Gold is just about to re test previous weekly support. I wonder if buyers will come in at this level or sell it off at the break. If gold breaks this major level, I’m slightly bullish towards dollar I’ve got two positions running currently NZDUSD and USDJPY.
Hey guys.
Thursday’s results.
AUD: +6 -0 1///+2 -0 1
NZD: +6 -0 1///+2 -0 1
CAD: +3 -2 2///+3 -0 2
USD: +3 -2 2///+0 -2 1
GBP: +3 -2 2///+0 -2 1
EUR: +1 -5 1///+0 -3 0
CHF: +1 -5 1///+0 -3 0
JPY : +0 -7 0///+0 -3 0
Well, Comms took this one alright. +13
Monday: M+5
Tuesday: C +14
Wednesday: M+6
Thursday: C +13
So the moral of the story is that when the Comms take it…they take it, unlike the Majors.
Mike
Quote “We made some nice pips in the summer when many retail traders went against the trend. We found it early. A lot later the retailers started to liquidate their positions. Now even the “slowlest retail traders” know that it goes good for the US. Even they spoted the trend. So it is time for me to leave. When everyone knows something then there is a problem: who is going to take the other side of the trade? Maybe everyone is already long and no one has money to push it higher. This is another option. If there is a pullback I might buy it, or if it breaks some important levels in currencies. But that takes time. We will see when they break those lines”
Good reasoning FE!
You want to fade those
I don’t feel good about my NZDUSD short but I’m learning to take it without any panic. Good thing. I suppose. I’ll close it at breakeven. And see what happens. I’m with you on that one FE.
ETF stands for exchange traded funds when I say gold etf it tracks the price of underlying commodity gold that is. To simply put, they tend to change direction prior the underlying commodity. So therefore ETFs can be used as a leading indicator.
There is nothing fancy about the chart that I attached. The yellow line represents gold etf, blue global commodity etf and gray line silver etf. As you can see they usually move in tandem. And are still in a downward move silver at the bottom with -25% and commodity etf at -7.34%. Once they turn up gold and silver futures may start changing direction to an upside. Since gold drives the price of silver. You want to look for gold etf rise followed up with gold futures rise before you long silver.
Well I know that FE and Rookie are shorting Yen across the board, great call you guys!! I’ve been in USDJPY since Thursday and am 151 pips in profit. My S&P trade is rocketing as well, 65 points in profit. I’m looking to enter CAD/JPY long at the right time and will share my trading idea on the weekend.
Hope the rest caught the move as well.
I wonder how the Commercial Net Positions are doing right now. Might be a nice long opportunity.
To be honest I really think it will be a while before we can buy gold and silver (I will look to buy them physically, but I will not trade them online.) We know that precious metal appreciate with inflation and we are living at a time of disinflation so there is no reason for them to pop now. This could be the era of stocks.
Hi guys,
very nice thoughts out there. I was away some time from computer and when I woke up I had to see that there were some major happenings and had to look after what happened. I share what all those happening meant to my trades:
[I]The good[/I]: well as I said earlier, I shorted JPY quite aggressive on low levels and we know what happened tonight. It was luck for my trades, but still: they just exploded. The same is true for my long AUD and NZD trades. I made mostly with these trades profit with the carry trade, now I even moved SL high as many trades just rocketed.
[I]The bad[/I]: needless to say the silver and gold trades were/are blown in my face. As the pip value is large, they are balancing out all my winnings grrrr. Despite rookies and Peters suggestion, I entered the trade. I think with silver it is not even that bad, but gold I should have waited. Looking from the positive side of things at least I did not scale in to the losses like with exotic currencies earlier. The currency winnings balance me out.
Saying all that, I see many good posts out there, here are my thoughts:
Rookie,
your thinking on gold is great, also the charts. I like the connection with the USD. I think it is reasonable so if the level breaks, I take my losses there. Until it holds, I am in. And thanks for the explanation on etf. I see the importance, I still do not see though why do they change price earlier than the spot price.
BB,
funny, I was thinking during my running yesterday something very similar. I wished I could see at the very moment a “live COT Report” to understand more what is going on. Poor us, this weekend’s COT Report does not have much value in my opinion. The time period it shows us (from last Wednesday to this week Tuesday; explanation for new readers) is not much of a help since the main moves in every market started on Wednesday night and continued on Tuesday. To get answers for our questions, we have to wait one more week.
Philip,
I need your TA help a bit. I liked you inflation thinking on gold. This makes me uncertain about my trade setup. Now, what happened often earlier, I lost I lost and I further lost with trades until I decided to exit the trade. And shortly after that a pullback occurred. Something like this happened even more often with entries. Just two examples: with my exotic currencies I found a nice spot to cut losses after a pullback, but made a horrible entry (like some of you too) with entering GBP trades right at the top of last month’s movement, just before a pullback. I think it would be stupid now to close my trades as a pullback has a good possibility after such a fall (not even saying that we might still be at a COT extreme, meaning that a reversal happens). Can you suggest something?
Also interesting is your thinking on stock rallies. I do not have as long experience as you with it so I also have a question here. I understand the reasoning what you wrote and intermarket correlations if stocks rise metals falls and vice versa. What I do not understand is the economic performance behind this crazy stock rise. Technically ok, but fundamentally? I mean the economies are really not doing good? Why do people invest in stock? If the economies have deflation, bad numbers etc. this would mean to me that main companies of the economy (which are traded on the stock markets)are also not doing that good. But stock indexes are rising and rising. I find this situation critical; maybe something like a bubble? Can you please explain so I better understand it?
Good luck team for the last afternoon of the week,
FE
Did you went long on Gold? Why? Silver is not a good buy just yet, I’m still waiting a valid bull signal to go long. Commercials are usually early, there’s no need to rush into the trades once they reached their extreme.
Edit: Take a look at the COT levels in S&P 500 Consolidated. I’ll post the values tomorrow, but it seems like Commercials were loading up on long contracts last week.
Congrats on your S&P trade Philip!
I agree with Philip on gold that its a little too early to go long and that price could decline more. However if the weekly support holds I think it would be a decent set up to go long only on short term. Whereas waiting for a complete reversal you could hold that position longer, and scale in on the way up.
I was long with USDJPY only, it was luck agree with FE. I didn’t want to go long on AUD and short NZD at the same time. Even with good GDP reading dollar didn’t do well in their session and indecision continued throughout asian session. I lost 70pips on NZDUSD short and ending the week with net +70pips. Live and learn I guess. I have trouble with entries FE… i just don’t get to work it properly. And I do understand how tempting it can be not to jump on a setup like that, we’ll always need to keep our discipline checked. Or think about it this way, whenever you enter a position don’t think about how much you’re going to make or how you’re getting in on a bargain price think about how much you would lose if things go wrong. That way even if you were tempted you’ll be able to walk away at a low probability setup.
Are you seeing this guys!!
FE: Hows your gold and silver positions are you in still ?
Hi guys,
quick question: who thinks there is at this very moment a good short-term possibility to go [I][B]long[/B][/I] with JPY vs. EUR and CHF? Thinking is easy: JPY lost a lot today and there has to be a correction, maybe to 38.2% or to 50.0% Fib level. It is easiest vs. the two weakest currencies. I know it sounds suicide but with good timing we can make a brave and good call there. Only short-term, for today. I would appreciate some fast answers.
Thanks,
FE
S&P500 may go in for some correction soon
Weekly chart
Daily chart
Gold is down ahead of commodities, dollar index stayed flat almost while S&P5oo did enjoy some move up. I wonder if dollar index will move higher if S&P500 heads down for a correction ? Where else would investors want to place their bets but dollar ? If gold does break the major support , on daily its already broken and heads down.
That’s not entirely accurate. Check Williams’ book, page 177.
EURJPY. Its going to be a risky one FE.
But before you pull the trigger have a look at dollar pairs, i think its something to do with gold breaking major support. Dollar is looking strong. All of a sudden.
Well that was last night, the DJIA futures only waited a few hours and have made that new high.
I referenced the transports re Dow Theory, presuming that the Dow opens high today then that confirms the bull run - there were a few traders watching this relationship.
Sure, there may be a pullback but with the new high then a trend reversal becomes less likely.
FE is right re the feeling of a bubble, I was inside that last major bubble on the Nasdaq back 14 years ago, the thing I’ve learned since is how difficult it can be to see it’s existence.
There is a major difference though in that commodities are so low and earnings numbers are reasonable.
The reality is that, unlike 14 years ago, we are now in a low interest rate environment, investors find it increasingly difficult to get decent returns and so the stock market becomes a choice.
The sad thing FE is that when you decided to long gold I had a technical signal to sell gold. I did not take that signal as I commit myself to opening two new trades at once, I chose USDJPY and USDCHF. My Gann analysis had today and November 21 as major days for gold.
I think what you need more is a bit of trade management. Your mental stops for gold and silver surely have been reached, close these positions now. The JPY trades you have some room to run and make up for the profit. There is some bullish divergence in Gold but I think its better to accept the loss on this one.
I also think you should change your bias on Gold to bearish until we get a signal to start buying.
You will have a chance to make up for these losses in coming weeks.
Also send me a private message telling me how you normally enter a trade. I might be able to help you sharpen a technical system that helps give you a filter of your fundamental biases.
Hi team,
many interesting answers, thanks everyone! I entered the long JPY trades. It wasn’t a long move though. It went my direction, I put SL 1-2 pips above my entry and a little later it turned back. I made altogether +3 pips with the two trades 
With Gold and Silver I am not done yet, it started rising the last hours, then I thought I still look the COT on the weekend, wait for BBs analysis and I discuss the situation in private mail with Philip on the technical side.
Rookie, the chart is good again, on USD there was something funny again today. The sudden strength happen at the moment of the news in the afternoon at 13.30CET. Now I say funny because the news were mostly negative and USD jumped strong again. The move is partly faded by many currencies.
Guys, I will watch (definitely do not enter at this point) from now on the RUB. If you check the web, the Russians made another rate rise, now it is 9%(!!!). In this year there is a 4% rate rise to stop the weakening currency with no success, so there might be further raising. A good entry there might bring a lot of money for a very long term trade with great carry possibilities. That could be a bet the holds maybe for years. Of course a good entry point is crucial as the currency lost more than 25% of value this year. They say: no risk no fun! Well, here there is a possibility for both
So good night guys and c u all tomorrow!
FE
I am always looking for leading indicators, one which often goes unnoticed but a very powerful tool on stock index is the Advance Decline tool.
What it does is measure the number of… well here is a description:
http://www.masterdata.com/Reports/Combined/ADLine/Daily/$SPX.htm
If you look closely at that site you will notice something important, you can just about see where the AD line does not make a higher high in mid Sept, whereas the S&P did. This meant that the S&P was rising on fewer stocks, the generals were leading - the troops were say no way jose.
The above chart is not great so I use Stockcharts again simply because I can write on the free chart.
You can see from my chart that not only was Sep signalled, but also the previous pullback, and brilliantly two different signals for the recent path back up.
So we had two independent signals for the market turns, the Russell 2000 and now the AD line.
Thanks go to John J Murphy yet again for these two little nuggets written about over 2 years ago.
And here is a video on how to set the chart up:
Edit: S&P is on the bottom, Advance Decline on top
Hi guys,
I will only look a bit later to analyse COT report. I do Crude oil again with the nem method and I try to analyse a new commodity. Of course not what BB makes.
BB,
I am interested now especially on your analysis that I am involved in trades. As I mentioned I am a bit sceptical because I do not think the moves are in COT, but still. I took a quick look at COT from yesterday. Gold looks bad for first look, but silver seems turning soon (there does not seem to a signal but I always try to visualize where the “live COT” is with adding the last three days in my mind). Interesting is also Copper, it turned back down again - good for us - and net position is on an extreme. We should look into it, where is the best buying point.
FE
I need to understand something about the AD line. How is it calculated exactly? More specifically, do we include volume? Is it each advancing stockvolume-each declining stockvolume?
Or simply if we have a 100 companies I subtract those that were up from those that were down. It was not clear in the video.
Yes Philip, it’s just the quantity of stocks that are rising less those falling, so you are monitoring breadth, and not just the actual value of the index.
The principle is exactly the same as the use of the small caps
Investors, when they get nervous tend to do move out of small caps first because they are more risky - likewise they move out of more riskier stocks that are in the larger index and tend to remain in the more ‘secure’ companies until the last or switch from riskier to more secure as a risk control measure.
The net effect is the same, small caps stop rising, measured by Russell 2000, and the larger index may continue to rise, but only the larger stocks (the Generals) in the main index are rising - A/D measures this.
Here is the quick formula: