Yep, that’s context - this past 3 days, since Friday, the 10yr price has been rising (flight to safety) and the poor old S&P falling,(flight from risk) - the Yen also rising (flight to safety).
Already the analysts are calling the top on the S&P, but that’s normal, reality is that fear can be hard to diagnose - my feeling is to keep an eye on oil price, causing a mild case of panic now.
S&P finally broke through the 50MA on 1H, if this will hold then Peter just called the bottom yesterday in the right hour. :35:
Yen also started to fall across the board. Hopefully gold is next. Now it is the great time to start practising soon the scale into winners. Or of course if it goes against me then cut it short.
FE
Gold is lagging, see the slope down line on HR1, keep an eye there.
Yes I am watching; I am not sure if those idiot terrorists now invalidated my trade or not…
PS: what about the post number 888? Should I post now or not? 
The nerve of those bastards! xD
There is a classic TA set up now on Gold -the 10yr is also riding a down trend line hr1 -
Now guess what - hr1 trend line up 3 hits S&P
Nice to see intermarket play out so neatly.
Intermarket visually on an inter day hr1 basis.
The problem with runaway trains is they can be difficult to stall, still figure the market has an eye on WTI, still not much momentum on S&P
USD/JPY hr1 at present:
S&P hr1 at present:
US10yr hr1 at present
GOLD hr1 at present
And finally,
I mentioned the sectors last night - it happens that Murphy points out the 3 “defensive” sectors in the market, namely consumer staples (things like toilet roll etc), health care, and utilities (electricity, water etc).
These things sell even in a recession, so shares in companies trading in these sectors tend to outperform in a bear market - thus “defensive”.
Would this play out intraday? - well see for yourselves:
Sector Tracker - Track the movement of the 9 Sector SPDRs
Update: All above have touched their respective trend lines - FE needs the USD to hold it’s head up on USD/JPY
Not sure whether you guys are watching live, if so you will see that USD/JPY is sliding, that will put pressure on FE’s trade - bonds will want to rise along with gold.
The only saver now can be the S&P, it will want to fall, but let’s see how far the USDX goes, EUR/USD soon to reach 1.860, hard to say that there would be much upside there, that could stall the USD slide, well at least until Asia anyways.
I’ll give it a rest now, just wanted to show how I watch intermarket.
BTW, I mentioned WTI, well I included it in my watching, in the past hour XOI has risen, that tells me that shares in the major oil players have risen, it’s a small sign, even tiny, but a sign nonetheless.
WTI fell a little on the USD, but nothing significantly, since energy is the faller in the S&P, well if there is a rise tomorrow in that sector … FE will be safe
Hi Peter,
thanks a lot for your great posts. I have to say I do not check all of what you mentioned. I am not sure where is the border, how many things to check really helps and how many things to check already hurts the trade. I am not sure if I checked all what you did then I would ever find a valid trade. But because it all makes sense to you and you put the pieces all together timely, it does make sense of course to do it like that way!
BTW I am safe. S&P was always a favorite, SL is above the second entry. I just put the pressure on the others but Gold could fall
I watched a little other things then you. Instead of 10yr and USD/JPY (the 10yr I only use in W/S as secondary market) I watched mostly gold, silver and S&P. I watched silver as to gauge gold only for its commodity part. Silver hold up good which told me that commodities are ok but gold is falling which gave me the signal that the safe haven momentum is away and it makes sense to take some risk on.
Anyway, we will see how the story develops itself.
Good night,
FE
Since you guys mentioned Copper, Larry Williams released his 2015 forecast. I don’t have the whole report but I have it for Copper.
He sees the start of a rally on January 16. The commodity will then top and start falling until September 7, where Copper will bottom.
He also anticipated, according to a preview I received from him, that 2015 will be a historic bull market for US stocks. It will carry bear market warnings as well.
I also wanted to remind you guys that I expect the week of January 12 and the month of March to be significant ones for oil.
Hey guys.
Wednesday’s results.
NZD: +7 -0 0///+5 -0 0
CAD: +6 -1 0///+5 -0 0
AUD: +4 -2 1///+4 -0 1
USD: +4 -2 1///+0 -2 1
GBP: +3 -4 0///+0 -3 0
CHF: +1 -5 1///+0 -3 0
EUR: +1 -5 1///+0 -3 0
JPY : +0 -7 0///+0 -3 0
Comms all the way.
Mike
FE, yeah, was just showing how it’s only one market at the end of the day.
Oil was underpinning the whole risk thing, the 50 mark caused a little ripple, just history repeating again from 2014 and GBP, then talk of interest rates etc caused rise, then some poorer numbers still was accepted until reality sunk in and inflation was not going to cause a int rate rise any time soon - then bye bye GBP.
This time it’s USD, the $50 oil being broke, no inflation soon - the only thing different is what else is there, what would you buy against it with serious conviction - nothing much, so decent NFP and on will go the risk train.
Remember too earnings - no reason for bad numbers next qtr - the only sector in the red in energy, so any buying there will underpinto any s&p rise.
Hey guys.
I found a very interesting article on the commodities, and the relationships to it.
Epic reversal for commodities in 2014 | Resource Investor
Mike
Good job, in a couple of sentence you summarized the main themes. I like it. Very true, at the moment if a weak USD might be stronger than the other.
Have a nice afternoon everyone,
FE
It is just one market, XOI gave that small sign, the Energy sector did indeed rise, that stopped any fall in the S&P right in it’s tracks, saved FE’s trade into the bargain.
There were a number of ways of playing out the scenario - at time of my post USD/JPY was down on it’s trend line - went up 100 pips, currently +70
Gold tested FE’s nerve today but continued down on that line, US10yr I don’t trade, only use as a marker, and well there is the S&P .
The confirmation of S&P outlook at NY open 14.30 gmt was clear -
First up needed confirmation that XOI, the index of the major oil companies’ shares was correct last night at the close, I needed to see the energy sector in the S&P rise, since it was the leader in the fall on Monday.
That confirmation was given by XLE, it gapped up with volume, note the reverse, it gapped down with vol on Monday.
I didn’t secondary confirmation, but it was there nonetheless, SPY too gapped up with volume, likewise the reverse on Mon.
Finally if wishing to add a little later, all the sectors in green, a healthy sign.
Sorry for all the posting, I had decided to do intermarket right side of the chart when I saw FE’s trade on Gold - sometimes it’s better live rather than with hindsight.
Anyways, NFP Friday tomorrow, so have a good weekend guys
Hi Peter,
I need some help with the interpretation. I looked at the sector’s performance today comparing with S&P. S&P is beating all the sectors. Hmmm I thought this is not possible. How can the S&P companies beat all sectors when those companies are listed int the individual sectors too? I thought S&P has to be somewhere in the middle of the pack.
Thanks for your help,
FE
Hey guys.
Thursday’s results.
AUD: +6 -0 1///+5 -0 0
NZD: +6 -0 1///+5 -0 0
USD: +5 -2 0///+1 -2 0
GBP: +3 -3 1///+0 -2 1
CAD: +3 -3 1///+3 -1 1
EUR: +1 -5 1///+0 -3 0
CHF: +0 -5 2///+0 -3 0
JPY : +0 -6 1///+0 -3 0
Comms took it by a good bit.
Speaking of that. A very notable thing is this. The Comms have taken everyday this week so far. And the NZD has been the dominating one of them. Although the AUD has been close behind!
And the reason I bring this up is because tomorrow is the big day. (NFP)
It would surely lead me to believe that the majors will take the day, and the Comms just dive. Because on the other hand if it doesn’t go that way, then the Comms to take a complete week? I should look but I don’t know if that has been done yet. If has, then very very rare. So, we’ll see how it shakes out.
BTW…I’m up with the AUD. Like around 700-800 pips. I hope tomorrow doesn’t skew it too much. But, nevertheless, I’m sticking with the plan. They are on the way up…no question. Just hope it will continue for sometime.
Mike
Hi Peter,
Would you look at Dollar index or USDJPY ? And hows US10Yr is correlated to gold ? --> I’ve got my answer to the latter in post 2538
You mentioned analysts calling a top on S&P, and added you’d be keeping an eye on oil. As I see on 1h chart oil has been ranging the past 2 days. Do you mean that further rise in oil or price breaking out of that range is bad for S&P ? Are we going back to the theory of cheap oil is good businesses and vice versa ?
