I’m In! These for starters….and far more to come.
AUD/USD at 97.00
NZD/USD ( adding to existing postion ) 85.13
EUR/USD ( small position ) 1.3780
GBP/USD enter at 162.58
EUR/NZD at 161.85
GBP/NZD at 190.50
USD/CAD at 1.02 85
I’m trying to get some of this out in as real time as possible so….please forgive the “lack of meat on the bone” here from a fundamental stand point.
We’ve been into all that already….and obviously there’s plenty more to come.
I couldn’t help myself as well – can’t possibly outline it any better.
Please….I encourage you to click the link below and ACTUALLY read it! In particular the 3rd chart where we see US Macro Fundamentals are diverging…
THE GREEN LINE IS THE SP 500.
TAKE THE TIME TO ACTUALLY LOOK AT EACH INDIVIDUAL CHART AND ASK YOURSELF……..
” What the hell is going on? ”
Just keep buying the dip right?
New traders / technical traders tend to move too quickly in looking to take advantage of short-term price action.
Looking at this morning’s “risk event” and the markets “completely insane near term reaction to it” would most certainly have any short-term “short time frame” trader ( anything under a 1 H time frame ) up to his/her elbows in sadness – scrambling to find a life line.
Then, with little knowledge of the fundamentals and a heart beating out of your chest you come to understand that: “I’m way too leveraged”, “My position is too huge” , “I’ve gambled here” , “What have I done??” – and you’re wiped from the planet.
We all make mistakes granted – and I’m the first to tell you – I can’t stand watching this “continue pushing higher” against every fundamental known to man but…..the key point being – “I’m watching”.
Trading within your means, and exercising “sick” levels of patience are extremely difficult psychological hurdles to overcome……….yet essential for long-term success.
“Patience young grass hoppa……..patience!”
So the jobs report out of the U.S this morning is literally “beyond horrible” – yet…..initial reactions across the board have people partying in the streets.
What could possibly be discerned from such an absolutely dismal report that would see equities/risk futures “burst higher” ?
The disconnect from any rational evaluation of fundamental economic principles and this “euphoric bliss” has now truly taken on a life of its own.
I will be fading this action no question, and will be initiating trades “after the dust settles” as suggested previously, in that we cannot be far from a major turn.
This “turn” will have a seriously “long USD / short risk” vibe.
Forex Trade Signal – October 22, 2013
You can visit a thousand different financial websites, each evaluating the markets using a different sets of tools, each with their own “take” on where things are headed next. More often than not I find the majority of these sites generally have a steadfast view either “bullish or bearish” – and tend to just stick with that. Each looking like “heroes” for a time then taking their turn getting wacked when the market turns against them.
Staying objective and working to “trade both sides” can be challenging no question.
I wanted to draw your attention to a chart and concept I had posted on some weeks ago “EEM” the Ishares ETF tracking emerging markets. Take note that we are now at “the exact same spot” as some weeks ago, as U.S equities have continued to reach new highs.
We had discussed how “lots of those freshly printed U.S Dollars” find their way into investments in emerging markets ( as the yield on anything U.S related is nil) and how when “risk aversion” comes into play – these dollars are repatriated back to the U.S and converted “back into USD.”
Why no breakout in “EEM” then? We’re at all time highs everywhere else?
Perhaps I’ll eat my words here, but to see this turn downward “again” in light of the fact that “everything U.S” is apparently headed for the moon certainly warrants interest.
Tomorrow’s “highly anticipated employment report” may prove to be the catalyst either way.
I remain focused on AUD and NZD as well ( and obviously ) USD here as “yet again” we find ourselves in a precarious position. It’s tough to argue with the continued “ramp” in risk assets but my analysis suggests we’ll see pullback before heading higher.
With every single headline, and every single website singing high praise to the “economic recovery” in the U.S , with disasters averted left and right, and an equities market seemingly “constructed out of pure titanium” – it’s difficult entertaining ideas that “anything” could go wrong.
One always has to keep in mind that when “too many people” are leaning hard in one direction, markets have a tendency to “correct that” – often with incredible efficiency.
Even if you’re of the mindset that “nothing is going to stop this train” you’ve still got to consider the normal market dynamic known as “profit taking” – where traders / investors simply decide to “take a little bit off the table”.
The recent moves upward in both U.S equities as well the Australian Dollar are highly correlated here, as the two both represent “risk on” market sentiment. It’s difficult to comment on the “never-ending rise” of U.S equities in light of recent events, however what I can tell you is that the Australian Dollar (AUD) is as “overbought” as it’s been for months , “if not” over the last entire year – on continued decline in volume.
If for no other reason than purely “technical trading” ( let alone with combined fundamentals ) short AUD is setting up for an extremely low risk / high profit opportunity here.
An opportunity I intend to take considerable advantage of.
Trade ideas include: long GBP/AUD as well EUR/AUD, as well short AUD/USD, AUD/CHF and AUD/JPY just to name a few.
Stock traders can have a look at the ETF: FXA
I’ll plan to “tweet” entries / ideas in real-time moving through the week. Should the correlation stand, I’d also be looking for downside action in equities.
I don’t have time this evening……and can’t get into too much detail but……
Who’s looking short AUD?
Not this minute…….but…….
Short AUD = What?
With respect to global appetite for risk?
I’ve been pretty quiet here these past few days…….and there’s reason for that.
I’ve been busy planning.
Aside from the fact that I can’t bear further discussion of the current (or future) state of America, I’ve been very busy planning. Planning for the “next big move”, for the “next big win”, for the “big enchilada” , the “piece de resistance”, the “creme del la creme”, the trade plan / concept for the following year….no scratch that – the following “years”.
Wether you believe it or not – we are indeed on the cusp of a major turning point.
I don’t mean a simple turning point in the short-term direction of markets no ( we’ve got tools to navigate that )…..I’m talking about a major turning point with respect to how you currently live your life ( depending on your age ) , and certainly how you “view” your life with respect to your ability to “accept change”.
I can’t comment on your own timeline. I don’t know if you are 65 or only 16 years old. Point being….regardless of where you’re at – you’ll have to open to the idea that things are going to change…….and likely change far more than you’d ever anticipated.
My dad used to read comic books as a kid – filled with wild ideas of “humans in outer space” and the “discovery of other worlds”. Boom – there we are a few short years later “walking on the moon”.
I “heard” about this thing called “The Internet”, lied to my local bank about starting a “house painting business” , got a loan for 2500.00 and blew the entire thing on a P.C computer. Boom – I’ve travelled the world and life’s a beach.
Changes come fast, some of them good, and some “not so good”.
Change is coming…….and you’ll need to start making plans.
Finally we get a solid move on the fundamentals, as last nights downgrade of U.S debt from Chinese ratings agency “Dagong” sent the U.S Dollar spiralling down.
Now Dagong is no “Moody’s or Fitch” ( currently rating on “negative watch” ) but this in itself brings about a very interesting point.
A Chinese ratings agency having such a significant impact on the dollar? Wow.
You might expect this kind of move given that a “reputable” agency in the U.S gave the “thumbs down” on the debt ceiling debacle sure…but a Chinese ratings agency?
As the largest holder of U.S Debt / Treasury Securities on the planet it is now painfully clear how much influence China truly has. The agency suggested that, while a default has been averted by a last-minute agreement in Congress, the fundamental situation of debt growth outpacing fiscal income and GDP remains unchanged. “Hence the government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future”.
Kicking the can a couple of months further down the road makes little difference when the U.S will just be back in the news then…..still unable to pay its bills.
The short USD trades obviously made big moves here overnight, but not exactly as expected. Great gains in EUR, GBP as well CHF but oddly the “commodity currencies” have shot higher. An interesting dynamic and certainly one to keep an eye on as NZD as well AUD approach overbought levels.
Gold up a wopping 34 bucks here this morning, so perhaps we’ve got the “risk off” flows on the move.
So you are looking for guidance (long pause)……………Completely understandable.
You’ve got the entire planets combined libraries / resources at your fingertips and nothing but time on your hands ( sitting in some cubicle somewhere surfing on “company time” ) yet….the markets still keep you guessing.
I can assure you – you are not alone.
If one truly “chooses to succeed” at any given discipline, you’d have to imagine the amount of time and effort required to do so no?
Take an Olympic athlete for example, spending literally “years and years” training if only to be given “the opportunity” to strut their stuff on the world stage, then “thrashed” in the qualifiers and “sent packing” before the games really even start. Talk about a disappointment.
Where they looking for an “easy ride”? Did they expect “someone else” to do the work?
Killer is……the athletes “did the work” and “still” got their asses kicked before the show even started.
I’ve seen supposed “gold gurus” lose everything ( as well as their entire subscriber base), as well as “NY stock picking legends ” get their clocks cleaned ( and even more so coming soon ) clinging to a single / pathetic trade plan based solely in the continued obliteration of the U.S Dollar so…….
If you are looking for guidance…fair – I can help you with that (to a certain degree). If you are looking for a “free ride” you’ve really got to ask yourself….
YOU ARE SURFING THE INTERNET TAKING ADVICE FROM 16 YEAR OLD BOYS POSTING FROM THEIR PARENTS BASEMENT SUITE IN MINNESOTA!
Start taking control of this “for yourselves”.