Money Flow Trading Method along with Risk Management

Hi Benjamin, here is the screenshots you asked for.

http://www.zerohedge.com/news/2017-0...hin-six-months

H/t Babak


If you want signs of a top in a particular asset, it’s hard to beat this.

Meanwhile, as everyone is crowding into an already overcrowded $USD Dollar trade, Gold has broken out of its downtrend. Not only that, but it’s broken above key resistance.
http://www.zerohedge.com/sites/defau.../GPC110172.png
This asset class is absolutely HATED. Investors have been pulling BILLIONS out of Gold based ETFs. And it is the single least liked asset class for the entire investment advisor community.


Guess which one will outperform in the next 6 months?


Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research

Thank You Very Much KeepCalmfx

From the two charts that you have just posted here we can see there is NO SET direction as regards USD/JPY so since we know that when the US 30 goes down then USD/JPY will get stronger and head towards 110.00. Now with regards to US 30 the direction is down as per the Chart and we know that it will go down sooner then later.

I would SHORT USD/JPY if and when it goes over 116.00 with little concern since our Risk Management will cover us and then of course we can scale in a second or even third position if we so decide. As for US 30 , I expect the Press Conference of President Elect , Donald J. Trump will give us some good opportunities so it must be considered A HIGH RISK EVENT.

I am still waiting for our other Forex Traders included in the 12 to become more active when they are able. I work best when I have interactive communications.

Please give me your views on, if we are in agreement of this strategy and feel free to add whatever that I might have left out.


Benjaminis

My thoughts on this chart you mentioned.

If it breaks the 114.95 level the possibility to go to 113.38 is great.

Here is my positions I have entered today. Made a +/-$708 loss on my FXCM Demo, did not re-enter as on my MT4 account, market moved to fast.

Also to answer Goodness question from earlier.

Just another confirmation that you can not be successful with the charts/price action indicators alone. It looks like the momentum was great, then I added a second position on the US30, then it retraced and took my stop loss out. I re-entered when it rejected the 19960 level, far better entry point, pin bar, when there was momentum I entered another position. So got back my losses and made some profits. Also again importance of risk management.

News/articles important, even though there was not big news events like tomorrow, other factors came in play, that is were the money flow comes in, have to look at whole picture. Still much to learn.

Also working on some bad habits I have when trading.

But what I think Goodness meant to ask is, now you know the Money Flow, you know the direction to enter. What indicators do you use to enter the trade.
As I private messaged him, I use Benjamin's indicators - fractal, SAR, awesome oscillator, but also indicators from Davit's thread, pivot levels/zones, TDI then also trend lines and price action and price patterns.

Good night, off to bed.

Thank You again , KeepCalmfx

I know the issues that you are going through as relates to wanting to make a trade. It is not easy to hold off doing a trade.

I know that for sure since on some days I do 25. However now even myself has learned to trade when the odds favor you however having said that YOU my Friend have learned the MOST IMPORTANT LESSON of ALL Lessons.

You CUT your losses and most Forex Traders DO NOT DO THIS and once the DRAW DOWN is too much they will pray for a reversal. The way you handled it was perfect. Your Account is still showing Great Results after only trading the FXCM UK $50,000 US FUNDS Demo Platform for the two weeks since December 27, 2016.

Is that CLEAR to everyone reading my words because it should be. What if I arranged for you to manage $50,000 US REAL FUNDS under LPOA (Limited Power of Attorney) ? Do you think that you could make the goal of 5% or $2500 US Dollars each month that you trade ?

You have earned near 8% in just two weeks. That is incredible however you look at it. All feedback is welcome and encouraged.


Benjaminis

IN CASE THIS MIGHT BE MISSED IN THE MORNING BY OUR EUROPE FOREX TRADERS !!!

As we approach 11 AM , I myself have not seen any Forex trading opportunity so I am completely in cash. I have my focus on the confirmation concerning the Attorney General Jeff Sessions.

We need to watch the close of Europe at 11:30 AM EST and allow up to Noon to be sure everyone has probably gone home for the day.

Please check back on this particular post as I will use it throughout the Forex trading day until 5 PM EST. We need to see if Short Covering causes any changes and of course the Money Flow then will only be from North America.

11:10 AM - 5 Minute Chart on US 30

http://finviz.com/futures_charts.ashx?t=YM&p=m5

11:13 AM - 5 Minute Chart on US 10 Year Bond

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

11:15 AM - 5 Minute Chart on USD/JPY

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

11:35 AM - 5 Minute Chart on US 30

http://finviz.com/futures_charts.ashx?t=YM&p=m5

11:40 AM - 5 Minute Chart on Gold

http://finviz.com/futures_charts.ashx?t=GC&p=m5

12:15 PM - Now that Europe is closed North America goes for lunch so the MAIN MOVEMENT that we look for to decide if we should do any trades is between 2 PM EST and 4:30 PM EST. If I see any Trade Opportunities I will share them.

12:45 PM - We now have RISK OFF so we wait and see when and where we can go SHORT US 30. We do not trade now since we want the near Top. Please post some charts showing where the resistance is. We should only post 5 minute and 15 minute charts. Please LIKE this Post so that I know that there are people coming in here. I am going to have my lunch now so will be back at 2 PM EST. Please let me hear from you. I only work good with Feedback. Thank You.

2:50 PM - Please give me your thoughts on this chart anyone. Thank You.

4:00 PM - The markets are now closed until Japan opens at 7 PM EST.

I will post here until 6 PM EST and tomorrow start a NEW THREAD FOR THE DAY. So Far only have I seen a LIKE from KeepCalmfx so we need to do better or there is no point for me to use this new method.

http://www.forexfactory.com/attachme...3&d=1484074759


Benjaminis

http://seekingalpha.com/article/4035...daily-briefing

Summary

Paul Krugman now opposes deficits.

What changed since he recommended "years" of deficit spending three months ago?

Economists still greatly overestimate their abilities.

Moving forward, expect a world with more volatility as central bankers and economists abandon efforts to stabilize asset prices.
Nobel prize-winning economist Paul Krugman is back with a seemingly timely message for the incoming Trump administration:
https://staticseekingalpha.a.ssl.fas...9037495956.png
However, if you have a decent memory, you may find that headline surprising. The same Paul Krugman, you may recall, had this insight less than three months ago:
https://staticseekingalpha.a.ssl.fas...9717625165.png
So, what's the deal? Should we ignore the "debt scolds" such as Paul Krugman, and support Trump's deficit-financed infrastructure spending? Or should we listen to Paul Krugman and criticize Trump for policies that would expand the budget deficit?
https://staticseekingalpha.a.ssl.fas...0823268735.jpg
The US Debt clock a few short years ago. Source.

Krugman V Krugman
Last year, Krugman argued, summarizing his view, that the economy was in the process of recovering. Full employment wasn't "too far off," and inflation was starting to gain strength.

However, Krugman still felt that risks were to the downside. Getting trapped in a deflationary spiral would be worse, it was suggested, than letting the economy run too hot for a bit:

[T]here's a risk of getting it wrong in either direction - not raising rates soon enough to head off some rise in inflation, on one side, versus raising them too soon on the other.

And the decisive argument, it seems to me and others - although not, alas, to the Fed - is that these risks are asymmetric. Waiting too long risks embarrassment and some cost of wringing out the extra inflation, but moving too soon risks long-term stagnation. Wait until you see the whites of inflation's eyes! (I coined that phrase, by the way.)
That was Krugman in late 2016. However, 2017's Krugman is a far more somber fellow, saying that: "[R]unning big deficits is no longer harmless, let alone desirable."

What changed? According to Krugman now, we've reached full employment. This means that, he says, deficit spending would serve now to crowd out private sector investments, harming the economy. If you've heard that talking point before, it's because Republicans have been using it for years.
The second critique is that - contrary to Trump's stated intentions - Krugman thinks Congress will use its powers to cut taxes on the wealthy rather than build infrastructure.

It'd be easy to criticize Krugman for flip-flopping. He wanted "years" of deficit spending just three months ago when he thought Clinton would be president. Now that Trump has the power, deficits are suddenly intolerable.

The Real Problem: Economists Don't Know The Future
But let's be more charitable and assume Krugman isn't flip-flopping for reasons related to political expediency. Perhaps Krugman arrived at this new view simply because we reached "full employment" over the past three months.


The US unemployment rate has declined from 4.9% to 4.7% since Krugman changed his view:
https://staticseekingalpha.a.ssl.fas...5818766473.png
A 4.9% unemployment rate was sufficient to justify "years" of deficit-financed infrastructure spending. Krugman talked about the risks and rewards of too much or too little stimulus policy. However, at 4.9%, the unemployment rate was high enough to unequivocally justify huge public works projects.

Now, however, at 4.7%, we've reached full employment. There's no shortage of good jobs anymore. The US economy is full steam ahead, and the government must ease off the throttle to avoid crowding out private investment, Krugman warns. Anyone else feeling the whiplash?

As someone with an economics degree myself, this is simply nonsensical. The economics field knows very little in the grand scheme of things. Our macroeconomical models are, in general, deeply flawed and rarely have any statistically significant predictive abilities. Human economic activity is hard to boil down to strict mathematical laws.

The idea that a 0.2% change in the unemployment rate should reverse a nation's fiscal policy 180 degrees is laughable. Say what you want about the short-comings of laissez faire economics, this sort of overly managed technocratic alternative is much worse. When even economists seem to flip on a dime, how are businessmen and politicians supposed to make sensible decisions?

The Great Financial Crisis showed that the banking industry's financial models were greatly inadequate. The mediocre at best recovery since 2009 has shown the shortcoming of modern economic thinking. Krugman is a prize-winning economist and famous columnist. Yet he appears to be engaging in rank political hypocrisy. That, or he sincerely believes government policy should flip on a dime when the unemployment rate drops 0.2%. Neither explanation is reassuring.

What's An Investor To Do?
As an economist by education, it's easy to find some sort of black humor in our field's leading lights embarrassing themselves. However, as investors, it's disheartening, since these flawed economic thinkers and their theories impact policy.
Under a hands-off economic system, the economy had a regular business cycle, with repeating booms and busts. It was volatile and uneven, but a reading of history gave you a strong guide as to what would come next.

Now, we've got a system where the economists and central bankers have tried to crush volatility and create permanently stable asset prices. Planners think they have much more control over the economy than they do. Only in an academic's mind can one be so certain that a 4.9% unemployment rate is too high, while a 4.7% one is just right.

After several decades of technocratic political control, neoliberalism is giving way to popular political uprisings around the world. It's not unreasonable to think a similar overthrow of entrenched economic theory comes next. Put another way, I doubt Trump, the Brexiters, the populist parties in southern Europe, etc., will be hiring Krugman-esque economists as their advisors.

I remember writing about a Bloomberg survey late in 2016 that polled dozens of analysts. Not a single one thought 10-year treasuries (NYSEARCA:TLT) would close the year above 2%. The rate exceeded that level by a wide margin by year-end.

Expect many more such unexpected outlier economic results in coming years. There's a good chance we're entering a much more volatile period. That's not to take a deeply bearish stance - the it's all going to crash view of the world is almost always wrong and costly to your net worth.


However, it's a good time to check your portfolio for potential shocks. I look at REITs (NYSEARCA:VNQ) borrowing money at 5% to buy 6-7% cap rate properties. A fine business model in a volatility-suppressed world. In one where central banks let the chips fall as they may, not so much.

Same for companies with negative tangible book values and declining revenues/net incomes borrowing yet more money to buy back stock. It worked great for the last 10 years, but the next 10 could look a whole lot different.

In general, it seems investors have become too comfortable. We expect the next few years to not be a whole different from 2010-2016. However, we're entering a very different period both economically and politically. The fact that Krugman just did a 180 in fewer than three months gives you a taste of the sort of rapid swings we're more likely to see going forward.


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Recent Exclusive Research by Ian Beze

Once again , I try hard for everyone to understand all the parts that would guarantee your success if you have the necessary skills and DISCIPLINE. I can not guarantee that you do however I will know for sure by your Forex Trading results. It is up to you not myself as I have done my part and at least three of our Forex Traders are learning well. The three that are working on it and participating. IT IS THAT SIMPLE and that has too be clear so JUST DO IT !!!


Benjaminis

I first want to talk about having an EDGE. Fundamentals by themselves is not an EDGE. However using Money Flow between Asset Classes from here on I will include in my basket of 100% of what a winning Forex Trader needs. I will not refer to it as a fundamental anymore since new people coming to this thread put my method as including Money Flow as a fundamental which it actually is however not in the same way as most people understand Fundamentals.

This week we will get to see Non Farm Payroll (N F P) and as any experienced Fundamental Forex Trader knows it usually is a fantasy number created by the BLS however next to a FED rate announcement it is the one number that can move markets hundreds of PIPS in seconds and minutes.

Whatever the number Trillions of Fiat Currencies and other Asset Classes will start to change values as we "SEE" the Money Flow. That is why I call it my EDGE and once you know it and understand it well then it becomes your EDGE as well.

Here are the 5 important things that any Forex Trader that belongs to the minority of constant profitable Forex Traders , which I have named , The 5% Club needs to have. Of course in my opinion, I would think that very few Professional Forex Traders use the EDGE. Of course when you know about it then anyone can use it.

Each of the following five important things which I have given a weighting of 20% to each makes up what a profitable Forex Trader needs to have in order of IMPORTANCE.

(1) The ability of the Forex Trader to control their FEAR and their GREED and their EGO. Perhaps the last one is the most important of the three since the MARKET is always right. Using Money Flow puts you with the Market instead of against it as your Forex Account keeps losing the value in it.

The reason that I teach Forex Traders whether experienced or new to Forex trading with a $50,000 US Dollars Demo Account is because that is how I learned my trade starting during 2003. By learning to trade with $50,000 US Dollars in Demo Funds, then I had no FEAR or GREED. However after 3 years of Forex Demo Trading I surely had EGO since month in and month out my Return On Investment (ROI) was constantly over 10% a month or 120% a year.

(2) Money Flow. I have now explained why.

(3) Risk Management. That is next to Money Flow the KEY element of my Forex Trading since when you blow your account whether you are trading with too little capital as the majority of Retail Traders are or because of a Black Swan event such as Brexit or Europe banking issue such as we have in Italy at the moment or the Swiss Central Bank as they did a few years ago say one thing and then next moment announce a major change in their policy and 500 PIP movements happen in seconds. The absolute MINIMUM Forex Account that I would and could trade with would be $10,000 US Dollars. I would be glad to answer questions as to why although most will understand. What if you do not have $10,000 US Dollars trade with ? Prove to yourself that you have the skills and the knowledge to trade with profits then you will have no problems finding funds to trade Forex with. After my 3 years of Forex Demo Trading, I went out and found 6 clients that first deposited initially $50,000 US Dollars and within 3 months along with the profits that I was generating in my first three months of Forex trading from March 2006 to June 2006, I was managing well over $100,000 US Dollars.

(4) Technical Indicators which includes all parts of it whether Support and Resistance or Supply and Demand or Pivot Points. I use when I do daily trades the 5 Minute Charts along with the 15 Minute Charts and 30 Minute Charts to go along with the 4 Hour Charts. When you toss a rock in the river the first ripple is the 5 Minute Chart and then on to the 30 Minute and the two others. I use other indicators aside from the standard ones which are SAR and Fractal and Awesome Oscillator. The most important one that I look at when I enter into a Forex Trade is Support and Resistance so if I am going long or short I enter either at the TOP or BOTTOM of the Chart that I am using. Of course my Risk Management protects me from Human Errors or EGO.

(5) Fundamentals. I am fairly sure most of those reading my words today or whenever they read it might be surprised how a Forex Trader such as myself who posts a tremendous amount of research can list fundamentals as number (5) in order of importance. It is the research that allows me to clearly understand the difference between PERCEPTION (Markets) and REALITY (Research) Then I know what will most likely happen in the future and I am better prepared to deal with it.

I hope that this post of my daily Morning Thoughts answers some of your questions both for the 12 Forex Traders using the $50,000 US Funds Demo account with FXCM UK or anyone else. There is no reason that an experienced trader reading this thread or anyone else to not open a $50,000 US Dollars FXCM UK account so they can use the knowledge that we share here to learn new things and try them without having any FEAR of LOSS !!!

As always , I look forward to feedback and thoughts and anything that you care to share with us on our Thread.

dear benjiminis...i do want to thank you once again for what you are doing here.....however i have some question...i hope it does not derail the thread....i was on a mission to study flow...which lead me to risk on and risk off....from what i learnt, in forex..risk on happens when commodity currencies(AUD,CAD,NZD) are demanded...while the safe heaven currencies(USD,JPY) are demanded during times of risk off.. So here is the question. Is it possible to be in a risk off,but u/j is selling or buying due to the fact that...the commodity currencies are the ones in demand....Thanks in advance..

Thank you for your question. You do not have it quite right as yet and that is fine because I can only help you when I know for sure that you and others understand.

We either have Risk On or Risk Off or you can I suppose have a perfect balance between the two.

Each day when I get ready to trade for the day say by the latest at 6 AM EST , the first thing that I do is turn on CNBC and see what happened in Asia and then Europe although at times I am up at 3:00 AM for the Europe open for a few hours then back to bed for an hour or two.

So say as for tomorrow WE will have RISK ON because of the Press Conference on Wednesday. Then say the Dow goes down by 100 points then some money will flow for sure to USD/JPY.

We post charts here to prove that. However there are other factors concerning USD/JPY, so you cannot make a general rule.

If Oil goes up and the Dow goes down then most likely USD/CAD will go up.

Just READ THE INFORMATION HERE on this thread and it will be easier to follow.

Benjaminis

http://seekingalpha.com/article/4035...daily-briefing

Krugman Worries About Deficits, What Changed? - Bezek's Daily Briefing


Jan. 10, 2017 3:22 PM ET

https://staticseekingalpha3.a.ssl.fa...png?1452396019


Paul Krugman now opposes deficits.

What changed since he recommended "years" of deficit spending three months ago?

Economists still greatly overestimate their abilities.

Moving forward, expect a world with more volatility as central bankers and economists abandon efforts to stabilize asset prices.
Nobel prize-winning economist Paul Krugman is back with a seemingly timely message for the incoming Trump administration:
https://staticseekingalpha.a.ssl.fas...9037495956.png

However, if you have a decent memory, you may find that headline surprising. The same Paul Krugman, you may recall, had this insight less than three months ago:
https://staticseekingalpha.a.ssl.fas...9717625165.png

So, what's the deal? Should we ignore the "debt scolds" such as Paul Krugman, and support Trump's deficit-financed infrastructure spending? Or should we listen to Paul Krugman and criticize Trump for policies that would expand the budget deficit?
https://staticseekingalpha.a.ssl.fas...0823268735.jpg

The US Debt clock a few short years ago. Source.

Krugman V Krugman
Last year, Krugman argued, summarizing his view, that the economy was in the process of recovering. Full employment wasn't "too far off," and inflation was starting to gain strength.


However, Krugman still felt that risks were to the downside. Getting trapped in a deflationary spiral would be worse, it was suggested, than letting the economy run too hot for a bit:

[T]here's a risk of getting it wrong in either direction - not raising rates soon enough to head off some rise in inflation, on one side, versus raising them too soon on the other.

And the decisive argument, it seems to me and others - although not, alas, to the Fed - is that these risks are asymmetric. Waiting too long risks embarrassment and some cost of wringing out the extra inflation, but moving too soon risks long-term stagnation. Wait until you see the whites of inflation's eyes! (I coined that phrase, by the way.)
That was Krugman in late 2016. However, 2017's Krugman is a far more somber fellow, saying that: "[R]unning big deficits is no longer harmless, let alone desirable."

What changed? According to Krugman now, we've reached full employment. This means that, he says, deficit spending would serve now to crowd out private sector investments, harming the economy. If you've heard that talking point before, it's because Republicans have been using it for years.
The second critique is that - contrary to Trump's stated intentions - Krugman thinks Congress will use its powers to cut taxes on the wealthy rather than build infrastructure.

It'd be easy to criticize Krugman for flip-flopping. He wanted "years" of deficit spending just three months ago when he thought Clinton would be president. Now that Trump has the power, deficits are suddenly intolerable.


The Real Problem: Economists Don't Know The Future
But let's be more charitable and assume Krugman isn't flip-flopping for reasons related to political expediency. Perhaps Krugman arrived at this new view simply because we reached "full employment" over the past three months.
The US unemployment rate has declined from 4.9% to 4.7% since Krugman changed his view:
https://staticseekingalpha.a.ssl.fas...5818766473.png


A 4.9% unemployment rate was sufficient to justify "years" of deficit-financed infrastructure spending. Krugman talked about the risks and rewards of too much or too little stimulus policy. However, at 4.9%, the unemployment rate was high enough to unequivocally justify huge public works projects.

Now, however, at 4.7%, we've reached full employment. There's no shortage of good jobs anymore. The US economy is full steam ahead, and the government must ease off the throttle to avoid crowding out private investment, Krugman warns. Anyone else feeling the whiplash?

As someone with an economics degree myself, this is simply nonsensical. The economics field knows very little in the grand scheme of things. Our macroeconomical models are, in general, deeply flawed and rarely have any statistically significant predictive abilities. Human economic activity is hard to boil down to strict mathematical laws.

The idea that a 0.2% change in the unemployment rate should reverse a nation's fiscal policy 180 degrees is laughable. Say what you want about the short-comings of laissez faire economics, this sort of overly managed technocratic alternative is much worse. When even economists seem to flip on a dime, how are businessmen and politicians supposed to make sensible decisions?

The Great Financial Crisis showed that the banking industry's financial models were greatly inadequate. The mediocre at best recovery since 2009 has shown the shortcoming of modern economic thinking. Krugman is a prize-winning economist and famous columnist. Yet he appears to be engaging in rank political hypocrisy. That, or he sincerely believes government policy should flip on a dime when the unemployment rate drops 0.2%. Neither explanation is reassuring.


What's An Investor To Do?
As an economist by education, it's easy to find some sort of black humor in our field's leading lights embarrassing themselves. However, as investors, it's disheartening, since these flawed economic thinkers and their theories impact policy.

Under a hands-off economic system, the economy had a regular business cycle, with repeating booms and busts. It was volatile and uneven, but a reading of history gave you a strong guide as to what would come next.

Now, we've got a system where the economists and central bankers have tried to crush volatility and create permanently stable asset prices. Planners think they have much more control over the economy than they do. Only in an academic's mind can one be so certain that a 4.9% unemployment rate is too high, while a 4.7% one is just right.


After several decades of technocratic political control, neoliberalism is giving way to popular political uprisings around the world. It's not unreasonable to think a similar overthrow of entrenched economic theory comes next. Put another way, I doubt Trump, the Brexiters, the populist parties in southern Europe, etc., will be hiring Krugman-esque economists as their advisors.


I remember writing about a Bloomberg survey late in 2016 that polled dozens of analysts. Not a single one thought 10-year treasuries (NYSEARCA:TLT) would close the year above 2%. The rate exceeded that level by a wide margin by year-end.


Expect many more such unexpected outlier economic results in coming years. There's a good chance we're entering a much more volatile period. That's not to take a deeply bearish stance - the it's all going to crash view of the world is almost always wrong and costly to your net worth.

However, it's a good time to check your portfolio for potential shocks. I look at REITs (NYSEARCA:VNQ) borrowing money at 5% to buy 6-7% cap rate properties. A fine business model in a volatility-suppressed world. In one where central banks let the chips fall as they may, not so much.

Same for companies with negative tangible book values and declining revenues/net incomes borrowing yet more money to buy back stock. It worked great for the last 10 years, but the next 10 could look a whole lot different.

In general, it seems investors have become too comfortable. We expect the next few years to not be a whole different from 2010-2016. However, we're entering a very different period both economically and politically. The fact that Krugman just did a 180 in fewer than three months gives you a taste of the sort of rapid swings we're more likely to see going forward.


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

http://www.markets.fallondpicks.com/...ade+history%29

TUESDAY, JANUARY 10, 2017

Gains Posted But Markets Quiet
There wasn't much to add to yesterday's action. The S&P closed with an indecisive doji, but given the context it was really a non-day with no advantage to either bulls or bears.
https://3.bp.blogspot.com/-KM06wSbI7.../SPX_Jan10.png

The Nasdaq posted yet another day of gain - its sixth such day in a row. Volume was down, so today didn't register as an accumulation day, but it kept the index away from breakout support. The probability of a 'bull trap' occurring looks very low.

https://2.bp.blogspot.com/-KsWccSNfL...NASD_Jan10.png

The Russell 2000 was able to claw back from swing lows. The index is trading near support, but is really caught in a trading range between 1,355 and 1,390. Given this - and prior action into this range - probability favors a continuation breakout higher. Can it deliver?
https://1.bp.blogspot.com/-aDBumBaKF...UTX_Jan10b.png
For tomorrow, bulls have done a good job in pulling the Russell 2000 back from the brink and putting some distance for Tech indices from breakout support. Only Large Caps were quiet. Look for a continuation of this action as junior traders give way to their more seasoned campaigners.




https://docs.google.com/drawings/d/1...ub?w=480&h=360https://docs.google.com/drawings/d/1...ub?w=480&h=360https://docs.google.com/drawings/d/1...ub?w=480&h=360

http://www.bkassetmanagement.com/mar...e-trump_10356/

DOLLAR MARKS TIME BEFORE TRUMP


January 10th, 2017

Dollar Marks Time Before Trump

Daily FX Market Roundup 01.10.17

The U.S. dollar traded heavy throughout the North American session even as it only ended the day lower versus the Japanese Yen and Australian dollar. With no U.S. economic reports released today, the back and forth in U.S. rates prevented any meaningful moves in the currency as the greenback recovered slightly against the euro, Swiss Franc and New Zealand dollars. The dollar is marking time before U.S. President-elect Donald Trump’s press conference on Wednesday. As you all know the rally in U.S. stocks and the U.S. dollar was driven entirely by Trump’s promise for tax cuts and big spending. In his first press conference since July and first official news conference since being elected President, Trump will most likely repeat everything that he previously vowed to achieve while giving little details on specific policy actions. The question then becomes how the markets will react – will they be disappointed by the lack of specificity or encouraged by his pledge to spend. Considering that he could be peppered with questions on tax reform, conflicts of interest, Russia’s interference, Obamacare, trade and other market moving topics, there’s no doubt that investors will be on edge but at the end of the day the incoming President could help more than hurt U.S. markets by simply repeating at every opportunity “he’s going to make America great again,” – the same tagline he’s used throughout his campaign. For the time being, the market and the Fed continues to believe that Trump will deliver a major fiscal spending package and until there’s reason to suggest otherwise, dips will remain shallow.



Meanwhile we have been watching the British pound closely and after 3 attempts to move below 1.21, GBP/USD so far has been able to withstand all the selling. Although the prospect of hard Brexit hangs over the currency, the ebbs of flows of negotiation have a long way to go and any upside surprise in data could create a squeeze in cable over the next few days. With that in mind, on tomorrow’s calendar we have the UK trade balance and industrial production numbers scheduled for release tomorrow – the sharp sell-off in the British pound and the uptick in manufacturing activity should go a long way in boosting trade activity. We saw that in the Eurozone and should see that in U.K. as well. Good news should cement a near term bottom for GBP.

Euro on the other hand treaded water in an otherwise choppy trading day. The only piece of data for the day was French industrial production, which posted a sharp rise of 2.2%, beating the 0.5% forecast. With little catalyst for the day, the euro was confined to a tight trading range. The euro took a brief peek above 1.06 before finding resistance. Although French data is not overly market moving, it does continue the recent string of stronger than expected inflation data coming out from the Eurozone. There are no major economic reports scheduled for release from the Eurozone tomorrow.

Interestingly enough, the worst performing currency today was the New Zealand dollar and one of the best performing currencies was the Australian dollar. This divergence translated into sharp gains for AUD/NZD. There were no economic reports from New Zealand but Australian retail sales came in weaker than expected, showing an increase of 0.2%, slightly weaker than the 0.4% increase expected. Chinese CPI also disappointed missing expectations, showing a 2.1% vs. 2.2% expected. However the miss in CPI data was offset by better than expected increases in PPI data. Chinese PPI rose by 5.5%, far better than the 4.6% forecast for the month of December. The Canadian dollar fell slightly despite stronger housing starts. Starts surprised to the upside with data showing 207.0k new homes for the month of December versus 190.0k expected. Canadian building permits also reported a smaller than expected decline of 0.1%, out-performing the expected decrease of 6.0%. Yet oil prices continued to fall, weighing on the Canadian dollar. Oil inventories are due for release on Wednesday.


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KATHY LIEN
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Ms. Kathy Lien is Managing Director of FX Strategy for BK Asset Management and Co-Founder of BKForex.com. Having graduated New York University’s Stern School of Business at the age of 18, Kathy has more than 13 years of experience in the financial markets with a specific focus on currencies. Her career started at JPMorgan Chase where she worked on the interbank FX trading desk making markets in foreign exchange and later in the cross markets proprietary trading group where she traded FX spot, options, interest rate derivatives, bonds, equities, and futures. In 2003, Kathy joined FXCM and started DailyFX.com, a leading online foreign exchange research portal. As Chief Strategist, she managed a team of analysts dedicated to providing research and commentary on the foreign exchange market. In 2008, Kathy joined Global Futures & Forex Ltd as Director of Currency Research where she provided research and analysis to clients and managed a global foreign exchange analysis team. As an expert on G20 currencies, Kathy is often quoted in the Wall Street Journal, Reuters, Bloomberg, Marketwatch, Associated Press, AAP, UK Telegraph, Sydney Morning Herald and other leading news publications. She also appears regularly on CNBC – US, Asia and Europe and on Sky Business. Kathy is an internationally published author of the best selling book Day Trading and Swing Trading the Currency Market as well as The Little Book of Currency Trading and Millionaire Traders: How Everyday People Beat Wall Street at its Own Game – all published through Wiley. Kathy’s extensive experience in developing trading strategies using cross markets analysis and her edge in predicting economic surprises serve key components of BK’s analytic techniques.

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5 Minute Chart on USD/JPY

If it gets over 116.000 tonight , I will SHORT 100 Units of USD/JPY

http://www.forexfactory.com/attachme...7&d=1484079690


Benjaminis

I second you Benjamin i will too short it...i am just waiting fir a good place to short or buy...i am still with you guys...I mean buy for the gold or silver....

Ben- could you please give me a brief description on how you pick your levels - using this example--- by looking at your chart I have some ideas but would like to be clear at what you are looking for.

if you have already covered this - please steer me to that post



great thread, regards

https://dailyreckoning.com/china-bar...y+Reckoning%29

Snippet:

China is now facing the reality of a major slowdown in economic growth. The Asian superpower was once hitting accelerating speeds not seen in the modern era. Now it must brace for the real possibility of going broke.


Reuters first reported in December 2016 that Chinese reserves had plunged to a five-year low, hitting just over $3 trillion, while also recording a massive drop in its amount of gold reserve in October. This reserve problem only compounds when under the threat of failing banks.


The country faces an insolvent banking problem brought on by the “off-balance sheet” issues caused by its wealth management products (WMPs). These WMPs, or what has been described as shadow banking, could turn into a considerable problem for The People’s Bank of China.

Chinese leadership has already said that the $3.5 trillion WMP industry has been a source of risk, but maintains that the industry will stay “stable and orderly” in the event of a shock. One survey found that delinquency rates in China’s less stable banking institutions to be at a whopping 30%, while still receiving injections from the Chinese central bank.

The risk combination of low reserve numbers and the need for a possible government bailout of banks maintaining WMPs adds considerable vulnerability in a Chinese government that is perceived by many foreign powers as an economic threat.

Many in the financial and political media reference the “Thucydides Trap” in which a rising power, out of fear of an already established global power, escalates toward war. While this war drum between the U.S may have credibility, the truth is China could very well be hitting considerable economic walls – and simply not keep up.

China might be seeking to diversify its involvement in the U.S economy but is hitting considerable backlash by doing so.

As economist Nomi Prins indicated regarding China, “It established a stronger relationship and side agreements with Russia, the BRICS community and increasingly with Europe and the United Kingdom post the Brexit vote. That was no accident, but part of a strategy to be distanced from the risk the US and its central and private banking system poses.”


While this strategy of distancing from the U.S continues, China is experiencing an economic slowdown and a weakening outlook for 2017.

One Chinese central bank advisor, Huang Yiping, who is a member of the central bank monetary policy committee, indicated that as Chinese residents diversify their investment portfolio, capital outflow will “last only for a certain period” in future.

This optimism from the central bank might be a fitting policy narrative, but the reality shows a different picture in China.

The yuan continues to weaken and money has started to flow outwards from the once booming Asian giant. The outflow of money has forced the yuan down a record 6.5% against the U.S dollar. That is the largest currency drop from the Chinese currency since 1994.



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A Stratfor report on the economic slowdown in China notes that, “By spending $1 trillion in foreign exchange reserves, Beijing has been able to buoy the yuan somewhat as it slowly depreciates, putting a sizable chunk of its spare cash toward reassuring the markets of its currency’s reliability.”

In 2015 alone China had an estimated $1 trillion leave the country through capital outflows. While that number might have decreased in 2016 to just over $762 billion, it also met considerable government pushback that otherwise could have produced similar figures.

The government has since stepped in to control money exiting the country at record amounts.

As of January 2017 the administration responsible for Chinese foreign exchange regulation is now requiring its citizens to provide added information and sworn pledges that their personal funds will not be directed toward property investments.

One obvious threat to a banking crisis, weakening yuan and massive flight of capital from China is the negative impact on trade. The not so obvious problem is that all of these could go off at once on a greater scale, causing economic tremors.

The actions from the Chinese government were meant to act as a floodgate in order to keep money domestically based and slow down the economic slump, but the history of preservation of wealth tends to extend beyond the rule of law. Clampdowns and financial controls can only extend so far, confidence can only be regulated so much.


Jim Rickards offers his analysis that, “History shows that weak capital controls may be worse than no controls because they send a message of “no confidence” while not really stopping the outflows.”

“The mother of all liquidity crises is coming to China sooner than most realize.”


Regards,
Craig Wilson, @craig_wilson7
for the Daily Reckoning


Ed. Note: The most entertaining and informative 15-minute read of your day. That describes the free daily subscription of The Daily Reckoning. It breaks down the complex worlds of finance, politics and culture to bring you cutting-edge analysis of the day’s most important events. Our top economists and writers will offer you an entertaining… even risqué insiders guide on the world today. Click here now to sign up for FREE.

This is the beginning of a VERY VERY dangerous matter.

The Rise of the Cashless City: 'There Is This Real Danger of Exclusion' -Forrest/Guardian
"Cities from Sweden to India are pushing for a totally cash-free society. But as more shops and transport networks insist on electronic payments, where does this leave the smallest traders and poorest inhabitants?....As more shops and transport networks adapt to contactless card and touch-and-go mobile technology, many major cities around the world are in the process of relegating cash to second-class status.

Some London shops and cafes are now, like the capital's buses, simply refusing to handle notes or coins. Could we see a whole city go cash-free? From Seoul to Bergamo, cities big and small are at the forefront of a global drive to go digital....'The beauty of cash is that it's a direct and simple transaction between all kinds of different people, no matter how rich or poor,' explains financial writer Dominic Frisby.

'If you begin to insist on cashlessness, it does put pressure on you to be banked and signed up to financial system, and many of the poorest are likely to remain outside of that system. So there is this real danger of exclusion.'....According to a recent report by Fung Global Retail & Technology, nine of the top 15 'most digital-ready' countries are in Europe. It predicts Sweden could become the world's first completely cashless society."

In a minute I will add the other side of the coin and the REAL REASON !!!

http://www.zerohedge.com/news/2016-0...sh-coming-soon

Submitted by Simon Black via SovereignMan.com,

This is starting to become very concerning.

The momentum to “ban cash”, and in particular high denomination notes like the 500 euro and $100 bills, is seriously picking up steam.
On Monday the European Central Bank President emphatically disclosed that he is strongly considering phasing out the 500 euro note.
Yesterday, former US Treasury Secretary Larry Summers published an op-ed in the Washington Post about getting rid of the $100 bill.
Prominent economists and banks have joined the refrain and called for an end to cash in recent months.


The reasoning is almost always the same: cash is something that only criminals, terrorists, and tax cheats use.
In his op-ed, Summers refers to a new Harvard research paper entitled: “Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes”.

That title pretty much sums up the conventional thinking. And the paper goes on to propose abolishing, among others, 500 euro and $100 bills.
The authors claim that “without being able to use high denomination notes, those engaged in illicit activities – the ‘bad guys’ of our title – would face higher costs and greater risks of detection. Eliminating high denomination notes would disrupt their ‘business models’.”

Personally I find this comical.

I can just imagine a bunch of bureaucrats and policy wonks sitting in a room pretending to know anything about criminal activity.
It’s total nonsense. As long as there has been human civilization there has been crime. Crime pre-dates cash. And it will exist long after they attempt to ban it.


Perhaps even more hilarious is that many of these bankrupt governments have become so desperate for economic growth that they now count illegal drug activity and prostitution in their GDP calculations, both of which are typically transacted in cash.

So, ironically, by banning cash these governments will end up reducing their own GDP figures.
What’s really behind this? Why is there such a big movement to ban something that is used for felonious purposes by just a fraction of a percent of the population?

Cash, it turns out, is the Achilles’ Heel of the financial system.
Central banks around the world have kept interest rates at near-zero levels for nearly eight years now.

And despite having created massive bubbles and enabled extraordinary amounts of debt, their policies aren’t working.
Especially in Europe, the hope of stoking economic growth (and even the sickening goal of inflation) has failed.
So naturally, since what they’ve been trying hasn’t worked, their response is to continue trying the same thing… and more of it.
Interest rates across the European continent are now negative.
Japanese interest rates are now negative.


And even in the United States, the Federal Reserve has acknowledged that negative interest rates are being considered.
They have no other choice; raising rates will bankrupt the governments they support and derail any fledgling economic growth.

Look at how low interest rates are in the US– and yet 4th quarter GDP practically ground to a halt. They simply cannot afford to raise rates.
As global economic weakness continues to play out, central banks will have no other option but to take interest rates even further into negative territory.
That said, negative interest rates will be the destruction of the financial system.

Because sooner or later, if banks have to pay negative wholesale interest rates to each other and to the central bank, then eventually they’ll have to pass those negative rates on to their customers.

Many banks have already started doing this, especially on larger depositors.
We’ve seen this in Europe where some banks charge their customers negative interest to save money, and in some extraordinary circumstances, pay other customers to borrow money.


It’s total madness.
There’s a certain point, however, when interest rates become so negative that no rational person would hold money in the banking system.
Eventually people will realize that they’re better off withdrawing their money and holding physical cash.


Sure, cash doesn’t pay any interest. But it doesn’t cost any either.

If you have a $200,000 in your savings account at negative 1%, you’d have to pay the bank $2,000 each year.
Clearly it would make more sense to buy a safe and hold most of that money in cash.



Problem is, the banks don’t have the money.

For starters, there’s literally not enough cash in the entire financial system to pay out more than a fraction of all bank deposits.
More importantly, banks (especially in the US and Europe) are extremely illiquid.

They invest the vast majority of your deposit in illiquid loans or securities of dubious long-term value, whatever the latest stupid investment fad happens to be.
And many banks have been engaging in a substantial balance sheet shift, rotating bonds from what’s called “Available for Sale” to “Hold to Maturity”.
This is an accounting trick used to hide losses in their bond portfolios. But it also means they have less liquidity available to support bank customer withdrawal requests.

The natural side effect of negative interest rates is pushing people to hold money outside of the banking system.
Yet it’s clear that a surge of withdrawal requests would bring down that system.

Banks don’t want that to happen. Governments don’t want that to happen.
But since central banks have no other choice than to continue imposing negative interest rates, the only logical option is to ban cash and force consumers to hold their money within the banking system.

Make no mistake, this is absolutely a form of capital controls. And it’s coming soon to a banking system near you.

Thanks maximus2005 !!! I was getting lonesome so it is great to see your post tonight. I will get in touch with you next week if that is ok with you.

Have a good evening.


Benjaminis