My opinion is the budget won’t hold many surprises. Mostly/hopefully inducement (tax relief) for businesses to hire and spend. Money is flowing into the UK in its billions from the likes of Qatar which is all positive news, but I can’t get over Mervyn indicating further QE. Of course the budget might be outlandish but it does seem unlikely given the situation now and joke of last year.
It’s like the EMF and BoE want parity with the dollar in the short term (months). What are they thinking???
I understand the positives but the man on the street will just feel squeezed in the short term and for investors it makes other currencies much more attractive, short term. Keep an eye on the CHF over the next few days, I anticipate money to flow from Europe to there as a safe haven.
I expect the outcome of the above to provide the dollar with more upside. But we will see what happens, my sentiment can easily change, the market players are not daft and may take advantage of the above feelings. I will look to the technicals for confirmations but I intend to sell into the rallies.
Hey. I’m with you, with all the good reports from US, and Draghi in Europe doing nothing but stalling, I am not expecting a change in sentiment.
For this week I’ll be bearish on EURUSD until the following news releases: US FOMC I.R. release is on Wednesday (No surprises expected, should stay at 0.25%)
Home Sales is on Thursday (If housing sales rise as expected, this should cause USD to appreciate)
I haven’t looked at the calendar yet. Should probably do that. I am talking about the next couple of days.
Now, I realise I’ve pushed this thread in a new direction and I don’t know if I’m comfortable about that anymore. But I do think it was needed to at least remind the readers that there is a bigger picture than just market structure and fibs. You are lying to yourself if you think ICT does not think about the areas I’ve spoken about. He openly admits he does if you just listened to him once in a while. Sure, he doesn’t focus on any of it in his weekly reviews, but infrequently he does mention it. He states time and time again to look at the calendar for high alert events and to treat them as liquidity spikes. All good advice but slightly misleading. Just… just look beyond the technicals from time to time. Treat it as gulps of fresh air. Absorb your chosen profession like a sponge.
From a purely technical standpoint, taking into consideration market structure, the USDX broke down on the 4H TF when it broke below 82.60. Depending on how we go at the start of the week (some big Euro news on Tuesday [ZEW Survey]), should we break that 82 level, I’ll most likely be looking to get Long on the Euro, should we maintain bullish MS on the EUR/USD, if we get some nice divergence, the opposite would be true :).
The 3 bar swing low that formed last Tuesday, Wednesday, Thursday, on the Daily TF (USDX) was taken out on the Friday, I’ll be looking for some confirmation of this bearishness, otherwise I’ll be hunting shorts again on the Euro.
The sentiment does indeed seem bullish for the USDX though, for this to be true I’d like to see a run up in the EUR/USD at the start of the week with a possible sell off and slide back down again. However, to me it seems more likely we’re going to see the opposite (should MS maintain its current change on both the USDX and EUR/USD). The last time people started calling bottoms of the EUR we rallied to 1.37
Anyway, as usual I will be taking the news into consideration and watching the HTF MS before I take any trades this week.
Thrax, Peterma, Jonnycab, and a few others who responded with PM’s…Thanks a lot for your responses! As always, I am amazed by the time and consideration that people put into their replies to questions and I really appreciate all your input. As there are so many books out there, I was hoping to pinpoint a few that people with similar “ICT’ish” mindsets found valuable. I don’t mean to lump you all into the category of ICT disciples by any means…just to say that you see validity in some of his methods and apply some of them in your everyday trading. I have been trying lately to learn more by doing, than by reading and studying theory…but I am finding that I think I need to build my knowledge as well in order to increase my confidence. It is hard to put into words but it is similar to the chicken and egg paradox. My knowledge helps breed confidence, confidence breeds success which reinforces and validates the theories that I am learning. I hope any of that makes sense to some of you. Anyway, thank you all again for the much appreciated input. I agree with all your responses and use them to improve my “knowledge/confidence/approach.” On a side note, Peterma, would you have any recommendation for sort of a starter point for Bonds? Kind of a Bond Basics for Dummies for lack of better words? Hope everyone has a great remainder of the weekend and like they say in Chicago(except in Chicago it is in relation to voting) I hope the pips come “early and often” next week!
Simon
It’s mentioned above but worth stressing that the Cyprus bail out could be a real game changer for the Euro and the EU politically. By making a ‘bail in’ conditional upon a tax being levied on individuals bank deposits held in Cyprus banks, the EU has effectively taken a sledgehammer to the cornerstone of the western banking system - i.e. confidence. Theres much to be said about what has happened this weekend in Cyprus, and where it could lead, but one thing is for sure - it must have a big impact on the Euro and I can’t see how any of this can be interpreted as bullish!
That’s fine jonnycab and I agree with you, technically. I’ve been talking about a bull run for the last two weeks. We had it.
So, what’s next? I have a pretty strong opinion and it would mean posting my charts and revealing too much of my hand to really show it, so I won’t go there, but I stick with what I said: I expect an attack of 1.2930 on the EUR again, maybe gunning 1.3180 first, and I expect 1.2930 to crumble, given the sentiment. Maybe not without a good old punch up first.
For the GBP I expect an attack of 1.4890 again. Perhaps a run up and stall at 1.5230 first.
We will see. I am not under pressure to trade at the moment, but like I say, I’ll look to short the bull runs on either currency. I’m happy to wait days, if not weeks, before I enter again.
There are some chart pattern reasons too I support this, really based on my feeling about how the market attacks and fades chart patterns recently. Nothing scientific. I could get all ICT and post a dozen different levels and say ‘oh yeah, the market did just what I said’, but it’s less meaningful, anyone can do that.
As an exercise, look at the daily and try and find a ‘fair price’ for the last 12/24 months and identify if we are above or below that price, then use that as an equilibrium. Then, look for technical hints to sell above it and buy below it.
I really don’t mind this label and I’m very proud to be part of his clique. He’s acted above and beyond his call and he still is. I might be taking snipes at him in the odd post here and there, but that’s because I believe he’s reading this thread and I think he can take it. Like I’ve said a few times, I still love him and forever will.
I just wish he hadn’t had another moment. I hope this time he’s really worked it out of his system. Naughty boy!
And to be clear, I didn’t mean it as a shot against ICT or people who believe in his methods. I still consider myself a believer in most of his methods. I simply did not want to broadly paint a label on everyone who reads, contributes, or lurks on this thread and call them ICT disciples.
Leecote - the story about the books is true, I realised that many authors were not real traders, just selling books to ‘dummies’ like me, I have only 2 books - both about cot and both by real traders - see Thrax’s list.
The bonds I have an interest in is the us 10yr - nothing else - it helps me to focus.
I use this bond as an indicator of what the ‘investor’ is thinking - short term, how he is reacting to news, risk and sentiment, I try to ‘feel’ his sense of greed or fear - when I see the price falling live, like a stone, I can see him saying ’ wow do’nt want those safe things - what can I buy with a better return and maybe a little more risk’.
This is where ICT comes in, he has pointed out the usdx triad div as a ‘clincher’ in one of his videos for getting long, he then used the usual entry tools.
Dailyfx’s John Kicklighter has a good article on the present risk environment ( and also the Cyprus analysis)
In my learning curve I prefer to use current analysis, current thinking, and not material written some years ago, I have found that this dynamic, ever changing, market will simply not fit into what was written then.
The one thing I have learned about the 10yr, is seems to be more predictable that forex, many times I have thought that maybe I’ll try a trading it on a demo - now I’m thinking…
An example of 10yr’s predictability on the daily - who in their wildest dreams would not have sold at 133.00 (beginning of this month)
Image from barchart.com (ZNM13, daily nearest)
I’ve thought long and hard about my analysis I posted this afternoon, done outside McDonalds on the way back from the airport. I’ve also done a little digging around what the analysts are saying. What Peterma says above is golden advice: Look at current thinking.
So, what have I read, where has this left me? Well, it doesn’t change my outlook for the next day or two, but it has made me question how much of an impact the ‘disaster’ in Cyprus will have in the longer term. The upshot is I’ll be monitoring other countries such as Spain, Italy and Greece to see how their population reacts. I imagine not at all.
Long story short: Sell off some Euros over the next couple of days, but then look to buy the dips. Cyprus represents 0.3% of the Eurozone and in the grand scheme of things, their economy doesn’t matter to the rest of Europe.
This has also made me question what I think about the Cable. I guess I’ll steer clear of the pair for now and try to capitalise on the liquidity in the Euro.
Let the tape print out the story and be flexible. Monitor the technicals closely this week: Market flow and market structure.
Trading isn’t easy, I seem to be flip-flopping today. I feel a bit dizzy.
Thrax your analysis is spot on, they are already back pedalling on the bail out terms, but fibre is down and when you see all the protests etc on tv it will prob fall some more - usually below real/fair value.
Good analysis on forexlive, Cyprus on 1.1million people - but if they are all chasing you with pitchforks it seems a lot.
I think my sentiment can be summed up as confused and I will go so far as to extend that to the majority of investors. I’ve got a whole bunch of other analysis that I’m not going into that supports buying the dips on the Cable, but it’s going to take a structure change for me to commit to that pair. Besides, I strongly dislike trying to trade both pairs, I try to choose one and stick with it for the a day or two at a time. Entering into this week I choose the Euro because I anticipate there will be heightened confusion and therefore liquidity in it.
I’ve never seen a gap like this. I simply don’t know what to think of it. Wow.
Actually, it’s smack at the bottom of the support of the falling wedge on the 4hr. I presume it will only go up if it holds. It had only just broken outside of the wedge to the north on Friday, and whilst I anticipated a move back inside the wedge, I didn’t anticpate it to be like this. Jeez.
Have to admit that I went short at 20, not based on ICT teaching, based more on experience of the way things work out on the EU.
I am very mindful of the gap and the probability of it being closed at around 3000, so I am in a short term trade only, there may be a lot of media hype on Mon and Tue which could drive down fibre, so my plan is to ride this down, I know it’s not pretty but sometimes the forex works likes that.
My stop is above 50, the only reason is because it’s a recent Asian low, like I say, it’s not pretty.
