Well here’s an intersting article found this morning:
Bear market retracement implied by market breadth - Financials - Futures Magazine
Well it’s interesting for ME anyway i.e. it’s what I would like to BELIEVE is going to happen anyway!!! LOL!!! But I’m also fully aware that if I looked hard enough I’d find any number of articles with contrarian views!!! LOL!!! And I guess THAT’S why one should always ignore stuff like this and simply trade your system(s) (that was a ‘reminder to self’)!!! LOL!!!
Regards,
Dale.
Edit:
I’m no longer short the NASDAQ by the way i.e. it turns out that I WOULD HAVE INDEED been stopped and reversed by this time (because when I noticed the trade that I thought I’d missed I’d noted the order prices BUT FORGOT TO COMPENSATE FOR THE SPREAD on subsequent bars while examining the perceived missed short trade)!!! CONCENTRATION Dale!!! Anyway: I made $5!!! LOL!!!
Market participation in this latest rally is small as shown in the volumes the past while. Everybody knows its a fake pump by the Fed via QE2 and will probably end in tears but while the Fed keeps churning out the free money to pump into stocks like Apple and Netflix that’s the only game in town for the Primary Dealers. Until it isn’t and the wheels come off.
But trying to call this inflection point is tough so long as the POMO bandwagon rolls on - don’t fight the Fed as they say. The economic fundamentals don’t match up with the market valuations right now but can’t blame the PDs for throwing more money at it as the Fed has ensured that supposedly risky stocks are basically risk free and they have balance sheets in dire need of repair. Leaves the market very twitchy though. I don’t know what the stock market is anymore really. It’s not a reflection of a fundamental analysis of the constituents that make it up that’s for sure. But hey it’s POMO twice a day lately so go long and all will be well… probably.
Good morning,
Ah you’ll retire soon then Dale! 
Not on $5 on a trade that I should not have been in in the first place!!!
Concentration is important (at least it’s something that I KNOW that I personally have to ‘keep tabs on’). If had a DIME for every trade that I’ve missed in the past few years I think I WOULD be able to retire!!! LOL!!! There has been more than one occasion where an instrument has started to trend, I had a valid signal at the time, but I wasn’t in the trade and I’ve asked myself many times ‘what the HELL were you DOING at the time’ (and the answer most times has been either that I was on BabyPips over analysing something or attending to some or the other personal crisis like taking a dog to the vet or something)!!! LOL!!! But I think I’m ‘cured’ (I hope so anyway)!!! At least this week I’ve checked my charts for signals BEFORE logging in here!!! LOL!!!
Anyway: so much for my ‘theories’ (and thank goodness I realised my erroneous trade in time) i.e. I’ve gone from loads of short signals to NO short signals on these things. Only my long S&P trade is still ‘good’ but even I’m starting to get the ‘jitters’ now i.e. these things have run up HARD and as PipBandit has noted (well at least I THINK that’s a part of what he is saying) (and in my rudimentary understanding of market fundamentals) it’s been without the committment of the ‘smart’ or the ‘big’ money (I’ve heard that and read that on more than one occasion in the past few weeks). But then it’s more or less ‘analyst flannelling’ (although ‘lack of volume’ is a statement of fact rather than ‘opinion’ I guess). I think the trick is is to NOT listen the analysts i.e. YOU follow YOUR system(s) and let everybody ELSE listen to the analysts!!! LOL!!! ‘In a perfect world’: your trading system will give you a signal and the analysts will validate it by ‘spooking’ everyone else!!! LOL!!! Who knows.
As far as retiring (on a serious note): I’ve wondered about that many times. I don’t think that this is a business that you ever retire from (well not unless you run out of capital and even THEN you’d probably ‘make a plan’)!!! LOL!!! A common thread I’ve noticed in all the interviews that I’ve watched (well: with floor traders anyway): they’re pretty much ‘disfunctional’ if they’re not at work!!! Of course: the GOOD thing is that this is one of the few businesses in the world that you really do NOT HAVE to ever retire i.e. there’s no HR Department to give you your ‘walking papers’ simply because you’ve reached a certain age!!!
Hey PipBandit,
Thanks for that insight.
end in tears
That’s one of my favourite phrases!!! LOL!!!
For better or for worse: I could simply just not ‘force’ myself into getting into a new long trade on any of these indices right now. It’s just a ‘feeling’ (and I know that should not be a factor ESPECIALLY with someone who believes TOTALLY in pure mechanical / technical trading systems but who knows: maybe at some point in time ‘the penny’ DOES drop). We’ll see I guess. The only ‘sure thing’ in this business (I guess) is the fact that nothing goes up or down forever!!! LOL!!!
And speaking of nothing going up or down forever: what’s the ‘deal’ (‘fundamentals’???) with EUR/AUD??? THAT is the only type of forex trade I will look at i.e. it’s just been going DOWN and DOWN and DOWN (and it’s WAY past a TEN YEAR low as per a chart I posted here previously). I know the price of Gold is playing a part and I guess EUR weakness as well but if you take a look at the Gold chart: Gold has at least ‘paused’ now and then whereas this pair has gone down without even so much as ‘stopping for air’ (take a look at the weekly and monthly charts)!!! Any ideas??? (I promise I won’t ‘hold’ anybody to their opinion if they’re wrong)!!! LOL!!!
Regards,
Dale.
Well here’s something I found this morning:
Stansberry’s Investment Advisory
MAN: is this guy a ‘prophet of doom’ or WHAT??? That being said (and if you can get past the ‘self gratification statements’ and the marketing): there are some very interesting points made. Oh and if you find that you cannot stay awake long enough to watch the entire video here’s a hint: simply try to navigate away from the page and then click ‘Cancel’ on the IE warning and then the entire script is displayed in text format with charts etc. LOL!!!
And once you done there go to his (their) website (Investment Research, Stock Analysis, Investment Advice, Newsletters) i.e. there are some very interesting links to articles by the likes of Marc Faber and some CNBC interviews etc. etc. etc. (to the right of the page). I’ve no idea who this chap is or who the company is so I obviously cannot vouch for his / their credibility. That being said: this is what I was saying in my previous e-mail (above) i.e. enough of this ‘talk’ and the indices are BOUND to at very LEAST correct (if not worse) at some point!!! LOL!!!
But alright: I’m ‘making light’ of this. There are some compelling arguments and statements of fact made in the video / script.
I don’t know: ‘what do ya’ll think’???
Regards,
Dale.
(What all of this has to do with including or excluding the spread I have not the ‘foggiest’ but seeing as this thread went WAY off topic quite a few posts ago I see no reason to interfere with its ‘momentum’)!!! LOL!!!
I can understand that feeling. There needs to be a correction really but so long as the Fed is removing risk from the stock market for the Primary Dealers and HFTs they’ll keep churning it up bit by bit. Why not? It’s free money for them after all. However if the Fed ever decides to pull some of this liquidity out of the market (not likely) or if the Fed loses control over rates (more likely) then we could see things correct in a major way and it’s a case of who’s going to get left holding the bag come the end. This is what has the remaining market participants all looking sidelong at each other wondering who’s going to twitch first but not too early so that they get burned by a continued churn up.
EU periphery bankrupt, price of gold good for Australian mining companies, unemployment in EU is 10% vs just over 5% in Australia so consumer demand is stronger, housing market hasn’t collapsed in Australia, China still going strong (or appearing to) which is Australia’s primary market these days, etc. All add up to one-way traffic. Won’t significantly change in my opinion until either the EU gets it’s arms around the debt crisis or China decides to tighten by raising interest rates. AUD will crash hard on the day that China tightens but when that will happen I’m not sure. Inflation is getting out of control in China but they don’t want to tighten as that’ll just bring even more capital inflows into the country and potentially just cause even more inflation. Could also have a severe effect on their building industry which has gone totally parabolic with building stuff on cheap rates. But if foodstuffs, etc. keep going up they’ll not have much choice or riots will break out.
Thank you for your insights PipBandit.
It’s that type of understanding and insight that I lack and I fear it’s too late to learn i.e. hence my belief in purely mechanical / technical trading systems (then again one is ‘never too old to learn’ although at this point in time it will be ‘a cold day in hell’ before I base a trade on MY understanding of ANY type of fundamentals)!!! LOL!!!
Regards,
Dale.
Don’t worry about it, now you know about the dog leg, you will realise how little you need to know, it’s 10% Psychology 80% dog leg 
LOL!!!
I’m not sure about those percentages though (I’ve had this argument somewhere before)!!! LOL!!!
It’s not ‘rocket science’ though let’s face it i.e. have you looked at AUD/NZD, EUR/CHF, and NZD/CHF??? Same ‘deal’!!! I guess it’s a bit different when you look at a ‘bigger picture’ (and I’m looking where I should not be looking but MAN those are some nice strong trends just DYING to reverse at some point)!!! LOL!!!
Regards,
Dale.
EUR/CHF is in freefall due to the EU conditions and the perception that CHF is a “safe” currency. CHF is growing stronger against all currencies right now as there’s clearly a perception amongst traders that all is not well with the economies of the major currencies despite that ongoing melt-up with the stock markets.
Currently it’s not possible for market participants to register their worries about the global economy in the stock market as the Fed is going full retard with QE2 and making shorting the markets virtually impossible. So as I understand it we’re seeing the market hit bonds and plowing into safe currencies. Gold, another safe haven and hedge against inflation, would probably be a lot higher than it currently is if it wasn’t for the blatant price suppression being carried by one or two large financial institutions who raid the market regularly between 9am - 11am EST (or after the Globex close during thin trading conditions if they’re feeling especially cheeky).
If these worrisome trends start to dissipate CHF will start to weaken again but, personally, I’m not sure for how much longer the charade can be kept going. Every forecast that ticks up the stock market is subsequently revised down at a later date (though the market doesn’t go down with the lower revision) and it’s just a relentless churn up that’s not really doing anything other than allowing major financial institutions to try and repair their balance sheets. Unemployment remains at 10% in the EU and US. The middle and working class are getting royally squeezed as there’s less jobs, there’s pay cuts and the price of everyday things are actually increasing so people have less disposable income for buying stuff. Using the stock market as a barometer for the US economy is a waste of time right now - there’s quite a few warning signals in other markets and in the numbers being released. Something has to give and I think it’ll have to be the stock market though who knows how long the Fed can kick the can down the road for.
I think that is a long way off for most of the traders.
Hello,
I think that unless you totally ‘wipe out’ you will never ‘retire’ from this business!!! LOL!!!
Sorry to be resurrecting this thread but ‘purplepatchforex’: I have included a chart that may be of interest to you (regarding your ‘dog leg’ theory) (and of course the chart also illustrated exactly what my point was in starting this thread).
Regards,
Dale.
usdtryspread.zip (85.9 KB)