Money Flow Trading Method along with Risk Management

Thanks for updating our thread during the afternoon. As you pointed out in this post now the focus goes here.

U.S. government bonds had been lower throughout the session, as investors looked ahead to the European Central Bank’s first policy meeting of 2017, which will occur on Thursday and could shed some light on European monetary policy in a year likely to be driven by geopolitical events.

“ In general, we have a bearish bias towards Treasurys and expect a further selloff,” said Marc-Henri Thoumin, rates strategist at Société Générale.

“We expect inflation to keep rising, and think this will be the driver for the coming year.”

Yields have been in a steady uptrend over the past six months, ever since the 10-year touched an all-time low around 1.36% in July, though the move accelerated after the November election of Trump, whose policies, including ramping up fiscal spending, are expected to stoke inflation. Rising inflation erodes the value of a bond’s fixed payments. Typically, when inflation is on the rise, bond investors demand higher yields to compensate for the corrosive effect that higher prices have on real returns.

However, the gain in yields appears to have stalled of late, with yields retreating from a recent high near 2.6% hit in mid-December.
Looking ahead, Thursday’s ECB meeting will be the next important event for Treasurys. At the ECB’s last meeting, the central bank extended its bond-buying program by nine months, although it reduced the pace of its purchases beyond March. Any additional details on the political or monetary environment will be closely watched, especially as President-elect Donald Trump will be sworn in as the U.S.’s 45th president on Friday.

Investors may be looking for more clarity on Trump’s legislative priorities and policy details before establishing longer-term investment strategies.

The announcement comes out at 7:45 AM EST and the most important part is the Press Conference starting at 8:30 AM EST !!!


Benjaminis

http://seekingalpha.com/article/4037...94ff30195&dr=1

Trump Looking To Manipulate Currency
Jan. 18, 2017 4:17 PM ET
|
About: SPDR S&P 500 Trust ETF (SPY), SH, SSO, VOO, FXE, SDS, UUP, IVV, SPXU, UPRO, SPXL, EUO, FXY, FXA, RSP, SPXS, YCS, FXC, UDN, FXB, FXF, CYB, RWL, VFINX, EPS, ERO, CNY, BZF, INR, ICN, DBV, JYN, GBB, USDU, DRR, CEW, FXS, CROC, BXUB, ULE, FXSG, EUFX, FXCH, YCL, SPLX, URR, ICI, SFLA, BXUC, SPUU, AYT, PGD, JEM, SPXE, LLSP, RYARX, SPXN, SPDN, SPXT, SPXV, TALL
https://staticseekingalpha3.a.ssl.fa...png?1304945067
Elazar Advisors, LLCPremium Research »
Follow(6,277 followers)
Medium-term horizon, short-term horizon, long/short equity, macro
Send Message
|
www.elazarllc.com
Summary
A strong dollar has been synonymous with strong US markets.
Breaking that relationship could work, but it will be a change and markets don't like change and uncertainty.
If the dollar is talked or pushed lower other countries could retaliate causing a currency war which would be destabilizing and negative for markets.
President-elect Donald Trump just slammed the dollar (NYSEARCA:UUP). The world has counted on a strong dollar as a safe-haven, helping the U.S. bond and stock markets. A change of this perception would be a risk to the equity markets (NYSEARCA:SPY).
"Too Strong"
Trump told The Wall Street Journal,
"Our dollar is too strong."
To date Trump has said that China is a currency manipulator, apparently referring to the fact that they keep lowering the yuan to the dollar.
This time PE Trump focused on the other side of the dollar:yuan pair. Instead of saying the yuan is too weak he said the dollar is too strong.
That has different implications.
If a country's leader tries to talk down their own currency it can be a warning sign of plans to step in and weaken the currency.
In fact, that is what Trump hinted to. The WSJ article was quoted as saying,
"Mr. Trump said the U.S. might need to "get the dollar down."
It's clear Trump has complained that China was manipulating their own currency. But here Trump threatens that the U.S. could take retaliatory measures. His quote above calls for pushing back directly in currency markets.
The WSJ article went on to say,
"The president does have the power to buy and sell foreign currency-called foreign-exchange intervention-to change the dollar's value, and can even call on the Fed to use its own resources in that effort. Such intervention is particularly powerful when used in concert with other nations. That is why presidential rhetoric can temporarily influence the dollar's value."
Can you say, "currency war."
Currency War Risk
If Trump encourages actions that materially change the path of the dollar other countries could retaliate. China has already shot back in the war of words with Trump.
If the U.S. takes action to weaken its currency, other countries will respond. Currency wars hurt multi-national company earnings and have proven to be destabilizing to markets.
Such comments are an initial step to such risks.
Dollar And Markets Go Together
https://staticseekingalpha.a.ssl.fas...1697558815.png
Source: St Louis Fed
Above is the relationship of the dollar in blue versus markets in red. The chart above shows annual returns dating back to 1975.
You can see that in most years, markets and the dollar moved together. They both probably fed on each other exchanging leadership over time.
A strong dollar encourages investment confidence in the U.S., driving markets higher.
If the next President is against a strong dollar, it pulls a historic support from markets.
Surprise Comments
Markets are starting to get used to surprise Trump comments. Since his victory, the president-elect has quickly moved defense stocks, drug stocks, oil, stock and bond markets up and down.
The moves come after surprise comments from a person with power. That said he has not even take power yet.
The surprise nature of these comments, coming consistently, could erode market confidence. The reason is some level of discount needs to get priced in if there is a constant element of surprise, change and unknown.
Conclusion
The dollar is now in Trump's cross-hairs. A move to a weaker dollar could have market implications. Historically a strong dollar means a strong market. The move to "get the dollar down" would have far reaching market risk implications.
PRO TRADER on Seeking Alpha
Thanks for reading our report. We hope you enjoyed it. If you did, you may want to check out our premium Seeking Alpha service.
Every morning and throughout the trading day, we offer our members unique access to our insight on the markets based on a wealth of experience working with multi-billion dollar hedge funds and institutions in PM, analyst and trader roles. We provide weekly and daily market models and analysis that can help you know what to expect next in stocks, S&P 500, gold, oil, bonds and more. We're also very proud of the interaction with our members which can help you harness your own unique strengths to become a great investor or trader. There is no secret formula in this business. Discover your own abilities.
Click here for a free trial of Elazar's Pro Trader on Seeking Alpha.
If you liked our work scroll to the top and click "Follow."
Disclaimer:
ETFs reported by Elazar Advisors, LLC are guided by our weekly and monthly methodologies. We have a daily overlay which changes more frequently which is reported to our premium members and could differ from the above report.Portions of this article may have been issued in advance to premium members.All investments have many risks and can lose principal in the short and long term. This article is for information purposes only. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC and their related parties harmless. Any trading strategy can lose money and any investor should understand the risks.
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.

Hello Forex Traders

I would appreciate your cooperation on updating the status of those that are actively trading your FXCM UK $50,000 US Dollars Demo Account.

This is my list and I can log onto everyone's account however, I am trying to organize and so please take a SCREENSHOT of your account so I know that you are around.

Here is the last list that I have. I will review my notes later to see if I have left anyone out. Thank you for your participation.

This is the list of our 12 Forex Traders learning how to trade successfully using Money Flow Method and Risk Management.

On Sunday I posted the list and now I will update the list and open the door to a few others as some on the list are not active.


(1) DavidRP D102728560001

(2) dttsomh D102731143001

(3) Dildubai D102731452001

(4) KeepCalmfx D102742634001

(5) Rockey007 D25557124001

(6) raveon D102742734001

(7) wayfarer D102743041001

(8) Maximus2005 D102746118001

(9) mrmkg01 D25558223001

(10) mbleska D50785188

(11) vladimir8686 2971864

(12) carbonado D102754631001


Number (3), Dildubai has unsubscribed from my thread and his place is now open. The first in line is goodness. If there is anyone interested then please subscribe to my thread and send me a PM and I will make arrangements for you. Please also post here if you are interested.

goodness , I see you online now. Is your account opened and did you send me your password by PM or email and your User account number ?

http://news.goldseek.com/GoldSeek/1484769007.php

By Bill Holter

GATA forwarded a fabulous link yesterday - http://www.plata.com.mx/Mplata/artic...idarticulo=304 to Hugo Salinas Price's latest writing.

This is a very short read and represents visually what Richard Russell said for years ..."Inflate or Die". Please read it carefully because if you do not understand it, you will not understand "why" mathematically we are about to go through financial and economic disaster.

http://www.plata.com.mx/Mplata/artic...es/grafica.png

Looking at this graph, you will notice the parabolic move began in 1971. This was possible because "debt" had previously been constrained by the amount of purported U.S. gold holdings. De linking from gold allowed literally parabolic growth in new debt issuance. The increase in reserves really started to accelerate around the year 2000 and went vertical beginning around 2008. These were both years when the economy (and markets) began to seriously falter. It has been my contention that these years also coincided with "debt saturation" milestones where Kirk called down to the engine room demanding "more power".


Before moving on, let's look at how Ponzi schemes work and how they die. At first, there are few investors so adding even one more sucker to the pile is meaningful as his capital can be parceled out into meaningful "dividends". But as the scheme grows, say to 100 unsuspecting souls, one more new investor only equals 1% "payouts" to the group. Then as the pool gets even larger at 1,000 or more, one new mark is almost meaningless. As the returns shrink, people begin to look elsewhere and bail out spelling the beginning of the end. If you look at the above chart again, it pretty much mirrors the birth, growth, maturity and coming death of all Ponzi schemes...doesn't it?


Looking at the chart from a real world vantage point, the last two plus years has been more than a minor hiccup ...the parabolic "trend" has clearly changed and reversed. Mr. Salinas Price wrote that Mr. Trump has communicated desires to eliminate the trade deficit which will expedite the decline of paper reserves.

I would remind you what Mr. Trump said yesterday, "the dollar is too high"! This is further evidence of a move away from globalism toward nationalism. A "lower" dollar will help our exports while curbing imports. This will truly not be good for an over levered world that relies on product sales to the U.S. to pay their debt service. Another way to look at it is through the eyes of "Smoot-Hawley" glasses, we already know what happens to trade when tariffs are erected, trade volumes implode.


For the last few years, even with the U.S. trying and struggling to "play the game", the debt structure had already begun to slow and roll over. Now with Mr. Trump at the helm, it looks like the U.S. will no longer play the game. Simply put, "game over" will be rapidly seen and understood as inevitable where no amount of hope will trump "policy" nor Mother Nature! The credit contraction is here and now, if you know this and understand what it means, then you know where it will all end.


As mentioned at the beginning, Richard Russell's most famous quote was "inflate or die". With regard to the above chart, Sir Richard was saying "inflation" (growth of debt) must either continually go up AND at an increasing rate ...or it rolls over and dies. This is exactly why for the last few months I have harped on "credit" and why it is so important. Credit conditions all over the world have been tightening. The greatest fear of the Federal Reserve has always been a credit contraction that could not be reversed ...their greatest fear has arrived and in spades! Please understand that "credit" affects EVERYTHING. Production, consumption and the "ability" to consume, and importantly "distribution". Without credit, the economic, nor financial world will turn ...which of course will affect the "social world" as stomachs begin to growl in hunger.


You see, unlike past "reflations", there is now little to no unencumbered collateral left (even including sovereign balance sheets) anywhere in the world. The amount of existing debt (Ponzi clients) is so large, new additional debt (new Ponzi clients) has little to no effect on the entire pool. In other words, we have reached and past the point of "debt saturation" where the ability to add meaningful debt does not exist. The availability to obtain new credit is winding down.

Assets are now in the process of being sold to pay existing debt down, very similar to Ponzi clients asking for their money back. Mr. Trump's proposed policies of weakening the dollar and balancing the trade deficit will only speed the process ...into complete and utter chaos. The "utter chaos" part is easily forecast because of debt levels compared to current production, and financial derivatives are often 10 times or many more the underlying assets themselves. "Orderly" will not be used to describe the coming liquidation process!

Standing watch,
Bill Holter

Holter-Sinclair collaboration
Comments welcome, [email protected]

Bill Holter writes and is partnered with Jim Sinclair at the newly formed Holter/Sinclair collaboration.

Prior, he wrote for Miles Franklin from 2012-15. Bill worked as a retail stockbroker for 23 years, including 12 as a branch manager at A.G. Edwards. He left Wall Street in late 2006 to avoid potential liabilities related to management of paper assets. In retirement he and his family moved to Costa Rica where he lived until 2011 when he moved back to the United States. Bill was a well-known contributor to the Gold Anti-Trust Action Committee (GATA) commentaries from 2007-present.

COMMENTARY FROM BENJAMINIS: We are on the verge of the COLLAPSE of the Financial Domino's and we must use the knowledge to protect ourselves and profit with our knowledge.

http://www.bkassetmanagement.com/cur...-dollar_10386/

Asia Outlook
Have We Seen the Bottom in the Dollar?

January 18th, 2017

Have We Seen the Bottom in the Dollar?

Daily FX Market Roundup 01.18.17

The U.S. dollar traded sharply higher against all of the major currencies today as the fundamentals we have been highlighting returned as drivers for the currency. On Tuesday when the greenback tanked for the seventh day in a row versus the Japanese Yen we said hawkish Fed speak and stronger data meant that further losses were limited. Today, a series of healthy U.S. economic reports followed by a positive Beige book carved out a bottom for the U.S. dollar. The currencys rebound was then magnified by optimistic comments from Janet Yellen. U.S. rates also shot higher with 10 year yields rising nearly 10bp, validating the reversal in market sentiment.

So unless Donald Trump attacks the dollar again on Friday, weve seen the end to a month of losses in the greenback. Of course, one damaging comment from the new President and the dollar could start tumbling once again. Yesterday Trump described the dollar as too strong, making it difficult for U.S. companies to compete with their counterparts in China. This followed earlier comments from a senior advisor who called the strong dollar the greatest risk for the U.S. economy. The President elects policies will be in center focus on Friday especially after his spokesman said there will be four or five executive actions taken on Day One. If he focuses on fiscal stimulus, the dollar will rise, if he talks trade, we could see another rollercoaster ride for the greenback.

With oil prices rising, inflation ticked up in the month of December. CPI rose 0.3% month over month, boosting the annualized pace of growth to 2.1%, the strongest level since June 2014. Industrial production growth also accelerated by 0.8% which not only beat expectations but also erased all of the past months losses. The NAHB housing market index ticked down slightly but that was not much of a surprise after the Federal Reserves rate hike. More importantly, according to the Beige Book many Fed districts reported tight or tightening labor market along, intensifying price pressures and wage gains. Fed Chair Janet Yellen also confirmed that they are close to reaching their goals with the economy near max employment and inflation closing in on 2% (although todays numbers show CPI exceeding that level). She refrained from providing a timing on the next rate hike but indicated that the hike in December took account of considerable progress. Further tightening will depend on how the economy preforms over coming months. Her only cautious comment was in reference to wage growth, which she said was fairly low. Housing starts, building permits, jobless claims and the Philadelphia Fed index are scheduled for release on Thursday. Given how quickly and aggressively the dollar rose today, we would not be surprised by a shallow pullback.


The worst performing currency today was the Canadian dollar, which tanked after the Bank of Canadas monetary policy announcement. Although the BoC raised its growth forecasts for 2016 and 2017 and said that inflation is expected to return to target in the months ahead, the only line that the market cared about was on easing. BoC Governor Poloz said a rate cut remains on the table, which is a departure from last months firmly neutral monetary policy stance. The central bank head feared the consequences from any U.S. protectionism and worried that excess capacity raises the risks of missing their inflation goal. With that in mind, Poloz tried to diminish the significance of his comment by adding that there is no compelling need to mention consideration of rate cuts. Beneath these headlines on easing, the central bank still believed that stronger demand, exports and government spending would support growth. However given how far the Canadian dollar had risen since the beginning of the year, the mere talk of a rate cut was enough to send the loonie spiraling lower.


The Australian and New Zealand dollars also fell victim to the reversal in the U.S. dollar. Both currencies traded sharply lower with the losses exacerbated by the slide in commodity prices. Australias employment report is scheduled for release this evening and based on last nights higher consumer confidence report and the PMIs, we are looking for another month of positive job growth. Both the manufacturing and service sectors reported an increase in employment but the jump in November will be difficult to match. Thankfully the bar is low with economists only looking for 10K increase in jobs.


The European Central Bank has a monetary policy announcement tomorrow and according to the table below, theres been widespread improvements in the Eurozone economy. The ECB is not expected to change monetary policy but investors will be watching carefully to see if the recent improvements in Eurozone data is enough for the ECB to start discussing tapering. When they last met Draghi completely dismissed the idea of unwinding their Quantitative Easing program by tapering asset purchases. The ECB clearly did not want to jeopardize their fragile recovery by taking any steps that could reverse the uptrend in growth and inflation. One month later, the economy has improved with inflation and manufacturing activity on the rise. The weakness of the euro has gone a long way in supporting the economy and boosting inflation leading ECB member Villeroy to say that growth will be solid in 2017. We believe that this is a view shared by Draghi. According to the last ECB minutes, headline inflation is rising significantly giving the central bank more reasons to consider reducing asset purchases. Any recognition of tapering would be euro positive but they could also refrain from talking about this possibility if they still believe that the recovery needs support.
http://www.bkassetmanagement.com/wp-...1.03.48-PM.png


Despite a stronger than expected labor market report, Sterling gave back a large part of Tuesdays gains. Not only did jobless claims fall, but average weekly earnings surged in the month of November. However none of that mattered in a week when the market was focused on Brexit and while some investors were happy to see a clear path forward, that path will lead to greater near term uncertainty and volatility for the economy

http://www.marketpulse.com/20170118/...NnPT0ifQ%3D%3D

Snippet:
US inflation and Yellen comments boost USD ahead of ECB

The European Central Bank (ECB) will publish its minimum bid rate on Thursday, January 19 at 7:45 am EST. Central banks will be off to a slow start in 2017 as the ECB is also expected to keep interest rates and its QE program unchanged in the first meeting of the year. The lack of quality assets for purchase is one of the factors that forced the ECB to trim its QE program but rising inflation expectations could further reduce the monthly amount dedicated to those purchases this year.

The USD bounced back from Trump comments that deemed the currency “too strong”. There were no surprises from US consumer inflation numbers in December. The consumer price index (CPI), the primary gauge of consumer inflation, edged up to 0.3%, while Core CPI remained unchanged at 0.2%. Both indicators matched the forecasts. Inflation levels are close to the Federal Reserve’s target of two percent, which means that policymakers will likely stick to their plan of gradual, modest rate hikes in 2017.

U.S. Federal Reserve Chair Janet Yellen kept the multiple U.S. interest rate hike expectations alive with her comments in San Francisco. After taking almost a decade for two rate hikes Yellen is now concerned about waiting too long to begin a faster monetary policy tightening.


https://www.oanda.com/labsds/graph/E...01-18_1d_m.png

The EUR/USD lost 0.401 percent in the last 24 hours. The single currency is trading at 1.0665 after consumer price index data came in as expected and comments from U.S. Federal Reserve Chair Janet Yellen pointed to more rate hikes. The U.S. central bank is now issuing a warning about waiting too long to keep up with inflationary pressures. Energy prices rebounded in two stages last year. First in February when Saudi Arabia first floated the idea of a production freeze and later in the year when it was finally announced at the Algiers meeting. A non-OPEC compromise soon followed.

European inflation has been positively affected the EUR as Kenny Fisher wrote earlier today
Eurozone inflation continues to point upwards. German Final CPI jumped 0.7%, up from 0.1% a month earlier. This marked the indicator’s strongest gain since March 2016. Eurozone Final CPI also impressed, with a gain of 1.1%, compared to 0.6% in the previous release. Meanwhile, investor/analyst expectations improved in January, although the markets were hoping for more. German ZEW Economic Sentiment rose to 16.6, shy of the forecast of 18.9. Eurozone ZEW Economic Sentiment jumped to 23.2 points, short or the estimate of 24.2. These indicators point to optimism about economic conditions from investors and analysts.

The rise in the U.S. CPI in December marked the first time in two and a half years above the Fed’s target of 2 percent. Steady inflation and a strong employment component are backing up Chair Yellen’s statement about the Fed’s actions in 2017. Donald Trump awaits his inauguration as the 45 President of the United States on Friday and he will hit the ground running with some executive actions expected to be signed that day.

On the other side of the Atlantic the European Central Bank (ECB) is facing an improved economy as inflation has gained momentum, but the dark clouds of political turmoil are plain to see. Elections in France, Germany and the Netherlands with continuing uncertainty in Italy will put pressure on the EUR. The hard stance on Brexit could also hurt the Union’s growth as it it hard to quantify what will be lost if there is not even a back up deal in place when Britain leaves. Brussels is using this as a threat to any want away member to avoid a run for the exit, but it might end up causing more damage in the long run to remain inflexible.

Market events to watch this week:

Thursday, January 19
7:45am EUR Minimum Bid Rate
8:30am CAD Manufacturing Sales m/m
8:30am EUR ECB Press Conference
8:30am USD Building Permits
8:30am USD Philly Fed Manufacturing Index
8:30am USD USD Unemployment Claims
11:00am USD Crude Oil Inventories
9:00pm CNY GDP q/y
Friday, January 20
4:30am GBP Retail Sales m/m
8:30am CAD CPI m/m
8:30am CAD Core Retail Sales m/m

*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

From Post 1329 - Article by Lance Roberts. When I read this article a second time, I saw some very interesting points made. I am going to post it again here and insert my comments so I can point out why, what we do has confirmation.

You will understand when I finish and it is important that each of you with the interest to offer your comments so that I am certain that you understand the important lesson.

ANOTHER AMAZING TOPICAL HEADS UP ARTICLE THAT I SHARE NOW !!!

http://seekingalpha.com/article/4037...al-impact-loss

Technically Speaking: The Psychological Impact Of Loss
Jan. 17, 2017 10:04 PM ET

https://staticseekingalpha2.a.ssl.fa...png?1317659714


Lance Roberts
Follow(5,070 followers)


Real Investment Advice
For the third time in four weeks, the market was closed on Monday due to a holiday. Not only is this week shortened by a holiday, it is also coinciding with the annual Billionaires convention in Davos, Switzerland, and the Presidential inauguration on Friday. Increased volatility over the next couple of days will certainly not be surprising.

In this past weekend's missive, I discussed a variety of "extremes" being registered in many areas of the market and particularly in prices. To wit:
"I have often compared market prices to the equivalent of "stretching a rubber band." Prices can only deviate so far from the long-term trend line before a mean reverting event eventually takes place. Much like a "rubber band," prices can only be stretched so far before having to be relaxed to provide the ability to be stretched again.


The chart below shows the long-term trend in prices as compared to its underlying growth trend. The vertical dashed lines show the points where extreme overbought, extended conditions combined with extreme deviations in prices led to a mean-reverting event."

https://staticseekingalpha.a.ssl.fas...317_thumb1.png

"This is shown a bit clearer below which compares the deviation of the S&P 500 from the long-term growth trend. Currently, while only slightly below the peak of the 2000 "dot.com" bubble, the deviation is at levels that have ALWAYS coincided with a negative mean reverting event or very poor, and highly volatile, forward returns."

https://staticseekingalpha.a.ssl.fas...317_thumb1.png
I know... I know. As soon as I wrote that, I could almost hear the cries of the "perma bull" crowd exclaiming, "How many times have we heard that before!"
They would be right. The problem with the majority of analysis, in my opinion, is the mismatch between long-term analysis and short-term time frames. The problem with long-term price analysis is the failure to predict short-term price changes. However, short-term analysis leads to psychological wear, where analysts have spotted "Head and Shoulder" formations, "Hindenberg Omens," and "Puppy Monkey Baby" patterns that have failed to predict a market change.

COMMENTS FROM BENJAMINIS: However, short-term analysis leads to psychological wear, where analysts have spotted "Head and Shoulder" formations, "Hindenberg Omens," and "Puppy Monkey Baby" patterns that have failed to predict a market change. This is how most if not all purely technical Forex traders operate. So then how can you know for sure where the price will go ? Look at USD/JPY as it ranges between 112.00 and 116.00. WE know almost 90% certain that as long as US 30 (Dow 30) heads back to 9,000 that USD/JPY will go towards 110.00. The Trend is your Friend. We have CORRELATION to go along with trading the trend and we have a Trade Plan.

Of course, like "crying wolf," when these short-term patterns and long-term prognostications fail to immediately validate themselves, they are summarily dismissed as being wrong or just "mumbo jumbo," which often leads to unwanted outcomes.

The primary problem is the "duration mismatch" between most technical analysis, which is typically very short term (minute, hourly, daily), and the outlook for investors, which is in years.

As a portfolio manager, what is important for me is the understand the longer-term "TREND" of market prices. By looking at weekly and monthly data, the trend of prices is revealed, allowing for a better match between portfolio goals and related market risks.

COMMENTS FROM BENJAMINIS: The portfolio manager Lance Roberts is one of the best there is so he becomes my reference and I can comment on his views as my own expert of my own method. We know the TREND and WE only trade with the Trend at least until March 31, 2017. We have an EDGE.



During "bull markets," prices are in a steady advance, with corrections to the longer-term bullish trend presenting buying opportunities. When prices become extended from the trend, such deviations provide opportunities to take profits and rebalance portfolios.

Conversely, during "bear markets," prices are in a steady decline, with corrections to the longer-term bearish trend presenting selling, hedging, and shorting opportunities. When prices become extended away from the bearish trend, such deviations should be used to take profits in short positions and portfolio hedges.

This idea is shown in the chart below.
https://staticseekingalpha.a.ssl.fas...617_thumb1.png
By using a 72-week moving average, the longer-term trend of prices is more clearly revealed. As stated, corrections to the longer-term trend during bull markets were buying opportunities, whereas during bear markets they were selling/shorting opportunities.
VERY IMPORTANTLY - Note that at the peak of the previous two markets, the change from a bullish to a bearish trend was denoted by the following price action:

 

1. A break of the long-term moving average.
2. A rally back to the long-term moving average.
3. A failure and a move lower in price than the most recent bottom.

While this occurred at the beginning of 2016, it was quickly reversed following rapid intervention by global Central Banks quickly intervening with a flood of liquidity. The markets have now resumed their bullish trend currently, but are pushing the limits of historical advances, as noted this past weekend.
https://staticseekingalpha.a.ssl.fas...917_thumb1.png

COMMENTS FROM BENJAMINIS: We go with the INTERVENTION since we understand it and how it CORRELATES. There we trade with the MARKETS and as WE know the markets are always right.


The Psychology Of Loss
The problem ultimately comes down to psychology.
Last year, I wrote an article about the fallacies of "buy and hold" investing which received a good bit of pushback from the community of advisors who tout that the only way to invest is to buy low-cost ETFs and hold them long term. As I penned:
"Let's assume an investor wants to compound their investments by 10% a year over a 5-year period.
https://staticseekingalpha.a.ssl.fas...und-011916.png

The "power of compounding" ONLY WORKS when you do not lose money. As shown, after three straight years of 10% returns, a drawdown of just 10% cuts the average annual compound growth rate by 50%. Furthermore, it then requires a 30% return to regain the average rate of return required. In reality, chasing returns is much less important to your long-term investment success than most believe."

COMMENTS FROM BENJAMINIS: Just imagine that if you CONSTANTLY do 5% a month how much compounding you will have at 60% a year.


Emotions and investment decisions are very poor bedfellows. Unfortunately, the majority of investors make emotional decisions, because in reality, very FEW actually have a well-thought out investment plan, including the advisors they work with. Retail investors generally buy an off-the-shelf portfolio allocation model that is heavily weighted in equities under the illusion that over a long enough period of time, they will somehow make money. Unfortunately, history has been a brutal teacher about the value of risk management.

COMMENTS FROM BENJAMINIS: As we all know we have a superior Risk Management Strategy which you all have been using since December 27, 2016.


Take a look at the chart below.
https://staticseekingalpha.a.ssl.fas...617_thumb1.png

The current extension of the market above the 200-DMA, combined with extremely low volatility readings and overbought conditions, have not been kind to investors over the last couple of years.

This overbullish, overextended market is also evidenced on a MONTHLY basis, with prices currently pushing a rare 3-standard deviation extensions above the 3-year moving average.
https://staticseekingalpha.a.ssl.fas...617_thumb1.png


Sure, this time could certainly be different. There is just a really high probability it will not be.

But such observations rarely deter individuals in the short term, as our emotionally driven "fear of missing out" and the now ingrained belief that the "Fed won't let the market fail" blinds us to a multitude of psychological traps. These "traps" are the biggest reason for underperformance by investors who participate in the financial markets over time.

1. Loss Aversion - The fear of loss leads to withdrawal of capital at the worst possible time. Also known as "panic selling."
2. Narrow Framing - Making decisions about one part of the portfolio without considering the effects on the total.
3. Anchoring - The process of remaining focused on what happened previously and not adapting to a changing market.
4. Mental Accounting - Separating performance of investments mentally to justify success and failure.
5. Lack of Diversification - Believing a portfolio is diversified, when in fact, it is a highly correlated pool of assets.
6. Herding - Following what everyone else is doing. Leads to "buy high/sell low."
7. Regret - Not performing a necessary action due to the regret of a previous failure.
8. Media Response - The media has a bias towards optimism to sell products from advertisers and attract view/readership.
9. Optimism - Overly optimistic assumptions tend to lead to rather dramatic reversions when met with reality.

The biggest of these problems for individuals is the "herding effect" and "loss aversion."

COMMENTS FROM BENJAMINIS: By learning your Forex Business using the DEMO ACCOUNT of $50,000 US Funds you learn the right habits without any FEAR or GREED.


These two behaviors tend to function together, compounding the issues of investor mistakes over time. As markets are rising, individuals are led to believe that the current price trend will continue to last for an indefinite period. The longer the rising trend lasts, the more ingrained the belief becomes, until the last of "holdouts" finally "buys in" as the financial markets evolve into a "euphoric state."


As the markets decline, there is a slow realization that "this decline" is something more than a "buy the dip" opportunity. As losses mount, the anxiety of loss begins to mount until individuals seek to "avert further loss" by selling. As shown in the chart below, this behavioral trend runs counter-intuitive to the "buy low/sell high" investment rule.
https://staticseekingalpha.a.ssl.fas...016_thumb1.png


Despite all of the arm waving and pounding on the table by advisors touting long-term average returns, time in the market, etc., the psychological impact of loss is all too real. While "buy and hold" investing has its appeal during bullish trending markets, the "impact of loss" on individuals is a far greater emotional pull. This is why investors tend to do everything backwards by "buying high" (greed) and "selling low" (fear).

COMMENTS FROM BENJAMINIS: We have eliminated that major problem.


This is why managing "risk" always "wins" over the long term by reducing the emotional pull to "do something" at precisely the wrong time. The reality of loss tends to be more than most can stomach, and sentiments of "time in the market" will go mostly unheeded. This is, of course, why many of the coveted millennial investors have already rejected much of the Wall Street rhetoric after watching the devastation that wrecked their parents over the last 15 years.
You can do better.

Let US now work even harder so we ALL join the EXCLUSIVE 5% CLUB.


Benjaminis

FROM POST 1200


From Post 1200

Quoting KeepCalmfx
{quote} This is probably a scalper or contra trend trader, trading against the trend or with. Trader trade the retracement, target 70 pips. Would have probably change after target to re-enter short? Not sure. But better probabilities in trading with trend. I use the Fractal and SAR, not so much Awesome oscillator. what other indicators do you have up your sleeve? lol {image}
According to some analysis: although defining trade parameters is important to traders in any market, it is particularly important in the currency market since over 80% of the volume is speculative in nature. This means that currencies can spend a very long time in a certain trading environment. Also, the currency market obeys technical analysis particularly well given its large scale and number of participants.


Too many traders have tried to pick the top within a trend, only to wind up with consistently unprofitable trades.

There are basically 2 types of trading environments, which means that at any point in time an instrument is either range trading or trending. The 1st step every trader needs to take is to define the current trading environment. The shortest time frame that traders should use in step one is daily, even if you are trading on a 5-minute time frame.


How to Trade Trend?

To trade trend the trader needs to answer 3 basic questions:

1. Trend detection - When is a trend in place?
2. Trade entry – How is a position initiated?
3. Trade exit – What constitutes trend exhaustion?

The use of Bollinger Band is a more accurate way to glean trend, though it is often used for range-bound markets.

What is trend really? The author will postulate that trend is actually a deviance in price. Typically, in all markets prices stay in a range somewhere between 70 and 80% of the time. Therefore, when prices decide to trend they in fact deviate from the norm. That is why Bollinger Band (“BB”) becomes one of the best tools to measure deviation in technical analysis. The BB formula contains the standard deviation (“SD”) calculation within it. BB measures the standard deviation of price away from its 20-period moving average. … Price action is captured within the 1SD – 2SD Bollinger bands.

THESE BB bands divide the price action into 3 separate areas. If prices are between the upper 1 standard deviation BB and the upper 2 standard deviation BB, they are in the buy zone. If a specific currency is trading between the lower 1 SD BB and the lower 2 SD, then its price is in the sell zone. Price candles that exists in the area between the 2nd BB bands are in effect in no-man’s-land as markets struggle to find direction.

With the BB bands approach, the trend detection rule is quite straightforward. The author considers the uptrend to have commenced once the price closes – not simply penetrates, but closes – in the buy zone. The idea behind this rule is that buyers must have enough conviction behind their actions to sustain a rally into the upper BB channel. If prices merely pierce the channel but cannot hold their value, then we do not have enough evidence of a clear up move in place.

The second component of the trade is perhaps the trickiest. Instead of simply entering the trade at market we will look for an opportunity to buy on any small dip into the no-man’s-land zone. IF the penetration of the buy zone is so powerful that prices reach the upper 2 SD BB, then we will wait for prices to retrace to the middle of the bands or to the 1 SD band. Why such hesitation? Shouldn’t we jump in the moment the trend becomes clear? No. Not if you want trade FX like a professional.

When it comes to trend trading in FX, the difference between professionals and amateurs is that while the pros are trend followers, the amateurs are trend chasers. The distinction may seem like nothing more than semantics, but in fact it’s often what separates those who earn money through trading from those who lose it.

Where would the trader abandon his position? At what point on the chart will be proven most likely wrong? If prices retreat all the way back to the lower 1 SD BB, then the trader should stop out. The probability that trend is over is very high. Note the difference in approach. In order for us to consider the trend valid, prices must not only touch but close through the upper 1 SD BB. As for our exit, a mere tag of the lower 1 SD BB will take us out of the trade. Why be so slow to enter and so quick to exit? Because, as I noted before, trend is not the common state of price, so price must really prove to the trader that it is making a directional move. Once price can’t hold trend, there is absolutely no reason for the trend t trader to stay around. His risks far outweigh potential rewards because he now faces 3 possible scenarios – consolidation, trend reversal, or trend continuation. 2 out of the 3 outcomes are unfavorable to his position and the last choice, which is advantageous, is usually the least likely under such circumstances.

Using the lower 1 SD BB provides ample room for the trend trader not to be falsely shaken out of the trade while the price meanders through the no-man’s-land zone before it decides whether it wants to continue its initial impulse higher.

Understanding the exits – the 3rd rule of the trade – may now be helpful to appreciating the 2nd rule of buying only when price retraces. It all has to do with risk and reward. Remember that in real life prices frequently fake out the trade. Just because price enters into the trend channel is no guarantee that it will remain there. If markers were highly predicable most traders would make money rather than losing it. The key to positioning in a trend-based setup is to minimize the amount of losses for the countless times you will inevitable be wrong, rather than to maximize the gains for the few times that you will be right. In trading, trends are the exception, not the rule, and in order to avoid being wiped out, traders need to try to always enter the market under the most advantageous of circumstances no matter what the market environment holds. Novice traders tend to succumb to the lure of the crowd and not restrain themselves from buying at the top or selling at the bottom. The more patient trader, however, who would wait for a retracement down to the upper 1 SDBB, would suffer only a smaller loss.

- Boris Schlosseberg, Technical Analysis of the Currency Market

From Post 1191

DO NOT FORGET THIS PLEASE !!!

What's the most most important thing a trader needs to know?

Answer: The most important skill you
have in trading is knowing exactly what
to do after a loss. What you do
next is what makes you great.

Let me take you through a little
progression.

If you know how to trade, you love it!
If you love trading, you know that losses
happen.

If your trade loses, you might think
it happened because you were wrong or
you made a mistake, or you just didn't
know what you were doing.

I have good news for you. None of that is true.
You were not wrong. You did not make a
mistake, nor did you fail to understand
what the market was doing.

When your trade loses, it's because the market's
timing was not there for you. Not only were
you not wrong to stop out of the trade, you
were exactly right!

What you do next is what defines you
as a trader.

Anyone can trade. Anyone can learn a strategy
and open and close a trade. What separates the
winners from the losers is what the trader does
after a loss.

- Jennifer Thornburg


As I said earlier today now my focus goes back to you the Forex Trader.

I share the following general rules that always work as long as you know them and have the DISCIPLINE to follow them.

From Post 1326


Benjaminis

I post this again so there is NO DOUBT on How To Trade Forex and Earn Money and Protect Your Capital.

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.

The Wrap Up - Nightly

From Post 1330

http://ezinearticles.com/?Day-Tradin...-By&id=1398584


By Dr. Barry Burns | Submitted On August 10, 2008

http://img.ezinearticles.com/spriting/trans.gif
http://ezinearticles.com/members/mem...urns_36257.jpg
Most people looking to make money in the markets believe that the answer lies in finding some simple technical analysis strategies that will catapult them to profitability.


The truth is that trading is not as simple as beginners believe. It is a profession, and like any profession it requires a learning curve. Reading a book or getting a few simple "tips" is not going to turn you into a professional trader.


After studying for a length of time, it's not uncommon for students to begin their search for the "holy grail."


They search for more indicators, chart patterns, gurus, alert services or the latest secret day trading strategies and other things that will provide their answer to becoming successful.


But here's the fact. Success lies within you .. and it won't come easy.


In fact, one of my favorite success principles is this:
"Successful people do what unsuccessful people are unwilling to do."

Let's apply this to trading in the form of my list of "Day Trading Rules to Live By" ... all of which have to do more with you than with the market.

 

1. The consistency you need is in your mind, not in the market. Many in the market get frustrated because the market often behaves differently than they expect. You can't rely on the market to be consistent. It is largely a random walk. But there are times when the market does setup with a probability scenario that gives you an edge. Your job is be consistent in trading those probability setups and trade them every time they occur.
2. Trade like a cat. Most beginners over trade. It's one of the most common trading sins. Your job is to be better than other day traders in having the discipline to wait like a cat in the brush until just the right moment (your high probability setup) and then jump on the trade without hesitation.
3. Successful trading is simply a game of not making mistakes. Keep a list of your day trading rules posted on the wall or on your monitor and then follow those rules perfectly. You must be more disciplined than the average trader. Never depart from your rules no matter how good a trade "looks" or "feels" to you if it violates your objective and back-tested rules.
4. Only trade when you are in an optimal emotional state. Never trade when you are tired or are in an emotionally unstable situation (after a fight with a spouse or friend for example). Day trading is more like athletics than academics. Trading on such a short time frame requires you to be able to make split second decisions, and you're risking a lot of money when you do. Make sure your mind is sharp and your emotions are centered.
5. Keep a detailed trading log. Every day trading course I've seen has a trading log. Yet my experience in dealing with trading students demonstrates that less than 10% of them actually use it. This is a huge mistake. Not only should you log every trade, but you should also record how you felt and what you were thinking as you took the trade. In this way your logs will become a type of "biofeedback" mechanism for you. Personally, this was the difference that made all the difference for me.

These 5 day trading rules are not the type of rules that you were probably looking for. The masses want rules about indicators, price bars, where you get in and where you get out.


Granted, you definitely need clear objective rules about those things as well. Yet thousands of traders have those types of rules, and yet continue to fail because those rules are about market action.


They fail because they don't have, or don't follow, the more important rules the rules about their own action.

If you find yourself resisting the importance of these rules about your own behavior, realize that you are one of the masses who feels the same way. But since the masses fail at day trading, you must set yourself apart and do something different than them.


Following these 5 day trading rules are what the retail traders fail to do. Not because they can't do them, but because they are unwilling to do them. And remember, "Successful people do what unsuccessful people are unwilling to do."


Dr. Barry Burns is the owner of Top Dog Trading which teaches people how to avoid the long learning curve in day trading


He started his study of the markets under the direction of his father, Patrick F. Burns, who became independently wealthy through trading and had over 70 years of trading experience before passing away in 2005.

He has been the featured speaker at DayTradersUSA, and developed a 5 Day Course for WorldWideTrders.


Dr. Burns has been a headlining guest speaker for the Market Analysts of Southern California, given seminars around the country at many Wealth Expos as well as many Traders Expos, been interviewed on the Robin Dayne "Elite Masters of Trading" Radio Show, and is the former moderator of the FuturesTalk chat room.

He has a doctorate in Hypnotherapy and is a certified NLP practitioner, and therefore able to help people with the psychology of trading.
Article Source: http://ezinearticles.com/expert/Dr._Barry_Burns/37770


Comments From Benjaminis: Good Night Finally (SMILE)

What Armstrong means is that there is debt in Italy and Spain and France yet the debts are owed by each country and the One Currency , EUR/USD does not make it really an economic union nor a Political one.


Benjaminis

Good Day

Hope everyone is doing well.

Charts for visual.

https://www.bloomberg.com/news/artic...e-global-elite


May takes her message of global Britain to a sceptical international elite.
by
Simon Kennedy
19 January 2017, 9:30 AM SAST
Hello citizens of nowhere.
This is unlikely to be Theresa Mays opening line when she speaks on Thursday to the World Economic Forums annual meeting in Davos, Switzerland. Yet the bankers, executives and investors the U.K. prime minister will be addressing certainly meet the definition of rootless international elites she attacked at the end of last year.
May plans to use the opportunity to promote her arguments that Brexit shouldnt be interpreted as Britain closing its doors to business or turning protectionist.
We will build a new trading relationship with our partners in Europe, but we will also be free to do new trade deals with countries from outside the EU too, she wrote in The Sun newspaper on Thursday.
May will speak to Bloomberg Television later.
Bankers Bolt
The bad news for May is that just as shes firming up her Brexit plans, so the bankers attending Davos are cementing their plans to leave London.
They are doing so after the premier announced on Tuesday that the U.K. will leave the European Unions single market, robbing them of their ability to service the bloc from London.
Several executives, some of whom are set to meet May on Thursday, warned in interviews in Davos that they are likely to shift staff abroad. Some of them already know how many will leave and where they will go:

1. JPMorgan Chief Executive Officer Jamie Dimon told Bloomberg Television on Thursday that it looks like there will be more job movement than we hoped for
2. HSBC CEO Stuart Gulliver said staff generating about 20 percent of London revenue may move to Paris
3. UBSs head of investment banking, Andrea Orcel, said the Swiss firm has operations in Germany and Spain and that they will definitely have to move from London. The question is how many, he said. Reports today indicate 300 may move to Spain
4. Goldman Sachs is considering halving its London staff to 3,000, with transfers to New York and the European continent, Handelsblatt reported
5. Lloyds Banking Group has already picked Frankfurt as its base for guaranteeing ties to the EU following Brexit, according to a person familiar with the matter

We simply have to accommodate the laws of the land both in Britain and the EU, said Dimon, who previously estimated 4,000 of 16,000 JPMorgan jobs may need to leave the U.K. That will determine how many jobs and how many people and how many things you have to move.
Dimon on Brexit, Capital Requirements, Trump's Impact
Calm Carmakers
On the good news front for May, executives from auto-manufacturers Toyota and Nissan said in Davos that theyll keep making cars the U.K. despite the plan to leave the single market.
We can survive this, Toyota Chairman Takeshi Uchiyamada said in an interview. In every country in the world, we dont tend to close or move factories when things like this happen and it will be the same in the U.K.
Still, Merkel is likely to put EU principles ahead of the German car industrys interests in her dealings with the U.K., Ulrich Hoppe, the head of the German-British Chamber of Industry and Commerce, told Bloombergs Alex Morales.
Europe United
With Britain on the way out and U.S. President-elect Donald Trump predicting others will follow, European officials closed ranks on Thursday.
German Chancellor Angela Merkel said that she is determined to hold the rest of the EU together, while Guy Verhofstadt, the European Parliaments point person on Brexit, called Trumps suggestion that Brexit will cause a domino effect insane.
Keen not to reward the U.Ks decision lest it encourage copycats, European Commission President Jean-Claude Juncker said it will be a very, very, very difficult negotiation. Verhofstadt said while there would be no retaliation, its an illusion to suggest that the U.K. could leave the EU and then opt back into the best parts.
Europeans were irked by Foreign Secretary Boris Johnsons warning to French president Francois Hollande not to behave like a Nazi in a World War II movie.

As a consequence of the Brexit vote, other European nations are now closer together, theyre determined to set out a course jointly, European Commission Vice President Frans Timmermans told Bloomberg in Davos.
Brexit Bullets

1. U.K.s Supreme Court will rule on January 24 on whether May can legally begin the Brexit process without parliamentary approval
2. Labour Party said it will seek to amend any legislation that triggers the exit to soften Mays proposals
3. Trade Secretary Liam Fox, who is also attending the Davos meeting, tells Daily Telegraph he is conducting trade audits with a number of countries. Newspaper lists a dozen including China, Australia, South Korea and India
4. U.K. house prices decline for first time in five months
5. Ryanair could scrap U.K. domestic routes once Britain leaves the EU
6. Heathrow cleaner Mities stock falls as Brexit slowdown hits profits
7. Liberty Global says U.K. consumers prove resilient amid Brexit

On The Markets
The pound may have found a floor against the dollar if technical analysis of the foreign exchange market proves true.
The pounds biggest advance of Tuesday helped it break out of its downtrend line drawn from the Brexit vote day, according to Bloombergs Sejul Gokal.

And Finally
The bankers looking to flee London may discover their destination will be decided in the classroom, not just the boardroom.
A new life outside the U.K. may also mean a change of school for the children of bankers, and theres already an increase in requests about available places in Paris, Dublin and Madrid, senior staff at international schools told Bloombergs Charles Penty, Peter Flanagan and Greg Viscusi.
Failure to secure enough slots could prevent banks shifting somewhere or could mean they look to local employees.
In a period of three weeks, I must have had inquiries from some 20 families of people in the financial industry in London, which is totally atypical, said Frank Powell, headmaster of Runnymede College, a British school to the north of Madrid with about 850 pupils. Practically all of them prefaced this by saying they may be moving to Madrid.

http://www.marketwatch.com/story/the...teid=rss&rss=1

The more boring, the better what to watch from the ECB today

Sharp jump in inflation raises calls for end to QE
After the European Central Banks December surprise, economists are expecting this months policy meeting will be a snoozer and that would be a good thing.
The ECB will hold its first policy setting meeting of 2017 on Thursday, after extending its easing program by longer than expected last month. Now European inflation is rising sharply, and Germany is calling for the bank to bring its ultra-accommodative bond buying to an end.
With those pressures on the ECB in mind, investors are looking for one thing from President Mario Draghi and Co. at this weeks meeting: Confirmation that the banks quantitative easing will carry on as planned.

We think Draghi will endeavor to be as dull as possible in [Thursdays] ECB press conference, economists at Bank of America Merrill Lynch said in a note Wednesday. The more boring, the better. We need reassurance that QE runs until December, irrespective of Q1 inflation or political pressures.
Even though recent European data have been moving closer to the banks targets, policy makers should sit tight, the BAML team suggested.
The dominant macro theme so far in 2017 is the twin acceleration in inflation and real economic activity. But we think it is too early to declare victory, they said.
Inflation has shot higher in the eurozone in the six weeks since the ECB added nine months to its QE run, which now ends in December 2017. Consumer prices rose 1.1% in December, up from 0.6% the previous month, largely because of a sharp rise in energy costs.

We need reassurance that QE runs until December, irrespective of Q1 inflation or political pressures BofA analysts ahead of the ECB meeting
On top of that, the latest purchasing managers indexes have shown the fastest rate of expansion since May 2011, indicating economic growth is finally picking up in the region.
The downside of those upbeat economic readings: A rise in criticism about the ECBs program. Germanys Finance Minister Wolfgang Schuble has urged the policy makers to stop bond buys, on fears about the effect on his country of rapidly rising inflation which hit its highest level in more than three years in December.
Those healthy data also provide ammunition for the few hawks on the ECBs Governing Council. Even so, analysts expect Draghi to be able to brush off any criticism of the banks easing stance at Thursdays meeting. For one thing, core inflation in the eurozone came in at 0.9% in December, showing no sign of a sustainable pickup in consumer prices.

Political risks
Whats more, minutes from the ECBs December meeting revealed policy makers opted to extend QE by nine months, rather than the six expected, for one reason: to weather the potential political shocks throughout 2017.
The Netherlands, France and Germany are set to hold elections this year, and there are concerns they will follow the populist trend that affected last years U.S. presidential vote and the U.K.s Brexit referendum. The election of anti-EU candidates could shake the foundations of the eurozone.
The December decision has put the ECB on autopilot, at least until the summer and until after the Dutch and French elections. This autopilot should also immunize the ECB against short-term volatility in macro data, said Carsten Brzeski, chief economist at ING, in a note.
The Dutch general election takes place on March 15, while the French presidential and general elections are in April and May. German voters head to the polls by the fall at the latest.
The ECB will want to see a pickup in core inflation and political certainty before it would announce a further reduction of the monthly bond purchases. We shouldnt see such a scenario unfolding before the second half of the year, Brzeski said.

ECB watcher Frederik Ducrozet is also giving a host of reasons why the ECB wont bow into tapering pressure.
The central bank is expected to release its rate decision at 1:45 p.m. Frankfurt time, or 7:45 a.m. Eastern Time, and it is seen as keeping its main refinancing rate at a record low of 0.0% and the deposit rate at negative 0.4%. That release will be followed by Draghis press conference at 2:30 p.m. local time, or 8:30 a.m. Eastern.

http://www.bkassetmanagement.com/cur...-dollar_10386/
KATHY LIEN
Managing Director HAVE WE SEEN THE BOTTOM IN THE DOLLAR?

January 18th, 2017

Have We Seen the Bottom in the Dollar?

Daily FX Market Roundup 01.18.17

The U.S. dollar traded sharply higher against all of the major currencies today as the fundamentals we have been highlighting returned as drivers for the currency. On Tuesday when the greenback tanked for the seventh day in a row versus the Japanese Yen we said hawkish Fed speak and stronger data meant that further losses were limited. Today, a series of healthy U.S. economic reports followed by a positive Beige book carved out a bottom for the U.S. dollar. The currencys rebound was then magnified by optimistic comments from Janet Yellen. U.S. rates also shot higher with 10 year yields rising nearly 10bp, validating the reversal in market sentiment.

So unless Donald Trump attacks the dollar again on Friday, weve seen the end to a month of losses in the greenback. Of course, one damaging comment from the new President and the dollar could start tumbling once again. Yesterday Trump described the dollar as too strong, making it difficult for U.S. companies to compete with their counterparts in China. This followed earlier comments from a senior advisor who called the strong dollar the greatest risk for the U.S. economy. The President elects policies will be in center focus on Friday especially after his spokesman said there will be four or five executive actions taken on Day One. If he focuses on fiscal stimulus, the dollar will rise, if he talks trade, we could see another rollercoaster ride for the greenback.

With oil prices rising, inflation ticked up in the month of December. CPI rose 0.3% month over month, boosting the annualized pace of growth to 2.1%, the strongest level since June 2014. Industrial production growth also accelerated by 0.8% which not only beat expectations but also erased all of the past months losses. The NAHB housing market index ticked down slightly but that was not much of a surprise after the Federal Reserves rate hike. More importantly, according to the Beige Book many Fed districts reported tight or tightening labor market along, intensifying price pressures and wage gains. Fed Chair Janet Yellen also confirmed that they are close to reaching their goals with the economy near max employment and inflation closing in on 2% (although todays numbers show CPI exceeding that level). She refrained from providing a timing on the next rate hike but indicated that the hike in December took account of considerable progress. Further tightening will depend on how the economy preforms over coming months. Her only cautious comment was in reference to wage growth, which she said was fairly low. Housing starts, building permits, jobless claims and the Philadelphia Fed index are scheduled for release on Thursday. Given how quickly and aggressively the dollar rose today, we would not be surprised by a shallow pullback.

The worst performing currency today was the Canadian dollar, which tanked after the Bank of Canadas monetary policy announcement. Although the BoC raised its growth forecasts for 2016 and 2017 and said that inflation is expected to return to target in the months ahead, the only line that the market cared about was on easing. BoC Governor Poloz said a rate cut remains on the table, which is a departure from last months firmly neutral monetary policy stance. The central bank head feared the consequences from any U.S. protectionism and worried that excess capacity raises the risks of missing their inflation goal. With that in mind, Poloz tried to diminish the significance of his comment by adding that there is no compelling need to mention consideration of rate cuts. Beneath these headlines on easing, the central bank still believed that stronger demand, exports and government spending would support growth. However given how far the Canadian dollar had risen since the beginning of the year, the mere talk of a rate cut was enough to send the loonie spiraling lower.

The Australian and New Zealand dollars also fell victim to the reversal in the U.S. dollar. Both currencies traded sharply lower with the losses exacerbated by the slide in commodity prices. Australias employment report is scheduled for release this evening and based on last nights higher consumer confidence report and the PMIs, we are looking for another month of positive job growth. Both the manufacturing and service sectors reported an increase in employment but the jump in November will be difficult to match. Thankfully the bar is low with economists only looking for 10K increase in jobs.

The European Central Bank has a monetary policy announcement tomorrow and according to the table below, theres been widespread improvements in the Eurozone economy. The ECB is not expected to change monetary policy but investors will be watching carefully to see if the recent improvements in Eurozone data is enough for the ECB to start discussing tapering. When they last met Draghi completely dismissed the idea of unwinding their Quantitative Easing program by tapering asset purchases. The ECB clearly did not want to jeopardize their fragile recovery by taking any steps that could reverse the uptrend in growth and inflation. One month later, the economy has improved with inflation and manufacturing activity on the rise. The weakness of the euro has gone a long way in supporting the economy and boosting inflation leading ECB member Villeroy to say that growth will be solid in 2017. We believe that this is a view shared by Draghi. According to the last ECB minutes, headline inflation is rising significantly giving the central bank more reasons to consider reducing asset purchases. Any recognition of tapering would be euro positive but they could also refrain from talking about this possibility if they still believe that the recovery needs support.

Good Day Everyone

Let us get straight to business.

By Joe Rennison and Eric Platt
Financial Times, London
Wednesday, January 18, 2017

China cut its holdings of U.S. Treasuries by $66 billion in November, reducing its position in the safe-haven debt to the lowest level since 2010 as the country battles to stabilise its currency.

The acceleration in sales -- the largest monthly decline since December 2011 -- threatens a rise in U.S. interest rates if it continues and follows an unwinding in October that saw China cede its position as the largest foreign holder of U.S. Treasuries to Japan.

China has been selling its foreign exchange holdings in part to support the renminbi, which has fallen 4 percent against the U.S. dollar since the start of last year. The fall in Treasury holdings is part of a wider campaign by Beijing to stem capital outflows. ... End of SNIPPET.

Today at 7:45 AM Eastern Standard time in 21 minutes the ECB makes their Rate Announcement. The press conference is at 8:30 AM. KeepCalmfx will listen live if possible using her 30 day trial with RANSQUACK.

I will be back after the announcement to post more about where we are in the teaching and trading of Forex on this thread.


Benjaminis

http://www.marketwatch.com/story/dol...teid=rss&rss=1

Dollar weakens anew, gives up strength triggered by Fed’s Yellen’s hawkish comments

The U.S. dollar turned mixed Thursday, on the heels of a rally pinned to hawkish remarks from Federal Reserve Chairwoman Janet Yellen.
Investor nervousness persists ahead of the Friday swearing in of U.S. President-elect Donald Trump, who in recent days had talked down the dollar.
The WSJ Dollar Index BUXX, -0.17% , a measure of the U.S. dollar against a basket of major currencies, was down 0.2% at 91.77. The ICE U.S. Dollar Index DXY, -0.24% , which narrows that basket to six rivals, was down 0.2%.
Sponsored Videos

Against its Japanese counterpart, the dollar USDJPY, +0.06% advanced to as high as ¥114.96, but later lost momentum to stabilize at ¥114.60, compared with ¥114.64 late Wednesday in New York.
“The upside test above the ¥115-line remains on hold,” said Yuzo Sakai, manager of foreign-exchange business promotion at Tokyo Forex & Ueda Harlow. “Ahead of Trump’s speech, we are seeing an intensifying mood to sit on the fence.”
The euro EURUSD, +0.3010% traded as low as $1.0623 but was since changing hands at $1.0664 compared to $1.0629 late Wednesday.
The catalyst initially pushing up the U.S. currency was Yellen’s comments that central bank officials expect interest rates to rise “a few times a year” through 2019. She also said in a speech that the Fed was nearing its goals for inflation and employment and that it “makes sense” to reduce the central bank’s level of monetary support.

The Fed’s stance contrasted with central banks elsewhere. The Bank of Japan has launched its policy framework to focus on keeping the yield on the benchmark 10-year JGB around zero. The European Central Bank is widely expected to keep its asset-purchase program intact when its policy setters meet later Thursday.
Read: Trump is waving adios to the longstanding ‘strong dollar policy’
J.P. Morgan said in a morning note that the dollar’s trade with the yen was returning to the level consistent with its correlation with U.S.-Japan interest-rate differentials since Trump’s election victory in November.
“At this moment, the rates gap is the main driver of the dollar against the yen.” But J.P. Morgan said the correlation would likely fade over time as the incoming administration may intensify its protectionist stance.

Hi Benjamin

Yes, I will be listening to Ransquack, I was move from a 1 min delay to a 5min delay trail.

Update on Charts