And talking about thinking, a little observation from a bank guy “Gold remains almost unchanged in value, in Euro terms that is”.
Good morning fellas.
Peter…thanks for all of that. I really do appreciate all the very insightful information you throw out to us!
I wanted to jump in here and throw out this link (again). This woman does so much research and this is definitely a good read. She looks at the market from many different angles. A lot of technicals. A lot of cross comparing of markets (which seems like the avenue we are adventuring down also). Much in the way of fundamentals also. So basically she sheds light on what’s going on in the market.
Talk to me. What do you think?
USD strength defining many FX moves: Trade Week Analysis | Trade Charting
I’ll be back with some stuff.
Mike
Fellas.
Well, I’m doing a lot of organizing of my data. And I just realized (thanks to you guys) that I have been keeping track of the weekly total pips of everyone. So now I have the last 4 weeks of data. I want to throw these out there. But also I was thinking if at least one of you who keep track of the COT data, maybe we can somehow put these 2 together and see if there’s any kind of correlation. (Hope you are catching what I’m throwing down).
//////////////////USD/////EUR/////GBP/////CHF/////JPY/////CAD/////AUD/////NZD/////
Sep. 1-5.///////+644////-880////-1427////-434////-99/////+664////+1114///+418///
Sep. 8-12.//////+895///+1328//+1970//+697////-883///-719/////-2327///-961/////
Sep. 15-19.////+332////-728////+666////-296////-992///+1462///-548////+104////
Sep. 22-26.////+1034///+143///+1227///-1//////+835///-591/////-636////-2011////
Sep. 29-3./////+883////-542////-1098////-478///+761///+321////+297///-144/////
So just to be clear. This is basically the weekly candle’s all added up. Ex…weekly candle of the USD to EUR, + USD to GBP, + USD to CHF, + USD to JPY, + USD to CAD, + USD to AUD, + USD to NZD. And we will have to total amount of pips the USD ended up with in comparison to all the others. And likewise with all the others currencies. This gives us a strength to weakness gauge.
So now all we need is the COT data is a similar format and possibly make some kind of connection. (if there is any)
Open interest correlated any? Extremes correlated to gained or lost pips?
If not, these are good numbers to look at by themselves anyway.
Talk to me.
Mike
What does it mean Peter ? Sounds like some insiders lingo I can hardly understand anything or maybe its just me :31:
Great idea Mike!
Let’s do some more thinking, we’ve got specs and commercials on the other side. And both do have extremes , I can get the extremes out of oandas website on specs Philip should have COT index - extremes for commercials.
Hahah, a sound advice Peter. Thank you, I’ll cherish it. My tendency to overtrading and revenge trading during my learning is undoubtedly due to my inability to just accept that I’m wrong.
Hm, the thought had crossed my mind in the past, but I’ve never given much attention to it. But now that you mention “industrial”, I’ll give it a shot. If silver weakens then industries, too, weaken. With industries weakens, there will be less goods produced. Less produced goods equals to less trades, less trades equals to low demand for currency, low demand for currency weakens the currency. Does my train of thoughts run way off track?
Ahah! This is something that has just gone through my mind recently. I was wondering if I could compare each currency with something else to objectively measure each currency’s strength. I figured that would be gold. But I still haven’t figured out how to do it. Any (again) tips, Peter?
PS: thank you Peter, FE, and everyone else for indulging my turning this thread in newbie Q&A 
Rookie - I’d say he is just making the comment that the value of Gold has fallen at a similar rate to the value of the Euro (i.e. vs the USD)
Flows, yes, when you compare the rate of fall of Gold and Euro there is something to learn.
Then you can put $USD into the chart.
And here is another one, apologies for deluging but thought it might be of interest, some guys are questioning non - usa stock indicies.
Well if I was invested there I’d pull my money, the reason is the stronger USD usually causes monies to desert foreign shores.
MSCI Global Index is a tracker for those indicies.
MSCI Global Equity Indexes - Indexes - MSCI
Now if you put into stock charts the symbol $MSCI and $USD you will see the pattern.
And one final piece, you might encounter the phrase “Doctor Copper”, copper has been thus dubbed because it is often regarded in investment circles as a health indicator of economic outlook.
In particular the Chinese market.
And back to FX, here are some Bank’s outlook:
EUR/USD Heading To Lows Not Seen In Over A Decade - Barclays
GBP Into UK IP, BoE Meeting: A Buy Or A Sell? - Credit Agricole
USD, EUR, JPY, GBP, AUD: Outlooks For The Coming Week - Morgan Stanley
On the Morgan Stanley one, see the ref re AUD and metals/China and the copper chart, thought that one interesting.
Hi guys,
Hmmm I enjoyed the nice weather today a bit and when I come to my computer I am behind again with 15 posts…
Peter,
ok, I do pay attention on S&P, my tight SL is already over my entry. It is a free ride. Thanks a lot to mention the correlation between S&P and the commodities. As I said last night, I did read your silver and gold post with fresh mind and still did not get it. Can you please write a bit about the silver (industrial) and gold (alternative currency), how the different roles are and what faster silver falling means? Sorry, I do not think as fast as you do. I guess you refer to some industrial, economic problems etc. but I do not know what the conclusions here are. I agree though that it causes a lot of thinking though. LOL Wow, I did of course not know that October for stocks are so bad, I watch even more out! Thanks for that. And the opportunity after that is more fascinating for me! May I do a suggestion for you (even if this sounds strange that I suggest something for you)? You quote very often some guys or what you read. Actually I do not care if Murphy thinks like that or you. I think he does not necessarily know the markets better than you. You think that if you find some sentences from someone famous then it has more probability to happen than if you say it. It is not true! Murphy said the markets get into a dangerous territory in October? I can “congratulate” on such a writing! Typical “grab the nothing” news. I can say something like that before every single month and later I can find something that was dangerous. It helped us nothing. Just share with us how Peter views the market. I have more credibility for that opinion.
Philip,
nice analysis on GBP and USD. I liked it. Also thanks for telling us there are no signals and for the coming updates on seasonality’s. So, what kind of divergence did you see? Price with what? The update on our system is also great.
rookie,
hmmm I guess now everyone is vs. USD. I thought we reach first the 1.20 EUR level. I make then also my stop losses tighter. However I am surprised to see that you are changing your mind, too. Do you remember our conversation if fundamentals are leading sentiments or vice versa? Well, based on that USD is not on a hype as US fundamentals are still the strongest. So I do not allow you to change your long bias for some years now 
You did not miss much with Draghis speech. Was not that interesting this time. The office idea is good, you can open the Asian office! I do agree on all your biases. The COT report was good as always. I do not go usually so far with my analysis as you did in your next post. You tried to cover almost all currencies which will go up or down in the long term. No problem with that of course.
Mike,
you have given us a link about a woman trader. Never trust a woman For sure she is looking at the colors of the MA’s and not the values. Your numbers are always getting better with thinking in the background. I like that. I cannot tell at this point if your findings do have relation with OI or extremes. But I think not really, your numbers show more the sentiment but I can hardly imagine that they show us extremes.
Flows,
I really like your thinking on silver. Either true or not but nice. Peter will tell how he thinks. The only part which is not so exact in what you write is when “low demand for currency weakens currency”. We should not forget all currencies are in pairs. So all commodities can weaken at the same time but this is not true for currencies. If one goes down then countercurrency has to go up. So we have to define which currencies weaken. I like a lot your strength idea based on comparing currencies with gold. That sounds great. You also ask good and relevant questions so there is no problems. I wrote sometimes already in the thread, I just do not want to go off topic completely, like discussing in 20-30 posts which Fib levels are the best etc. But we have not had any kind of problems like that. Philip for example shares his entry and exit ideas which is technical analysis but we need to find a system so for example I think it is completely good the way we do.
Guys, 1 more thing. I have serious internet problems today. This means sometimes I can view our thread, sometimes not, and cannot give likes at all.
Last week the bank tricked us, now we go hard on the banks.
Hi guys,
we are here a good team, I definitely do not want to insult anybode or make enemies. I am usually the “bad guy” I think and it will be like that, this time too. However, honosty is still important.
I usually read all posted links here, I will not do it from now on. It is not that I do not like them. No. Some fo them confuse me though, and make more harm for my trading then what they help. Of course keep posting it guys but as we are a team, I thought I share my thoughts.
90% of the links are good, especially what Peter shares, the different stocks (a market which we do not know at all), correlations etc. are great. Also some news are good. Or the last link from Peter about the general view for the coming week.
However other posts like the Morgan Stanley and Barclay’s exact USD reversal values or the technical analysis of someone really confuses me as they do not line up completely, or altogether with my thinking. This results that I lost my confidence and I will do poor in trading. I think I told you guys earlier that I lost most money on analysis like this. Banks make a tons of failure, I want to remind you it is also in the COT books.
[I]I do believe what we do here, how we analyse the market, look into COT is at least as good as other analysis. We make up our mind, we do have a bias and mostly it does work out good. Why should we confuse ourselves and disturb our lines? When banks/private persons give us bad ideas and we lose, are we gonna say we lost because of the stupid banks? Does that help? At least if I lose I want to lose because I made the mistake and then learn I from it.[/I]
Sorry if I offended someone, it was not my intention.
Still, I concentrate mostly on our analysis, forecasts, read still of course much reports data etc. but no technical analysis or exact reversal point analysis of speculators who are no better than we are.
Hi everyone, (especially flows)
Ok, I read the whole babypips.com school on COT report so I can look into the analysis flows is doing (I told him I try to catch up with that).
If someone wants to read where they calculate the positions like flows does, here is the link:
How to Create Your Own COT Forex Trading Indicator
Well I do understand at least the logic behind it now, I forgot it as I never used this calculation method. I guess most of you have done babypips school but did not use the method. I am still not so impressed about the method but now I can talk with flows about it. What is funny flow, the very next page of the school says it is not an accurate analysis, so rather use something else:
How to Interpret the COT Report
This is exactly the analysis what I do! I just clicked 1 page further then you and got my idea there. Well, we have to say with a longer knowledge now that babypips school is good for basic knowledge but fails to say very important information. For example there is nothing about following the commercials.
One more thing:
What is interesting as we talked about it very often, and also relevant as I expect silver to turn, and more than that some of you expect USD to turn or JPY is also there sometime at an extreme. So here is a nice chart which shows a COT extreme and shows perfectly that it is not a timing tool:
How to Use the COT Report for Trading Forex
I just thought it is good to remind us to pick the bottom with technicals.
I picked out the sentences which I like the most, it can summarize some of the most important issues we are doing in this thread:
“Determining extremes can be difficult because the net long and short positions are not all relevant. What may have been an extreme level five years ago may no longer be an extreme level this year.”
„The basic rule is this: every market top or bottom is accompanied by a sentiment extreme, but not every sentiment extreme results in a market top or bottom.”
Lol, FE, I like Murphy because he has an Irish name.
I don’t like Williams because he knows too much and is always right, and he doesn’t have an Irish name.
I’m guessing Murphy is putting out a warning to subscribers because of the falling commodities prices and also the fact that we are entering the ‘halloween’ month - apparently the final month of summer doldrums.
I’d also hazard a guess that he doesn’t like the way that silver is falling faster that gold - but like I say I’m not a subscriber, so I don’t know his reasons.
Big thing though is what Williams was saying back a couple of years ago, we are getting ready for it, he said he was looking forward to it - the year of 2015 - a raging bull market 
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Morning guys! :44: /Evening/
FE… The reason why I wrote that one up is I wanted us to be flexible and also to remind us that there’s always a possibility. Thats what this is all about after all. It’s constantly changing. That’s all. I haven’t changed my bias just yet FE don’t worry we have to follow the specs and so far like I said dollar is the strongest of all in terms of sentiment as for fundamentals I’m more or so neutral to slightly bullish than bullish on dollar now we’ll see what comes next. But I still do think there’s more room to go up for dollar against the basket of currencies.
I’m looking to long USD across the board this week, it looks like they’re all in need for some correction. I’m trying out RSI14 and tick volume analysis on daily TF and make my way to the lower TFs. I better be careful this time around and not enter too early.
Good trading guys!
Market just opened… well sydney not much movement happening just yet.
Oh by the way there’s FOMC minutes of meeting this thursday! We might get some clue there.
Looks like gold is reaching a critical level…
PS: RSI14 on daily TF oversold and selling volume is getting weaker. I hope I’m not getting out of context here FE :20:
Here’s the latest developments on demonstration in Hong Kong — 5 Oct 14
The protest is gaining back its momentum as tens of thousands of protesters poured back into the streets around Hong Kong’s government headquarters after Chief Executive called on them to clear access to the complex by monday morning /6th/. “The most immediate thing: on Monday, entrances of government headquarters must be clear,” he said, in a televised address yesterday evening. About 3,000 civil servants were prevented from going to work at the offices on Oct. 3.
Student protesters seeking direct elections free from limits set by China’s central government have obstructed roads for more than a week, paralyzing much of central Hong Kong and forcing schools, stores and government offices to close.
Sporadic clashes erupted yesterday between pro-democracy protesters and those who say their occupation of some of the city’s busiest shopping areas has hurt local businesses and hampered transportation.
Demonstrators remained clustered on the roads leading to the government offices even after the founder of the Occupy Central With Love and Peace group of protesters, called on the crowds to give way.
As Chief executive himself announced today is the day or otherwise the deadline ‘the big day’ I suppose. So I wouldn’t go short on yen just yet. And I am waiting on Mikes screenshots that should give us a better picture as to where yen stands in midst of all this chaos.
And here’s some visuals and apparently as I read these kind of events do affect the stocks and S&P 500 wasn’t an exception. During this time Hang Seng index /HK benchmark index/ fell 2.6% steepest drop since March.
PS: I’ll also follow gold during this period to see if there’s any correlation , I’m thinking in times of uncertainty gold should rise as investors flee to safer bets. If you guys have seen my earlier post on gold reaching a critical support level, this might be a good time to go long if demonstration in HK escalates then again I don’t know if it has reached any COT extreme levels yet. It’s just an experiment, observation. Don’t go on trades based off of this guys… I’m trying to work out the intermarket correlation Peter has got me on to this one and I’m prety sure that I’ll have to thank him in the future but for now its definitely going to be a lot of work - observation. Hopefully my mind won’t get cluttered with excess information.
Then Peter has mentioned not to catch a falling dagger… I do think I have accumulated enough knowledge to start trading other markets - I mean the basics ABCs by reading your posts Peter. What an insight! you sure must lead a fund or two. Don’t be so modest! Peter :20:
A thought crossed my mind while I was reading your posts, and I’m curious what you have to say you mentioned in one of the posts that silver/gold ratio influences the stock market and how silver is falling faster than gold when they should move in tandem.
If silver is ‘falling’ faster than gold wouldn’t that mean the ratio would be bigger I mean the gap between the two will expand as silver falls faster therefore the impact will be that much on the stock market ?
And the fact that you mentioned silver is industrial and we are in a deflationary era , are you implying that the downward drift of commodities including precious metals haven’t done just yet and there’s more to come. Thus why its not a good idea to catch a falling dagger ?
If gold has more room to go down, where does dollar fit in with all of this ? Do they not have inverse correlation gold and dollar ? I saw that you posted a link earlier on how dollar rally might last for years… I think I get that now.
Seasonality for September and October
EURAUD: -377 pips.
EURNZD: -476 pips.
EURCAD: +137 pips.
GBPJPY: +490 pips.
So you would be slightly down on those trades.
As for October, nothing really stands out. It is the second worst month for EURUSD. Not surprisingly, its also the second strongest month for usdchf. That’s about it though.
Hi rookie,
I see that you are also looking into the metals now We can try to figure it out together. I do agree what you said about Peter’s information. Great stuff and good charts. I also looked at all of them and what I really like: his findings do line up great with my COT research! Peter showed the divergence that silver is heading down faster than gold; the COT shows that silver is almost at the very extreme level while gold is going down but is not quite there yet. I have not analysed the historical chart movements yet, so I do not know if gold and silver usually turn at the exact same time.
Still, with my little experience I see 3 scenarios:
- silver gets to the extreme level first and turns before gold.
- gold loses in the near future fast from its value to catch up with silver and they turn together
- gold does not reach the extreme level as silver does and they still turn together
I wish you guys a good trading weak and hopefully USD will get stronger than how it started the week. At least S&P did not disasppoint in the start of the week.
FE