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  • #148,601
  • Mar 16, 2017 8:11am Mar 16, 2017 8:11am
Quoting Sitting duck
The white vertical lines represent the yellen speech and ...
I think this chart will help and address some of yesterday questions.

The answer was very simple. Hikes got bought in the Euro (we'll get into the FA later).

Here is the updated chart with the ONLY 3 short term swing trades this year in the Euro. I added the E (extension of lows) to wrap up the last conversation we had and to put it in REAL LIVE contest.

 

  1. Why didn't we break down on Yellen and just extended the lows?, Does it tell you anything?
  2. Why we didn't break down with NFP confirmation? does a E tell you anything there? and rather went straight those last highs? does a E tell you anything there? Does it tell you anything about whats going on? Should start considering clearing positions or trailing stops if you were short?
  3. Should you play the reverso? if no when you should look for short again?
  4. If you decide yes? when? ...etc etc


I hope it helps to put some answers in context.

sisse

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Pending conversations? PM for a chat...I am mainly in OTM now
  • #148,602
  • Mar 16, 2017 9:01am Mar 16, 2017 9:01am
Quoting sisse
{quote} I think this chart will help and address some of yesterday questions. The answer was very simple. Hikes got bought in the Euro (we'll get into the FA later). Here is the updated chart with the ONLY 3 short term swing trades this year in the Euro. I added the E (extension of lows) to wrap up the last conversation we had and to put it in REAL LIVE contest. Why didn't we break down on Yellen and just extended the lows?, Does it tell you anything? Why we didn't break down with NFP confirmation? does a E tell you anything there? and rather went...
Are you implying that the euro fundamentals are starting to get the overhand on the USD fundamentals?
Have we maybe entered the phase where the smart money is starting to sniff a change from miles away while the retail thinks the sky is the moon?

The E's in that place could be positioning form large hands that are betting on good elections in France so they already have positions in place for when the political unrest in europe disappears and the market will start focusing on the good numbers in Europe. If that happens we will have the beginning of a ECB hiking cycle.
In that case we should start trailing or clearing our short positions.

Best regards,
Nik
  • #148,603
  • Mar 16, 2017 9:12am Mar 16, 2017 9:12am
Quoting sisse
{quote} I think this chart will help and address some of yesterday questions. The answer was very simple. Hikes got bought in the Euro (we'll get into the FA later). Here is the updated chart with the ONLY 3 short term swing trades this year in the Euro. I added the E (extension of lows) to wrap up the last conversation we had and to put it in REAL LIVE contest. Why didn't we break down on Yellen and just extended the lows?, Does it tell you anything? Why we didn't break down with NFP confirmation? does a E tell you anything there? and rather went...
While technically its kind of understandable what happened and exactly as u point out - those EŽs have printed a swing low/bottom and the first candle after last E killed the break.

What I think is more interesting is the FA. I have no *ucking clue why these moves. And I dont think we can go with just a simple answer of like Euro fundamentals generally strengthening over US and rates. If so we should kill the MT/ST outlooks right now because there is no reason to go lower anymore. Pls pls pls, need help on this one.

Also have a Q on the expectations vs. facts trading - I mean if the fact is a single easily dated fact (3rd hike) - should not be the reaction imminent =) break down straigt away? Why this pullback up?

P.S.: its very much starting to look as a S-H-S pattern. Bet weŽll get to a point of forming it with a try of a break up, which will be just a extenstion to trap the late longers jumping in on calling a mid and long term bottom.
  • #148,604
  • Mar 16, 2017 9:15am Mar 16, 2017 9:15am
On a second thought, A hawkish ECB together with a hawkish FED would put us first in eur/usd neutral phase, since there will be no more divergence if that happens.
So we will probably enter in a range first. In that case it would be to early to think about longs for the big players, unless they are already aiming for the very long term when the ECB will still be in a hiking phase while the FED wil have ended it hiking phase. So they are maybe seeing this already as the bottom of a range that on the longer term can evolve to a longer term uptrend. ( if there is no political european risk and US wont jump as far as everybody is expecting now)
The fact is that i have never seen a full cycle happen in real live so its hard to estimate when who is taking which actions.

Best regards,
Nik
  • #148,605
  • Edited 9:34am Mar 16, 2017 9:19am | Edited 9:34am
Traders are always looking ahead
A lot of comentators were hawkish -about the Fed even talking about 4 hikes or even a 50 basis pt hike
When you factor in sell the news
There was only one way it was going to go
  • #148,606
  • Edited 9:43am Mar 16, 2017 9:29am | Edited 9:43am
could those moves have to do with a CB buying the euro*, like the SNB..
I mean for reasons that have nothing to do with hiking rates
  • #148,607
  • Mar 16, 2017 9:34am Mar 16, 2017 9:34am
Quoting chester123
{quote} While technically its kind of understandable what happened and exactly as u point out - those Es have printed a swing low/bottom and the first candle after last E killed the break. What I think is more interesting is the FA. I have no *ucking clue why these moves. And I dont think we can go with just a simple answer of like Euro fundamentals generally strengthening over US and rates. If so we should kill the MT/ST outlooks right now because there is no reason to go lower anymore. Pls pls pls, need help on this one. Also have a...
Hi chester,

I am thinking that Sisse for once didn't make notice of the outlook changes and wants us to find it out ourselves. He also talked a few times about an exhaustion leg of the eurusd if the FOMC would overshoot.
He also noticed that the first hikes of the normalisation process have the most influence on there respective currency.
So if you ad that al up together it could be possible that we are entering neutral eurusd outlook that could turn to bullish long term once the fed has to end its hiking cycle.

I am just thinking out loud and i am probably wrong on this, so take my opinion with a grain of salt.
  • #148,608
  • Mar 16, 2017 9:37am Mar 16, 2017 9:37am
Quoting Sitting duck
{quote} Hi chester, I am thinking that Sisse for once didn't make notice of the outlook changes and wants us to find it out ourselves. He also talked a few times about an exhaustion leg of the eurusd if the FOMC would overshoot. He also noticed that the first hikes of the normalisation process have the most influence on there respective currency. So if you ad that al up together it could be possible that we are entering neutral eurusd outlook that could turn to bullish long term once the fed has to end its hiking cycle. I am just thinking out loud...
it also came to my mind but its the problem - I see reasons to change the outlooks but Im not sure how to weight them between each other. In any case I do not think he wants us to figure out that he changed them cuz in that case all the complex discussions about trading a fact for an extension break would be completely useless.
  • #148,609
  • Edited 9:55am Mar 16, 2017 9:42am | Edited 9:55am
Quoting chester123
{quote} While technically its kind of understandable what happened and exactly as u point out - those Es have printed a swing low/bottom and the first candle after last E killed the break. What I think is more interesting is the FA. I have no *ucking clue why these moves. And I dont think we can go with just a simple answer of like Euro fundamentals generally strengthening over US and rates. If so we should kill the MT/ST outlooks right now because there is no reason to go lower anymore. Pls pls pls, need help on this one. .
Yes exactly! There seems to be a contradiction between sisse's outlook / midterm map and the latest ST chart posted with the 3 bull candles. I agree with sitting duck, that based on that chart- it looks like its time to trail or kill positions from 1.08xx.

but fundamentally and via outlooks- I feel like that is the wrong answer.

supposing we are right in direction, and based on outlook, we should be looking for where bulls will get trapped and feed a momentum leg down (which I believe is in line with chester's post) but that requires a catalyst....
  • #148,610
  • Mar 16, 2017 9:48am Mar 16, 2017 9:48am
Quoting sisse
{quote} I think this chart will help and address some of yesterday questions. The answer was very simple. Hikes got bought in the Euro (we'll get into the FA later). Here is the updated chart with the ONLY 3 short term swing trades this year in the Euro. I added the E (extension of lows) to wrap up the last conversation we had and to put it in REAL LIVE contest. Why didn't we break down on Yellen and just extended the lows?, Does it tell you anything? Why we didn't break down with NFP confirmation? does a E tell you anything there? and rather went...
While looking at your chart again it came to my mind that eurusd went down on the EXPECTATION of the march hike. Then we had the 3 E's which could represent the profit taking or clearing of the shorts and could also point us to the fact that the expectation of a march hike was fully priced in and price wouldn't go lower then that without new EXPECATIONS.
Then we had 3 times a conformation of the march hike whit yellen, nfp and the hike itself and 3 times the market was disappointed because there was nothing more hawkish. So we had a case of Sell the rumor(once) Buy the fact ( three times).
  • #148,611
  • Mar 16, 2017 9:53am Mar 16, 2017 9:53am
Quoting chester123
{quote} it also came to my mind but its the problem - I see reasons to change the outlooks but Im not sure how to weight them between each other. In any case I do not think he wants us to figure out that he changed them cuz in that case all the complex discussions about trading a fact for an extension break would be completely useless.
that and EURO risk is still on the table, until that is cleared no reason to change outlooks- sisse has mentioned this before

sisse did show us a how-to on creating fundamental outlooks one time, I wonder if someone put it into a pdf
  • #148,612
  • Edited 1:23pm Mar 16, 2017 10:05am | Edited 1:23pm
Shorted UK100 7404. Equities shippers going haywire, looking to short TOPS around 3ish area.

EDIT: Stoped on 7412, 7408 failed. TOPS 2,5 down to 1.70 solid exhaustion and piling of shorts in 2,5-20 area, didnt get the entry.
  • #148,613
  • Mar 16, 2017 10:32am Mar 16, 2017 10:32am
Quoting Sitting duck
{quote} While looking at your chart again it came to my mind that eurusd went down on the EXPECTATION of the march hike. Then we had the 3 E's which could represent the profit taking or clearing of the shorts and could also point us to the fact that the expectation of a march hike was fully priced in and price wouldn't go lower then that without new EXPECATIONS. Then we had 3 times a conformation of the march hike whit yellen, nfp and the hike itself and 3 times the market was disappointed because there was nothing more hawkish. So we had a case...
I think this is spot on.
  • #148,614
  • Mar 16, 2017 11:00am Mar 16, 2017 11:00am
My opinion is that change in ST/MT outlook in Euro will only come with FA change on the Euro* side and not because FED hiking process has reached its cruising speed, ie. once we get a clearer idea of a normalization path in EZ (end of QE + hikes). So far, we are far from this as there is still political risk in play (Brexit + Fr elections) and also because inflation improvement in EZ has been quite tempered and put in perspective by ECB last week (through oil price). Thus there are really few reasons (if any) to break the highs (1.087x) until at least Fr elections are over and it's 7 weeks away ! Meanwhile risk will increase as we will come closer to the election (televised debates are only starting next week) and also article 50 will be triggered on the brexit front... June hikes could be also in play .... From my perspective, trying to fade the current NFP/FED flow (the trees) to aim the MT targets (the forest) looks a no brainer. Catching the move on the way back being the safest option.
  • #148,615
  • Mar 16, 2017 11:07am Mar 16, 2017 11:07am
Quoting Replicant
My opinion is that change in ST/MT outlook in Euro will only come with FA change on the Euro* side and not because FED hiking process has reached its cruising speed, ie. once we get a clearer idea of a normalization path in EZ (end of QE + hikes). So far, we are far from this as there is still political risk in play (Brexit + Fr elections) and also because inflation improvement in EZ has been quite tempered and put in perspective by ECB last week (through oil price). Thus there are really few reasons (if any) to break the highs (1.087x) until at...
I totally agree with you!
But I think this current retracement has to be done very quickly in order to be inline with US FA strong data and be in time for EUR political risks and price in the consistent FA data from EU. For these reasons, I thought the zigzag movement is down and then up.
  • #148,616
  • Mar 16, 2017 12:06pm Mar 16, 2017 12:06pm
Great discussions. Don't even know where to start....

Well I honestly think most of the latest comments have a deep insight and have blow by a mile or two the usual average market conversation in FF.

A couple of points before we get into details.

-> I would recommend to spend less time in explaining the past and in focusing in the present so you can trade the expectations in the future.

Not trying to avoid the points raised. We will go into details as you have triggered a good discussion.

However, instead of starting from what happened, let's start from what we have now first and then look back. I have the feeling that will answer most questions.

So to all interested.

In no more than one line and assuming you don't know anything FA wise about what happened in the last few months. You have to make your current outlook from scratch:

--> Can you tell what is current market outlook for Dollar and Euro* right now. In the macro front (inflation, employment,) and in the monetary front (rates).

I am asking in the present. Right now with the confirmed official information. So what happened before is irrelevant. What are the expectations going forward are also irrelevant. ..

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #148,617
  • Mar 16, 2017 12:23pm Mar 16, 2017 12:23pm
Dollar: Inflation in check, employment has long been in check, rates hikes guaranteed = Strong Buy (strong because all is confirmed)

EU: Inflation subdued but getting better, employment (not sure), no end to QE yet but speculation = Soft Sell (Soft due to ifs/ands/buts...nothing confirmed)
  • #148,618
  • Mar 16, 2017 12:27pm Mar 16, 2017 12:27pm
Quoting sisse
Great discussions. Don't even know where to start.... Well I honestly think most of the latest comments have a deep insight and have blow by a mile or two the usual average market conversation in FF. A couple of points before we get into details. -> I would recommend to spend less time in explaining the past and in focusing in the present so you can trade the expectations in the future. Not trying to avoid the points raised. We will go into details as you have triggered a good discussion. However, instead of starting from what happened, let's start...
dollar current outlook : bullish via confimed hikes this year and solid macro numbers
euro* current outlook : bearish to neutral via inline ECB monetary policy and elections risk to improving EZ macro numbers
Get Rich or Die Tryin
  • #148,619
  • Mar 16, 2017 12:42pm Mar 16, 2017 12:42pm
Quoting sisse
... --> Can you tell what is current market outlook for Dollar and Euro* right now. In the macro front (inflation, employment,) and in the monetary front (rates). I am asking in the present. Right now with the confirmed official information. So what happened before is irrelevant. What are the expectations going forward are also irrelevant. .. sisse
Dollar: inflation and employment show good numbers, two more rates hikes this year confirmed ---> BUY

Euro*: inflation under ECB target, EZ employment good, no rate hikes in the horizon ---> NEUTRAL
  • #148,620
  • Edited 12:57pm Mar 16, 2017 12:47pm | Edited 12:57pm
USD Bullish rate hikes and good numbers all over. Trumponomics. Expectation USD much stronger.
Euro. Good numbers lately . ECB keep the bond buying program at 60 billion monthly ( reduced from 80 ) until end of year. Some risk with elections and Brexit. Rates expectations unchanged. Overall neutral for euro.

With the last rate hike this also become an even better carry trade.
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