Just to update, when there was no selling at the S&P open, I then hedged with a long on S&P, when that went into profit I just closed the Jpy trade at minus 27 pips. the S&P trade has worked out ok, one way of using the correlation I suppose.
Hi BB,
here are the answers:
- I have been following the thread quite early, sometime in May. Ok, I guess you do not want to read here jokesā¦ So, the reason I started the thread was to start a discussion between people who think market sentiment is their edge on the market. I found the COT and knew āit is the simplestā way to get out from the market with winning in the long-term. As you see, some guys have found the thread and we have work to do but since the beginning we made some good steps in the right direction. The thread serves the purpose what I thought off in the beginning. I also try to pay attention not to get too far away from the original market sentiment topic. This also means COT is not the only topic, but that is the main topic. You apperance in the thread increases the goal of the thread and also the quality of COT report analysis.
- my database goes back until May, I know however that I cannot make trades based on this. Until I get the needed 3 years historical data, I use oanda website, timingcharts.com and cotbase.com (this last is not so good) to provide me enough historical data.
- I download the COT report every Friday from the CFTC website.
- my main reason to enter a trade if my COT bias lines up with my fundamental bias. I agree with you that it is confusing and I do follow the news as I find it very interesting to understand what is going on, still I do not care for most of the individual news. As Mike said, I also look for the big picture. The weakest part of my trading is TA.
- I am mostly interested for forex, gold, silver and S&P500.
- my goal (besides the most important goal of getting successful) is the same as Mikes, getting to know more markets; I do learn a lot from Peter
- my personal opinion: Peter has the longest and most experience. You do not see him posting as often as many of us, but as longer you stay here the more you see that his 1 sentence has the value of 10 sentence from most of us. He really knows what he is talking about. I really respect him.
- I also respect all other members, we all have our strength and weakness. The most important strength of ours is dedication and hard work. This cannot be replaced. Everything else can be studied.
I did not answer for all your questions. Not because I do not trust my colleagues here, we are a great group. But this is a public thread and I do not intend to give information out here on my financial or live account issues. I always answer for any of my friends here in private messages and keep the provided information between the person and me.
FE
And everyone else,
I am very sorry that I do not answer too much now. I told you these days are very busy. I just had the time to read through all posts, I go to sleep right away. Thanks Peter on your posts, I will definitely think about during the day tomorrow. Rookie, nice writeups, Mike good daily sentiment and a nice story of yours. Good to know. Philip and flows are also busy these days as I see, just like me.
I took only a short time to answer BB, I think he conrtibuted very hard and great resources in his first week and would have not been fair not to answer him.
FE
Morning guys!
So dollar index is seem to be finding support on previous resistance
Weekly chart
Daily chart
Like I said CRB is nearing a major level as well, Iām wondering what happens here now
Weekly chart
Daily chart
Iām going to go with the flow today since dollar rally has been quiet lately.
Hereā what Iām planning to do if AUD decides to come on top again
I usually sleep through NY session , but from what I can see on my charts thereās no sight of dollar bulls still so Iām rooting for the commdolls comeback at least during their own session except for yen.
Hey guys.
We have a Tuesday.
USD: +7 -0 0///+3 -0 0
JPY : +6 -1 0///+3 -0 0
CHF: +3 -2 2///+1 -0 2
NZD: +3 -2 2///+2 -2 1
AUD: +2 -2 3///+1 -2 2
EUR: +2 -4 1///+1 -1 1
CAD: +1 -6 0///+1 -4 0
GBP: +0 -7 0///+0 -3 0
The Majors took this one. +4
Back and forth. Yesterday was Comms +2
These numbers are just so close. Weāll call it ājust edging them outā.
Well guysā¦I have nothing to brag about. Iāve been losing some trades. Getting stopped out too much.
Iām still working on some things. Itās gonna take some time, but Iāll try to get out a teaser tomorrow am.
Speaking of that, I got to run.
Hereās the 00 shot.
Mike
UK v US v (AUS)
Its me again guys! Iām going to compare US and UK on the basis of 3 macro economic indicators which I assumed to be the most crucial 1. GDP growth 2. labour market 3. CPI and inflation rate
UK GDP annual growth /quarterly
V US GDP annual growth
UK unemployment rate
V US unemployment rate
UK inflation rate
V US inflation rate
BoE and Fed target inflation rate is at around 2% both have fallen short of target. Comparing the two on the basis of 3 indicators except for GDP annual growth US sure seem to be leading the way.
UK released its quarterly inflation data yesterday came out at 1.2% as youāve seen from the attached graph above was the lowest in 5 years. Most of it was due to strong pound and declining oil prices imposing downward pressure on import costs and therefore lower inflation readings.
US is in a similar situation and is not getting away with above 2% target inflation rate anytime soon. Fed has addressed several times that despite the concerns on global slowdown should US economy gets back on track in terms of labour market and wage growth they will go ahead with rate hike within the scheduled time frame unless there was a serious setback in global economy.
Whereas BoE governor is to maintain the neutral view on rate hike and said āa benign global inflationary environmentā would be a key factor for the path of policy as a deterioration in the euro-area economy threatens the U.K.ās expansion.
In conclusion neither of these economies are doing exceptionally well than the other, US may be moving a tad bit ahead of UK. However Fed has been more direct in its view towards the timing of rate hike even on the concerns of global slowdown whereas BoE was more or so neutral leaving no clue as to the timing of its rate hike. I think we may have to count on market sentiment as to who will lead the way. Sentiment has been in favour of dollar not pound lately. And we have enjoyed a nice dollar rally.
But lets not forget that thereās the commdolls lead by AUD , should their economies pick up China had published decent data and their forecast remains about the same with AAA credit rating and relatively high rates who do you think will be in the spotlight ? Pound ? Lets not get into politics but theres a genuine uncertainty surrounding UK politics. And deteriorating euro zone. Given all this if I were an investor Iāll park my cash on AUD.
[QUOTE=ārookie39;661019ā]UK v US v (AUS)
Its me again guys! Iām going to compare US and UK on the basis of 3 macro economic indicators which I assumed to be the most crucial 1. GDP growth 2. labour market 3. CPI and inflation rate
UK GDP annual growth /quarterly
<img src=ā301 Moved Permanentlyā/>
V US GDP annual growth
<img src=ā301 Moved Permanentlyā/>
UK unemployment rate
<img src=ā301 Moved Permanentlyā/>
V US unemployment rate
<img src=ā301 Moved Permanentlyā/>[/QUOTE]
Youāve got to keep in mind that these economic indicators are not much value in and of themselves. What gives them any use in trading is to view them through the perspective that their respective central bank views them. For instance the RBA may be more interested in the unemployment rate currently, while inflation may be put on the back burner. The FEDs are now more interested in inflation data then employment data. You also have to keep in mind that different economies are so structurally different that you canāt really say "because Xās economy has a higher GDP then Yās, then Xās currency will be better.
Its critical to figure out whatās important to the central banks (they will tell the market what they are looking at) then view the data in terms of how it will affect the monetary policy. There are often instances where certain economic numbers come in high or low, and should move the currency, but they donāt because the central bankers have said they are looking at a different indicator for there next policy move.
As a side note, a country with higher inflation would typically have a depreciating currency. The recent development of a higher inflation rate as a positive development for a currency is only because the market now expects the central bank to tighten monetary policy as a response. So the currency is appreciating because tighter policy expectations rather then directly because a higher inflation is inherently positive.
Hey global macro!
I am aware that itās not black and white. And that thereāre a lot of gray areas on top of what you have mentioned to view those indicators in perspective. Thereās no simple solution to this complicated world of economy and monetary policy what I did was to try to put it together the big picture in a summary so that its easy to understand. Which again doesnāt necessarily mean itās accurate.
The gray area that I was referring to was sentiment and on top of that thereās a whole lot of factors that comes into play which I have yet to figure out besides the macro economic indicators or the fundamentals, those I believe are one of the reasons as to why currencies move the way the do regardless of the data. Thereās flow of things. And fundamentals is a part of that ābig pictureā.
[QUOTE=ārookie39;661026ā]Hey global macro!
I am aware that itās not black and white. And that thereāre a lot of gray areas on top of what you have mentioned to view those indicators in perspective. Thereās no simple solution to this complicated world of economy and monetary policy what I did was to try to put it together the big picture in a summary thatās easy to understand. Which again doesnāt necessarily mean itās accurate.
Thanks for your comment ! Iāll make sure to keep that in mind at all times[/QUOTE]
Sounds like you got it handled 
nice too see someone looking past the charts and into the actual market drivers.
Iām sure you guys have seen USD/CAD and WTI prices this past 48 hrs.
One of the drivers is this report:
Hey guys.
Peter.
Yep, Iāve noticed CAD definitely going down, big time. Confirmation is right here. 0915 shot.
Thanks for giving us the reason Peter!
Mike
Great analysis Rookie, well thought out.
Some months ago there was a poster from the UK who stated that even though UK unemployment was falling it was all a sham created by the Govt (his words).
There was a certain truth in what he was saying in that well paid employment was not on the rise, part time and self employment were a big factor in getting the numbers down.
The market cottoned onto this āmanipulationā of unemployment, it recognized that falling unemployment caused by low paid jobs would not pressure inflation, so now the focus is on the two numbers - the unemployment and the average earnings index - see a rise in the latter and that causes raised eyebrows.
See the way it stayed at 0.7 - that will, imo, lend some cable support, at least for a few days anyways.
Thank you Peter!
I suppose both Fed and BoE are looking out for a similar data wage growth and unemployment rate. With declining oil price /thanks again by the way for USDCAD setup!/ now euro is in even bigger trouble I suppose with flat inflation rate thereās a fear of deflation and possibly another recession ? How all thats going to affect UK, US and other nations, I mean who do you think will have the biggest impact ? Iām thinking UK as US is consumer driven self sufficient economy - only my assumption.
I have a feeling weāre heading into a range market now for a while. Itās going to be a challenge with all thats going on. I was long on AUDJPY during asian session it went up 27 pips I waited but few hours into london after the ebola news yen has strengthened Iām thinking it was ebola Peter ??
Oh boy its going to be a tough ride Iāll be on board with USD and AUD unless thereās a clear change of bias and policy. By the way if you guys have missed this one out : Australia sells A$7 bln 2037 jumbo bond in longest-dated issue | Reuters --> Australia sells A$7 bln 2037 jumbo bond in longest-dated issue. Hows this going to affect currency market /is there going to be upward movement for aussie?/ or other markets Peter ? Please enlighten us on the subject of intermarket correlation. Iāve been fascinated by intermarket analysis lately. Even ordered a book on the subject!
PS: I have decided to keep you guys /myself/ updated on fundamentals on a monthly basis. Iāll be doing it in a more organized manner as global macro has suggested. And we can have Mikeās whoās dominating sentiment up together I think it will be a pretty decent confirmation tool for ācrossesā as we havenāt formulated COT data for crosses just yet. If in case dollar rally dies down which is probable.
Hi guys,
Rookie, thatās a great analysis and it really gives me better understandings of the market (since what I do is mostly TA). Lol, the things you can do when youāre in the zone there Rookie. And to answer BBalazsā questions, I guess Iām the youngest in almost everything here. A friend of mine introduced me to forex some time last year, but I hadnāt really put my mind on it until early this year. From then on I read books on TA and began papertrading. I started following the thread since July and I opened a really small micro account in August to get a feel of live trading and to learn about trading psychology. What I do is mostly simple TA (MAs, S&R, fibs, trend lines, etc.), I joined the thread to learn more about sentiment analysis. I download the data from CFTC site and analyze the difference between comms and non comms net position. My database goes back until January this year. I learn from babypips school that the difference between net positions can be turned into an indicator like RSI, but since programming is not my thing, I use an indicator that seems to correlate with the difference numbers. This is still an experiment though.
Hey guys.
Doc Rookie.
I just wanted to pipe in here and give an update, on what Iām up to. I thought I might have given you something, but as I look at some figures, this is gonna take a little bit of time.
See, I have plotted the last 11 weeks of data, so far. Itās weekly data.
All of the eight currencies I have ranked from the strongest to weakest. That is who was on top, of the week, and on down to the weakest, of that week. Ranked. And their ranked by how many pips they ended up with against all of the other currencies, for that week. So as I have THAT plotted, they each are ranked also by whoās stronger to whoās weaker on a long/short term ranking (general ranking).
"sorry for using the word RANK so much"
Iām just looking for who comes up on top, for the week, and down to the weakest, in the context of how they are ranked in the general sense. And itās interesting to see that the #1 ranked currency does not always stay up on top. In fact, the weakest ranked currency almost never comes in last on a weekly basis. And I have seen that the line up for the week will seem to be almost random also. ALSO I see that it goes back and forth very much. Kinda like how the USD was up close to the top for the last 3 weeks and then last week (even though ranked 1st) came in last. Which could have been foretold, I think.
Anyway, I plan on getting out this data sometime soon. (I could go back as far as the first of the year if I wanted to). But will just get out enough weeks to look at any kind of pattern.
I hope you can understand some of this.
I have a lot of analyzing to do though, even with only the last 11 weeks. But to put it short, things go back and forth very much, and it doesnāt seem to matter how they are ranked to begin with. (kinda reminds me of the fact of how the charts look, just back and forth, back and forth)
Iāll keep you up on whatās going on with it. And if you have any input along these lines, please let me know.
Mike
Lol, when I said āsupportā I didnāt mean for all you guys to go out and sell the USD.
Just another little note on correlation - down comes the USD, and see what happened WTI.
It would not be nice to have been long USD and short WTI at the same time.
Also just a thought, I was actually short on oil, but in mind only - sell stop below the market didnāt get hit, however, a buy stop on Eur/Usd did get hit.
I used a market order on cable because of the reasonable news, and stop orders on the others in the event of cable buying causing a USD shift in Eur/Usd - in the event the USd news helped.
I remember an educator once discussing his technique for market entry. One of his students asked why he used stop orders ahead of price instead of limits behind price, his answer caused me a lot of thought.
Remember, he said, that with every limit entry, you are guaranteed to be in the market when you are wrong.