US factory orders have been declining for half a year…hello, and so has the rest of the world…hello.
The Manufacturers’ Shipments, Inventories, and Orders (M3) survey - commonly called ‘factory orders’.
Factory Orders in the United States is reported by the U.S. Census Bureau.
Here is their report releases October 2, the opening paragraph sheds some light on current trend:
Factory orders for last 12 months, source tradingeconomics.
That should have a negative effect on GDP, no?
Also I have to say that recent gains in commodities show that we can’t find the COT report. When its time to buy the dollar again, we will get the signal from the COT.
Hi everyone,
I see a lot has been happening in the last 24 hours again, I start catching up right away, but before doing that, I wanted to show Mike that Pip Diddy might got a good idea with currency strength comparison and posted this article:
Top Forex Market Movers of the Week (Oct. 5-Oct. 9, 2015)
FE
Hi Philip,
here are my thoughts:
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I agree what you wrote about China.
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I agree what you wrote about intermarket analysis.
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I do not agree with the chart when you compared the USD with all other instruments. Although the results for the last 50 years are correct, but I would call that an “unfair” comparison. How would it be possible for the USD to get stronger and stronger for that 50 years? I mean it cannot rise to the moon, lets say to USD/JPY from 120.00 to 800.00. Or EUR/USD cannot go down to 0.00! I have no problem with stock making a 500% rally in 50 years (made up the numbers) or to have the same for commodities. But for a currency? I believe if you make the same 50 years chart for GBP, NZD or doesn´t matter which minor currency, they would all show a similar and flat line compared to the USD. I believe it does not make sense to hold 50 years any of the main currencies. Only exception might be if you have carry trade strategy for long-term.
Intested to know how you see it,
FE
PS: as Peter always says, great posts makes you think and your posts qualified definitely for that!
Hey guys.
Wow. What good stuff you put out there Philip. It is good to keep all that in mind.
Well, I would like to talk about the short term. This week. I’m gonna tell you my idea. And plan.
Ok. So, you all know that I like to trade a basket of trades. I think it’s good for diversification.
You all know that I look at the field. And I have the numbers for back testing any kind of idea.
You know I always seem to bring up the ‘Major/Comm’ thing. (I think I’m the only one!)
This is it.
I’m trading the Majors against the Comms.
That’s 15 trades. (3 Comms against 5 Majors)
And I’m going with the Comms long against the Majors. Now. I put them on at the open.
See, all I need to do is find which of them is trending over the other. Do you remember only a few months ago that the Majors had it all over the Comms? Generally it was pretty easy to figure out who was on top.
And now we have a change. I know…I have read that this all could be just a real good retracement. But, I don’t think so. I have seen the Comms peak up, just to fall back down. It’s happened a few times last month.
And I was thinking they are getting poised for some real strength. And sure enough, it has started, beginning with October.
Ok, and if I’m wrong, well, I will see the numbers. They will convince me. And then…I go with the Majors against the Comms.
It’s gonna be one or the other, for me. Do you know…if I would have thought about this just before last weekend was over, I would have done this, this past week. Ok. So, do you want to know the outcome??? You are not gonna believe it.
+4,375 pips.
Well, I have not defined exactly when to exit yet. I have options in mind.
And the position sizing I’ve upted. I went with a 2k size each. Which turns out to be like a 30k one trade size.
I was trading with 1k with around 17-20 different pairs. But, I’ve been thinking that’s just not enough.
Well, I’m super excited with this style of trading. And I know I need to refine the trade management of it.
Maybe I might keep them open for entire week.
So I see it like this, this week.
The trend is with the Comms. Unless I see something big changing that, it’s all Comms.
I’m not afraid to keep you guys posted on my results.
This is big stuff.
Mike
I agree with you on point 3. That is exactly the point 
The context of the chart was that many analysts were saying the dollar would appreciate beyond measure,…etc. So I shared the chart to say exactly the same thing you are saying, it is just a currency.
A practical way to think about this chart is to say that there were six guys in the seventies who had a $100 each. One decided to invest it in a stock, the other in gold, the other in bonds and another in Dollar,…etc. This would be the result of their investment.
The point I was trying to make is even if the dollar appreciates in 2016 as well and we see a stock crash, it would be the perfect opportunity to invest in stocks, rather than just keep your money as dollars.
Hi Philip,
we are on the same opinion. And I beleive Peter too. That is why he also looks to buy S&P on lows as it will rise. However long-term currency trading has one advantage: carry trade revenue. And this cannot be shown on charts.
Hi Mike,
look at those CHF pairs again vs. commodity currencies
Have a great trading week everyone,
FE
Guys…
Taking a hit. Running total for the week here.
Now I’m starting to wonder if the Comms just had a good week last week (real big retracement).
But, I’m still convinced that they had a trend started. One day up (ok, a big up) isn’t a deciding factor for me. I’ll see how the week turns out.
BTW…what your looking at there is the Majors against the Comms. 15 trades. Comms long against Majors.
Mike
Coming back.
Mike
That’s one wild day wow.
Back in it boys. (About one hr into London now)
Mike
Hi guys,
Just thought I’d mention Gold - I’m sure you have noticed the inverse correlation with USD is very much prevalent.
If you have a look at Oct2 (Nfp) you can see the strong move in each, the correlation has been accentuated since that data release.
The likely cause is the uncertainty surrounding Fed policy/ timing on rates - this uncertainty does not help USD and does the reverse for Gold. Price seems to react on to the slightest negative US news or again the slightest positive for competing currencies, some of the moves can seem exaggerated.
Looking ahead, this uncertainty is likely to be addressed by the Fed, the thought then is whether Gold would continue it’s recent upward path - investors in GDX, GLDX and GLD remain active, whereas the volumes in UUP (dollar bulls) remain low.
One other thing I wanted to mention - the S&P
Tonight watching to see whether it would break to the upside, it’s been trying for about an hour or so.
XLF (financials) is the leader, that’s important, helped today with good results in Citi, XLF is an offensive, probably as offensive as you can get, have a look at the date on this chart and associated volume Oct2nd
and then compare the S&P from same date.
Then if only day trading or scalping the S&P, look at current sector map, this helps in anticipating momentum.
BTW, XLF is hr1 and map is today’s action.
Another btw that I forgot to mention, when seeing this momentum getting played out took a long on Usd/Jpy as a short term trade, if the S&P stays up then will likely stay with that one, will also stay with the S&P and see how the futures play out tomorrow, chance may be positive European, at least in the morning.
The reasoning on the fx is twofold, first the positive data today on US and secondly possible selling of Yen in risk on sentiment with the rise on S&P
(well that’s the plan :))
Lol, me again, now that the dust has settled I can post yesterday’s and today’s s&p.
First the 2 broken lines on price and w/s, I put those on after the close of the first up bar after the down play. - divergence in extremes, price’s fall was much more extreme, then I could see the 200 sma, then w/s refused to go below zero at the down bar, then it happened that the low of that bar was also Tuesday’s low (didn’t draw that horiz, just was aware of the level).
So then, to add to the mix was Citi with it’s numbers - so in truth there was very little doubt of direction.
Hi Peter,
I have two comments to your great analysis:
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I did not search the earlier posts about the sector map - but as I remember - we had 9 sectors. Why are there 11 now?
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Hmmm was reading your in post 3958 you wrote “positive data today on US”. I guess this is the tough part of fundamentals. We all see them as we want. To me it doesn´t look that positive. The Unemployment Claims change was positive, but for me the CPI is the most important which came in line with expectations, which is -0.2%. Of Course we can talk about what is more important, CPI or Core CPI reading. What do you think?
Have a great day and take care,
FE