And finally, thanks to Tradingview, two charts:
Current play in S&P with those two recent up days - price not following the advance decline down.
Time for another new high?
similar in the past:-
One final post re levels intraday - yet again GBPUSD today, two yellow lines, one from yesterdayâ mid Asian level, the lower one has now moved up to Tuesdayâs mid Asian.
On Tuesday see how price pushed right up through the mid without a re-visit, wonder would that mean there may be some buys left unfilled - so if price were to make itâs way back for a visit and I remain bullish, then could I leave a buy here.
Week over, one of the guys on Forexlive said yesterday that this week itâs âall about the levelsâ - the two yellow lines on last nightâs post represent 40 pips max, so tradable 30 pips with spreads out.
So, again remaining bullish today. what about just leaving yet another buy at the low line and exit at the top - just leave the lines as was since yesterdayâs price has closed where it opened.
Today:
Guys, I have been hogging the thread this week with all those charts, that was not my intention, apologies for doing so.
My reasoning was to show how I combine charts with fundamentals in day trading, this past week the spotlight has been on GBP and interest rates, whereas that same light has been, in a sense fading on USD.
Anyways, when a trader can hook into market sentiment, then thatâs the time to use session levels for entry - you may notice from the above charts - a SL required was minimal, thatâs the power of sentiment.
Iâm glad you are doing well Peterma. I have been struggling though for the past two months due to the lack of trend. Thatâs why I went back to commercials. They are holding a three-year high long position of New Zealand. So surely shorting New Zealand now is too crowded.
The good news for me though is, with Fed highlighting employment reports as the determining factor for improving rates, now non-farm payrolls will become a market mover. So we get a strong number buy dollar we get a bad number sell dollar.
Personally I hope for bad numbers so I can buy NZDUSD.
How do the rest feel about the market so far?
EDIT: Just a small correction. Commercials are holding a nine-year high long NZD position.
Hi Peter,
why do you apologize? I really like those analysis, might be the few day trading strategies which turn successful in the long term. I always read and check them. For me it does not seem to me so obvious as it is for you so I keep studying it. For you it is obvious if we buy at the middle of the session or at the low, and also if we take profit on the high of the session or we hold it for a breakout. These are for me not that obvious so I have to keep studying it.
Hi Philip,
actually I do believe we had good trends also in the last 2 months. For example GBP vs. the commodity currencies was definitely a good buy (or vs. GBP).
I cannot say anything new about NZD. Last week we had the discussion, you said it was a 3 year extreme - nothing happened - now it is a 9 years extreme and fundamentals still did not change so we might see a 15 years extreme I guess (based on the tendecy) 
The same with gold and silver. Commercials got almost long but until now no signs of an upside rally.
FE
Hi guys.
Iâll tell you what I think of the market.
First off, âŚPhilipâŚI almost fell off my chair when I read your statement saying âthe market having a lack of trendâ. UhâŚI think the market has been trending. For quite a while now. I have not seen a change in trends.
Sure, last week, and at the end of the week before, the NZD turned things around. But the last 3 days of last week went right back to the trend (low). Monday they were 2nd. Tuesday they were first. Wednesday they ended up last, Thursday they were last also. Friday they were 7th. In fact, talk about the Comms, on Friday all three of them came last, to everyone. And we also need to put this into the proper perspective. Last week was the end of the month play. And if you ask me, I thought there was profit talking (for the month) that began a week and a half ago, (NZD taking back some pips). And then it seemed that the trends all continued starting on Wed of last week to the end of the month.
Look, I can be wrong about this. We always can see how things have unraveled after-the-fact. So, weâll see.
How about the Major/Comm sentiment? I wonder if any of you guys still take that into consideration.
Well, I sure do. And this is what I know. Itâs all slanted to the Majors. Remember last weekend, Philip, when we mentioned if the NZD was turning it all around? But, I didnât think so. Like I said, the first 2 days of the week it did continue, but then that was it. Back to the Majors over the Comms.
One thing I do want to talk about. When I was tallying up everything for the week and month, something did jump out to me big time. And that is the AUD. And more specifically the AUD/JPY. Do you guys remember a long time ago how I came up with the notion that that chart is the poster for risk on/risk off? And even the main media coverage thinks that the risk on/off has to do moreso with the AUD/USD. I personally think the picture depicts it more on the AUD/JPY. Well, anyway, take a look at the chart. Monthly. Ok. Here it is.
Well itâs fact that we are at a monthly support zone. And look back some, this has been tested a few times already. I think something is gonna happen. I just donât know what. But, I have a feeling something big is about to take place. Either itâs gonna go up. âŚOr down. (I know, mister obvious here) But, I think in a major way.
UP: âWe would have risk on scenario. That means the Comms would be coming back. Trend change. And who? Well, surely the AUD. And would need another one with it. I would venture to guess with the NZD, as opposed to the CAD. Only because of the oil situation. That seems to be back on the dive, even further. Who knows, maybe all three of them, if oil comes on up.
DOWN: â We would have risk off. That means the trends continue for the Majors. The GBP, USD, even the CHF all strong. And the Comms continue on the slippery slope.
Letâs look at the AUD/USD monthly chart.
This is a different story. There is a whole lot of room for the AUD to drop before a good bounce. Well, there surely is no major support level anytime soon, anyway.
I donât know guys. Maybe Iâm reading too much into all this. But one thing that always stays with me (since I keep track of trends) is trying to see any trend change. And thatâs looking at the big picture.
The reason why this is so important to me is because Iâm in on the trend, collectively. I want to know if and when it changes. Cause then I would need to watch what I trade.
Talk to me guys.
Agree or not.
Mike
P.S. Iâll come right back and tell you how it went with the trends this past week, in conjunction with my trades.
Fellas.
This week was not a good week. But, it didnât turn out all that bad either.
My end results:
â[B]+3.1%[/B] to the account. Thatâs what happened this past week. (the gap must have been the positive difference)
â [B]-6.7%[/B] since the start of this strategy (2 weeks now).
â [B]-304.4[/B] pips.
â [B]27[/B] trades were running.
â [B]8[/B] trades closed. Win/Loss = 3/5. For -605.6 pips.
And on Friday late, I closed all of the other trades. I plan on starting on fresh ones for the beginning of the month.
I was looking at -1500 pips total the first half of the week. Then things turned around mid week to the end.
Hereâs a break down. Of what I won or lost with who.
GBPâ Up +499.4 pips
USDâDown -304.1 pips
CHFâDown -352.3 pips
EURâUp +93.1 pips
JPYâDown -240.5 pips
Bottom line is Iâm still very confident in this system.
I will keep you guys posted.
Clue you in on what Iâm gonna trade this week coming up.
(Weâre off to the movies now, but be back at around the open, couple hrs into). Then I place all my trades for the week.
Come on trend.
Mike
Mike, Philip is right, itâs not so much the lack of trend, but the market is very much at the possibility of a trend change, if you check the banks each are conflicting in their outlook.
At the end of the day the fx market revolves around the USD, so to get a sense of how the market is feeling it is sometimes good to have a look at the most traded cross involving the USD.
The week coming up I would be surprised if there is increased volatility, the market is waiting on NFP - itâs a while since I remember the significance of those numbers.
It kinda bugs some in the business fraternity that an âitchy fingerâ may have such an influence, the hope is that the numbers come Friday will cause sense to prevail.
Those trends actually, at least on my chart, all started in the week of the elections. Thatâs why I donât count them as a trend emerging in the last couple of months.
Nothing happened may be for you :), but there was a100 pips run NZDUSD long last week. Something like a 500 pip run in for NZD in GBPNZD in the last two weeks
No we were not discussing if New Zealand would turn around. We were discussing what COT has to say about it. And it said that New Zealand are at extreme levels. This only means that NZD short is a crowded trade, not that it will turn around.
So why is this useful? Well if we get bad employment numbers in the US, I think New Zealand Dollar (followed by CAD then AUD) would be good buys. But thatâs a big if for now.
I agree with your call 100% regarding the increased importance of the FOMC report. I think we are now back to a place where the FOMC numbers will dictate the trend to the end of the month.
We will finally return to having a clear direction.
I agree with your call 100% regarding the increased importance of the FOMC report. I think we are now back to a place where the FOMC numbers will dictate the trend to the end of the month.
We will finally return to having a clear direction.
Hi Peter,
I have a question. You wrote about the importance of USD and NFP and possible trend changes. I have many open trades but not with USD (OK one with USD but it is a long term trade which has good carry trade so out of question). The question would be if you would close any trades not having the USD before the US NFP report? I never read an article about this.
Hi Philip,
now we can argue a bit :-))) True, I said for me nothing happened last week. Why did I say that? Because I only have long trades open aiming for many hundreds of pips. I do not consider a 100 pip NZDUSD countertrend move an important event. It can be a great money if you are daytrading, but for long term positions it is a ânon eventâ, especially since I am not trading USD pairs at the moment. I find a lot better setups. The other thing is GBPNZD, if you remember I wrote how much I love to trade GBP vs. comdolls. Most of those pairs had pause last week so it is another reason why I said nothing happened. This week is a lot more interesting although it is only Monday. My positions boomed right from the start!
Last but not for least I was really suprised on one of your sentences. You, as a technical trader tell me you do not consider trends because they started in the week of the elections. Well, if it is like that, this week we have NFP so I guess we should not consider trends either. Maybe next week there is some Retails Sales report or Inflation and we can cancel our trends too. I never heard something like that because of a fundamentals reason we just ignore the ongoing trends which were one way and great profit opportunities I am already waiting for your answer buddy!
FE
Yeah a lot of good points so I wanted to divide them.
Regarding the last bit I think there is a misunderstanding. I was talking about the Forex market as a whole. You cannot say that just because 3 GBP pairs are up you can say that there were trends in the forex market. Because you can say GBPNZD, GBPCAD, GBPAUD and EURGBP were trending (you cannot say that GBPJPY is trending or GBPUSD because its been a while since we saw a new high or low).
Because then I will have to list the remaining forex pairs that werenât trending. All the dollar pairs, the Euro pairs and the Yen pairs for instance.
Look at AUDUSD for example. The ENTIRE month of July its going sideways. EURUSD the same. USDJPY, GBPUSD, AUDCAD, AUDCHF, EURNZD and on and on.
Now that was not true back in October. You knew back then that going long the Dollar against any currency will make you money. You cannot say that about the pound in the last two weeks, because it was sideways against JPY and dollar.
A pair like AUDCAD was clearly in a downtrend for example, now not really.
So the fact that you mentioned 3 or even six forex pairs only I think proves my point.
Now there are some logical problems for me here. First you said that the 100 pip move in NZDUSD is not significant since you look for 100s and 100s of pips.
But then you said your GBPNZD position âboomed.â When I checked is that GBPNZD moved 80 pips up. So how come an 80 pip move is âboomingâ and a 100 pip move is insignificant. This shows that your analysis is neither rational nor objective.
Plus, to make 100s and 100s of pips you need to be in the position first before it moves 100s and 100s of pips. You cannot wait for a pair to move 100s and 100s of pips first before determining the trend.
So the fact that any pair has 1000,000 pips does not mean âit is trendingâ it means it âhas been trending.â And all of us need different criterion to determine if that trend is likely to continue, pull back or reverse. Now all of us are in this thread because we use COT as [B]one of the criteria[/B] (as I said that seasonality) has not yet lined up for NZD.
So if you are dismissing the finding of the COT report, then youâre probably in the wrong thread man!
Hi Philip,
thanks for your detailed answer!
I liked the above sentence the most As we are the only two probably who follow the report on a weekly basis it is especially good to see Do you remember when I wrote a longer post 1-2 weeks ago how I see the usage of COT Report with spotting reversals or jumping into ongoing trends? Nothing has changed, I stick to it. The point was only to pay attention for picking bottoms.
As for trends, well I tell you honostly I have seen a couple of bloody conversations in other threads about what is a trend and what is not. So I just decided to better is not arguing about that. It seems like everyone has a different opinion about what is a trend, I have my own, you have yours and it is all fine.
One very last point: how much did GBPNZD, GBPCAD etc move? Honostly I do not know, I never count the exact pips (until I close the trade when I make a review). I check if there is a signal for closing a trade if not then it is still running. My very simple analysis is something similar like Mike writes down in longer report: my trades did not move up anything last week, they all had a pause. I woke up today and had significant gains. I am in trades based on pairs where I do see with my own evaluation longer-term ongoing trends. So if last week there was no gain and today morning I had nice ones then for me the trends were going on the direction I decided based on my analysis And just like Mike, if I made a decision I let the market decide. So you are right in a way that I cannot tell you exact pip numbers. I check the charts often but never care much for the exact pips.
Either way you go with NZDUSD I wish you good trades! Oh, almost forgot, the only reason I am interested about USD NFP report is because of your Gold and Silver discussion. I am very interested to see what happens if commercials will have an overall lon position.
FE
Hi FE,
I wouldnât close a long term trade pre - NFP.
To give a sense of how undecided opinion is I look to GBP/USD daily (not eur/usd because of the Greek distortion.) and we get this:
Btw, todayâs low was yet again that same yellow line on post 3703 .(1.5565)
Loool you always misunderstand me donât you :). Iâm not holding a NZDUSD long, I already closed the trade last week. I was just highlighting the instruments that were in an extreme.
I need to say that NZDUSD is now out of the extreme zone btw according to last Fridayâs report. CAD and AUD are close to being in an extreme but not quite yet. Gold is definitely ready for a long. In fact I think it could be a nice long scalp on bad employment numbers.
GBPNZD since May or April has moved 3000 pips. Since June 800 pips (thatâs all the way to the high not to the current levels)
Now we speak the same language. I was thinking yesterday the same. What would I do if traded the NFP? I am not ready to trade it if it comes out strong. Just do not feel comfortable about it. But what if it is weak? Well the gold trade with its extreme position came also into my mind. USD afterall cannot be traded only vs. currencies!