Dixieland. Issue #2 from 11.09.2016
Updated
Expectations
Last week we could perfectly see how "Sell rumours, buy facts" work. Well, for now we´ve only seen the "Sell rumours" part...
US Dollar index climbed from the lows of the week after testing the uptrend line and, after the verbal intervention of one of the FED voting members, SPX500 index plunged.
Obviously, many people talked about the intervention and few noticed that there was another news from the FED behind: the Countercyclical Capital Buffer or CCyB. The details can be found on one of the links below. When this is implemented, the basic outcome is that the banks will may find difficulties on buying bonds at the emerging markets and junk bonds. In search of profitability, emerging markets and junks experiencing an impotant bounce this year, so CCyB will basically drop the risk/reward level below the reasonable limits.
The reaction to this was a clearly risk-off: indexes dropped and I expect oil, gold, Euro and GBP to follow next week. Many will run into the US Dollar before the next FED meeting.
bankingjournal.aba.com/2016/09/fed-finalizes-countercyclical-capital-buffer-proposal/
federalreserve.gov/newsevents/press/bcreg/bcreg20160908b1.pdf
Last week we could perfectly see how "Sell rumours, buy facts" work. Well, for now we´ve only seen the "Sell rumours" part...
US Dollar index climbed from the lows of the week after testing the uptrend line and, after the verbal intervention of one of the FED voting members, SPX500 index plunged.
Obviously, many people talked about the intervention and few noticed that there was another news from the FED behind: the Countercyclical Capital Buffer or CCyB. The details can be found on one of the links below. When this is implemented, the basic outcome is that the banks will may find difficulties on buying bonds at the emerging markets and junk bonds. In search of profitability, emerging markets and junks experiencing an impotant bounce this year, so CCyB will basically drop the risk/reward level below the reasonable limits.
The reaction to this was a clearly risk-off: indexes dropped and I expect oil, gold, Euro and GBP to follow next week. Many will run into the US Dollar before the next FED meeting.
bankingjournal.aba.com/2016/09/fed-finalizes-countercyclical-capital-buffer-proposal/
federalreserve.gov/newsevents/press/bcreg/bcreg20160908b1.pdf
Note
Still developing before the September FED meetingNote
Flat flat flat... Oil and SPX500 are ready to fly which opens possibilities for a trendline breakdown.Note
Getting close to the target. I bet it is time for a new issue of the "Dixieland" which will be published on a weekend
Please, follow your strategy! Always!
If there is no strategy that has proven itself successful, please do not trade with real money!
If there is no strategy that has proven itself successful, please do not trade with real money!
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