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The Really Useless Thread

  • #146,401
  • Dec 15, 2016 6:52am Dec 15, 2016 6:52am
Quoting gatorinla
{quote} fallen knife atm. above 0334 i dont trust bears power to deepen this st. above 0334 i am looking to short after 1.108. not a prediction. just more a thought. an ideal time to screw the most is after a new high or low is set.
its hard to stop a train. i actually think this is only the beginning of what may take several years or a decade. toward 0.8/0.7. meanwhile st 033x usually experiences a bounce somewhere above it. that bounce is just speculation of past pa. its in no way a Nostradamus type prediction to bounce. so dont say i said it was going to happen. i play odds of the past toward future. sometimes right and many time wrong. in this case i would rather short after a bounce 1.108x
those who can, do. those who cant, talk about those who can
  • #146,402
  • Edited 8:17am Dec 15, 2016 7:48am | Edited 8:17am
Quoting sisse
{quote} You keep ignoring the difference between direction and current swings and more importantly keep mixing up the current swing with news flows. I am going to keep posting the exactly same chart we have used as a base with exactly the same comment until is clear. {image} One more time the same points: We trade expectations not facts. The sooner you get in synch with expectations, the better and less risk you will have. Map your direction for swinging before trying to trade. Macro direction (outlook) will give you the path of least resistance...
Hi Sisse,

The last few days i have been reading thru backpost from December 2015 till now and have been bookmarking some posts for later reference.
While reading thru all those posts there came a lot of question to my mind, most of them got answered by reading further but a few of them didn't got answered and are bothering me know I am sorry if they where already answered in this thread and that i overlooked them.
It would be great if you could answer the questions where i couldn't find an answer for.

You have been stressing about the fact that we trade expectations instead of facts in the above post and many others. I fully agree with this and this has also been my findings and observation in the last year that i have been studying FA.
The thing i am struggling with the most is knowing when the change in expectations are fully priced in.

Following you approach i assume that a leg is started when the future value expectations of a asset change. Current value has everything already priced in and the change in expectation of future value means that market will have to move to a new value.
That part is clear for me, what isn't clear is how to know when that move is over? Can we say that we are in the neighborhood of the new value when we start to see profit taking wile noting has fundamentally changed since the last change of expectations?

Can i assume that a long rally of an asset or a single currency consists out of multiple changes of expectation in the same direction all priced in individually over a period of time? If this is correct then this has the implication that a long trend can only exist when expectations keep getting better/worse and a trend will stop when the last change in expectation is fully priced in and there isn't another change of expectation to be priced in. This would turn the outlook from the asset from BUY/SELL to neutral.

Is this correct? Could you confirm if i have understood it well? Input from other FF members is off course also appreciated.

Thanks and thank you for taking the time explaining al this to use, there is a lot of theorie to be found on the internet about how FA should influence price but there is almost no info to to use that info properly in a trading environment. So thank you for filling that gap.
  • #146,403
  • Dec 15, 2016 8:16am Dec 15, 2016 8:16am
Inflation was the keyword for the BOE as expected and good numbers keep coming from the US.

Asia first, Europe second and now finally the US testing the lows @ 1.046x....

All eyes in NY after the FED. Most first readings are in consensus about the FED so opening range will kill/settle the news flow from reports. More importanly expecting yearly close flows to start taking place as early as Europe goes home today....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #146,404
  • Dec 15, 2016 8:35am Dec 15, 2016 8:35am
Quoting sisse
{quote} The whole iterations set we have been discussing was triggered because a few traders around were trying/or complaining to grasp how Fundamentals affect markets. If you go a few pages back there is a key starting points on the types of FA moves. However we stopped before going into details because there is no point of going into deep and more complex details if a trader doesn't have the core and basic tools in trading clear. Trying to learn to drive a F1 car without even knowing how to drive a stick car is a no no... In any case, going back...
The second unanswered question that is bothering me came from reading the above posts (that was very helpful in other aspects by the way inflicting some AHA moments)

In this post you say that the following: "Macro policies and numbers (interest rates being the key ones, QE, inflation, GDP, employment, rate differentials, bands, etc etc) The trends in macro numbers (no one off number) define expectations and direction"

What happens when you throw political uncertainty in the mix? Lately the numbers from Europe are starting to get better, ECB announced tapering despite the fact that they don't want to call it tapering. This could al be seen as a change in expectation and a change in policy at a very early stage.
Would you say that political uncertainty can also give direction? What would generally have the most weight? Is this something subjective that we should try to feel and gauge by reading reports on FT, Bloomberg and Reuters?
Can it be that the uncertainty sometimes goes out of the picture like the fading hard brexit jitters the last few weeks and can come back at any time?

Nik
  • #146,405
  • Dec 15, 2016 9:24am Dec 15, 2016 9:24am
Quoting gatorinla
{quote} its hard to stop a train. i actually think this is only the beginning of what may take several years or a decade. toward 0.8/0.7. meanwhile st 033x usually experiences a bounce somewhere above it. that bounce is just speculation of past pa. its in no way a Nostradamus type prediction to bounce. so dont say i said it was going to happen. i play odds of the past toward future. sometimes right and many time wrong. in this case i would rather short after a bounce 1.108x
reason for @ 033.
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don't predict direction, but dance with flow of water
  • #146,406
  • Dec 15, 2016 9:38am Dec 15, 2016 9:38am
Quoting priceaction1
{quote} reason for @ 033. {image}
the the smaller dt bottom break.. i can see a bounce to 1087 or 1114 (on larger) as likely chart wise. the smaller one usually would happen b4 0334. the larger before 0.931x.. so to avoid a draw down, i am not trying to long or short. i may long slightly above 0334 with a stop to close any drop below 0334. with 1.108 as a target.

meanwhile all sissy says from the fudis point are valid.
those who can, do. those who cant, talk about those who can
  • #146,407
  • Dec 15, 2016 9:50am Dec 15, 2016 9:50am
High time frame
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don't predict direction, but dance with flow of water
  • #146,408
  • Dec 15, 2016 10:43am Dec 15, 2016 10:43am
I suspect a flash-crash in eur/usd too!
don't predict direction, but dance with flow of water
  • #146,409
  • Dec 15, 2016 11:23am Dec 15, 2016 11:23am
long near 1.037x target 1.045x ... s/l below 1.036x
Re-Incarnated
  • #146,410
  • Dec 15, 2016 1:40pm Dec 15, 2016 1:40pm
sisse,

I always appreciate your input. However, what I was asking was not directly direction;rather , if your terminology of re-balancing portfolios and EU closing bearish but no break no shake meant that EU may be headed NORTH during this time as portfolios are shuffled.

Last time I had profit like this, you indicated that the sharp rise up was not a squeeze but rebalancing and adjusting going on. This is what I was trying to understand.

Neverthelss, thanks for your map. It was close to mine except I was a little deeper at .02xx. I looked at your stop at .037x and it was more reasonable given the market, FED, end of yr rebalancing and no big news for the remainder of yr.

I held for it and closed one position on re-rest of .0400 and 2 positions when London was closing at .0374 and .0370.

I am out for now. Looking at a possible position at the FLIP if conditions warrant another look.

Thanks for all tour help this year! EU finally decided to get in for a dip w me!
  • #146,411
  • Dec 15, 2016 2:25pm Dec 15, 2016 2:25pm
Quoting sisse
{quote} 1.046x tested overnight ...I hope there are plenty of happy faces in the thread... .....==> 1.097x (Strong R) ==> ...1.084x (Strong R) ...==>1.065x (Flip)[check].... ==>... 1.046x [check] (Soft S) ....==>(.1.037x Support)...e
A flawless flow in the Euro. Here cleared main swing target on the test 1.037x which was also part of the crowdsource map we made for the news.

.....==> 1.097x (Strong R) ==> ...1.084x (Strong R) ...==>1.065x (Flip)[check].... ==>... 1.046x [check] (Soft S) ....==>.1.037x [check] (Support)

Very well done all that rode it as high as from the 1.08xx handle (I know a couple here) and for the rest of the mortals from the 1.07xx handle. I think most of the usual in the thread got it spot on this time so enjoy.

FED hikes flow completed perfectly timed with the European close. The final 'easy' part of the mid term swing in the Euro gone. Year end's flow in full swing especially with the W close tomorrow.

On the rest of the board, nothing to see or do but same levels, same trades, same all.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #146,412
  • Edited 3:10pm Dec 15, 2016 2:51pm | Edited 3:10pm
Haven't seen much in the way of post Fed breakdown posts, so here goes!

That was a very eventful Fed as it turned out, not so much the event itself but the directional flows afterwards, and thanks again sisse for the pre Fed posts (and you certainly nailed it again with that 1.0370 strong support level! )
Well, here's my own personal post mortem on the Fed action since yesterday, which I got totally wrong ...epic fail!! I still find it hard to understand how we got such a strong and continuous move down after such a relatively inline & expected event. ..ah well, looks like I won't be straying too far away from this thread for a long while yet ha ha! .

Beforehand I had anticipated: "Inline: This would be 0.25% rate increase, moderate increase in dot plot expectations, at least 2 hikes likely for 2017, cautious & dovish comments.", and i.m.o. this is roughly what we got with just a slightly more hawkish twist (and remember the Fed can signal many rate increases which don't necessarily ever materialize, see last Dec!).
In the event of the above happening I had expected a sharp move higher and also in a zig zag flow movement, but of course we got the exact opposite a sharp move downwards in a direct play.
For myself I need to know how I got it so wrong and what made me come to those conclusions!?

Firstly I thought that because inline with 0.25% increase was already baked in for so long and expected as the very minimum, that we'd have a buy the rumour sell the fact result with dollar being sold off.

Secondly, that the usual market hopes for more eg a 0.5% hike and/or very hawkish dot plot with increased 2017 rate hike expectations would lead to the market being disappointed and contributing further to a dollar sell-off.

Thirdly I thought that an air of unrealistic market "over exuberance" had been creeping into market expectations due to Trump's supposed expansionary policies (eg just see the many Q's for Yellen on that very topic during the presser!), and that since none of these "unknowns" could figure in the Fed statement or form part of their policy that this would only add to the market disappointment.

And, to finally put the nail in my coffin, I had the "feeling" that "the market" had been preparing a trap and that those dollar bulls expecting it to automatically strengthen with the hike were being suckered in and would be burned (I suppose that's what trading can do to you ..makes you irrationally over-suspicious ha ha! )

....and also in this last regard I "felt" the dollar had had a nice little run up already and was maybe due a retrace anyway? ...and ..then there was that recent short squeeze, now what was all THAT about? ... definitely Trump & Putin at work there hatching some trap for us poor traders to be sure! ha ha! . Joking aside but it's exactly these "feelings" which get us into trouble when trading but it's almost impossible to keep them entirely out, we just have to be aware of them and try keep them to a minimum I suppose. And speaking of that recent short squeeze, with hindsight of the post Fed drop has anyone got any ideas that this was very conveniently just clearing space and hoovering up orders beforehand? ...now who's being irrationally suspicious! ha ha!
EDIT: PS, btw I wasn't trading long in case anyone gets that impression this was just theorethical for sisse's pre-Fed excercise
The spoken word is your master, the unspoken word your slave.
  • #146,413
  • Dec 15, 2016 3:17pm Dec 15, 2016 3:17pm
Quoting CommercialB
...I still find it hard to understand how we got such a strong and continuous move down after such a relatively inline & expected event...
I want to reinforce CommercialB post by asking why we didn't have a zigzag movement with an inline data?
  • #146,414
  • Edited 4:15pm Dec 15, 2016 3:26pm | Edited 4:15pm
Quoting Sitting duck
{quote} ... You have been stressing about the fact that we trade expectations instead of facts in the above post and many others....
...What happens when you throw political uncertainty in the mix? Lately the numbers from Europe are starting to get better, ECB announced tapering despite the fact that they don't want to call it tapering. This could al be seen as a change in expectation and a change in policy at a very early stage.
....trade expectations instead of facts...

I will put it in different words because i don't think it matches what i meant:

The real money in any investing in any market is in positioning with expectations not after facts.

The simpler example is buying a property for investment. You don't buy it because the value is at its peak, you buy it because you are expecting the value will increase in x time. When market valuation reach your target, you can either sell and pocket the profit or revaluate the new factors and decide to either hold for longer or even buy a second property next door ....

For your other questions. You may need to dig deeper in the backposts as there are pages of pages of extensive details already written. Search for the 'PINEAPPLE' case posts set and before on the post on how Expectations, Risk and Fundamentals interplay with each other ....

Quoting CommercialB
..... I still find it hard to understand how we got such a strong and continuous move down after such a relatively inline & expected event. ..ah well, looks like I won't be straying too far away from this thread for a long while yet ha ha!...
Good job. Its always healthy to wrap up a flow to tick all your boxes right or wrong. A healthy habit to develop.

On your comments. Let me simplify the rates part of it. It maybe trigger a better answer to your doubts.

Before fed:

--> FED expect for DEC hike .25 were at 100%.
--> FED exp for 2 hikes next year were at 45%
--> FED exp for 3 hikes next year were at 23%
--> ECB exp for a rate hike next year after last conference went to 5%

After ysterday hike:
--> FED exp for 2 hikes next year are at 75%
--> FED exp for 3 hikes next year were at 65%

With all the rest constant (ceteris paribus) you can easily do the map from the rate differential front...

@ Fadhl

Why direct?.... very simple answer this time. Inline with expectations with 2 of the 3 movers and shakers (the O O) and the other overshoot in the direction of the trend.... why on earth we will got a zigzag especially when all levels were raised and everybody already position since the ECB. Remember it was a ECB /FED combo. Many times we said this before ECB exp for positioning ECB for the nail FED the rain maker ...the flow was very simple in terms of timing ....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #146,415
  • Dec 15, 2016 3:50pm Dec 15, 2016 3:50pm
Quoting sisse
{quote} .... Before fed: --> FED expect for DEC hike .25% were at 100%. --> FED exp for 2 hikes next year were at 45% --> FED exp for 3 hikes next year were at 23% --> ECB exp for a rate hike next year after last conference went to 5% After ysterday hike: --> FED exp for 2 hikes next year are at 75% --> FED exp for 3 hikes next year were at 65% With all the rest constant (ceteris paribus) you can easily do the map from the rate differential front... @ Fadhl Why direct?.... very simple answer this time....
Ok that's good, can't argue with the beauty & simplicity of maths, also the answer to Fadhl's Q makes things a bit clearer ..thanks again
The spoken word is your master, the unspoken word your slave.
  • #146,416
  • Dec 15, 2016 4:00pm Dec 15, 2016 4:00pm
Quoting The Fool
what's your cap for the S&P by year-end? I still want 2,300 & think we will see that but I need a little pullback first. We agree the real money will be made when the honeymoon is over....
you get an hour or so to grab a micropullback entry. Still all you need to know about trading equities: BTFD.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #146,417
  • Dec 15, 2016 4:06pm Dec 15, 2016 4:06pm
...and we are rolling. Very important close in the Euro for many reasons. The most important and the one I will leave floating around in the thread (we have a similar discussion with Sterling early this year)is:

-->As usual in ATH/ATL or multiyear highs/lows ALL soft retail, small, medium and even large non speculative hands are out of the market. Meaning if you want to play Superman, Robin Hood or Hero catching tops or bottoms you are playing with fire and you will get burnt more often than not.

No single micro or short term level is relevant at these area and very large hands will be the ones that decide when the move ends not your super uber multi fib magic line ....not today not in the next few sessions.

With that in mind a couple of important TA updates in the Euro that i leave for discussion:

  1. 1.022x officially unlocked for the year and bit beyond.
  2. 1.032x naked for the rest of the M.
  3. Slightly bullish daily close and we pretty much have set the low and high of the week.


On the rest, expecting Equities to start marking territory from tomorrow European Opening and start readjusting to the new environment now that we have all data for the year.

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #146,418
  • Dec 15, 2016 4:26pm Dec 15, 2016 4:26pm
Quoting sisse
... expecting Equities to start marking territory from tomorrow European Opening and start readjusting to the new environment now that we have all data for the year. sisse
meaning what?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #146,419
  • Dec 15, 2016 8:07pm Dec 15, 2016 8:07pm
sisse,

I wasn't sure if you saw my post above yours. I still would like to understand what you meant. Thanks
  • #146,420
  • Dec 15, 2016 8:07pm Dec 15, 2016 8:07pm
I took profit on my short positions at 1.04 after 1.036x. Will wait to see if that was a mistake or not. I'm comfortable with it either way.
I see lower targets. But as of yet I don't see a clear path to them. I'll trade when I do.
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