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The Really Useless Thread

  • #149,261
  • Apr 3, 2017 8:29am Apr 3, 2017 8:29am
So a question here- we all know by now the various correlations between rates/bonds/currency ($)/equities

That being said, 1, 2, 4, and 5 all show the correlation we expect to see between rates and currency. was the distortion and divergence in number 3 on this chart an indicator that something was fundamentally wrong in the underlying economy? Or an early signal of the rates cycle end?
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  • #149,262
  • Apr 3, 2017 8:48am Apr 3, 2017 8:48am
Quoting Pharm0r
So a question here- we all know by now the various correlations between rates/bonds/currency ($)/equities That being said, 1, 2, 4, and 5 all show the correlation we expect to see between rates and currency. was the distortion and divergence in number 3 on this chart an indicator that something was fundamentally wrong in the underlying economy? Or an early signal of the rates cycle end? {image}
I guess risk off / Safe haven was part of it but possible not the complete reason.
Trading in the shadow of SM
  • #149,263
  • Apr 3, 2017 8:51am Apr 3, 2017 8:51am
Quoting Pharm0r
So a question here- we all know by now the various correlations between rates/bonds/currency ($)/equities That being said, 1, 2, 4, and 5 all show the correlation we expect to see between rates and currency. was the distortion and divergence in number 3 on this chart an indicator that something was fundamentally wrong in the underlying economy? Or an early signal of the rates cycle end? {image}
Expectation of coming cuts overtook fact of recent hike?
  • #149,264
  • Apr 3, 2017 8:52am Apr 3, 2017 8:52am
Quoting goosebone
{quote} Expectation of coming cuts overtook fact of recent hike?
this is what I suspect.... smart money saw the smoke before everyone else saw the fire (going off the sisse quote "where there's smoke there's a fire")
  • #149,265
  • Edited 9:27am Apr 3, 2017 9:02am | Edited 9:27am
Quoting Earleone
{quote} I guess risk off / Safe haven was part of it but possible not the complete reason.
Was looking more. And USD was dropping . Not safe haven then. and not the way expecting it to move in risk off So I take it back

If I remember correctly it was lost around 6 millions jobs in US in this period. Also I think US delivered overall weak economic numbers this period from mostly all sectors.
Trading in the shadow of SM
  • #149,266
  • Edited 9:23am Apr 3, 2017 9:08am | Edited 9:23am
Quoting Pharm0r
So a question here- we all know by now the various correlations between rates/bonds/currency ($)/equities That being said, 1, 2, 4, and 5 all show the correlation we expect to see between rates and currency. was the distortion and divergence in number 3 on this chart an indicator that something was fundamentally wrong in the underlying economy? Or an early signal of the rates cycle end? {image}
i like the uj to weed through some stuff. few can argue the yen with 0 to negative rates should be weaker. or theoretically with the u.s in the raising mood while boj negative. the uj should climb. it did climb, and has since fallen even below the 100.5 norm. in 2007 the usdx dipped to a lower low. that LL may have triggered a new LL target on usdx now..uj did attempt 68.20 after in 2011/12.. it missed it.. that attempt never followed the norm before move. it has since hit norm in 2015 (with abe's help). so it can drop to 68.20 now, chart wise. it just closed a 1/4 below 111.61. we will see.. and if uj is doing a normal move on a large scale. equities usually do a like direction correlated move. if this is remotely true. the eu would be set to climb. the last break of 108.29. could give a 1.0585 entry. today is day one, of a quarter falling below 111.61 on uj. i cant know for sure or even if its right. lots of ducks are lined up on uj.. in this view. definitely against what a carry and what most experts write about. the chart looking at 68.xx is at odds with interest rates and most stated fundies. something built the chart. its why i prefer to be short uj..
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those who can, do. those who cant, talk about those who can
  • #149,267
  • Apr 3, 2017 9:44am Apr 3, 2017 9:44am
1st day of the month and so silent everywhere ...
Re-Incarnated
  • #149,268
  • Apr 3, 2017 10:16am Apr 3, 2017 10:16am
Quoting Pharm0r
So a question here- we all know by now the various correlations between rates/bonds/currency ($)/equities That being said, 1, 2, 4, and 5 all show the correlation we expect to see between rates and currency. was the distortion and divergence in number 3 on this chart an indicator that something was fundamentally wrong in the underlying economy? Or an early signal of the rates cycle end? {image}
Seems like the FED is behind the curve.
  • #149,269
  • Apr 3, 2017 10:39am Apr 3, 2017 10:39am
Quoting Pharm0r
{quote} this is what I suspect.... smart money saw the smoke before everyone else saw the fire (going off the sisse quote "where there's smoke there's a fire")
Yup. There was so much smoke then , like Earlobe is saying, everyone had to think fire.
  • #149,270
  • Apr 3, 2017 10:46am Apr 3, 2017 10:46am
NOKSEK is an interesting trade for exotics. Also a small carry long. Some good numbers in March from both. But Swedish krona is the weakest and it is finally a bullish engulfing on weekly at the lower part of a swing. This is a long term trade for me and I target area around 1.10

Some more info from Danske bank here: https://www.investing.com/analysis/l...rsal-200178756
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Trading in the shadow of SM
  • #149,271
  • Edited 11:43am Apr 3, 2017 11:24am | Edited 11:43am
Sisse,

Please share the answers to the right ranges we all picked for Mid using W/M/Q. And, are you still waiting to share whether that DXY candle is Bullish Neutral or Bearish that we gave an opinion on. Thanks.

I can see that the WAVES in a Swing is where I struggle as I know you take both sides despite Outlook due to your experience. When I do this, I usually fail as I showed here a few days ago taking the .0804 level and looking for a deeper pullback to .097x.

We have tested .0640 and now it appears you believe it will or might go back to test .073x first before momentum leg down. Therefore, I sit and wait. However, this is where I believe you understand the legs/waves within this swing that I do not.

The more you share and others about FA and TA the more I feel so overwhelmed and lost in the forest. I know you said to get the basics down. But, understanding how to trade legs in a swing in a current Outlook would be helpful for me. Thanks
  • #149,272
  • Apr 3, 2017 1:13pm Apr 3, 2017 1:13pm
A rather soft sessions across the board. EZ only area that keep providing good news from almost every front. From Portugal to Spain, Germany and else to macro numbers in all fronts finding a solid platform for a extensive recovery in the mid and long term.

Rest of the world, markets feeling very heavy in the UK via Brexit and warmongering (UK triggering Gibraltar warmongering and nationalist chest beating talk now against Spain...insanity of the dinosaurs in charge of this country) and Trump is definitely not helping US markets opening more and more dangerous political fronts and very little in the economic policy plan. On top sad news from Russia not helping the general market mood.

Obviously only Gold and to lesser extend Yen on the move.

Not expecting much till the Minutes and of course NFP.

sisse

Quoting IMARICH1
Sisse, Please share the answers to the right ranges we all picked for Mid using W/M/Q. And, are you still waiting to share whether that DXY candle is Bullish Neutral or Bearish that we gave an opinion on.
I already did it ....

Quote
I can see that the WAVES in a Swing is where I struggle as I know you take both sides despite Outlook due to your experience.

I rarely trade a counter wave in the short term myself. Mostly those trades you are referring are with news flows only and most of the time (if not almost always) after profit taking or playing a reverso to stop me out on trailing positions ....

Quote
We have tested .0640 and now it appears you believe it will or might go back to test .073x first before momentum leg down...
.

Not sure what momentum leg you are expecting at these levels and time....

Sure 1.064x was tested as more than widely expected since last week but thats about it. There is nothing to analyse around these levels if you are talking about the mid or short term swing....

Quote
Therefore, I sit and wait. However, this is where I believe you understand the legs/waves within this swing that I do not....

Sit and wait depending on what are you planning to trade? You need to put in context what are you talking about...you seem to be referring / wanting to trade an inner wave inside of the short term swing. Well that is edging too close to the market for my taste.

Won't recommend you especially until you feel very confident swinging short term waves first as you not only run the risk of getting 'lost in translation' but without data around and in the middle of nowhere time wise you are edging towards quant and algos that will eat you alive in small wounds and with very inconsistent results. If you want to trade those at least play it with a proper mover and shaker ....

Quote
The more you share and others about FA and TA the more I feel so overwhelmed and lost in the forest.....

Right. Thats a problem I have been noticing a lot recently since lots of traders are contributing to good conversations.

There is a very wide range of traders and discussions open now. Some are focusing in very particular aspects of previous conversations, others in some specific TA and price base action, others in Fundamentals and the usual live current market conditions and expectations ....

I try to backlink and quote the person with @ when replying questions addressed to me to make it clear that I am referring to a very particular topic but quite a few people are starting to mix different topics out of context ....

I will start wrapping up all topics as this is getting very messy. Until then I would suggest all to just quote and use @ to see what each one is referring ....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #149,273
  • Apr 3, 2017 6:01pm Apr 3, 2017 6:01pm
Quoting Pharm0r
So a question here- we all know by now the various correlations between rates/bonds/currency ($)/equities That being said, 1, 2, 4, and 5 all show the correlation we expect to see between rates and currency. was the distortion and divergence in number 3 on this chart an indicator that something was fundamentally wrong in the underlying economy? Or an early signal of the rates cycle end? {image}
Ok, starting to sound more interesting, IMO you are starting to explore with the right perspective macro interrelations.

Just a couple of things before digging deeper on FA:

  1. Don't forget that interest rates/QE are not the only reason for a currency to move. Sure monetary policy via rates is very important but is definitively not the only variable in the equation.
  2. Don't forget that markets trade expectations first. Meaning that you may want to add some notes on where and when expectations shift especially at the beginning and end of the cycle. The time axis in your chart would not match exactly the actual flows. For example last Dec hikes were trigger back in the summer via Yellen, or March rates back in February, etc (check bas post on exact dates we changed outlooks as fresh example)
  3. Thats why we are obsess in discussing 'normalisation' or the 'end of ECB QE, etc' because if you get in synch with this you could catch and get in synch with the market for very long periods of time....
  4. Finally and more importantly, we trade pairs and crosses in FX. Thus, assuming only rates and monetary policy variables (we'll discuss other factors later) the normalisation of currency X needs to be in context of what currency Y is also doing. Why don't you check what happened in 2008/2009 between ECB and FED (***obviously there was risk involved here but ignore that for a sec and focus on the monetary policy side) can you spot the sharp short circuit?

sisse

Pending conversations? PM for a chat...I am mainly in OTM now
  • #149,274
  • Apr 3, 2017 6:21pm Apr 3, 2017 6:21pm
Quoting sisse
Why don't you check what happened in 2008/2009 between ECB and FED (***obviously there was risk involved here but ignore that for a sec and focus on the monetary policy side) can you spot the sharp short circuit? sisse


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Get Rich or Die Tryin
  • #149,275
  • Apr 3, 2017 6:32pm Apr 3, 2017 6:32pm
Sisse are you implying that ECB will start hiking rates following the FED like the international policy coordination that happened back in 2008 !
Get Rich or Die Tryin
  • #149,276
  • Apr 3, 2017 7:39pm Apr 3, 2017 7:39pm
Quoting hoom
Sisse are you implying that ECB will start hiking rates following the FED like the international policy coordination that happened back in 2008 !
This is what I was thinking as well....ECB will naturally be behind a bit....but if you think about it....it makes sense.

ECB has largly followed the US with monetary easing following the world recession. US started it way sooner, thus it stands to reason that the FED normalization cycle will occur first.

But of course the ECB will start raising rates, that's the natural occurrence of normalization. That being said, inflation has to catch up first.....

I wonder the effect countries leaving the EU has on inflation
  • #149,277
  • Apr 3, 2017 7:39pm Apr 3, 2017 7:39pm
Quoting hoom
{quote} {image}
where are you getting these charts?
  • #149,278
  • Apr 3, 2017 7:49pm Apr 3, 2017 7:49pm
Quoting Pharm0r
{quote} where are you getting these charts?
sent you a pm .
Get Rich or Die Tryin
  • #149,279
  • Apr 3, 2017 8:19pm Apr 3, 2017 8:19pm
Quoting hoom
Sisse are you implying that ECB will start hiking rates following the FED like the international policy coordination that happened back in 2008 !

AHA!!
ECB has first to give us a sign of when it's going to end QE before they start raising rates.
But even if ECB starts raising rates, the FED is already expected to raise rates two more times this year, it's still not clear which way for example EUR/USD will go.

Quoting sisse
Finally and more importantly, we trade pairs and crosses in FX. Thus, assuming only rates and monetary policy variables (we'll discuss other factors later) the normalisation of currency X needs to be in context of what currency Y is also doing.
  • #149,280
  • Apr 4, 2017 1:29am Apr 4, 2017 1:29am
Quoting sisse
{quote} Ok, starting to sound more interesting, IMO you are starting to explore with the right perspective macro interrelations. Just a couple of things before digging deeper on FA: Don't forget that interest rates/QE are not the only reason for a currency to move. Sure monetary policy via rates is very important but is definitively not the only variable in the equation. Don't forget that markets trade expectations first. Meaning that you may want to add some notes on where and when expectations shift especially at the beginning and end of the cycle....

So, clearly the leader (dollar) goes, and then follows the rest (Euro, etc.)
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