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The Really Useless Thread

  • #145,541
  • Nov 21, 2016 2:16pm Nov 21, 2016 2:16pm
Quoting sisse
{quote}In a nutshell: FED expectations DEC irrelevant. FED exp next year skyrocketing after FED dec (check inflation as a catalyst) and/or a mute ECB is fast continuation. Any other softer outcome in between is soft continuation. ECB tapering unlocks for the first time in +6 years the possibility of a long term bottom by late Q3/Q4 2017 .... sisse
thank you for your outlook and input, all of that makes sense and fits into my view enough that I can agree
  • #145,542
  • Nov 21, 2016 2:23pm Nov 21, 2016 2:23pm
Quoting sisse
{quote} I would only recommend to split the Brexit play from the macroeconomic / monetary plays. Although they may and will crossover at some point in the future, markets like always (you can also see from the debt crisis drama the same pattern) will stand aside while populist politicians play the 'we are the only almighty Empire in the world card'. --> On the brexit front. Lets make it this long to have it for future reference and we don't have to repeat what are the expectations on this front. In a nutshell: Is very simple market expectations...
Agree with everything said above, except the last part about ECB tapering. Altough i dont have enough historical patterns to put that view better behind, my guess would be that tappering as long as its related only to asset purchases and not rates should not have major impact on EURUSD while the FED is driving rates higher, those two macros are in different proportions reflected on EU. Just saying i would not add tapering into changing the large macro outlook for that pair while FED is driving, at least not in terms of expecting large surge in price for that pair.
Any market information that cannot be checked for hundreds or better thousands of historical examples is less reliable and unless you use spectrum analysis to project it from micros it could be very missleading. QE programms are new pattern on economic side, they have different behaviour than previously traditional printing and monetary expansion had.
  • #145,543
  • Nov 21, 2016 2:55pm Nov 21, 2016 2:55pm
Quoting sisse
{quote}In a nutshell: FED expectations DEC irrelevant. FED exp next year skyrocketing after FED dec (check inflation as a catalyst) and/or a mute ECB is fast continuation. Any other softer outcome in between is soft continuation. ECB tapering unlocks for the first time in +6 years the possibility of a long term bottom by late Q3/Q4 2017 .... sisse
What if we have a flop in rates next year? With the rate hikes Trump will have a lot of problems for increasing U.S. deficit and a help from the FED wouldn't be that rare. If the last flop took us to 1.16, this could send EURUSD to the moon.
  • #145,544
  • Nov 21, 2016 3:08pm Nov 21, 2016 3:08pm
2017s big wild card will be the US dollar getting weaker, not stronger, strategist Jim Paulsen says

http://www.cnbc.com/2016/11/21/strat...us-dollar.html
  • #145,545
  • Edited 4:28pm Nov 21, 2016 3:54pm | Edited 4:28pm
Quoting sisse
{quote} I would only recommend to split the Brexit play from the macroeconomic / monetary plays. Although they may and will crossover at some point in the future, markets like always (you can also see from the debt crisis drama the same pattern) will stand aside while populist politicians play the 'we are the only almighty Empire in the world card'. --> On the brexit front. Lets make it this long to have it for future reference and we don't have to repeat what are the expectations on this front. In a nutshell: Is very simple market expectations...
Sisse, just a technical question as we are on the same page (i.e. more like me being on FA page written by you ) from the FA perspective. Should have not we changed short term oulook for US equities to buy/soft buy post-elections? Or you still see the post-election leg as a sub-short term as its a part of short term range? I mean the second version fits my map. But it depends if you project the leg beyonf the extreme (see my map) - I guess no.

Or if we put it other way. Why would we trade the thing to the outside (after it got back to flip) if we are in neutral? Is it because we not trading a swing but a post-election flow?
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  • #145,546
  • Edited 9:17pm Nov 21, 2016 6:47pm | Edited 9:17pm
->How do you think expectations could flop in the upcoming weeks?

Possibilities include: Hawkish ECB, Dovish no hike FED, over the top Hawkish FED, Italian referendum surprise (yes vote), and to a much lesser degree given timing: Expectations in France shifting left and away from EU haters and White Power knobs (before anyone schools me I realize it's far more complicated than that)

-> What do you think have higher odds this time another major flop or just continuation to complete the FED rate cycle and close the QE ECB cycle?

Well, just like the odds of a Clinton victory were here in the USA, odds are much higher that things go as they usually do, continuation, no real surprises, business as usual. (cooler, less extreme heads prevail politically and today's new policy is not a radical, drastically unexpected change from yesterday's policy)

--> Which one will be a fundamental macroeconomic event that MUST happen sooner or later and which one will be just noise, kicking the can or an unforeseen game changer?

Not sure how to answer this because both interest rates in the US coming off of near ZIRP level and EZ stopping QE seem to me to be fundamental macroevents that must happen sooner or later and both are cans that can be kicked. Over my head I guess. Actually it all is but I thought i would at least try to answer these questions so here goes:
FED can kick that can with a hike in Dec. and a dovish plan for the coming year, or they can big hike, big plans right into an unforeseen game changer. Also could change the game with no hike of course.
The ECB, while they could kick that can too with biz as usual, wouldn't be changing the game all that much with QE wrap up talk (unless uncharacteristically drastic and sudden) since everyone understands QE cant last forever and there are a limited amount of cans to kick at this point.

Choose you poison....

Did. For now.
  • #145,547
  • Nov 21, 2016 10:21pm Nov 21, 2016 10:21pm
seems like a pretty easy trade, no? - when the ^VIX dips to 11, you go long....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #145,548
  • Nov 22, 2016 1:30am Nov 22, 2016 1:30am
Quoting The Fool
seems like a pretty easy trade, no? - when the ^VIX dips to 11, you go long.... {image}
Isn't this bound to be like the SNB decoupling fiasco? Black swan event == low liquidity == stops jumped so far that a huge loss is to be expected?I'm not really familiar with vix but that's the first thing that comes to mind.
  • #145,549
  • Edited 7:15am Nov 22, 2016 2:44am | Edited 7:15am
--> Bad news for the US and Asia. Trump announcing first official confirmation that free trade and international cooperation (TPP) will be off the table.

Free liberal democracies in the west are aligning for heavy losses and in countries like the US, protectionism and unilateralism without the social safety networks of the counterpart in Europe is a guarantee recipe for disaster and to make the country worst off if things go upside down on free markets .... Another blow to global markets.

--> On the European session, Europe far in the backseat until next week so expecting to just playing catch up with US moves so same levels, same trades, same all.

sisse

Quoting janpec1000
i would not add tapering into changing the large macro outlook for that pair while FED is driving, at least not in terms of expecting large surge in price for that pair.
No. What I meant is the end of QE unlocks the window for a long term bottom expectations for late Q3/Q4 2017. Long[any] term expectations are made of several factors. Long term ones take time. ECB trigger happy with QE is one of them. If it is announced on DEC despite a quick knee jerk reaction we need to mark the FA chart that day...doesnt mean we will change the long term outlook straight away in the Euro or that will rally to 1.3x the week after....

Quoting Paintomaker
{quote} What if we have a flop in rates next year? With the rate hikes Trump will have a lot of problems for increasing U.S. deficit and a help from the FED wouldn't be that rare. If the last flop took us to 1.16, this could send EURUSD to the moon.
The flop wasn't in hikes DEC 15 (even with a flop, nothing would have happened except a one more quick short lived spike up) but in Yellen promising 4 hikes in Jan 16 and by March the FED backtrack to none.

Quoting chester123
{quote} Sisse, just a technical question as we are on the same page. Or you still see the post-election leg as a sub-short term as its a part of short term range? I mean the second version fits my map. But it depends if you project the leg beyonf the extreme (see my map) - I guess no. Or if we put it other way. Why would we trade the thing to the outside (after it got back to flip) if we are in neutral? Is it because we not trading a swing but a post-election flow? {image}
Sure I understand good questions. A quick sketch. We are here in the mid term:

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To your questions:

  1. The answer is short and mid term outlook are not aligned yet.
  2. Short term is still neutral (and if you are long from below and clear all around 2200.xx is a perfectly and prolly the best risk-reward option) caught between happy numbers, risk on election flow and FED hikes.
  3. In strictly TA sense clearing right now is the answer and you are right to point that out
  4. However, we haven't changed yet mid term leg which is flying on superb Q3/Q4 US numbers in all fronts. While on the mid term things got a lot more complicated with fiscal and aggressive public spending and inflation helping the good mood but a sharp rise in rates, global markets and protectionism knocking at the door. We are set for a cluster fck especially until the guarantee honeymoon period with Trump ends with Europe potential turnoil next year.
  5. In strictly TA sense, the mid term map chart is self explanatory (you can track back a conversation with @Fool about it). We are coming from the last leg for a break (happening this week as we speak) in an EXHAUSTION leg where 'smart money' is expected to .....
  6. Why there aren't change in outlooks in short term? because is no reason to until FED hikes.
  7. Why keep holding longs? Well you can close all short term and is perfectly valid but holding the remaining positions is because of the mid term leg betting on the exhaustion leg (read backposts expectations is a M [W] break to fresh ATH [we are already trading ATH since yesterday close] which will be extremely difficult to target as we are in uncharted waters with a plethora of negative FA movers and shaker on the horizon.

Quoting goosebone
->How do you think expectations could flop in the upcoming weeks? Possibilities include: Hawkish ECB, Dovish no hike FED, over the top Hawkish FED, Italian referendum surprise (yes vote), and to a much lesser degree given timing: ....
Hmm... I think we will need to discuss in details your post. You got some points but in general you are mentioning every single potential outcome. That is not really the point of the question neither useful for trading. You need to narrow down and abstract your analysis to what markets are really tracking otherwise you will need to also factor in a potential meteor crashing in California too...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,550
  • Nov 22, 2016 2:58am Nov 22, 2016 2:58am
Well, PC crashed so had to rewrite the answer, comes a little late but here it is


Quoting sisse
{quote} Trump unlocked inflation and fiscal 'irresponsibility' expectations on the little we know from his economic plan making expectations 2017 hikes skyrocket
Thanks for pointing out this

Quoting sisse
{quote} I would only recommend to split the Brexit play from the macroeconomic / monetary plays. ... Ignore all noise until Article 50 is announced and elections in France & Germany. Eveything else put on ignore. Markets wont play the BS game any longer as otherwise they will miss the next 4 years of markets in limbo with a bunch of random clueless politicians ...
and this

Quoting sisse
How do you think expectations could flop in the upcoming weeks?
Very dovish DEC FED talking about slow rate hikes cycle next year, ECB announcing in next meeting strong QE extension
Quoting sisse
-> What do you think have higher odds this time another major flop or just continuation to complete the FED rate cycle and close the QE ECB cycle?
Continuation, macro numbers good on US Side, soft recovering in EZ (Brexit not counting now as for your suggestion, election fears to be checked later, italy referendum shouldn't be major disaster ...)
Quoting sisse
--> Which one will be a fundamental macroeconomic event that MUST happen sooner or later and which one will be just noise, kicking the can or an unforeseen game changer? ... Choose you poison.... sisse
FED rates cicles and ECB tapering both must happen, sooner or later ...
EU Elections and Brexit will be noise in the next months and a possible game changer in results days if France, Germany, Austria and Italy fall in far-right and anti-EU hands (talking about EUR effects, not personal political evaluations).
Trump is another noise/game changer front (the number one "twitter mode" politic). He can announce whatever and whenever. Untill now big electoral promises on some fronts and big holes on other key ones (foreign policy above all).
Need to be checked step by step. Plus he has to manage internals: he is already hated from half the country and beloved from the other half: must be careful to not disappoint the latter ones (but this probably won't happen or will take years ...) or exasperate too much first ones (more probable) if he wants to avoid internal major disorders and consequences
  • #145,551
  • Nov 22, 2016 4:38am Nov 22, 2016 4:38am
@sisse I see what you mean. Here's an edit. Hopefully more concise and coherent.

->How do you think expectations could flop in the upcoming weeks?

Possibilities include: Hawkish taperhappy ECB, No hike Dovish fed, over the top Hawkish FED, Italian referendum surprise (yes vote).

-> What do you think have higher odds this time another major flop or just continuation to complete the FED rate cycle and close the QE ECB cycle?

Odds are higher that things go as they usually do, continuation, no real surprises, business as usual. In other words ECB keeps current policy with a dash of hawk for good measure, Fed hikes in Dec and issues another cautiously worded statement that says nothing very discernable either way.

--> Which one will be a fundamental macroeconomic event that MUST happen sooner or later and which one will be just noise, kicking the can or an unforeseen game changer?

Not sure how to answer this because both interest rates in the US coming off of near ZIRP level and EZ stopping QE seem to me to be fundamental macroevents that must happen sooner or later and both are cans that can be kicked. Over my head I guess. Actually it all is but I thought i would at least try to answer these questions so here goes:
FED can kick that can with a hike in Dec. and a neutral to dovish plan for the coming year. Alternatively they can Big hike, Big plans or (to similar effect flopwise) No hike, No plans right into an unforeseen game changer.
The ECB, while they could kick that can too with biz as usual, wouldn't be changing the game all that much with QE wrap up talk (unless uncharacteristically drastic and sudden) since everyone understands QE cant last forever and there are a limited amount of cans to kick at this point.

Choose you poison....

Did. For now.
  • #145,552
  • Nov 22, 2016 4:44am Nov 22, 2016 4:44am
Quoting sisse
--> Bad news for the US and Asia. Trump announcing first official confirmation that free trade and international cooperation (TPP) will be off the table.
It's good news for rural Japan because TPP would have a major negative impact on the farmers. As such it's intensely disliked in my prefecture. But it's bad news for the exporters of course (like the car industry). And good news for China I would think?
You reap what you sow.
  • #145,553
  • Nov 22, 2016 4:54am Nov 22, 2016 4:54am
Quoting sisse
--> Bad news for the US and Asia. Trump announcing first official confirmation that free trade and international cooperation (TPP) will be off the table. Free liberal democracies in the west are aligning for heavy losses and in countries like the US, protectionism and unilateralism without the social safety networks of the counterpart in Europe is a guarantee recipe for disaster and to make the country worst off if things go upside down on free markets .... Another blow to global markets. --> On the European session, Europe far in the backseat until...
ok, so if I understand it well - the short term is clear - but its relationship to mid term - the short term pre and post election range and its move to upper extreme beyond ATH (happining right now) is also a move between top and extreme of mid term - so the short term extension will actually set the mid term high - thus showing us the mid term extreme lvl - as its hard to call since we on ATH - but its somewhere in the wide rectangle.

But what my map shows me and I bet u also implying in the discussions - even after the short term/mid term extreme is set - we come back to mid term flip (on keeping mid term neutral status - the unclear cluster of FA forces u described + if it blows (eu, trump) we go sell =) so we could go beyond the flip to the downside. Hmm, so the direction from the top seems clear in both scenarios after FED is cleared.
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  • #145,554
  • Nov 22, 2016 6:16am Nov 22, 2016 6:16am
Quoting NorthTrader
{quote} It's good news for rural Japan because TPP would have a major negative impact on the farmers. As such it's intensely disliked in my prefecture. But it's bad news for the exporters of course (like the car industry). And good news for China I would think?
Yeh just like NAFTA, TPP is completly double edged sword. Well majority of global trade agreements are. China surely didnt wait long to start packing new deal lol.
  • #145,555
  • Edited 7:04am Nov 22, 2016 6:50am | Edited 7:04am
Quoting goosebone
....... Did. For now.
Quoting change
...He can announce whatever and whenever.
@change @goosebone

Ok it has been a v. good conversation but lets start wrapping up all those expectations in something more manageable as I think that is were the problems/questions coming.

The only hint is you need to differentiate between market expectations and positive expectations. I think @goosebone is particularly mixing both

->How do you think expectations could flop in the upcoming weeks?

Compare and let go one by one:

@G: Hawkish taper happy ECB, No hike Dovish fed, over the top Hawkish FED, Italian referendum surprise (yes vote).

@C Very dovish DEC FED talking about slow rate hikes cycle next year, ECB announcing in next meeting strong QE extension

Hawkish taper happy ECB vs ECB announcing in next meeting strong QE extension

Market are expecting some kind of ECB announcement/comments on the tapering front.

  1. So Hawkish taper happy ECB WONT be a flop.
  2. ECB announcing in next meeting strong QE extension WILL be a flop in expectations. Do markets really expect something like that? NO Why? strong numbers from the EZ with inflation ticking up. Why if it actually happens? it will mean something very bad is cooking in the background for next couple of Q.
  3. The inline expectation range around some kind of announcement to start tapering by Q3 2017 to letting silence trigger the expectation play by default.

No hike Dovish fed vs ery dovish DEC FED talking about slow rate hikes cycle next year

Right both. That will be the flop in expectations. Markets are expecting every single scenario but not a dovish FED.

  1. Do markets really have any expectation of a dovish FED? NO Why? Strong macro numbers in the US in all fronts. Full Employment target hit, inflation target hit and raising expectation above after Trump.
  2. Why if it actually happens? it will mean short term triple whammy free money, low interest rates and strong economy so ride the pig blindly. However it will unlock a major change outlook for the mid term to strong sell as the rally will automatically transform in a bubble with major risk factor, less free trade on the horizon and with the FED losing 100% control of monetary policy, inflation expectations and overheating the economy.
  3. Inline expectation range from hawkish FED for next year hikes (dec hikes exp are not important at all now) to a proper .75 base point hike that will leave the FED matching the initial 2016 expectations of 3 or 4 hikes this year.

Italian referendum surprise (yes vote).

Markets are not tracking Italian referendum for the monetary and policy front. Its just a extra risk binary event that will add fuel for next year EU drama.

--> Which one will be a fundamental macroeconomic event that MUST happen sooner or later and which one will be just noise, kicking the can or an unforeseen game changer?

FED rates cicles and ECB tapering both must happen, sooner or later vs Not surefundamental macroevents that must happen sooner or later and both are cans that can be kicked

Right. ECB tapering and hikes will happen sooner rather than later.

  1. Do markets really expect both cans be kicked ? NO. Markets expectations are strongly align to trigger both right now.
  2. Why if it actually happens? Kicking the can will be irrelevant beyond a short lived spike as US macro numbers are ATH in almost all fronts and EZ is picking up fast with ECB warning us all year about the need of fiscal stimulus to end QE.
  3. Inline with exceptions range from any confirmation either by action (hikes), outlook (FED forecasts) or date announcement (ECB) from DEC till late Jan will do the trick. Everything else is not on the table for now.

Quoting NorthTrader
{quote} It's good news for rural Japan because TPP would have a major negative impact on the farmers. As such it's intensely disliked in my prefecture. But it's bad news for the exporters of course (like the car industry). And good news for China I would think?
Indeed. Those groups are usually the only ones who benefit from less free trade and competition. Sadly the majority and the country as a whole will be worse off especially in the comatose Japanese economy in urgent need from a pull from somewhere ...

Quoting chester123
{quote} ok, so if I understand it well - ..
Yeap....no comments

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,556
  • Edited 7:32am Nov 22, 2016 7:20am | Edited 7:32am
Quoting sisse
{quote} {quote} @change @goosebone Ok it has been a v. good conversation but lets start wrapping up all those expectations in something more manageable as I think that is were the problems/questions coming. The only hint is you need to differentiate between market expectations and positive expectations. I think @goosebone is particularly mixing both ->How do you think expectations could flop in the...
Thanks sisse for the very thorough explanation. Very helpful to bounce my mixed up thoughts off of the thread. They always come back clearer.
  • #145,557
  • Nov 22, 2016 7:34am Nov 22, 2016 7:34am
Quoting sisse
Indeed. Those groups are usually the only ones who benefit from less free trade and competition. Sadly the majority and the country as a whole will be worse off especially in the comatose Japanese economy in urgent need from a pull from somewhere
Yes, I was actually secretly hoping for TPP for the reasons you mentioned. despite being surrounded by farmers and having quite a few customers who are involved in the farming industry. Abe's trying really hard to boost the economy but it just isn't working somehow, is it? At least not in the dramatic way he imagined. The failure of TPP must be a big blow to him and I thought he looked very grumpy last week after meeting Trump when he thought the cameras weren't on him. One thing he's not trying hard enough to do, in my opinion, is to increase immigration. Japan will need lots of young workers in the near future - even now - to support the ageing population, and it's obvious they're not going to come from within. But immigration is a prickly subject here - they're a bit scared, racist maybe, about letting in the "wrong sort". Also it's not the easiest country to emigrate to, what with the language barrier and culture difference.

Anyway, that's f*ck all to with trading. On that front I've caught 50 pips on EUR/USD three times now going long from 1.06 (on the futures), so that's paid for my stops on the longer-term longs, just in case there's a bigger retrace. Not entirely confident about that though. But I think the Italian referendum "No" vote is mostly priced in, and can't see any fundamental reason the pair would drop further at this point. I suppose technically they could push it down to take out more bull stops before the retrace. Anyway, let's see what happens.
You reap what you sow.
  • #145,558
  • Nov 22, 2016 9:31am Nov 22, 2016 9:31am
Quoting sisse
{quote} ...and I will take that, clearing first target in US equities on the tick to fresh highs (ES 2190.xx for reference) , simple ride so far for those who missed the last chance on 'early' black Friday' las week train is gone risk wise ...all eyes in US equities before Thanksgiving as we have a fresh break in play. ... sisse
...opening range completed and prolly week over in equities with US on a short week. Clearing second target in US equities with the test 2200.xx... only one left ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,559
  • Nov 22, 2016 10:28am Nov 22, 2016 10:28am
For reference...lets see how many check marks at the end of 100 days
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  • #145,560
  • Nov 22, 2016 10:38am Nov 22, 2016 10:38am
Quoting Pharm0r
For reference...lets see how many check marks at the end of 100 days {image}
Didn't read (or watch) the list yet but I read it was almost entirely comprised of the easy ones on the left side there.
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