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  • #145,461
  • Nov 18, 2016 11:13am Nov 18, 2016 11:13am
since Im out of FX now as sisse is. Thanks to everyone for sharing ur views!!! til FED we move to equities as sisse notes. here is my view on DAX. the chart is self explanatory - even can see how I played it with partial profits and scaling in.

On FA short term: I expect a sell off to be triggered by Italian risk-off creeping in + by FED hikes expectations =) both negative for equities. What do you think?

P.S.: its analogical for SP500. Will post over the weekend.
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  • #145,462
  • Nov 18, 2016 11:42am Nov 18, 2016 11:42am
Quoting hoom
{quote} the scale of the moves suggests that the expectations translated into these moves are beyond the next few weeks and Dec hike is fully priced in...for euro* side there is ECB ,Italy referendum and German/French elections , for USD there is FED and Trump taking office . Market is looking for higher interest rates and fiscal policy stimilus for next year or at least that's what it makes us believe for now. Risk should be on as soon as Jan 2017 , market could be in denial or something beyond our charts is cooking . Recession ?!! Trump is a real...
Mind that market is in denial for crisis that will hit emerging markets in next few years since 2014 when FED papers first roled out. Yes we are pricing it in trough EM currencies, bonds, equities but that is only first leg. But non the less that is how usual large scale macro events are priced, becouse so few participants actually realize it ahead, the real moves starts once the panic is in. We have a sour cooked soup of commodities in hole crushing the income of EMs, dollar soaring and the several trillion USD denominated debt waiting to tick up in breakout. Risk is already there for long time, but its being priced in slowly, like it has been pointed out on this thread a lot its all about timining when you get in that leg that starts to roll.
  • #145,463
  • Edited 11:59am Nov 18, 2016 11:47am | Edited 11:59am
Quoting Pixie666
{quote} Sisse if i may ask, the outlook was changed from buy to neutral for US Equites? If i have missed anything or i may be wrong. Now chose your posion time in Equites defines EUR equites or only US?
Yes US equities was changed to Neutral for the long term. Yes it means positions for US equities only. I wasn't referring at European Equites.

Quoting hoom
{quote} the scale of the moves suggests that the expectations translated into these moves are beyond the next few weeks and Dec hike is fully priced in...for euro* side there is ECB ,Italy referendum and German/French elections ,
Quoting primejarvis
{quote} Risk of getting a hike ... + Ecb not tapering ... Extension of QE ... Midterm levels not changed the flow same in sort a small +/-200 - 250 pips retrace .. Breaching the .064x and a close above might take it to close the gap @.086x ... If breached the .0517x the above flow might not get effective ... Correct me if I am wrong ...
I think we need to put a quick point of reference here. I noticed that RISK is being used in the wrong context.

--> Rates, monetary policy, macroeconomic factors, fundamental macro news that point down, etc DOESN'T MEAN RISK.

Rate hikes is no a risk play. Trump winning the election is NOT a RISK play. Why should it be right now? he is not even the President yet. Don't confuse the expectations of his economic policies with RISK. He can send the US economy to the drain and make the US poorer than Zimbawe in 4 years and STILL NEVER trigger a RISK play.

--> Risk come from 2 fronts for trading:From unexpected shocks and externalities or when there are severe symptoms and conditions for an imminent collapse of the economy. Sure Trump was a 'surprise' election but markets even during the results were thinking about risk. We don't have any of those conditions anywhere in the develop world yet and especially in the US.

--> The only confirmed and potential risk play that we have in the agenda for next year and beyond as for today is the UK via Brexit. Even now risk IS NOT in play in the UK but it may trigger if Europe descend into chaos and the largest trading block in the world collapse with WAR flaring on the east front ...that will be RISK.

--> The other very soft and closer short term theoretical risk play is from Italy but is not expected to be a game changer.

Quoting chester123
... On FA short term: I expect a sell off to be triggered by Italian risk-off creeping in + by FED hikes expectations =) both negative for equities. What do you think? P.S.: its analogical for SP500. Will post over the weekend. {image}
--> The odds in global Equities surviving any of the storms cooking after RMT are very very very thin. I mentioned before and also Fool is trading the same flow. We want a pop in US Equites before the ECB/FED (and therefore Italian referendum) combo for large hands to clear 'happy Equities with Obama and UK still benefiting in trade as part of EU times' on the highs.

--> Wouldn't bet the house on selling before the FED confirm economic outlook and hikes not for DEC (that is irrelevant right now) but the next 2 or 3 for Q1/Q2 2017. If it makes any sense expecting a exhaustion pop for fresh ATH and get headlines making the average Joe jump on the bandwagon that Brexit and Trump was just noise while real money start position for what is expected a very wild and gloomy 2017.

--> We'll go in details but markets are aligning for a mid and long term top in Equities. We wont see higher levels in 2017 in the US and and prolly a bit longer (2019 in the UK) after this short term leg.

We'll discuss in detail....

---------

For now I just want to open the core expectations in play for the next few weeks in Euro* and Dollar*.

 

  1. Risk (except an unexpected event) is not in play.

What about Dollar. Are we trading hikes? inflation? or US economic strength till year's end

What about EURO*. Are we trading end of QE? or EZ economic strength till year's end

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,464
  • Nov 18, 2016 11:56am Nov 18, 2016 11:56am
Quoting sisse
{quote} Yes US equities was changed to Neutral for the long term. Yes it means positions for US equities only. I wasn't referring at European Equites. {quote} {quote} I think we need to put a quick point of reference here. I noticed that RISK is being used in the wrong context. --> Rates, monetary policy, macroeconomic factors, fundamental macro news that point down, etc DOESN'T MEAN RISK. Rate hikes is no a risk play. Trump winning the election is NOT a RISK play. Why should it be right now? he is not even the President yet. Don't confuse the expectations...
Thankx for the correction...
Re-Incarnated
  • #145,465
  • Nov 18, 2016 12:01pm Nov 18, 2016 12:01pm
Quoting sisse
{quote} ---- For now I just want to open the core expectations in play for the next few weeks in Euro* and Dollar*. Risk (except an unexpected event) is not in play. What about Dollar. Are we trading hikes? inflation? or US economic strength till year's end What about EURO*. Are we trading end of QE? or EZ economic strength till year's end sisse
Dollar: Hikes. But hikes in the longer term expectations sense not simply December FED (How many, How quick) and inflation as it relates to those expectations.

Euro: Expectations of end of QE. And expectations of economic strength by extension of QE (end of QE signalling economic strength)
  • #145,466
  • Nov 18, 2016 12:07pm Nov 18, 2016 12:07pm
Quoting sisse
...and that was it for the week. Europe going home and we have pretty much the high and low of the day and week set across the board. A great couple of week for currencies but for now is the traditional "choose your poison time" for those in Equities starting with the US closing session for the early birds. On the rest of the board, nothing new all markets in synch without surprises... On the thread I have read very little opinions on direction, expectations and 'maps' for next FX legs and a lot of trigger ideas... Q: What do you guys think general...
Nothing change before there is some FA change/news even if technical somehow is lined up for retracement from overbought condition. And when retracement start going I think we can take out one or two handles during a couple of 4H candles. USD is heavy overbought and market just wait for a reason to jump in for some retracement. USD is King on the hill and will possible be for a period ( Until numbers start showing huge inflation) I think the strength in USD since election is currently somehow trading more positive economic politics outlook for the Trumponomics then rate hike expectation ( that is close to 100% by now ) .
So short term Neutral on USD
Mid term buy
Long term sell
Trading in the shadow of SM
  • #145,467
  • Nov 18, 2016 12:10pm Nov 18, 2016 12:10pm
Quoting sisse
{quote} Yes US equities was changed to Neutral for the long term. Yes it means positions for US equities only. I wasn't referring at European Equites. {quote} {quote} I think we need to put a quick point of reference here. I noticed that RISK is being used in the wrong context. --> Rates, monetary policy, macroeconomic factors, fundamental macro news that poindown, etc DOESN'T MEAN RISK. Rate hikes is no a risk play. Trump winning the election is NOT a RISK play. Why should it be right now? he is not even the President yet. Don't confuse the expectations...
Thank you sir for your valuable insight. Always a pleasure to learn here. This thread is a true Gem
  • #145,468
  • Nov 18, 2016 12:22pm Nov 18, 2016 12:22pm
Quoting sisse
{quote} Yes US equities was changed to Neutral for the long term. Yes it means positions for US equities only. I wasn't referring at European Equites. {quote} {quote} I think we need to put a quick point of reference here. I noticed that RISK is being used in the wrong context. --> Rates, monetary policy, macroeconomic factors, fundamental macro news that point down, etc DOESN'T MEAN RISK. Rate hikes is no a risk play. Trump winning the election is NOT a RISK play. Why should it be right now? he is not even the President yet. Don't confuse the expectations...
Agree the risk is there already, but its not yet priced in. Mind that historcially looking if you study the path to war in most of cases it is ireversible. Once the micro patterns are starting to lay down (troop positioning on boarders, economic warfare, sanctions, large decrease in political relations) it almost always leads to war. Now that doesnt mean that it always leads to actual full blown confrontation, in modern era superpowers have mainly been involved in asimetric warfare and currently the probabilities are that are going to see large spike in NATO/Russian relations which should lead to risk being priced in much more. Whether its a real risk or not it doesnt matter from trading perspective even for large long term macro play. In my book the game that is played atm between US and Russia is same asimetric war that was already played out 40 years ago, its all about crushing the oponent trough attrition, whole holds the longest, and ofcourse the history tells who usually wins such conflicts.
So in that manner there is alot more risk to be priced in, that is just one side, the other is more generally relative to EMs across the globe. In that sense i would agree that stock markets are likely to see its top becouse you cannot contain EM spillover just on their boarders, negative impacts will travel across. But becouse this macro has such hard volatility and time window to define its very dificult at least for me to play it becouse i could have too many micros gone rotten before it actually plays out, thats why i try to follow some other pinches in mid term macros to help give better short term perspective.

Sadly EU did not manage to close bellow with weekly close so we need more action however the path is already confirmed trough US dollar index and UCHF for possible large USD expansion upwards in next months/2 years (probability 75%).
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For now long term charts are screaming risk, macro fundamentals are screaming risk, bonds are pricing certain mid term risk, Bitcoin is pricing certain risk spikes, geopolitics aswell, perhaps the silent one for now is gold.
  • #145,469
  • Nov 18, 2016 12:33pm Nov 18, 2016 12:33pm
Short term
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  • #145,470
  • Nov 18, 2016 12:48pm Nov 18, 2016 12:48pm
lmfao @ spikemageddon

Ive stated my general outlook up to fomc...

but Im in the same camp as goose... im on the move so havent had a chance to read the others. euro* bullish and dollar bullish generally, but i think dollar will be unstable comparitively because of trump....where as euro* will be more predictable

i expect midterm outlook from sisse will change to nuetral after the combo (eu)
  • #145,471
  • Nov 18, 2016 1:36pm Nov 18, 2016 1:36pm
For now I just want to open the core expectations in play for the next few weeks in Euro* and Dollar*.

  1. Risk (except an unexpected event) is not in play.

What about Dollar. Are we trading hikes? inflation? or US economic strength till year's end

What about EURO*. Are we trading end of QE? or EZ economic strength till year's end
Dollar: Dec. hikes is already priced in. As we are trading expectations (i.e., Trumps is in favor of rate increase; Trump economic plan is very promising for investors (infrastructure; tax decrease; etc.). So Investors start moving their money to US economy via Bonds, Equities and buying USD. USA becomes the most attracting place for investors in comparison to the rest of the world. Hence, I don't see any risk with Dollar.
EURO: I think we are trading the risk from political side and neither the end of QE nor the EZ.

  • #145,472
  • Nov 18, 2016 2:00pm Nov 18, 2016 2:00pm
Quoting goosebone
{quote} Dollar: Hikes. But hikes in the longer term expectations sense not simply December FED (How many, How quick) and inflation as it relates to those expectations. Euro: Expectations of end of QE. And expectations of economic strength by extension of QE (end of QE signalling economic strength)
Again- agreed with this.
  • #145,473
  • Nov 18, 2016 2:15pm Nov 18, 2016 2:15pm
Quoting goosebone
{quote} Dollar: Hikes. But hikes in the longer term expectations sense not simply December FED (How many, How quick) and inflation as it relates to those expectations. Euro: Expectations of end of QE. And expectations of economic strength by extension of QE (end of QE signalling economic strength)
So basically you are reverse of a gold bug/AE. Sounds good, just by doing that your short-mid term odds are up.
  • #145,474
  • Nov 18, 2016 2:37pm Nov 18, 2016 2:37pm
Quoting janpec1000
{quote} So basically you are reverse of a gold bug/AE. Sounds good, just by doing that your short-mid term odds are up.
Sorry I didn't get that. But I want to. Can you explain?
  • #145,475
  • Nov 18, 2016 2:56pm Nov 18, 2016 2:56pm
Sure. Gold bug/AE is usually someone refered to having bearish view on current market overall no matter of its cyclical phase. They usually use historical projections to base their view, yet they fail to acknowledge the differences in historical patterns to adapt on current market view, which usually makes them either very wrong for a while, or very wrong for long time, but eventually the hit the "correct" run simply becouse they dont use leverage. So think about it like that: You make projection that your fiat currency will collapse becouse every fiat currency in history has, so you bear view, place a bet, but its a non leverage bet (gold, currency, bonds). Meaning that you hold that for years and years, time goes by, hundreds and hundreds of oportunities and possible investments go by, and somewhen down the road where you were pretty much wrong for hundred times the currency does actually collapse and you call it a green trade, and "i was right". Thats usual approach of a gold bug/AE.
Tie 100% of capital in single trade, stick in it, miss 1000 oportunities and then along the road you call it a victory, becouse eventually everyone is right at least once on certain time scale.
You can face a gold bug with market gun and aim point on sight and he will not admit mistake ever, thats why they keep going with bear view trough many many market cycles even if there is cycle going in their favour they keep going sticking to their initial view, not baring anything becouse in non leverage market you can take many more hits that one can in leveraged one. I am not going to point any famous names here, but if you would know them pretty much all would qualify into that basket case for past many many years. If you want to hold a value of anyones opinion having leveraged view is much more powerful if one is consistent than a non leveraged one.

What your view reflects for mid/long term macros is oposite of that projection on both USD and EUR.


Gold bug/AE belives no hikes can be done, becouse US has too much debt to hike anything at all (not just Dec, anything). So if you take 2015 hike use your imagination and youll see the reasons they will find why hike back then happened. They think QE will keep growing and growing never ending. So if you face them with FED tapering they will find whatever reason to justifiy that tapering of FED actually is just a pause, or whatver else. The main point behind is not that they are right or wrong, they actually might be correct, but if you cant admit the mistake and cut the loss you cant trade. Thats the bottom line, thats why majority of gold bugs actually give outline and view on majority of market moves, yet they do not place or care to admit of placing any trade.
  • #145,476
  • Nov 18, 2016 3:25pm Nov 18, 2016 3:25pm
Quoting sisse
--> The odds in global Equities surviving any of the storms cooking after RMT are very very very thin. I mentioned before and also Fool is trading the same flow. We want a pop in US Equites before the ECB/FED (and therefore Italian referendum) combo for large hands to clear 'happy Equities with Obama and UK still benefiting in trade as part of EU times' on the highs. --> Wouldn't bet the house on selling before the FED confirm economic outlook and hikes not for DEC (that is irrelevant right now) but the next 2 or 3 for Q1/Q2 2017. If it makes any...
Yes I am wary about jumping the gun on a hard breakdown in US equities. I am set up for catching a grind up for the S&P up to the FOMC and beyond. I don't have any trades set up past mid-Dec yet, but I am scoping out bearish trades starting mid-Feb to end March. Plenty time to fish those and I am watching for super cheap fills which is one of the quirky aspects of trading options.

Lots of uncertainty about the new regime in the USA and it remains to be seen if that could spook the equity markets enough to see a serious breakdown. Looking at 15 years of monthly candles it really looks to me that this bull market could enter its 9th year on a strong breakout north, but what it really needs is a deep purge and a 20%+ breakdown.....we could see both as the US and the rest of the West enter into very uncertain and possibly turbulent times.
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #145,477
  • Nov 18, 2016 3:30pm Nov 18, 2016 3:30pm
Quoting goosebone
FB notifications just told me "The President-elect just beat your high score on Candy Crush"
Just walk away...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #145,478
  • Nov 18, 2016 3:48pm Nov 18, 2016 3:48pm
Quoting janpec1000
. What your view reflects for mid/long term macros is oposite of that projection on both USD and EUR. Gold bug/AE belives no hikes can be done, becouse US has too much debt to hike anything at all (not just Dec, anything)
Well I guess I can live with that. Thanks for explanation.
  • #145,479
  • Nov 18, 2016 3:56pm Nov 18, 2016 3:56pm
Quoting The Fool
{quote}. Lots of uncertainty about the new regime in the USA and it remains to be seen if that could spook the equity markets enough
I heard Chachi is on the short list for press secretary. Loyalty.
  • #145,480
  • Nov 18, 2016 4:04pm Nov 18, 2016 4:04pm
Quoting goosebone
{quote} Well I guess I can live with that. Thanks for explanation.
Well they can live with that, becouse of no leverage, not sure if you can
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