As per my previous post – I have absolutely “zero expectations” for the next few weeks / months of trading.
I’ve seen this kind of market activity many, many times in the past. Dead money just sitting there doing nothing. Staring at it……not the way I choose to spend my days. Now, there is always the possibility that things may change…some major news event, or large-scale geo political scenario where markets react but seriously……in the current environment, the “Trump environment”?? One can only assume something impactful leading to further “downside” if anything.
This “summer thing” is for real, and rightfully so. People are out throwing frisbee’s with the dog – not hunkered down in some dingy basement pouring over charts.
Best recommendation I can make for trigger happy traders – keep a close watch for news / anything that “might” provide opportunity to move the needle but otherwise..take this down time to do two things:
Practice your entries on a one hour chart.
Continue study on “macro markets” as opposed to “day to day activity” in a single market.
The one hour chart is where I generally make my entries “after” I’ve established a reasonable area of both “price and time” to do so. This generally dictated by daily cycle counts.
Getting a handle on “how this entire thing works” is extremely valuable. Once you’ve included Japan in your analysis, currencies and their roles on a global perspective “and” the relationship with bonds / stock prices and gold. You’ve got a very good platform to form your trade analysis.
If you only approach this as a technical exercise ( trading that is ) …..unfortunately you’ll struggle longer term.
I’m cashed out, short of small holdings in ACB ( Aurora Cannabis ) having blasted out my few “USD long trades” entered some days ago – flat / break even / boring as hell / stuck in the mud.
I don’t waste time on this, when markets go on holidays.
Just because you’ve got your fancy new monitors set up, and all your charts / bells / whistles / lights ‘a flashing – doesn’t mean you’re gonna find a trade. Human nature would have it that you “expect” amazing things to happen. You’ve got all the tools, you’ve even gone a little overboard on that “extra screen” and you’re hell-bent on sitting down every morning at your trade terminal, and conquering the world.
Sorry buddy…ain’t gonna happen.
I can’t tell you how many times in the distant past I was 100% completely “jacked” to jump on into markets based on some over night news release, or some new article I’d found. Like a kid on Christmas morning I’d be up well before the crack of dawn, hardly able to contain myself sitting there in dark waiting……waiting…waiting for that opening bell.
Then summer came along and spoiled the party.
Hours on end sitting there staring at charts now frozen. Pacing the floor in anticipation of “hitting my exit” only to find the trade moving sideways for days……then days ‘n days more. Finally one year it got so bad that I almost gave up. I just couldn’t understand. There it all was right in front of my face…lights flashing, news running, bing bing – bam bam! Let’s do this!!
ZZZ zzzz zzzz…….zip…nada..zero – nothin.
You can’t make markets move, and as much as it’s a difficult thing to do when you’re just so excited to just get in there and kick ass…you’ve got to understand.
There is a time to step on the gas, and there are times to pump the brakes. Summer has arrived baby.
Market euphoria has now lead to a complete and total collapse in volatility.
Volatility rises when people get scared. No one appears to be very scared as volatility is now at an “all time low” ( obviously correlation with markets being near all time highs ) – Get it?
Isn’t this about the time one starts thinking…hmmm….no one is scared, volatility at all time low, markets at all time highs….hmmm…..thinking, thinking….hey! Let’s start looking at buying some volatility around here!
Volatility Has Crashed
One can only assume we are getting very close to a reasonable bounce in volatility as – markets never change. Just when you think it’s safe…..boom – things head in the opposite direction.
Watch that Nikkei. Watch that AUD/JPY as well USD/JPY and add volatility to your short list ’round these levels.
A lil bit of UVXY here over coming days? I like it.
So many retail investors constantly searching for the “single metric” that “single indicator” that will Trump all, and provide the most valuable insight into the deep dark secrets of “mother market”.
Look no further.
The currency pair USD/JPY tells you everything you need to know.
USD/JPY at resistance
No need to draw any more lines / arrows on the chart as you can clearly see ( by looking back and identifying areas of previous support and resistance) – USD/JPY is now approaching “serious” resistance here around 112.00
This is a simple “bell weather for risk appetite” as….USD/JPY will FALL as risk comes off. From a purely technical standpoint – things don’t look good for bulls here.
Watch and see as the outcome from this week’s Fed meeting comes to light here Wednesday. You’d have to assume The Fed will again “talk down the dollar” as further appreciation will continue to kill U.S Exports.
This set’s up time and time again when you’ve got the timing right. Gold is going to complete its correction here very shortly, and there are several “juicy trades” on deck. Every “wanna be stock guy” on the planet has this chart / set up on his screen.
Something interesting though…
The U.S Dollar “has bounced” against a large number of currencies but “vewy very quietwy” as The Euro has bounced EVEN more! This is not something you see very often and ( in my view ) is suggestive of some very VERY SERIOUS currency repositioning.
This is setting up for “crash like / waterfall action” in USD – and I would expect U.S Equities to follow.
I “could enter as early as Friday as this is a slam dunk. Risk gonna come off HARD next week.
Here is what you do:
Wait until you see gold bottom / dollar top. You need to “get ready and wait” as this one’s gonna help you pay for that big vacation you’ve been planning.
The FOMC meeting is early next week so I would not be surprised if we just bounce around ’til then. Get ready and wait…I’ll post specifics over coming days but this is the plan. This is gonna be a doozy!
I’ve sat out a few days and missed some pretty decent action in USD – as the slide continues.
This will continue for much longer, so I’m going to take a day er two here to let it breathe – then jump back in on the short side. The U.S Dollar is attempting to find a bottom, not only in an immediate sense ( having absolutely no luck ) but more so in an “intermediate / medium term” sense. Let me explain…
When you see a continued pattern of “lower lows and lower highs” on a daily chart / time frame you’ve got to understand….this is no small time trend. We are talking about weeks and week of a given asset falling lower, then lower than the previous low, then lower than “that” low until finally a much larger “intermediate cycle” completes. You dig?
The U.S Dollar will bounce here and likely bring in a large number of traders assuming this is a bottom. This IS NOT even close. Look for a decent bounce here on the 1H as a great place to re enter short.
That’s all I’ve got for today folks as I am busy busy with “yet another venture” so…watch for the bounce here in “risk in general” and get your levels checked/locked and loaded on all correlating pairs – set for another round of “short use trades”.
I too will be taking part….but of course – in my own “creative way”. Even at that “very cautiously”.
The U.S Dollar as well U.S Equities will now put in the long-awaited “swing low” ( if you don’t know what that is yet….please research swing trading ) so for those of you interested in pressing the long side in stocks – now would be your time. I have no individual stock suggestions as the vast majority are so ridiculously bloated, with valuations that ( to me at least ) make very little sense but….you can’t knock “retail euphoria”.
The larger question at hand begs….
Will the next leg in “risk” reach for higher highs before hitting the skids? Or……will we fall short / put in a “lower high” and roll on over for the larger scale “plunge” expected in coming months?
The current geo-political landscape isn’t exactly what I would call “stable” but how many times has that been the case where U.S Equities simply shrug it off…and the funny money just keeps flowing.
I’m immune to earthly headline / media disease and rely only on my “inter-dimensional time shifting machine” to guide me. I see retail money……must get retail money…must have MORE RETAIL MONEY! So……there it is in a nutshell.
Buyers beware. Stay tight. Remain vigilant. But feel free to jump out on the playing field and take a kick at the can.
NEW YORK (Reuters) – The Trump Trade could start looking more like a Trump Tantrum if the new U.S. administration’s healthcare bill stalls in Congress, prompting worries on Wall Street about tax cuts and other measures aimed at promoting economic growth.
Investors are dialing back hopes that U.S. President Donald Trump will swiftly enact his agenda, with a Thursday vote on a healthcare bill a litmus test which could give stock investors another reason to sell.
“If the vote doesn’t pass, or is postponed, it will cast a lot of doubt on the Trump trades,” said the influential bond investor Jeffrey Gundlach, chief executive at DoubleLine Capital.
U.S. stocks rallied after the November presidential election, with the S&P 500 posting a string of record highs up to earlier this month, on bets that the pro-growth Trump agenda would be quickly pushed by a Republican Party with majorities in both chambers of Congress.
Investors extrapolated that a stalling bill could mean uphill battles for other Trump proposals. Trump and Republican congressional leaders appeared to be losing the battle to get enough support to pass it.
Any hint of further trouble for Trump’s agenda, especially his proposed tax cut, could precipitate a stock market correction, said Byron Wien, veteran investor and vice chairman of Blackstone (NYSE:BX) Advisory Partners.
I expect markets to continue lower well into next week, as those who’ve not yet sold “freak out” at the last minute…then sell into the waterfall. Sound familiar? Stocks will bounce sure…so if you are holding now…you likely lose a few nights sleep but “its too late to sell now”.
How many days / weeks ago did I suggest to “raise cash” and look for another great entry opportunity?
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I don’t leave money one table, and when looking at “the macro” hey – a trade is a trade “within” this framework.
I’m booking some 230 pips profit on a long and hard-fought battle/trade – long EUR/USD around 1.05
Markets suck and you know it. You think you’re right – but you’re wrong. I think I’m wrong and I’m right etc… This is no time to be a hotshot as the sky is cloudy, the water muddy, the day-to-day ( without question ) – unclear.
You need to be right “more times than you are wrong” – get it? If you are still searching for some kind of “krystal ball” here on the ol Internet well…..I advise you to stay tuned here, as well go visit your local psychic. This is likely as good as it gets.
Don’t get me wrong as I will never EVER apologize. If you go bet the farm with your piddly 2k trade account and choose to roll the dice – all power to you baby. Moving forward I will do the following:
Simply look to re – enter “short risk” when yet another grand opportunity arises..just around the corner.
Short USD, long EUR and JPY
Short AUD , NZD and CAD
Gold = hold.
Gold can kiss my ass……these long term trade ideas are exactly that. Long term. You don’t expect to get rich overnight but…..wait – Do you ever expect to get rich overnight?
Calm yourself newbies. Watch and learn. This is the big boys game.