More than half of the traders are currently in long positions on EURUSD, as always retails are against the major fundamental drivers, I recommend only selling EURUSD, the current retail longs are around 80% and they clearly added to the longs since the market open today where they were sitting at 71% longs, on the chart above you can see the selling zone and the target.
How do you determine long-short ratio by only price action? Do you have some other sources of information, like volume from exchange-traded products where underlying asset is the currency? The zones your draw is a product of your imagination.
The zones i drew yes are just simple supp/res, the chart is only showing some techncial analysis, everything else is done outside the charts, fundamental analysis, sentiment analysis etc
Nowdays you can find the sentiment ratio on any broker, you just have to know how to work with it and how to collect the data, i personally built an algorithm collecting all the retail sentiment from the web, then the data is organized by start of the month, start of the week, start of the day and current, that way i can see the trapped volume, how the retails are behaving during the week etc…
Anyway i never base my trades purely on sentiment analysis, i only use it to confirm a fundamental bias, so let’s say fundamentally i would like to be short EURUSD like in the current trade then i look at the retails and what they are doing, and use them to time my entries.
Just a small observation on the S&P500, we run a small research and it looks like the current price action on the S&P is mirroring the 2013 price action, you can see in the first chart above the grey line is 2013 historical chart and the orange line is the current 2019 chart, it clearly seems to be mirroring the 2013 movements, these type of things do happen and if nothing shakes the current environment then the correlation might continue.
This means that for the month of October we could see a small dump followed by the beginning of an uptrend lasting until the end of the year, worth keeping an eye on.
The second picture is showing the 2019 chart and above it, it’s drawn the 2013 price action (transparent yellow candles), we plotted the buying zone and the potential target for the year-end is 3290.
EUR USD retails now turning short while fundamentals turn bullish…
We got out of our EURUSD shorts around the target trailing the stop, now at the beginning of the week retails were buying EURUSD, up to 80% of them was on a long, most of them took the loss and are now turning to the sell side, up to 70% now are selling, while at the same time the fundamentals turn bullish.
Both key ISM surveys are pointing to a major slowdown in US growth rates.
A weak NFP today seems to be certain, will likely add fuel to the repricing of the Fed seen this week hence USD NEGATIVE.
With retails now selling and US data pointing to weakness we suggest only buying EURUSD for now.
I personally did close this trade around break even, but eventually it did play as planned, price is now around the 1.1150 handle and i would suggest to close any position and remain neutral for now.
This is a chart from last week Friday, the buy bias was formed on positive news on the trade talks and the tensions in middle east after Iran’s tanker was hit by a missile, i did enter a small buy position targeting 57.00
S&P500
The S&P500 is playing exactly as mentioned in the previous analysis, following perfectly 2013 price action, the buying zone worked nicely and i now see a break of all time highs coming in the weeks ahead, we can expect indices to benefit from the “risk-on” flow, we are heading into the Christmas season which is known to boost stocks, and with Trump heading into the elections he will do “whatever it takes” to have his S&P500 at all time highs, at the same time the FED is slowly but steadily cutting rates which will help stocks rallies.
On the chart above you can see the plan for S&P longs.
Crude Oil reached target, we personally got out of the trade 53.30 for a small loss to keep the risk of the portfolio in check, it eventually went to target, i don’t see it going much further from current levels so take your profits.
I find that this is very nice thread. I like your posts as there is something new to learn. Thank you for your share. I can see that break is coming, but I wanted to ask you how do you determine that the break will be on up side? Thank you
I would say it’s safe to take the profits here to avoid a sell off in case the negotiations between China and the US escalates over the Hong Kong bill.
We are entering a strong period of seasonal flows, GOLD tends to run higher as demand picks us from Dec 23rd and keeps increasing through January, you can see this on the chart by yourself too, look at the past years for GOLD and you will see rallies in prices from exactly Dec 23rd, i have already set a few pending order and will look to add trough January.
We have two scenarios here, first one is a selloff of safe heavens given the positive outcome of trade talks, which would allow us to buy at the cheapest price, second scenario is an immediate break of the wedge and resistance which would turn into support allowing us to buy at the retest, we will not deploy capital until one of the two scenarios materializes, trade safe.
The retail data we use is taken from various brokers and then we make an average, for the seasonality we take commercial flows of the previous 10 years and then build a chart with that, for more info on the tools we use feel free to check the “BeSomebodyFX Terminal” on Google.
USD 
retails against the major fundamentals…
