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The Really Useless Thread

  • #146,661
  • Dec 29, 2016 9:17am Dec 29, 2016 9:17am
Quoting sisse
Here we go for NY ...not expecting much for today... sisse {quote} Simply because of Supply and Demand: For example, We have a product 'ABC' (service, asset, anything really) and lots of new people decide to start buying it (for whatever reason). -> The DEMAND of 'ABC' increases. -> If the SUPPLY of 'ABC' hasn't changed, -> Therefore the price of 'ABC' will increase. Simple economics there as you and most prolly know by default: -> Original demand for ABC = 10 units -> Original supply for ABC = 10 units -> Original Price = lets say $50 per unit...
His question was more related perhaps to what are the trees doing inside that forest? (dont want to put words in anyones mouth but thats how it looks to me). Demand and supply factors at the end define price thats all clear and fine, but his USD-EUR sale and outside of US asset liquidations do affect sup/dem of currency, the same way as Tbills outside liquidations effect, and name it there are hundreds more assets doing same. It was more question of point of a scale and size of flows rather than its core exchange. And that is what is more difficult to answer. Internal US liqudations of equities into dollar affect supply of currency on X (argubly less), while outside liquidation affects on Y (if money returns home and dollars are sold), and the dollar shortage with ever rising dollar affects demand and price trough direct index/USD conversion rate on Z which also relates to equities so several factors, so a good exercise would be mapping those flows in size to see the end effect on sup/dem from all the + and - forces that apply to it. Mapping sup/dem flows is good example of trees vs forest becouse one can get easily lost if your checking each tree and side flows (at least human, computers are much better at that), where forest can more easily point to end macro outcome.
Altough you could have answered that with above and i just didnt get the point.
  • #146,662
  • Edited 10:33am Dec 29, 2016 9:20am | Edited 10:33am
sisse,

i know this is a basic question but one I still am not confident in as it deals w Timing.

If you are tracking a certain handle or level, do you wait for that confirmation before taking a position or exiting one? Does London's close have a significant impact or does NY have the bigger impact? I would say yes; but, I can see it also being Counter-productive and getting in too late.

Obviously, these are expensive seats now. But, still seats nonetheless. So many things still to tweak.

Your exercises made me a better trader trader and first year of success despite the big loss mid yr. However, recovered and standing in avg profit for the yr.....unless, I do something real stupid. And, I have to guard against that as there is another trader inside lurking around in the psych dept of my make up.

Thanks for all you do here!
  • #146,663
  • Dec 29, 2016 11:17am Dec 29, 2016 11:17am
i dont know why but really not feeling good about e/u ... an imminent break up alert from my side (waiting for daily close)
Re-Incarnated
  • #146,664
  • Dec 29, 2016 11:21am Dec 29, 2016 11:21am
Quoting IMARICH1
if you are tracking a certain handle or level, do you wait for that confirmation before taking a position or exiting one?
What is waiting for confirmation mean? ....

I take trades when they come base on direction first and R:R only. If you are referring to 'roll plays' or 'momentum entries' or similar...well by default those will come after markets have settle. However, all the other entries are just base on my price, levels and timing as they come...

Quote
Obviously, these are expensive seats now. But, still seats nonetheless. So many things still to tweak.

We have discussed this since we killed the year with the FED a couple of weeks ago: I don't think there is ANY tickets or seats in this area. There was/is nothing to see since we cleared 1.037x first target in the mid and long term. There was/is even zero options for any short term play since we cleared 1.061x.

Let it roll for the year, the next leg is only to complete mid and long term moves. If you are not in from way above, you already 'missed the train' mid term (we are in the momentum part of the red area on the 'sketch'...far from anything tradable r:r wise).

If you are calling the bottom and want to go long mid term you are way too early...even if this is the bottom, close your chart and come back in a few weeks you will pretty much +/- get the same entries but without holding a turd until pans out...

In the short term ....there is nothing to see...come back next year for the first 'news flow' to try to get in synch and squeeze the remaining of the leg.

....

@primejarvis How can you have a imminent break up alert in a downtrend? .... the closest thing to a break up level in the short term comes at 1.088x? ...You are way too close to the market

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #146,665
  • Dec 29, 2016 11:27am Dec 29, 2016 11:27am
Quoting sisse
{quote} Yes in general but don't forget that market correlations: (this part is especially for the OP) They are NOT most of the time the primary reasons for an underlying to move. The OP is making the mistake of assuming that equities and currency always follow the same correlation (indirect in this case) and stay static in time which is absolutely NOT TRUE at all. Right now is a very particular circumstance which is RATES and QE (or RATE HIKES in the case of dollar) that it has been making the case for the indirect correlation for a while both...
Correlation function between E/U and SP500 changed from extremely positive in 200x to strongly negative today.
Attached Image (click to enlarge)
Click to Enlarge Name: EUROSP.png Size: 22 KB


It might be interesting to add interest rates chart.
  • #146,666
  • Dec 29, 2016 11:46am Dec 29, 2016 11:46am
@sisse i have a lot of questions in mind but will ask you when the right time comes ...

hope this time i am wrong .... closed 98% of the midterm trades only 2 % trades are running from 1.13xx

95% of traders wants to pin point the highs and lows so as i do ... but even tough i know that is not the way trading is done .... we all know we are in critical levels ....

and sometimes i really gets too close to the market you got me .... but in a way i also wrote waiting for daily close
Re-Incarnated
  • #146,667
  • Dec 29, 2016 12:20pm Dec 29, 2016 12:20pm
...and here we go for the final review of the year point by point from 30 Dec 2015:

Quoting sisse
{quote} +++++ Yearly review / overview +++++ 10. Scenarios and Macro Expectations 2016

+++++ Yearly review +++++


10. Scenarios and Macro Expectations 2016

Quoting sisse
1. --> Dollar ... the king
The first 2 Quarters are set for dollar to rule markets far beyond the FX board. ECB, BOJ and to lesser extend BOE are far from starting to normalise rates. With a couple of hikes by June/July, the actual real (not expected) divergence between FED and the rest will be notorious [TRIPLE CHECK].

Review: Solid check. Hikes June/July were short circuited via Brexit but the general flow outcome 8/10

Quoting sisse
2 .OIL & commodities...."winter has come"
I expect exhaustion and/or capitulation moves across the commodities board [UBER check] . GOLD look especially 'al dente' for a final leg down (Reference 970.xx via FED rates) in Q1/Q2 to form a mid/long term bottom [check]. Oil will keep leading the board at these nearly dramatic low levels. Either OPEC and OIL emerging economies will descend to chaos, or major earthquake panic leg (reference $26.xx [check one of the calls of the year])will force OPEC to take action [check] and attract LOTS of buyers hunting the best buy bargain for the next 2 or 3 decades ...

Whatever the case, Oil and commodities look set to stay on the driver seat pushing for one more extensive leg in Q1/Q2 [triple check] before forming a very long long long and choppy bottom [in play]...

Review: Stormer year in Commodities in all fronts check. Gold flop to complete the final 970.xx all via risk and Brexit but the general flow outcome was 9.5/10.

Quoting sisse
---> Europe Economy and European Equities...."Europe is coming back"
...I am expecting the second part of the year late Q3/Q4 to be a radically different playing field [check]. I expect Europe Economy to start picking up [triple check]with strength (strength for European standard of course) at the end of 2016 for the first time in nearly a decade.

Markets are setting up for a super bullish year(s) in european equities (especially in the periphery) . Ireland, Spain and to lesser extend Portugal are starting to look as SCREAMING BUY [check]...

STRONG BUY in European equites for the end of next year.[check]

Review: Simple year in European Equities. Brexit provided the hiccup in the summer but no brainer rally in Europe this year Solid 9/10.

Quoting sisse
---> US equites ...."End of Obama's happy years"[UBER check]
US equites are set for a rather dull and wide range year. In the first half, FED normalising will keep bulls at bay [check] while the usual election calm will avoid US equites going anywhere outside the range.

Not expecting much on the election front. Markets only dislike uncertainty and extremes so as long Clinton or any of the mainstream Republicans win, elections will be uneventful [triple check...elections was eventful].

The only wild card marketwise that can create a short term short-circuit will be if Americans decide to vote for Trump [check]. Old fashion nationalism combined with populism and zero clear policies mixed with lots of dangerous politic usually don't get digested well (at least in the short term)....

On the other hand, Trump winning can trigger a major rally [check]in Defence and Security sectors (that have been on the losing side since US withdraw in Iraq and Afghanistan) as the US could be back in Warmonger Mode providing the best opportunity for a major corrective rally in commodities (especially OIL)[check]

Review: First half of the year was simple and clear check. BOE, BOJ, ECB world combo after Brexit triggered the pop and the rest was just US strength that sweep the board. However, US election put the whole board upside down. Although it was on expectations this event, I didn't forecast last year by a mile or two the initial reaction (inflation expectations via Trump fiscal irresponsibility plan, etc). 6/10 was sidelined and out of synch for long periods after Brexit.


Quoting sisse
-11. Currencies Macro Expectations 2016
---> GBP ...".the beginning of the end in the old empire"[UBER CHECK]

For the first time in nearly 6 years Sterling may leave the super noisy chop zone and become one of the best trading opportunities for late 2016 (and beyond). Among major currencies this is the only pair with Long Term levels in play for the yearly close. [check]

We are set to lose the 1.53xx handle [check] for the year on today's close unlocking the mid term legto 1.436x [check] with extension 1.380x [check]and more importantly and impressive the long term to 1.210x [uber check] with extension to parity (YES PARITY in the) and strong intermediate stop 1.052x. [still locked]

There is only BOE hikes in play for Q2/Q3 but failure to hike with the massive self-inflicted uncertainty of the EU referendum next summer could mark the start of the end of Sterling as major currency in World markets.[check] ....
..

Review: Flawless !!!!. Trades and call of the year. Nothing to expand . 10/10.

---> EURO ... "may the force be with the Euro'

As long as ECB and FED are in full control and monetary policies are diverging there is no much to see, neither where to hide for the EURO [check]. The Greek drama seems to be over for next year, and without risk in play, with the periphery recovering and with european equities more tempting than ever, the Euro is really a no brainer.

We are closing very bearish for the year and I am expecting dollar to rule the board in the first half of 2016. Expecting Euro to start flirting to find a solid bottom once ECB QE start fading away and inflation ticking up in Europe at the end of Q4 2016.

Review: A mediocre year for a mediocre forecast. Underestimated for too long the weight of the carry trade until well into the Q2. Thereafter no brainer but the expectations didn't really panned out as most would have liked making Euro stay for long period in chop zone. Mediocre 6/10.

---> JPY...."A long term bottom confirmed"

JPY was the other with something in play for the yearly close. We are going to hold the 120.xx handle marking a confirmed LONG TERM bottom in UJ locking levels for decades to come as high as the 90.xx handle [in play]. However, on the mid term holding 120.xx [UBER check]for the Q close also will extend current chop zone for the next Quarter or so while DOLLAR takes control.

Expecting BOJ to start softening down late Q2 [check]and yen start to fade down below 120.xx for a sharp momentum leg toward 100.xx [UBER check] that will leave us chopping around till the end 2016....

Review: A superb year in yen. Flawless flows and forecast. Just the last couple of weeks went far beyond of making a chop zone. V. Solid 9/10.

---> AUD, CAD , NZD & commodities currencies ..."they will need a hand from OIL and risk to avoid a massacre early in the year"

Despite having one the best and easiest trading years, the 'meat' of the mid term moves in commodities is set to end rather early next year [check]. As long as commodities keep falling, there will keep being heavily sold via both fronts (Commodities down and Dollar strength) . As long market don't find foot in correlated markets, there is nothing to stop the sharp momentum.

Gold forming a bottom Q1/Q2 will trigger a good early alerts for all commodities currencies. For the end of year (late Q3), I am expecting trading opportunities to shift from the pairs/usd to the crosses in these commodities currencies (especially AUD/JPY [check] that looks super yummy to complete the mid and long term legs).

Review: A mixed bag year in commodity currencies. CAD and NZD matched expectations but were softer than anticipated. AUD after completing the move, it actually trigger a sharp pullback that i didn't see it in the forecast. Mixed bag (from 3 to 8) 5/10.

-->CHF ..."fear of the walking dead..."

....CHF is a walking dead and is set to be worst currency for trading next year [check]....

Review: No brainer. 10/10.

--> Emerging markets currencies ... "....you can run but cannot hide"

There are too many currencies to go in details plus I and most around here don't trade them at all because of the lack of liquidity but in general 2016 is aligning to be a dramatic year (even more than last) for most emergent economies [uber check]. Dollar strength will be felt the most in these currencies added to political and risk tension we may have the perfect recipe for fast, sharp and nuclear moves [triple check].

Expecting risk to be back on the table and 2016 will complete the economic cycle marking the full recovery of the major west economies and the end of the 'happy years' emerging countries enjoyed during the financial crisis [check]...

Review: Crazy moves across all exotics. From Mexico to Turkey and everyone else in between. Capitulation moves across emerging world currencies. 10/10.

+++++ The END +++++


sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #146,668
  • Dec 29, 2016 2:16pm Dec 29, 2016 2:16pm
Quoting yg10
{quote} Correlation function between E/U and SP500 changed from extremely positive in 200x to strongly negative today. {image} It might be interesting to add interest rates chart.
Agree, correlation with gaps and bumps, not good to follow strictly currency vs equity maps. But plotting interest rates to that chart wont do much good, never sample probabilities from few events only, stretch it out. Interest rates are long cycle lasting years, you need century + of data to have some samples.
  • #146,669
  • Dec 29, 2016 3:47pm Dec 29, 2016 3:47pm

+++++ Yearly review 2016 / overview 2017 +++++

Winner(s)
1. Best Performing Currency Pairs

* liquid

GBP/USD (average +/- 20% moves for the year). Destruction not necessarily because of the large move but the importance of levels broken and the official liquidation of Sterling as major world currency after Brexit .

* low liquidity

TRY, MXN

-30% got hammered. All emerging currencies got the triple whammy Dollar strength, recession and political risk. Scary part the moves look far from over.

2. Worst Performing Currency Pairs

CHF

As widely expected SNB killed the free exchange rate. CHF stuck in micro ranges of +/- 5% all year long with pretty much CHF as fix CB rate currency.


3. Best instrument to trade overall (from the majors discussed here during the year)

USDJPY

Although Sterling rock the currency board this year (brexit and then 'flash' [not really] crash). Yen produced the cleanest and easiest ride overall. Both the pullback and the bottom gave plenty of chances to ride. Clean levels and clean FA triggers. The easier and more user/newbie friendly instrument of the year

4. Wildest instrument to trade.

OIL

Clear and simple ride to the bottom and then wide swings to confirm the bottom. Plenty of swings, mover and shakers, fundamentals and macro TA in play during the year. However, it looks time is nearly up for the wild moves .....

5. Best Performing commodity (from the majors discussed here during the year)

NG

Natural Gas pretty (+140% and counting!!!) completed the final long term leg. As forecasted last year we are setting to go to bed at the 15 years low for the foreseeable future (probably for the next decade or so is my call)

6. Worst Performing commodity

Gold

In comparison with the rest of commodities Gold had a choppy year. Caught between FED hikes against the rest of CB in the world and with risk in between (brexit and US election) we got just choppy legs.

7. Choppiest Market overall

USDCAD

OIL bottom and pullback combined with flops in Canada and strong Dollar provided a good few early months in Q1 but after we got the choppiest market overall in the FX board with very untidy moves highlighting a major long and mid term top is around the corner.

8. Worst Central Bank

BOJ

Tricky one this year and after 2 consecutive years with SNB in the 'bottom' position, this year was all about the BOJ. Ambiguous, contradictory, politicised and in some case even random and confused. BOJ lost a ton in term of credibility this year. Japan was align in my books for the next big fck up 2017 and beyond but since Brexit and Trump things may get kicked further down the road via risk ....

9. Best Central Bank

BOE

No discussion here. Carney and BOE got the best CB by a mile or two.

It was the only UK public institution with a clear plan after Brexit. It single handle put a hard stop in panic and avoid a collapse after the vote. It pulled the trigger (QE and rates) without hesitation to keep the economy and bastards afloat. It sat tight against insults and attempt to kill the independence of a CB from the very unqualified (and even dumb in some cases) politicians now sitting in the Government economic front. It pulled the hand break on expectations and inflation via rates.

It's the only one that has use and using all policy measures for next year and beyond Brexit debacle even sacrificing Sterling [wasn't any other option] in order to protect the economy.

Still BOE has the hardest job of all CB for next year ....

....TBC

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #146,670
  • Dec 29, 2016 7:50pm Dec 29, 2016 7:50pm
Quoting janpec1000
{quote} Agree, correlation with gaps and bumps, not good to follow strictly currency vs equity maps. But plotting interest rates to that chart wont do much good, never sample probabilities from few events only, stretch it out. Interest rates are long cycle lasting years, you need century + of data to have some samples.
Sisse was telling that correlation between market and currencies is changing in time. This chart shows how it is changing.
Correlation period of 100 months instead of 50 as in previous chart we get much smoother curve.
So what made correlation coefficient to change from +0.92 to -0.7 during last 10 years?
Attached Image (click to enlarge)
Click to Enlarge Name: Corr100.png Size: 21 KB
  • #146,671
  • Dec 29, 2016 8:14pm Dec 29, 2016 8:14pm
Quoting yg10
{quote} Sisse was telling that correlation between market and currencies is changing in time. This chart shows how it is changing. Correlation period of 100 months instead of 50 as in previous chart we get much smoother curve. So what made correlation coefficient to change from +0.92 to -0.7 during last 10 years? {image}
The Euro. And Risk. Maybe UJ would be a better pair to use for such a correlation? Not sure what your looking for though.
  • #146,672
  • Dec 29, 2016 8:50pm Dec 29, 2016 8:50pm
Quoting goosebone
{quote} The Euro. And Risk. Maybe UJ would be a better pair to use for such a correlation? Not sure what your looking for though.
That was just an illustration for Sisse's post where he said
Quote

  1. The OP is making the mistake of assuming that equities and currency always follow the same correlation (indirect in this case) and stay static in time which is absolutely NOT TRUE at all.
  2. Right now is a very particular circumstance which is RATES and QE (or RATE HIKES in the case of dollar) that it has been making the case for the indirect correlation for a while both in euro and dollar ...
  3. However, now we are days away to start diverging and there is a lot of factors that will enter

...

http://www.forexfactory.com/showthre...50#post8638450
  • #146,673
  • Dec 30, 2016 4:39am Dec 30, 2016 4:39am
Quoting yg10
{quote} Sisse was telling that correlation between market and currencies is changing in time. This chart shows how it is changing. Correlation period of 100 months instead of 50 as in previous chart we get much smoother curve. So what made correlation coefficient to change from +0.92 to -0.7 during last 10 years? {image}
Since 07 retail market got flushed out from stocks, that should add some to disconnect. On other hand you have central banks buying up and prompting stock markets which also adds to disconnect in correlation. Also agressive buy backs of stocks from largest corporations that form indexes as DAX or DJ also adds to disconnect.
  • #146,674
  • Dec 30, 2016 5:02am Dec 30, 2016 5:02am
Nice pop in the Euro in the middle of nowhere and at the exactly same time of the usual time of the last spikes this year (got it in yen, euro and the monster move in sterling) problem is that by now most already 'know' who is behind so outsmarting large position is losing its surprise effect .... expecting plenty of regulation in the next couple of years to start coming in this front but for now ....

A very thin European morning with the year already close for trading. More interesting in the Euro the pop back 1.061x finally unlocked the short term maps for next year. After that tracking extremely closely the close today. Euro lossing 1.049x today unlocks a powerful M and W 'roll play' (we seldom get those in a year)....

On the rest of the board, nothing to see or do ....

sisse

PS: @primejarvis v. nicely spotted if you were referring at the spike
Pending conversations? PM for a chat...I am mainly in OTM now
  • #146,675
  • Edited 6:02am Dec 30, 2016 5:14am | Edited 6:02am
Quoting janpec1000
Added some turkish lira shorts 5140. EA cross unlocking some higher targets of 4650/80.
EA target completed offloading the rest 70% longs at 4670. Remaining of TRY shorts cleared on BE along with 20% of remained UK100. Done for the year.
Missed nice short squeeze on UJ...
  • #146,676
  • Dec 30, 2016 5:31am Dec 30, 2016 5:31am
Quoting sisse
Nice pop in the Euro in the middle of nowhere and at the exactly same time of the usual time of the last spikes this year (got it in yen, euro and the monster move in sterling) problem is that by now most already 'know' who is behind so outsmarting large position is losing its surprise effect .... expecting plenty of regulation in the next couple of years to start coming in this front but for now .... A very thin European morning with the year already close for trading. More interesting in the Euro the pop back 1.061x finally unlocked the short...
Thankx sisse but the problem is i didnt rode it and the most important part right know is that i am really confused with the low do you really think that we are going to get a new low .... i spotted last break up in accordance to a trend change for all short/mid/long term with purely on PA perspective .... eagerly waiting for a close of the year .... could you please give it a glance and an explanation and trust me i will the most happy person if we get a new low ..... my all calculation is based on PA shows me a change in trend ....
Re-Incarnated
  • #146,677
  • Dec 30, 2016 5:46am Dec 30, 2016 5:46am
dont get me wrong but i am confused and dont judge me on that if possible show me the right path any one .... but right know my whole system which i depend on shows me a change in trend and going against almost every1 trader in this thread ..... and i will be the happiest if i am proved wrong ....
Re-Incarnated
  • #146,678
  • Dec 30, 2016 7:27am Dec 30, 2016 7:27am
Quoting sisse
Euro lossing 1.049x today unlocks a powerful M and W 'roll play' (we seldom get those in a year)
I am very curious too where the close will be. Too bad I can't figure out what a roll play is. I am assuming it means that if we close below 1.049x there will be an opportunity to enter short in the begining of trading in the new year. I guess we'll see if something pans out.
  • #146,679
  • Dec 30, 2016 8:15am Dec 30, 2016 8:15am
DE30 finnaly unlocking the run above 11500.
  • #146,680
  • Dec 30, 2016 9:48am Dec 30, 2016 9:48am
Quoting sisse
...and here we go for the final review of the year point by point from 30 Dec 2015:
and it has been a very instructive and formative year! (and a pleasure too)

Maybe i still need 2 or 3 (maybe 9-10 ) years to succed but having followed the process for a year has made clear many many things (though not all, of course)

For my limited skills, and time allowing, next days I will try to write a similar map for myself: you learn by making mistakes and you need to write statements and check 'em on a regular base to make the process consistent ... basical and common to every learning process but, who knows why, so often forgotten in retail trading ...
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