematical view from an options perspective) so those pricing of expectations as a whole make the valuation of different assets change and adapt accordingly.

so Why they think that?

  1. Markets expections and pricing of those expectations. This is with what you got as fact and number right now not what you or me think. This is what different markets and consensus are pricing in as for today.

    1. The time between now and December is shorter and the all variables that can change the outcome are more or less aligned.
    2. The less time the higher the odds,
    3. The better and inline the numbers the higher the odds of a even higher hikes increase because FED original expectations were set to at least 2 hikes this year....etc


  2. Macroecnomic factors. Every single economist, investor and analyst in the world knows that we are, if not overextended (i am here), at best living with borrowed time without hikes. The moment you get the confirmation of a inline with expectation report...there is no much you can hide in this particular moment, hikes coming by default and there is one less report to hide and kicking the can ...

    1. Gradual rates are losing track after this year. The only way to keep track with monetary policy without causing collateral damage is to overshoot in DEC or later more than prolly 1 or 2 times hiking over expectation before inflation spoil the fun (as it always does) sooner or later...


  3. Markets are dynamic and move in time. Think in a domino. While most of us are trading/tracking the next hike, markets are already starting to price in / value the next one. Why? that's how the economy and financial markets work:

    1. Just by simple mathematics. In a linear form if the odds of getting from A to B increase -> The odds from going from A to C increase accordingly ... if the race is to reach Z and the sooner you get in, the better the results ...guess what ...you start pricing the next step as soon as possible to avoid missing the boat ...


Not sure if it makes sense but we can surely leave the discussion open until it star making some sense ...

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #143,987
  • Oct 7, 2016 12:48pm Oct 7, 2016 12:48pm
Yup- makes sense, actually a pretty obvious answer as to the odds and mathematics involved
  • #143,988
  • Oct 7, 2016 12:49pm Oct 7, 2016 12:49pm
Funny this just came out during our convo

http://www.forexfactory.com/news.php?do=news&id=610238

It's zerohedge so take it with a grain of salt....but still lends to my original point...the market seems split. A overshoot or undershoot in NFP (what I was hoping for) would have cleared the way, however; now the market is still in limbo.

Does that really matter to my specific trades....well yes and no. Confidence wise it's a question, TP and SL wise it doesn't matter at this point

My original question to Fool was to verify whether or not what I was seeing was the same as him, as I consider him a better versed options trader than myself (ironically when we first met he thought the opposite)
  • #143,989
  • Oct 7, 2016 1:35pm Oct 7, 2016 1:35pm
Quoting Pharm0r
Funny this just came out during our convo http://www.forexfactory.com/news.php?do=news&id=610238 It's zerohedge so take it with a grain of salt....but still lends to my original point...the market seems split. A overshoot or undershoot in NFP (what I was hoping for) would have cleared the way, however; now the market is still in limbo. Does that really matter to my specific trades....well yes and no. Confidence wise it's a question, TP and SL wise it doesn't matter at this point My original question to Fool was to verify whether or not...
Well you are an intelligent person ... just read the headline and go to the source ... Since online digital marketing discovered the "top 10 cats picture in your fridge" and "10 reasons why your car show you are dick" etc etc headlines to grab the short span attention of some unaware reader ...., plus ZH shouldn't be anyone's primary source for objective and well structured market info.

Read the headline, read the source (a tiny news wire with a one liner quote), basically a news filler stating the obvious taking by a website out of context to create a selling click bait headline ....

"The Fed next meets Nov. 1-2, before the Nov. 8 presidential election. Given this room to run, confirmed by the latest jobs data, a rate increase at that November meeting is almost certainly off the table . A December rate increase is still the most likely scenario for the Fed, but it isnt a sure thing. If the jobless rate keeps rising, Fed officials might decide to forestall rate increases until next year."

Basically, with so much and quality information available to read from .... don't waste time even reading those sources ....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #143,990
  • Oct 7, 2016 1:43pm Oct 7, 2016 1:43pm
Good conversation! Like understanding principles and perspectives on market as a whole.

How does or does Sterling factor now into JPY? Additionally, does the soft inline NFP FACTOR slow momentum of next leg of the USD/JPY in short term? It did break thru 103.8x @104.1x Is this extension leg still locked now?
  • #143,991
  • Oct 7, 2016 1:47pm Oct 7, 2016 1:47pm
Quoting IMARICH1
...USD/JPY in short term? It did break thru 103.8x @104.1x Is this extension leg still locked now?
Well you tell us what you think? ...if you got anything from the risk and position management posts last week you should be able yo answer that question yourself. Whats your view? Clearing time, reloading, trailing? what ?

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #143,992
  • Oct 7, 2016 2:22pm Oct 7, 2016 2:22pm
Quoting sisse
{quote} Well you tell us what you think? ...if you got anything from the risk and position management posts last week you should be able yo answer that question yourself. Whats your view? Clearing time, reloading, trailing? what ? sisse
Hope you don't mind me attempting to answer this as I am in this trade.

I reloaded at 103.30 still with a target of 105.00.

I saw todays dollar weakness on an inline NFP as an opportunity to reload rather than a change in trend.

I suspect the answer Sisse is looking for is to sit tight though so look forward to his views.
  • #143,993
  • Oct 7, 2016 3:03pm Oct 7, 2016 3:03pm
I would wait on a retrace to take a position. This is where you could manage capital or reward. However, my confusion came into play when you indicated all eyes on 103.8x to unlock momentum leg to 105.30.

102.8x looks like good support and support zone and level. Just didn't think with reaching 104.16 that we would go back there. At the moment we are not breaking thru 103.0x (Edit: we just did)with the GU in play, NFP and RATE Expectation in play. Would look at this as a
place to take a position as well.

NFP stayed inline though soft. Rates are a definite IMO and EU, GU and JPY not positive w rates or economy for awhile compared to US.

I will clear at 105.3x once a position is taken and look to TP and wait on another retrace to manage capital and if see if we get another retrace to 103.8x.

I didn't know if the ext would be unlocked since NFP soft inline w rate hike expectation for now. As this would determine how much I clear at 105.30.

Since I don't understand markets as a whole well, I didn't know if Sterling would impact the JPY? I know if Sterling goes again and EU follows it will affect the entire FX board which would make me believe taking a postion soon to get in would be beneficial and would unlock the short term leg extension to 107.5x

I actually had 105.8x as my next leg as opposed to 105.3x. I think 102.8x offers good support for another leg up.
  • #143,994
  • Oct 7, 2016 3:35pm Oct 7, 2016 3:35pm
That was pretty much it for a wild week in FX via Sterling, commodities also on the move while equities on the very back seat with European ones coughing at the highs while US ones indifferent with only eyes on elections digesting imminent hikes after today.

Euro in uneventful week grinding the lows every day but the 1.11xx held one more time after the soft inline headline reports. Floor is naked as 'nobody' will protect the handle after today's reports and setting the high of this Quarter (@hoom) is in play for next week ....

Dollar closing W very bullish after key NFP report week but in large part skewed to the impact of the massacre in Sterling capitulation move....

Not much to see or do for the close. Actively looking for positions in European Equities, flat in Gold and Sterling ...on the rest of the board same levels, same trades, same all....

Quoting suntan
{quote} Hope you don't mind me attempting to answer this as I am in this trade. I reloaded at 103.30 still with a target of 105.00. I saw todays dollar weakness on an inline NFP as an opportunity to reload rather than a change in trend. I suspect the answer Sisse is looking for is to sit tight though so look forward to his views.
Here is all the i have to say...

Quoting sisse
..... DOLLAR ...taking 96.6x on the W close will via RMT will unlock a momentum play to 100.xx with intermediate stop at 98.4x till the FED actual hikes. A flop or inline with soft expectations will trigger profit and back to 95.9x until further data while only major Fck up will bring something new on the table killing rates for the year.
@IMARICH1 ...read above .... 103.8x is momentum x short term swing ....all same stuff we have been talking about.... this is not outlook sell so change it to long obviously...

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Like we have discussed a million times. Start from the macro direction before you go to the short term swings. IF you did your homework you will know that 100.8x is mid and long term key level ....can you sport the flip?

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #143,995
  • Oct 7, 2016 3:38pm Oct 7, 2016 3:38pm
Did any1 read this 
http://m.nasdaq.com/article/draghi-s...20161007-00412
Re-Incarnated
  • #143,996
  • Oct 7, 2016 4:01pm Oct 7, 2016 4:01pm
...and we rolled with a bearish daily close in the Euro .... thats all for this week ....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #143,997
  • Oct 7, 2016 4:32pm Oct 7, 2016 4:32pm
Thanks sisse and all in the thread. Good weekend everyone.
  • #143,998
  • Oct 7, 2016 9:01pm Oct 7, 2016 9:01pm
Have had ago at TA on the AUDUSD would appreciate critiques on my analysis.
On FA side, Australia's interest rate is 1.5% so room to lower rates compared to other countries some negative
Reserve Bank of Australia (RBA) is under pressure to keep interest rates low partly due to real estate bubble (mostly housing,apartments).
With these issues in mind and the stronger US Dollar.
A biases towards lower AUD could be argued. There probably is other influences for and against, will keep reading

Have been trying to get a grip on FA as this has not been something I had taken much notice of in the past, until I found this
Useless Thread and realizing how little I knew.
All the Praise for this thread is well Justified.
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  • #143,999
  • Oct 7, 2016 9:40pm Oct 7, 2016 9:40pm
Dipping back in to mention I think this trump tape might have legs (for anyone thinking about the us election). Damage control from now til debate Sunday night needs to be A game to quash it. We will see but when news "trumps" a cat 4 hurricane landfall...well like I said. We'll see.
  • #144,000
  • Oct 7, 2016 10:59pm Oct 7, 2016 10:59pm
Quoting goosebone
Dipping back in to mention I think this trump tape might have legs (for anyone thinking about the us election). Damage control from now til debate Sunday night needs to be A game to quash it. We will see but when news "trumps" a cat 4 hurricane landfall...well like I said. We'll see.
I'd like to expand on this with some further news : Jason Chaffetz withdrew his endorsement of Trump while Paul Ryan withdrew his invitation to Trump for his campaign event. This may signal a general reversal within the GOP and more prominent members may turn against him. And while this was to be expected during the primaries it's evidently more negative for Trump's campaign just 32 days before election. Obviously the main issue here is the tape itself which will be the catalyst in my opinion for further developments and a great weapon for most media platforms which have been pro-Clinton since the start. If we extrapolate from the perceived Clinton victory in the first debate which was positive for the Dollar, this series of events should be even more positive. The extend of that I don't know.

p.s. The above do not constitute an expression of political beliefs. I honestly only care about the impact on the Dollar and my positions.
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