Nice call!!
I can picture the big “T” and his kids sitting around the oval eating happy meals, and I can hear it now…
“Ok it’s dropped on tariffs, too bad so sad. Kids… does everyone have their “longs and TPs” on? I’m going to tweet the China tariff delay. We should have price spike in 3… 2… 1!”
KC
… can’t tell be there aren’t any “insiders” profiting from these tweets.
Hmmm, things didn’t go quite according to plan!
Went short on SP500 again towards the close yesterday, and when it finished on the lows I decided to leave half the position overnight as it was almost definite that the Far East would continue the decline - afterall, why would they buy it!!
But logic seldom prevails in these markets and we moved higher during this morning’s London session and the balance got stopped out almost on the high of the move.
But, anyway, once the decline continued, I sold a double size position as a good risk trade. Fortunately, I took the profit on both these after 100 pips and thus recovered the stoploss from the half position and a nice chunk in addition from the other 1,5 positions. But it was a sweat 
- and I’m getting too old for sweats!!!
But it gets scary when one sees how things can reverse so fast and if I had left these positions they would also now be in the red…whether a situation ends up with good win or an upsetting loss is dependent on so little, it seems! 
I don’t know about anyone else but it seems survival in these markets nowadays is becoming more an issue of lucky timing than skillful level-setting. The markets jump on random speeches, tweets, statements and so on.
I haven’t been trading currencies like EU and GU for some time, but even looking at the charts for these is enough to put me off.
It’s making me nervous! 
Its Friday and little change in SP500 overnight. The current hourly system cycle closed out this morning and so now waiting for the next signal that a new cycle is starting.
Technically, the system changes simultaneously from one direction to the other but only if certain other filters are in confluence. In this case the RSI is still negative and negates a buy at this stage.
Max pips on this cycle was 886 with a max drawdown of -16 pips.
One can see from the price movements yesterday (in the red rectangle) the unusually excessive volatility on the hourly chart yesterday compared with the Mon to Weds range. This seems to me to reflect the current divergent pressures of a seemingly strong and healthy US economy v. suspicions of a global recession on the horizon.
The news was full of the conversion of the US interest rate yield curve into a negative form, where longer term money is cheaper than the shorter term. This has historically often occured prior to recessions.
So the downside remains the vulnerable direction and is still dominant on the 4-hour =>Daily charts, whereas the 1-hour, as mentioned above has turned neutral-positive. This situation suggests the possibility of some upside potential into the close today, but the trade risk assessment associated with this is not good whilst the RSI is still negative.
So there may be a later trade in US time, but otherwise I am done for this week and thankful for a positive end result in what have been some choppy stormy seas this week!
And there indeed was a later trade in US time.
As anticipated, there was very little upside following the first signal (blue ring) whilst the RSI was still negative, but then came another signal (the red ring), at almost the same price as the first signal a few hours earlier. This new signal came with a strong bounce off the low of the same candle - and this time with a neutral RSI. And that made a probability worth buying into.
And, as usual with the B&B set-up the target was 150 pips, but I was in a little prematurely and so, using the same theoretical level from the candle close, I hit target in the next candle with 122 pips instead of the full 150 - and with only a -12 pip pullback from entry.
I had fine-tuned the TP here as it coincided with the 1-hour 200 SMA. I was conscious of it being Friday and generally a bit slow and that the longer TFs are still technically negative - even though price looked firm enough to go higher than this (which it has) - but the B&B is a fixed-pip basic earner, not a trend follower (I have to keep reminding myself of this!).
Well, I doubt there will be another turn this evening and I don’t enter trades into the weekend, so this is now it for the day and week. A good end to a positive, but mentally-challenging, week - strategically, the week has been very much like a chess match (especially the patience today) and I’ve enjoyed it and the brain cell is now in need of rest! Happy weekend to anyone that might actually be reading this!
One of the high profile issues this week was the brief inversion of the US interest rate yield curve. Whilst the yield curve generally considers the cost of money from one month to 30 year duration US bills, notes and bonds, one of the closest watched benchmark comparisons is the 2 yr v. 10 yr rates. Here is a chart showing this week’s inversion:
So why is this important?
Its main significance is that every US recession since 1955 has been preceded by an inverting of the yield curve and therefore this week’s reversal may also be an indication of an imminent recession occurring.
This is of concern in the current climate due to the signs of economic slowdown in other parts of the globe and the uncertainties arising from Brexit. However, maybe things are not quite as straight forward as that and there are significant differences in the management of economies in today’s world compared with the last century and, indeed, from the lessons learnt since 2008.
It is relevant to remember that earlier recessions followed a yield curve inversion by even 2-3 years and this week’s brief inversion is not therefore a sign of an immediate collapse into recession. But it does indicate certain possible events in the near future.
US notes and bonds are normally fixed rate instruments and therefore when increased buying raises their prices it creates a corresponding inverse fall in the actual interest rate earned from them compared with their nominal fixed rate. Therefore increased buying depresses the long end of the yield curve,
However, in principle, the longer term interest rates should, traditionally, carry a premium over short term rate to reflect the impact of future inflation. So an inverted yield curve does suggest something “abnormal” is going on.
But it is worth remembering that the US yield curve has been extremely flat for some time due to the outlook for a prolonged period of low inflation rates. Therefore the chances of a small and brief dip into negative territory is greater than in previous times and perhaps not so significant as a barometer reading on the state of the US economy.
Although the negative data in other global markets is pointing to a weakening trend, the US market is not yet following suit. For example, retail sales and wages are strong as well as employment. These are not signs of a faltering economy at all.
At this stage, it would seem most likely that the inversion of longer term rates below the short term is mainly reflecting the anticipation of further cuts from the Fed - which would bring interest rates back into a normal shape of a gently increasing curve, reflecting a strong economy and low inflation.
But one cannot dismiss the situation globally, and when Germany also announces it is introducing debt-related measures to boost its economy, then we can be sure there are serious problems around.
We could imagine 2 scenarios:
-Mr Trump’s aggressive tactics in the form of trade negotiations and sanctions will successfully lead to the US resuming its unopposed economic and political supremacy in the entire world boosted by a strong trade deal with the UK and its partners as well as reigning in competition from other superpowers such as China such that growth in those areas means growth in the US as well. This scenario is also boosted by the US being almost self-sufficient in energy.
-Mr Trump’s policies of attempting to force other economies and sovereigns to toe the American line pushes those economies into a weakening situation that turns into an irreversible spiral into recession that inevitably backfires into the US economy, too. And when recession fears hit the US equity markets, which are now at or near record highs, then the ensuing collapse there will be fast and furious and will have a catastrophic impact on other global markets which are currently already weak and vulnerable.
The main hope at present is that the US-China trade disputes can be resolved satisfactorily and soon, and that the Brexit upheavals and uncertainties will also be settled quickly and relatively painlessly. Afterall, the UK is the 5th largest global economy and the EU is another giant trading entity.
From a trading perspective, one can expect the roller-coaster to keep on rocking and rolling - let’s just hope no economies end up sea-sick and falling off the ride…
Been a bit busy this week with last of the summer visits, etc. But the SP500 has been relatively peaceful anyway.
But the trusty B&B method still managed one trade per day. Monday’s was in fact a continuation of the move started on Friday and Tuesday’s was an overnight move started late in the NY session. They were both 150 points each.
Today’s trade started early but I missed it through being in the car and entered nearly 2 hours later and 60 points higher than the entry point. So I only got the remaining 81 points from today’s move.
Three trades, no losses this week so far.
And so the seasons start to change once again. The nights are getting darker and the nature is weary and its clothing is looking threadbare and melancholy:
and the autumn skies are filled with powerful cloud formations:
Autumn - oh what a wonderful season!
Its been a boring and uninspiring week on SP500. As can be seen from this 4-hour chart.
We have been inside only the top half of last week’s range all week and any attempts at the high have been weak and fallen away again quite sharply - only to be met with more buying. But whether that buying is real, long-term or just technical “on the day” is impossible to say.
There were no trade signals yesterday and today looks just as flat - so far. But there is always a message in the latter half of a NY Friday session, so maybe later…
But autumn is a time of powerful sky patterns and at least there have been some lovely sunsets this week:
We seem to have a sell signal on the downside here, so I have given it a go and see how it turns out.
We had a similar down spike yesterday that immediately reversed into a steady climb back. But the fact that we now have another spike down shows inherent weakness. We also have a slight cross on the RSI, albeit microscopic!
But it has been a great month so far, so I am happy to risk this somewhat uncertain sell trade - no great expectations here.
That one didn’t go as hoped, but not really unexpected somehow - I just thought it unlikely to get two reversals like that. Still, thats 4 wins/one loss for the week
Huh huh! How the markets sometimes favour the brave and the foolish!
So it collapsed again after stopping me out - so what more can one do than a new, doubled-up sell position! - and then an immediate collapse further, TP hit, and the stoploss covered and another net win in the bag!!!
That is definitely IT for this week! 
Its been a while. Over two weeks, I see. But nothing much else for entertainment than the UK House of Commons. Would be hilarious if it were not such a serious issue.
SP500 has been in a gentle rise and there’s been nothing much to say and do but buy and sell higher. Makes money but boring to keep repeating…
But it changed yesterday in the charts and the downside took over - and so it continued today - a morning short and cover and then a bigger sell and cover in the ear,y afternoon. Nice pips but not so much explanation behind the moves - but is that anything more than an afterthought on whats has been rather than where we might be going…
The same old 1H chart but with a revamped guppy style GMMA -look. I get bored with the same old look.
Funny thing, how one’s mind can be manipulated as to what it sees! There has been so much talk recently about the future of global food sufficiency and eating insects and even growing protein in basement laboratories from air, bacteria and electricity. And then when I happened to see this recipe in a magazine, what did my mind see? Yes, I saw fried worms on fish!!!.
Interesting that over half the gobal population now apparently live in large towns even though there is so much uninhabited space - but maybe the natural world is not so very different, maybe there is a strength, or at least a comfort, in living in a crowd there, too! This one I call Mushroom Manhattan:
But we are getting into autumn now and there fewer hours to enjoy the natural light. An early evening lake ride with a fast setting sun:
Question is though, is it worth going short SP500 overnight! Stills looks a little vulnerable…Will have to think about that.
I know I like my MA’s and shouldn’t really comment on other people’s use - but I came across this and, well, it seems the only thing missing amongst all the lines is the price itself! 
How does anyone trade such a thing? (I think I can safely ask that since this was published about 12 years ago - I wonder if the trader concerned is still trading this! 
)
It really gives me an unwell feeling just to look at it!:
I can’t help wondering are all the various indicators added to substitute for something else that is inadequate? A futile search for the 100% Holy Grail system instead of a high probabilty method with sound risk/reward management? There must be a lesson in this somewhere for anyone thinking that losses just mean heaping on more indicators…
Maybe not! 
The US market managed a sharp spike to the upside just prior to its close (red circle) and that put paid to any thoughts of going short overnight.
And there was an early morning signal to go long (green circle) and so I have bought the BB method looking for 150 pips on the upside. I don’t generally like early morning trades as sentiment can change remarkably during the London session and I am not overly hopeful about this one- but let’s see how it goes.
Yesterday, John Bolton either got the sack from My Trump - or resigned - depending on whose view one gives greatest credibility to.
Personally, I think this is probably quite bullish news. We have an election on the horizon in the US and Mr Trump has set a lot of fires burning under a lot of cooking pots over the last three years but has not produced any decent meals from them yet:
Mexican wall, Venezuelan power change, Iranian power change, China trade war, North Korean denuclearisation, Afghanistan troop withdrawals, peace talks with the Taleban…
Seems a lot of the blame may be thrown at Mr Bolton for a lot of these prolonged battles, which, if not seen to be progressing soon, will provide the opposition with a lot of mud to throw as the electioneering gets going.
So I am beginning to anticipate some reconciliatory actions from Mr Trump in the near term and hopefully will result in some optimism in the stock markets and some first aid to the ailing economies around the world.
Well, I got up early here at the cabin and shared these thoughts with my “neighbour” who told me what he thought of it all:
–before gliding serenely off for breakfast in the morning mist with his family…
Well, well, well! So Boris Johnson’s suspension of the UK Parliament is now found to be unlawful, according to Scotland’s highest civil court.
“It was to be inferred that the principal reasons for the prorogation were to prevent or impede Parliament holding the executive to account and legislating with regard to Brexit, and to allow the executive to pursue a policy of a no-deal Brexit without further Parliamentary interference.”
"The UK government had failed to show a valid reason for the prorogation…The circumstances, particularly the length of the prorogation, showed that the purpose was to prevent such scrutiny. "
“The only inference that could be drawn was that the UK government and the prime minister wished to restrict Parliament.”
Is there anyone or their dog that didn’t already know this, one could ponder!
So at least the courts have not caught the modern disease of “democratic dictatorship” so rampant amongst politics today. But now to see what the Supreme Court says next week about it! 
Well it took its time and bit of a bumpy ride, but at no time during the day was there a serious challenge to the MA bands. Another win for the BB method!
Last night saw some “ground bait” thrown on the waters of the US-China trade dispute by both the Chinese and the US. Only tit-bits but enough to attract the big fish and build up an expectation and appetite for bigger things to come.
China removed a few US products from its list of tariffs, whilst the US postponed the date of implementing additional tariffs from 1.10 to 15.10. These offerings ahead of the new serious talks due to commence in October.
The SP500 nibbled well and has nearly reached the record highs of 3026 set in July this year.
Is this the first sign of a new "reconciliatory US President"? who "got things done"?
This continuation was reflected in the hourly charts that already turned bullish at the start of this week:
MA bands clearly separated and even expanding…good signs of a follow-through.
From an investment point of view - not a BP trader environment at all(!), it is interesting to look at this same MA set-up on a monthly basis - this current up-move started in the US almost 10 years back - and has continued with hardly a ripple of serious challenge ever since!
But one has to smile just a little! 
Yesterday Mr Trump says about the Chinese:
“I deal with them and I know them and I like them”
Does this mean then that all the US companies that MrTrump recently "ordered" to leave China and set up elsewhere, can now shift all their factories back to China? (at least for the next month, anyway?)
And so the upside continues today with the US SP500 index - but not without some drama on the day.
The Far East took it up to its highs close to 3020, but still fell short of the record highs from the summer.
From there, it was taken back during the day to the psychosupport at 3000 before climbing again.
A difficult day to judge which way to go but I bought it anyway on a close back above the MA bands. But the very next hourly candle happened to be such a real see-saw that I closed it for a mere +33 pips rather than risk a loss.
I would/could have gained more by waiting but I think this is a good example of applying commonsense override to a TA set-up. It is always good to remember that there is always another trade around the corner. If a trade is opened and subsequently does not perform as anticipated, then it is worth considering whether to dump and wait. In this case there were clear signs of possible weakness on the day and the trade was currently in profit - so I took it and wait for the next set-up - why complicate things or take unnecessary risk!
It is fascinating how one’s concepts about, and attitude towards, an issue can change so rapidly simply because a different perspective is applied to it.
Like everyone else, I am used to seeing food products for sale at reduced prices in supermarkets as they approach their “sell by” dates, but I rarely buy them simply because I prefer to always buy fresh goods, and I even always check the dates to ensure I get the freshest available.
But now one of our major supermarket chains is starting a campaign to reduce its food waste as a move towards helping environmental issues. It is packaging various product groups into parcels as they approach their end-dates and selling them for heavily reduced prices in order to avoid eventually throwing them away.
And as a result, instead of walking past these packages as just “bargains for the poor” they have now taken on a conscience-pricking role that creates a guilt feeling about what is in your shopping trolley as you pass them by!
I like the concept and will willingly participate in it. And, hey, it saves a little money, too! 
