increasing bond prices = increased! (not like increasing in the future, but increasing right now!) demand for usdx = stronger usdx
kuzia is correct
That is the textbook answer, and indeed how it works in a stable environment, but sentiment in the real world is forever changing and even Lori only gets a true idea of it by talking to the Credit Suisse FX dealing desk (…or so he has said). With all due respect to Michael (as he has been clear and enlightening on a number of trading areas, for which I am always grateful), his interest rate charts and presentations have been contradictory with little background as to his thinking.
I believe the ‘safe haven’ factor can override the yield seeking advantage at times, and money can flow out of currencies like the Euro, and into US Treasuries (which pushes the USD up along with Treasury PRICES). The smaller the differential, the more likely this is to happen as the need for safety is far greater than a 0.25% interest rate advantage. I assume that parking huge amounts of money in cash is not an option that most large scale institutions are able to take.
That reply was to sKractch, but somehow the original post was lost.
Generally foreign currencies chase yield, most brokers’ feeds are bond prices, as bond price rise so their yield falls.
At present the bond market is behaving differently - there is greater demand from Japanese investors who are seeking better yields than their own Govt bonds - their Govt is beginning a purchase programme of their own bonds which may reduce their yield, there are better profits to be had in US , for now.
This is one of the reasons that usd/jpy is behaving contrary to the usdx over this past few days, it is also part of the reason for US bond price increases (again supply and demand).
How long will this situation last? - now that’s the question.
so for the mentally challenged (like me) please answer the following multiple choice question:
select the right answer:
A) generally, if US10Y Bond PRICE goes up - expect USDX to follow its way up anytime soon.
B) generally, if US10Y YIELDS go up - expect USDX to follow its way up anytime soon.
Which one is correct and which one is false?
A! give me the million, now!
A - Usually I’m reluctant to buy fibre if I see a push up in 10yr, and vice versa 
Having said that all the fundies were pointing to an increase in fibre for nfp - the adp numbers, the re-write down of the expected payroll numbers etc etc .
1 million for topfroxx… Ill put it on the list… but before you get excited… it is a very long list, and your million is on the very bottom;) maybe oncle ben can print you a bunch instead;)
No, generally foreign currencies chase safety… then yield
Bond buying reduces yields…I understand the theory, but let’s look at the evidence.
Bloomberg US 10 YR chart + Dates
QE1, December 2008 to March 2010
QE2, November 2010 to June 2011
QE3, September 13, 2012
JGBs seem to be wobbling already!
No, [U]absolutely[/U] Foreign Currencies chase [seek] yield… which in turn reflects implied “safety”. That is the money cycle.
:57:
That should have a “?” not a “.” I was asking the viewer to ponder what it would suggest as it relates to the US Dollar. To further the inquiry… how did that video end… what question did it raise?
:57:
Can you make this clear? In the original video you were asking a question, and not making a statement? You made a grammatical error?
Aha now i understood Michael, thanks for clarification
If that is true then you should invest on Greek or Venezuelan Bonds… or maybe carry trade USD/VEF
[I]Usually[/I] high yield instruments are inherently risky, because they need the flow of investors.
The late surge in the yen crosses is not because of rate differential, it is because the monetization of debt.
The first definition an investor/speculator must learn… is Capital Preservation, but what do I know… I am not a Guru and only experienced two inflationary cycles in my country.
hmm now that the 90’s day job pizza delivery was brought back up it reminded me of a legitimate question i have/had for ICT.
If i’m not mistaken, you said back in the late 90’s or whenever you ran account from 5k - 90k in 3 months and was making crazy returns way back then. Then you said that you quit all your jobs to become a full time trader (equities/bonds?) and have been doing so for many many years right?–which i assume meant back in the late 90’s or early 2000’s.
And also that you have only been trading forex the past few years (5 or so ??) because thats when you learned about chris lori and his time zones/ kill zones etc etc… but in an old post from years ago you said that you had a day job while trading forex, because you woke up at 2 am to set orders in the cable pair. then went back to bed for your 9-5 job??
So I’m confused on the timeline here, I thought you’ve been a full time trader making 100’s of thousands of dollars since the 90’s but still worked a day job all the way up until just a few years ago??
This is a serious question so i hope everyone doesnt start jumping on it saying i’m being disrespectful or post gets deleted or whatever else may happen …:33:
^^^ post was from 2010 , and the highlighted part at the bottom is the thing i’m referring to
Lol my bad, the post about dominos was made yesterday in one of the other 40 ICT threads i was catching up on:p …i’ll just leave the question here though if it doesnt get deleted
“30% a month is a pretty good return” lol, wow…
I ran into this guy in chat and I guess he taught traders at banks or something, but still that’s a pretty ridiculous gain to claim to be making month in, month out. Been getting a feel for the skill level on this forum, and I’d be really surprised if any more than 2 people are making more than 30% per YEAR. In an industry where your own expectations often dig your grave for you, that’s a pretty toxic idea to be planting in the minds of these retail folks
From what I can see, it seems as though everyone is getting hung up on the terminology and their preferred way of expressing what they perceive on the charts. Look at late July 2012 to the end of the year. USDX down. Fiber up. Cable up. Yen down. Now look at the 10 Yr YIELDS. US 10YR up. GER 10YR sideways. UK 10 Yr up. J 10Yr sideways. Now look at the SPREADS. GER-US spread widens in favor of the US yield (0.24%). UK-US spread widens in favor of the UK yield (0.21%). US-JP spread widens in favor of the US yield (0.27%). That is the reality. So money flowing out of USDs into Euro would be chasing the stagnant yield? Hmm. But money flowing out of USDs into Cable is chasing the yield advantage? Hmm. I think I agree with yunny1 when he says that the sentiment is geared to safety, and not yield when it comes to Cable&Fiber AT PRESENT. Safe haven flows to the USD and treasuries were being unwound in the second half of last year causing the US yields to rise. This is, though, the way that Michael expressed it in Pt3 of his trading series…‘Risk on Market: Bonds No Demand. USDX Declining’. So let’s not get hung up on terminology!:44:
‘There are relationships between markets, one moves based on the movement of another.’
I’ll give you another relationship to argue over…
The following is referencing the s&p day trading.
‘Price was in a trading range, going back and forth … then large selling pressures hit the market’
… was showing that stocks were considerably weaker than bonds and that a trader could expect a negative unemployment report.
Have a look at the S&P pre Friday and look at bonds.
Both quotations above are not some random analyst, and they were not about last Fri, Larry Williams was talking about June 2011.
bones, could you copy and paste your post to the thread called “ict”, i think it’s in the melting pot. and then delete the post in here. thank you