Well, if your still out there, checking the market, reading, and thinking about what’s up and coming…here’s my thoughts on the sentiment.
First off, I believe this last week of the year is going to be very telling. Sure, we have been having very low volatility lately (normal around the holiday season). But, not only do we have months’ end play coming, also the years’ end play. Plus, what I have seen this last week.
OK…I can show you…(“no Mike, don’t do it”)…or just tell you.
It definitely was a Comm week. Believe it or not the CAD was the top dog on Wednesday. They, as a whole, had more pips/ % over the Majors. And to step back a bit and give a summary of this month it was like this.
The Majors absolutely crushed the Comms the second week of the month. So much so that even though the Comms dominated all of the other weeks, I don’t think the Comms can catch up and over take the monthly running pips total. We had 1 day short of 4 full weeks so far. So, the last 2 weeks were dominated by the Comms. And we are approaching the last week of the month. Year also.
Now, when I think of profit taking, balancing of accounts, and stuff like that (which is the opposite of trend following) it surely is interesting. And I’m always asking the question of who’s trending. OK, well, we all remember when the Fed made the big announcement. It was in the third week. Ok, so we can easily see that the old saying was true. ‘Buy the rumor, Sell the fact’. That was probably the reason why the week before was nothing but selling of the Comms (and buying the USD). Then when came time, it was risk on and selling of the Dollar. But then the following week (last week) that all continued. Still selling of the USD and interest rate differential buying.
So, when I step back and think of the flow (well, see it on paper) I see there is more Comm buying, than Major buying. In fact, I know there is because of my one chart. Ever since Sep 29th, the trend is with the Comms.
Sorry guys…I must.
So, this is what I’ve been thinking. And asking.
This coming week should go completely one way or the other.
It could be a continuation of the Comm run. Which is a lot of unwound trades taken place. (Cause this entire year really belonged to the Majors, as you see) Squaring up of accounts.
Or maybe all this Comm buying will be the end. And come early next year, it’s back to the Majors. See the chart? Those arrows are the M/C trends. (Blue is Majors, Tan is Comms) And this last Comm trend seems like the same length as they had back in the beginning of the year.
Look, I happen to think that we are gonna see some real stuff fly come the beginning of the year. I think that the affect China has on the market is gonna continue. I have a feeling it’s gonna get real ugly for the Comms. Once everyone comes back to work, I think we might have some new faces up at the top.
GBP, along with EUR, and the CHF. With the USD.
Guys…I got to run.
I’m off (of work) this last week. And opening a live account.
Watch for the thread. I’m gonna make a statement.