Page 2 | Macroeconomic Analysis And Trading Ideas

Happy anniversary Bitcoin.From a 1989 article in the The Wall Street Journal, by Victor Niederhoffer, speculator: Speculators don't only create bubbles (not sure short term speculators make bubbles happen, they might actually smooth them). The Federal Reserve was created by a US president to separate the money supply from the government. But they ended up being control freaks very destructive. I'll make another idea more detailed on that, in particular on the Bretton Woods system. Satoshi in his white paper, published 11 years ago, said: And 6 months later he said: "The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." I do not know a single Fiat currency outside of the British Pound that stood the test of time. And just 4 months after this, Bernanke told US politicians "The Federal Reserve will not monetize the debt". Because it was temporary apparently. Today the FED has pumped the stock market to a point where the rich are so rich and the poor so poor than 1/3 of US citizen get in debt just to eat (corporate buybacks did not help). Europe is not better. Some countries even have negative interest rates and they are looking into "deep negative" rates, like -10% a year. The IMF has a guide on Enabling Deep Negative Rates to Fight Recessions www.imf.org The central banks are debasing currencies. And it's actually hurting the 90%. They keep pushing this pyramid scheme up. The problem is, a peer to peer system can't even fight those low IQ central authorities, because they are just going to ban it. They're going to have to end up in jail. The UK drifted to the right, the US drifted right, but also left, actually very far left it's scary. Those central morons that think they are helping (are they really that stupid? It has to be intentional) won't stop, and won't let people save cash, buy gold. So maybe citizen voting far left or right is necessary. But do those politicians understand they have to get rid of the central banks (or reduce their powers)? All I hear is "white man bad, rich people evil, let's stop progress" it's like none of them has a clue what the real issues are. Bitcoin reached a point where it went into a mania attracting alot of gullible unskilled speculators excited by stories of "Bitcoin millionaires". The tech reached its saturation point, it can't scale further, and there is very low interest in using it as a viable currency. I hope it will remain in history as a great prototype and not just a speculative bubble that cause "innocent people" to lose their shirts. Bitcoin ended up being a ponzi/pyramid scheme, with early adopters making a huge amount of money on the back of late adopters. But anyway, it possibly opened the way. Central banks have done so much harm. Over and over. Just like governments trying to prevent traders from trading or forcing prices. Take the example of oil demand being high on the east coast because it's terribly cold, and demand is very low on the west coast. When the government forces a price, traders have no incentive to buy cheap on the west and sell high on the east (as price is not moving even with supply and demand varying). And so on the west coast they warm their swimming pools they don't use, while on the east there is not enough Oil for everyone and people are cold. I could list so many examples. Over and over same story. Perhaps we could evolve into having currencies that are not completely controlled by some central authority. The gullible victims that are dreaming of lambos would really love to see their favorite ponzi scheme be bought by everyone (greater fools). But I have a better solution: The free market. Let's let currencies not be controlled in such a way, or very minimally, let's let the stock market not be controlled, and let them fluctuate naturally as they should. Ultimately it does not even matter what currency we use, it's just a number to help make things convenient, to help with trade. As long as it has the basic qualities it's all good. Central institutions hear about Bitcoin and immediately they want to control it... Risible... Crypto gambling moonboys don't care of course, but using a crypto will serve no purpose if it is fully controlled by a central bank. What we really need is to get rid of ultra controlling and manipulative central authorities. Central banks power must be reduced. Governments too. Their role should be of regulation, administration, resolving conflicts, governing the military (with limitations)... Not manipulating and spending like degens. Look around, there are great examples of centralized systems, decentralized ones, and mixed. But I think the best ones are a fusion of both. Just some examples off the top of my head... Central powers have to stop sticking their filthy paws everywhere, preventing innovation and causing poverty and generally pain & destruction. Let people with a financial incentive to do good, participate freely in the economy. There is no simple workaround. We have to get rid of all controlling central authorities. No alternative. Just like Ron Swanson said. Satoshi was right. We need to get rid of central institutions.

Exceptional speculation from mid April '18 onwards Using an updated chart of earlier posted opportunity around AUDUSD (AU) I like to highlight and illustrate the exceptional speculation that has been going on since mid April onwards. The first and many incidence of the same speculation has often seen coming in very sudden which indicates a single source instead of graduate forming of buying/selling pressure you see normally when larger long term trends are forming. Only news events cause such sudden incoming interest in the buying or selling of an asset when it's coming from a group, but then there have to be a profound reason for it been in the news and it always dies out within a few hours. Quite often we have seen USD buying surges since mid April not complying with any of these rules on top of that these volumes were sometimes hidden from public pools and planned very timely to exactly block a USD bearish cycle from bringing down the value of USD or a potential opposite interest such as London open. The latter is just too silly to observe, suddenly on Tuesday morning Asia timezone when there are normally low volumes until one hour before London open, there would be a ridiculous sudden surge of GU and EU selling at a time it was never seen before. There is simply also no reasonable explanation for anybody selling GU and EU at that time other to stopping GBP and EUR from being appreciated. Nobody says a word and nobody writes about it since that I have noticed these out of place events. There are some economists speaking in youtube videos but searching for manipulation of USD returns litle results on Google and first few entries are about China manipulating their currency and Google's very nice suggestion list doesn't show a single entry when typing it out into the search field. Well, everybody knows that every single central bank is doing it, all of them. They call it market operations and it published on their websites. Look at the implementation notes published by the FED May this year or read on about RBA market operations published clear in public, just to name two examples but all central banks list it as normal operational tasks as part of their portfolio of services. Yet search seems to return limited results, making everyone believe very few people are interested in this business. Something so important as a ring-network of almighty controllers manipulating the financial market on a daily basis and nobody would be interested. That doesn't glue very well with me, censored it is, big time, for only one reason, this network of market operators have a lot to hide. More than they trying to let the everyone believe with their website publications. The dangers are that like this year the speculators are all making to believe the sudden interest is genuine, just to grow a large group of supporters because the FED know it can't beat macroeconomic cycles. At one the these will overpower the built up speculative forces against the macros over 6 months and that contr force will be stronger than ever seen on the market and speculators will realise that at one point in time and start selling on top of the macro selling pressure. That combined could give us the strongest ever seen sling back down from high up reaching far below it normally would go, the so called overshoot could reach the opposite side of the market at USDJPY 67...

FOMC / Educational Preperation. XXX / USD # USD / XXX Hello guys. Personally I am excited as we get closer to FOMC, and I will be trading FOMC event. I will have positions on: DXY USD/JPY GOLD SILVER EUR/USD I will manage to trade this event with High Frequency news trading machine, as HFT is back in da building, and we had a great success trading news with this machine. Last NFP was sweet as well. Since I have a lot of new followers that have no Idea how HFT works, I will refresh memory for you guys as well write down things for new followers, but always remember News Trading involves high risk. So basically what we are doing is predicting the first momentum with HFT. If you remember the last NFP, you saw the momentum spike upwards. Strange even tho we printed good NFP and rate data, still first momentum was up, and HFT nailed it's job. Persoanlly how I trade news with HFT is I open BIG lot size, and set TP for this trade to lock the profits, if TP not hit I monitor situation manually and if momentum loses STEAM I close the trade. I am not using SL because in first second or second before the news there are spikes before momentum direction and spike size depends on your broker. Last NFP for example It was not a killer, because I feel the signal that is being generated and I know whether the event will be meh.. or event will have strong impact. Last NFP generated weak signal and we got relatively weak NFP impact. The same goes for FOMC, as I will feel whether the event will be weak, or strong impact based on data that I get. But I reckon that FOMC will be a TURNAROUND event and not a Dirrect one. Basically what that means is that HFT will generate for example LONG signal, once FOMC come out the momentum will be LONG ( spike up ) and then the turnaround follows, the same vice versa. Of course it can be dirrect move and if signal for example is LONG it can start to go long, and go straight up, same vice versa. Anyway I'll be in the trade, because this FOMC event should be great and should move the market and you can trade any xxx/usd usd/xxx pair if you want since on all of them there will be an impact. Let me know in comment section below if you have any questions. TPP

Trading Fundamentals I personally follow 4 central banks in detail: FED (USD), ECB (EUR), BoJ (JPY) and BoE (GBP). Knowing the monetary policies of these banks and how they differ, helps me in trading the following 6 major pairs: EU, GU, UJ, EJ, EG and GJ. I also follow three other central banks, be it more at a distance and with less detail: SNB, RBA and BoC. The banks to follow would normally depend on your trading portfolio. Central banks monitor the following five economic areas: I) Growth. Referring to whether an economy is expanding or contracting. On the economic calendar, there are several indicators on the health of the economy such as (not a complete list): -Business climate -Gross domestic product -Personal spending index -Retail sales -Consumer confidence / sentiment II) Inflation. Referring to how costs of goods and services develop. On the economic calendar, you will find: -Consumer price index -Producer price index -Retail price index -Core price index III) Employment. Referring to a countries labour force. On the economic calendar, you will find: -Unemployment change -Unemployment claims -Jobless claims -Non farm payroll IV) Production. Simply put, this refers to the things a country makes. On the economic calendar, you will find: -Factory orders -Core machinery orders -Building permits -Industrial production -Purchasing managers' index V) Geopolitical. Referring to anything non-economic that could cause risk in the market. Think of things like elections, natural disasters and wars. Central banks watch these areas and have specific targets for them (for instance inflation 2%, unemployment 8%). If a central bank is focussed on an indicator and sees it´s off target, there are several tools it can use to affect the indicator. A) Changing interest rates. Raising them cuts inflation and encourages investors to come in, thereby increasing demand for the national currency. For example the FED is believed to plan a rate hike this year that will further strengthen the USD. B) Setting price limits. The value of a currency impacts exports, so banks can make sure a pair will not drop below a certain amount and will spent millions buying foreign currency the weaken their own. For example the SNB until recently had a cap on EURCHF to artificially weaken their currency. We all know what happened when that cap was suddenly removed. C) Quantitative easing. This is basically printing money to spur the economy and inflation. It weakens the currency by increasing the availability of it. Good example is the recently announced powerful QE programme by the ECB, leading to selling pressure for the Euro. D) Using certain language. With press conferences, minutes of meetings, speeches or written statements a central bank can influence the market and thereby the value of its currency. Good examples are public statements by Draghi, president of the ECB. The EU pair can move hundreds of pips while he speaks. The key to trading fundamentals, is understanding what a central bank might do to move the value of an indicator towards its target. So when news comes out, you can asses if it will make the central bank more or less likely to use a certain tool and consequently if that news event weakens or strengthens the currency. For example: towards the end of 2014, the inflation in the Eurozone had fallen to very low values. The ECB had tried several things (like lowering the rates) to up the inflation (for which it has a target of 2%), but to no effect. The only thing left to do, was a QE programme. So with every new Eurozone cpi that came out lower than expected, the probability of a QE program increased, so the euro weakened instantly upon the release of that cpi data.

Black swan events: How currencies react - Yen Apologies for the ominous chart title on a Monday morning, but having spent the weekend watching a few documentaries about the Japan earthquake, I was intrigued on how the currency markets react to black swan events. The Story (Japan Earthquake - Yen) ------------------------------------------------------------------------- The Tohoku earthquake hits Japan on 11th March. What we see is a sell off in USDJPY... In other words, people were selling USD to buy the Yen. Goes to show how strongly the markets believe in the Yen as a safe haven even if crisis comes to Japan. After a sharp drop, G7 central banks intervene in the markets to offer support. So they start buying USD and selling Yen, which forms an interim rally. On 04/07 BoJ announces a stimulus package, which triggers another sell off in the markets. Few days later, Fukushima nuclear alert is given which sparks a continuation of the sell off. This time it breaks the CB's support as well. I could go on but follow the notes on the chart backed up by the news sources that explains the currency moves. PS: For all those ECB QE addicts, I stumbled upon a very nice article which is worth reading and could possibly shed light on how European QE could work: Source: yhoo.it PPS: The chart is incomplete... There's just too much happening when it comes to the Yen.