Hi FE - the effect of QE on German shares - money from ECB is seen as positive for EU companies - having said that if the S&P tumbles then the Dax will follow, risk sentiment would take over.
Hi Team,
is it only me or you guys also do no not see anything to trade? Pretty boring to wait but I do not have a better plan. I even got stoped out on a strong retracement on my long-term NZD/CHF trade. I look for S&P long opportunity, maybe if the little retracement is over.
What are you guys up to?
FE
Yes I was just telling some of my friends about that. Its like trading in deflation when nothing is going up to trade it against something going down. Stock market is down, dollar is down. But at the same time commodity currencies are struggling and Euro strength not sustaining.
Very, very tough. Still better than losing money though.
EDIT: Things will probably explode after the employment number but Iām not going to make a prediction which way. Not even with a gun to my head.
Iām flat as well. Doesnāt matter, I usually use quiet times to discover/develop new methods which I can add to my trading arsenal.
Hi BB,
that is a wise suggestion of course. It is always good to use the quiet times to develop our knowledge. And what exactly do you learn nowadays? You make some indicators or read some books?
FE
Iāve been studying correlations between market sectors and individual stocks. Also, Iām experimenting with the Williamsā Valuation Index.
This is a very interesting time in the market for me.
Many times I have read about the market period of accumulation or distribution during which time prices tend to consolidate within a range. There are many educators who have written books, made videos, even created software all devoted to this phenomenon, all these claim to be able to predict whether the market is accumulating buys or sells based on the behaviour of price within the consolidation time.
Since all these are price behaviour based there is no regard for market context.
I believe that the market is going through one of these phases, but I very much believe that context gives much more indication than recent price analysis. Imo the Euro is being bought (re QE etc), that USD is stalled, and even if there is a hike after the knee jerk will continue to be stalled.
My reasoning on Euro is as previously posted re the positive effect of QE on EZ business (knee jerk down then slowly up on Euro), on USD if the Fed do raise sooner then that has a very possible negative impact on US business (so knee jerk up then slowly down on USD).
So forwarding testing the fundamentals 
Hi Peter,
thanks for the nice thoughts. I have similar thinking on the USD. I also would add how much USD won lately and it starts hurting their economy. Even if EU would not go better, USD cannot get stronger for infinity with this single rate hike expectation. I know we have to be open minded (and I try to be) but there is a limit how much EUR/USD can fall. It lost already about one third of its value since last year and I do not like to sell the pair anymore.
I am interested in NFP. Actually not for the number, but the reaction for it. Especially if it will be faded later or it holds to its gains or losses. That is a strong indicator always for me.
FE
NFP was a huge surprise today. Are we talking about a reversal? Now the game starts to become very interesting!
I think we will see a multi-month retracement in USD. Everything was lining up for that in January. We also talked about the divergence with SPX and now it seems that stocks will follow.
However bare in mind that the market was very thin due to holidays. So on Tuesday we will get the first feel to the marketās reaction.
But to me this was perfect in terms of FED pushing back the rate hike. This was the subject of an earlier conversation between Peterma and myself.
EDIT: I think I mentioned before that April is the worst month for USD seasonally.
I am not sure the USD will make a huge retracement, it will most likely remain range bound.
Could be. Thats very possible. However from a technical point of view if EUR which makes up around 50% of DXY, GBP (12%) or JPY (14%) starts trending up against USD there maybe more downward pressure for dollar in the upcoming months. Although I think its very unlikely for GBP or yen to rise against dollar for now, fundamentally Japan is still in bad shape and politically UK is in uncertainty the upcoming election and so forth although thereās a chance that EUR bulls if they prove to be persistant we already see EUR rising up against most currencies may impose varying degrees of lifting effect on GBP given their close economic ties, or dependency on each other, correlation. I hope this makes sense.
The forward test was pre - nfp, the idea being that it is possible to use current market context analysis to indicate whether there is buying or selling happening.
There was something else of a contextual nature - that was how price had behaved during Thursday, especially in the lead up to UK lunch time. Price made a surge just before lunch and then remained high for the remainder of the day.
The buyers were in a rush to break for Easter, likely more buy orders set for NFP, usually around mid Asian levels.
Was the NFP really that bad? - wouldnāt have mattered on Fri, anything negative was always going to impact on USD because of the impression being created that the Fed are hanging their coat on employment numbers regarding interest rates.
Just an update to above, there is a current feel in the fx market, especially on USD and EUR, that it is in a transition phase, in such times it can be wise to take profits when they are offered.
Sometimes it is possible to see a strange kind of āsnobberyā by us retail traders, long term guys vs short term and which is the better, the reality is that both are best.
Just substitute context with environment and this guy says it much better than I can.
Hi Team,
what do you guys think about CHF? Is the retracement over? Is it time to short CHF again?
FE
I guess we can do that now FE. Although I donāt see a reason in my chart.
There is a thought in my head. We talked earlier about the divergence between Dollar and S&P. With dollar going south, the FED talked it down even further. More interesting was that S&P moved down as well. Commodities moved up after the news, they are hardly moving up now. Everything is side wise
We know technically that sideway movement (consolidation) is followed by a continuation of the original move. So do you think that this indicates that FED will in fact hike rates in June despite them trying to put people off last month?
Hi Team,
I thought I share with you what the charts tell me today. First is the AUD strength. Honostly I was not aware that the market was expecting a rate cut again, for this reason I am also surprised for the AUD strength based on fundamental reasons. I will be interested to see if it can hold onto the gains.
The CHF retracement is over (it seems like it is) as I mentioned yesterday, there are some good setups out there.
I took a small S&P positions not much before this post, we will see if it will rise.
Also interesting is the RUB. It is falling like a stone, Peter any thoughts on it? Oil prices did not increase as much. If there would be a retracement I would buy RUB but not now. It would just be the perfect long-term trade with carry trade. I hope the retracement comes.
Mike, where are you?
Have a nice day everyone,
FE
My sober analysis: I will go long CHF/JPY if it makes a new four week high (less than fifty pips away right now and almost made it earlier this week). I am short GBP/CHF. USD/CHF is just above the 200 day moving average, if it hits a new 10 day high I will go long. EUR/CHF is something to stay short in but since I am not in it and benefiting from euro shorts elsewhere I am going to stay out of it for now.
-Adrian
Hi Adrian,
is there any fundamental reason behind your decision? I do not see any reason to go long with CHF.
FE
Hi Peter,
can you make a comment why was the Utilities so weak today and the energy sector so strong? Do you trade anything else besides S&P long?
Take care,
FE