Yeah, the feeling is growing that rate hike is a pipe dream for the Fed, even Lockhard may have to pull his horns in - inflation in US imminent? - hardly.
Lets see how he gets on with his Q&A session.
I’m sticking with shorting USD, took a little short on S&P but think I’ll not jump in there tomorrow, also will have to careful on FX, will wait until mid morning before doing anything rash.
The upcoming Asian session will give a clue on their latest thinking.
Fun times.
Lots had happened while I was asleep.
Here’s the latest headline PBOC academic says RRR cut won’t add liquidity to stock market
So far yen/franc crosses are up. A good sign ? I’ll wait until London open.
Wow guys!
I did not have the chance to come to the thread. So I turned the computer on and decided to share my view that market decided instead of us and traders took the decision as not rate hike.
I thought I will open a discussion with this great idea 
Reality is that first Philip, then Rookie and Peter already analysed the whole thing…
Oh well. I agree with Rookie about gold too, that is also my take about it. I will wait with it until inflation gets higher.
And Peter, what a pitty you did not trade JPY. You were just on the spot once more. Maybe the market read your post on the weekend and acted upon it.
Yesterday was a tough situation, maybe I am not late to discuss that issue. As I often stated, I have GBP long positions, mostly vs. comdolls. They made huge gains yesterday. The problem is, GBPNZD shot up about 1000 pips and I was not sure to close it or not. I did not and that was a pitty. Did anyone trade any of those setups? If yes, let it open or closed it?
I do believe yesterday however showed why it is good to trade long term trades without a take profit and rather wait for the exit signal. If someone had a 100 pips stop loss, then would have missed the whole move. Especially as GBPCAD moved back up to the highs.
FE
Hey guys. FE.
Well, yesterday worked out good for my system. Trend following.
I placed 16 trades at the open. When I woke up (London open) 12 were closed. All positive. Then by the end of my day (at the end of US session) the rest closed. My results:
+1233.7 pips
+9.1%
Broken down it looks like this.
GBP—4 trades. +570.6 pips
EUR—4 trades. +171.7 pips
CHF—3 trades. +170.3
JPY —3 trades. +170.9
USD—2 trades. +150.2
My only loser was EUR/JPY— -200.1 pips
So, this morning I decided to go back into EUR/JPY. That’s the only one I will go in to for now. (100+/200-)
All I have to say is it was a trending day yesterday, the field that is. The Majors took out the Comms.
Here is the results.
% all added up.
[B]JPY +21.07[/B]
[B]EUR +15.7[/B]
[B]CHF +11.44[/B]
[B]GBP +4.23[/B]
[B]USD -.85[/B]
[B]CAD -4.34[/B]
[B]AUD -17.21[/B]
[B]NZD -27.34[/B]
Mike
Lol, was short Eur/Jpy, but did not wish to influence any of the guys who may have been long (just wanted to give the heads up on the likelihood of Jpy buying and Gold stalling)
When I have a good day like yesterday I am usually over careful next day so no trading as yet today.
I actually had a sell signal on couple of EUR crosses but couldn’t take them due to work. You spoke of mid asian level many times ,I didn’t use to pay much attention but I finally see what you mean i was able to spot those on my chart on many pairs yesterday had I placed trades on all of those along with my signal it would have worked out great, thanks a million Peter! very useful stuff.
There is something I can’t understand and was hoping to hear what you guys think about it.
I was looking at the S&P 500 on the 4 hr and daily. Then I looked at the same timeframes for USDJPY. They were close. But, by chance, when I looked at AUDJPY it was identical to the S&P.
Is that by chance or is there a fundamental reason why this is so?
I mentioned the difference between Gold, Silver and Oil. Now we see clearer as it seems like gold was the one who lost the battle and started following oil and not vice versa.
Also interesting to measure current strength. I checked USD weekly charts. USD is down against everyone except CAD. This shows how much cheap oil prices can hurt.
Have a great day everyone (Philip, I leave your S&P question open for Peter),
FE
Here’s my take for what it is worth.
I seldom trade Yen, only trade it when there is a sense of panic in the stock market. lately such sense has been prevalent.
The increased fear was emanating from China, not so common, but the writing has been on the wall.
FX was echoing the panic via Yen which is no surprise, but since the turbulence of coming from China then good chance that Aud would reflect that turbulence as reflected on the S&P.
I was going to trade Aud/Jpy for this reason, but chose not to because of my habit of sleeping during the Asian session
S&P 500 sees further downside, Fed hike likely this year, China rate cut undermines the currency further
Nick Batsford, CEO of Tip TV, opened the Tip TV Finance show alongside Zak Mir, technical analyst for ShareProphets.com, and Mike Ingram, strategist at BGC Partners, to discuss broken China, as well as the failure of QE and the S&P 500.
The great fall of China
Batsford began by noting some facts about China over the last few weeks, with it having sold $100 billion T-bonds, burnt through £200 billion of reserves and an equity sell order, which rallied and then collapsed $3.5 billion. Ingram then noted a correction is healthy and a buying opportunity, whilst China still has $3.6 trillion worth of reserves available. He continued to highlight that the rate cut from China only undermines the currency further and accelerates capital flight out of the currency, and unless investors go the other way, the Yuan will fall further.
Fed to hike this year, but not in September
On the note of China’s situation, Mir commented that it is copying a failed attempt of QE over here. Ingram added that US data from the housing market and consumer confidence held up well, whilst September is looking shaky, this year is still more likely, with some suggesting October. Mir outlined that the markets could be tanking ahead of a rate rise, and that they will be doomed on China or doomed on a rate rise.
S&P 500 to test 1815 level
Mir noted how the S&P 500 looks like it is falling off a falling cliff, with two unfilled gaps to the downside remaining, and it closed near the lows on Monday. He highlighted that there is no way it can avoid testing the 1820 and 1815, with at least one more day of downside at the minimum.
Yeah, maybe the S&P will see 1815, don’t know, I have gone long at 1900, will likely just place a stop at that level and see what happens, if there is to be a rebound this week then maybe tomorrow, a strong finish will hearten Europe tomorrow morning.
Sometimes these panic falls, especially after last evening can become exhausted by now.
I’m watching Eur/Jpy, signs of a stall on breaking 135.00 - all very tentative, so therefore the zero risk.
Update: Well we got the strong finish, a reasonable chance that Asian and European markets will take heart, so I’ll leave the trade open with no risk, if it exits then maybe re-enter later tomorrow. I see the minor rebound on Eur/Jpy also late.
Now that I’ve time, a quick analysis of what was happening on the S&P and why I was encouraged to go long.
First up is the Russell 2000, the risk indicator of the S&P
Investing.com h1 chart, see the double bottom 5 bars back, that is replicated on h1 S&P with a higher low, it was significant that the S&P didn’t come down.
Then the sectors, the leader was XLK, up over 5% - technology, an offensive sector
See the volume on h1 Tradingview, price moved up on that volume, 7 bars back - the stage was setting, risk was changing.
Hi Peter,
thanks you very much for the great analysis! You put them always together real time. Just amazing.
Have a great day,
FE
Hi Team,
I remember last year when we had very long discussions about the Jackson Hole Summit. Did we forget it completely or just did not consider it to be important?
Either way, here is Forex Gump´s article for a quick guide about it:
How the Jackson Hole Summit Could Influence Forex Action
After that, it is time to make your bet!
FE
That’s the thing. No one is discussing the Fed rate hike, which should be the main issue. Yellen’s abscence also seems to suggest that she might have something more important to attend to.
I was watching a discussion on China’s slowdown the stock market panic and the possible cause and have come to realize there’s going to be more downfall to come.
Whether or not if the market will perceive that as a healthy correction or an actual possibility of crisis is another story. One of the panel was noting that its not China that has started the panic it was the US, Dow Jones /he noted of a bubble/ had already started falling even before China stock market and that the panic sell off over in China stock market isn’t simply because of yuan devaluation and which then eventually spread to other markets. He doesn’t see Fed hiking rates in fact he assumes dollar will fall that the current market is in a bubble.
I think its a sensible argument, I had been looking at yen crosses over the last few days hoping to go long GBPJPY, EURJPY either of the two. And despite stock market calm over the last one or two days yen is still holding on even against pound or euro although it has lost against CAD for it has a different reason oil gain. Speaking of oil gain, referencing back to inter market analysis if dollar falls commodities should rise /oil already did/ along with it commodity currencies have done relatively well this week. Based on this reasoning NZDCHF, NZDJPY, AUDCHF, AUDJPY, CADJPY would have been great setup.
What do you guys think ?
Interesting Rookie, although Chinese numbers have been on the negative side for a while, I was often surprised how the market seemed to shrug it off, but maybe because of the notion in US that the economy doesn’t need to worry about Chinese numbers - when you think about it the Fed never seemed to notice, hence the talk of hike for so long.
On the Yen, I’ve often noticed that if there is volatility on the stock market it can take a while to reach the FX market, it seems like a knee jerk reaction, takes a while to realize the knee has been hit. I was for this reason that I was able to say to watch out on Eur/Jpy.
Btw various studies seem to indicate that there are not massive flows of capital into Yen during these times, that Yen reacts more because of perception and tradition.
What I think is that I agree with you 100%. By the way I think these setups (especially AUDJPY and NZDJPY) are still good step ups if the Fed doesn’t hike.
It would be great to share that talk here so we can watch it as well
EDIT: on the one hour time frame, I’m noticing an inverse head and shoulder pattern forming in EURJPY, GBPJPY. Basically a break of Thursday’s high is an entry long. Might actually give it a shot if it happens.
Hey guys.
Yeah, Rook, your right. The Comms seem to be breaking the trend this week. Tuesday on out they have dominated. And now, Friday, the way it usually goes (end of week play) there should be some profit taking and the Majors [I]should[/I] take the day. But we need to see what happens. Cause I think if things are gonna turn around, then today should be the tale. We should see more Comm domination. Relatively speaking.
Talk to you this weekend and give some details on all that.
Mike
Hi Rookie39,
Larry Williams was interviewed recently & had some fascinating things to say - including his forecasts - but he says he’ll “stand aside” for someone younger now he’s reached 80 years of age.