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XAUUSD: GET LONG on open in Oz and you'll wake up richerXAUUSD: Gold - was bearish of gold on Friday. Now the wind's changed - completely - 180 degrees due to the Dollar breaking down. This should save gold from further falls as people flock to it as a shinier, safer safe-haven than the Dollar for a while. Worth getting long asap (NY will be too late for this) as Oz opens as the price is so low at 1228 it means a stop can be placed at 1224 for a 4 to $5 maximum loss if wrong. Upside from here could be considerable over the next few weeks if the Dollar tanks as anticipated looking across all Dollar crosses right now.
FX:XAUUSDLong
by sumastardon
2
LONG USDJPY - FED & BOJ MONPOL, RISK SENTIMENT & ELECTIONLONG USDJPY: 1. Slightly late posting this position but we got long at 104.5 earlier today. The rationale behind owning USD VS JPY is as follows. USD risks are bid 1) in the run up to the 2015 dec hike USD traded extremely bid with DXY breaking through 100, based on the last 2wks i expect USD to mirror 2015 and continue the bid tone we have seen both in 2015 and now. That said in the past few wks usdjpy has traded relatively mutely compared to the market thus imo has more alpha than other crosses and as another few 100pips before we can consider usdjpy stretched. 2) the usdjpy has a Dec hike to look forward to. Whilst i expect USDJPY to be faded as we saw following the last hike, i think these next 2 months we will trade to 109/11 as rate hike hopes push the pair into firmer resistance. 3) USD election risk is likely going to fade with the neutral choice of Hilary winning. Thus any Trump uncertainty weighing on the USD will be washed out which could be worth 50pips at least. JPY risks are to the soft side 1) BOJ monpol risks remain skewed somewhat to the dovish side since whilst inflation continues to trade firmly and consistently below 0 the BOJ are DEFINITELY unable to raise rates and are unlikely to consider tapering (the ECB has firm 0.4% inflation and even they may not consider a taper). Thus the risks are certainly to adding to easing, with the most hawkish outcome being neutrality. 2) JPY like the rest of the safe havens remain bid up some 20% in 2016 alone thus a correction lower some 5% isnt extreme and infact is fairly justified (thus a 111 target is arguably on the cards). This is especially true assuming the next big risk event (election) passes with the most neutral and odds on favourite candidate winning (hilary). Thus any risk premium priced into yen for this purpose will be faded and encourage the 5% correction i mention above. 3. JPY volatility remains at the lows of the yearly range thus a topside correction encouraged into election and FOMC events will possibly see yen trade with a softer bias. Risks to the view: 1. If Trump pulls off the tail end probability then USDJPY long imo will be invalid given i expect the USD to trade softer and yen to rally. I would expect USDJPY to trade to 100 in the event of Trump winning.
Long
by QuantumLogicTrading
1
LONG GOLD - STRAT TRADE: 99.7% PROBABILITY OF REVERSALLong XAUUSD: 1. Based on the last 16yrs of daily close data (since 01/01/2000 to date) XAUUSD has a cumulative probability of a =>7th day lower at 0.3%, hence there is a implied 99.7% chance of reversal on the daily. 2. Technically there is also some nice structure about the 1250 level. 3. Fundamentally I think risk is priced very cheaply here, although risk-off assets on the year are still heavily bid up some 20% even at these levels thus a pull back may be justified - nonetheless for this particular strat trade this is less relevant given the tactical nature Trading Strategy: 1. Sell XAUUSD at market in 1xlot, and add 2x on each daily close higher from here. Start in VERY small lots to reduce risk and ensure you can add on adverse moves lower (it could be several days). TP is the next/ First daily close higher. Any questions please ask - also see performance attached of recent trades using the same stats
FX:XAUUSDLong
by QuantumLogicTrading
4
LONG GOLD - STRAT TRADE: 99.7% PROBABILITY OF REVERSALLong XAUUSD: 1. Based on the last 16yrs of daily close data (since 01/01/2000 to date) XAUUSD has a cumulative probability of a =>7th day lower at 0.3%, hence there is a implied 99.7% chance of reversal on the daily. 2. Technically there is also some nice structure about the 1250 level. 3. Fundamentally I think risk is priced very cheaply here, although risk-off assets on the year are still heavily bid up some 20% even at these levels thus a pull back may be justified - nonetheless for this particular strat trade this is less relevant given the tactical nature Trading Strategy: 1. Sell XAUUSD at market in 1xlot, and add 2x on each daily close higher from here. Start in VERY small lots to reduce risk and ensure you can add on adverse moves lower (it could be several days). TP is the next/ First daily close higher. Any questions please ask - also see performance attached of recent trades using the same stats
FX:XAUUSDLong
by QuantumLogicTrading
5
LONG GOLD XAUUSD: RISK-OFF ASSETS TRADING CHEAP ON US STOCK DIPGold Positioning - Buy @ Market; 1350TP1 1370TP2 - 1 lot (small) and add double every daily close lower - 1lot, 2lots tomorrow, 4lots the next day: 1. Risk sentiment looks to be turning south, particularly in US equities which have seen monthly lows which is consistent with the broad equity valuation correction lower that i have been expecting for the past few weeks. - However the highly correlated safe haven assets look to be showing some divergence/ value by also trading lower. Given im a risk-sentiment bear, I back this view with short SPX and long Gold/ YEN. 2. Also Fed unlikely to hike means USD demand is likely to be parred which puts less pressure on gold, but either way, a hike increases risk-off and will drive gold/ haven demand so it is a win win situation. 3. Statistically gold is also a long after trading lower 5 days in a row which for the past 16yrs of data is a 1/100 chance of having a bullish day for the next day (today). Also on the weekly we are 1.3 deviations lower, with the monthly and quaterly at 0.9sd and 0.7sd lower. 4. Risk here looks to be to the 1300 pivot with topside at 1350, 1370 and 1400 - i personally feel we can see gold bid to 1370 on a SPX to 2000 backdrop, a fed hike would have my bets moving SPX well through 2000.
FX:XAUUSDLong
by QuantumLogicTrading
3
SELL GBPJPY: RISK-OFF SHIFT COMING? LOWER BOE MONPOL EQUILIBRIUMGBPJPY: 1. Given Fed Yellen's "hawkish" market response and GBPUSD, GBPNZD and GBPAUD shorts TPd on the rally lower today cleared (FX risk book clear too), im looking to add some safe haven assets to my portfolio. 2. Looking at GBPJPY and GBP structures on the whole, there has been alot of sterling longs in the past 2wks accumulating in spot as economic confidence falsely increases (imo, given intelligent money understands near-term UK risks are to the upside). - GJ rising some 7 of the last 9 days, and now 400pips above the aug 16th lows of 129 at 133.3 I think there is at least that 400pips in downside available from here as the new equilibrium for several reasons: 1) Fed Yellen being hawkish looks like it may be the catalyst for the september US Equity sell-off, in which case, highly negatively correlated assets (e.g. safe havens yen, gold UST) are likely to pick the bids up, thus driving GBPJPY lower i.e. A tightening of financial conditions in the US will put pressure on US equities and also US election risk will transfer into Yen demand - also Brexit/ A50 risk is a medium term yen topside catalyst which makes sense owning through GBPJPY downside. 2) GBP shorts at these levels, given the monpol introduced by BOE, look like the smart move as the market is significantly higher than the monpol lows (which should be the new equilibrium). 3) Further BOJ action is made more unlikely by a hawkish Fed - hawkish fed looks to have provided $yen some topside support in the immediate term if nothing else, this eases pressure on the BOJ to ease - though a counter to this is the recent BOJ Inflation CPI traded some 30bps lower at 0.5% - the biggest drop since its inception (and the lowest level ever) this could be a push to more easing. However, the July Meeting misfire when expectations were perhaps at their highest and the current JGB drying liquidity situation somewhat capping the extent of further easing, I cant see the BOJ doing anything more than jawboning, as they have consistently continued to do (and about the only thing they have). Also for extra confidence, even if the BOJ was to ease - look at the past 2 times (Jan April), both policy measures provided 0 equilibrium relief to yen downside and infact fueled some 500pip+ topside to yen, so yen bulls imo can feel conforted that further easing is likely to have little impact, even more so as their ability to do more is ever reduced. 4) Technically, as mentioned weve been on a 2wk bull run so i feel GBP topside is due a rebalancing lower, and also the downside targets are not uncharted territory having traded at the 129 level on 2 previous occasions so the profit target isnt unreasonable. 5) I hear RM long-term short positioning, is picking up at these levels where sterling looks arguably overbrought. Trading Strategy - SHORT GBPJPY @133.3, add at 134 135 and 136 - TP 130.5 and 129 1. Short GBPJPY - Small at market price 133, and add ever 100pips higher if bulls continue up to 136 - the macro resistance levels on the daily are the 134 and 136 level. - Short small here at 133.3 and ADD as we move higher as short sterling given brexit/ monpol future and long yen given the risk-on bull run which is bound to run out given hiking and election risk intensifying imo is an all but guaranteed trade. Any questions on the trading strategy PLEASE ask!!
Short
by QuantumLogicTrading
4
SELL GBPUSD & USDJPY: FED CHAIR YELLEN JACKSON HOLE HIGHLIGHTSYellen as interpreted by the market was bullish, though price action immediately following the JH Speech Highlights was anything but this clear cut and imo said alot more about what was actually said i.e. there is still uncertainty/ no clear commitment, as DXY moved higher immediately after before aggressively selling off for the next 20-30minutes, before then making what looks to be now the decisive move higher, concluding the markets decision to view here statement as hawkish. One of the contradicting elements I found was her view on the near term possibilities, where in this statement, implied at the least that things arent as rosey as the market may think - "Fed Can Provide Accommodation Should Expansion Falter in Near Term" - a truly recovering economy wouldnt need this statement but maybe this is nit picking, but nonetheless could explain the lack of certainty that caused the USD sell-off initially. The USD 30D Fed Funds futures rallied to imply a P=30% chance of a September hike, up from 21% yday and one of the highest post-brexit readings, with equities look to have broken lower, whilst gold remains in bull territory, despite the USD appreciation implying what is expected to be the start of a broader medium term risk-off shift now. Given this fresh lease of life in USD STIR, attention will now closely focus on the USD employment report next friday, where if another 250k+ print comes in im sure we could see another 10pct addition to the september odds, if not more - especially if the unemp rate fell close to the feds terminal expectations of 4.8%. From a trading perspective, and the above information in mind, I remain long on USD vs GBP on rallies - 1.32 or 1.325 prices are the best to engage.. On hind sight some legacy longs should have been added in the post-Yellen vol to 1.328 but given the uncertain comments it is forgivable not to have added/ held here. Next weeks, UK PMIs will remain key for Sterlings hold above 1.30/29 level - a miss and we will likely test lows again, though a hit and sterling bulls will likely continue to be happy to own the pound here in the low 1.30s on the pretence that Carney will not e so forthcoming in future policy despite his aggressive dovish fwd gd. Also I am watching USDJPY - given US equities may pop on the back of this, short gbpjpy or usdjpy to own a risk off asset may prove to be a good call - especially at the 133 level for sterling. This also hedges the long usd exposure in the event data doesnt hold up. Yellen JH Speech highlights: -Fed's Yellen: Case for Increase in Fed Funds Rate Has Strengthened in Recent Months -Yellen: Growth Has Been Sufficient to Generate Further Improvement in Labor Market -Yellen: Economic Outlook Uncertain, Monetary Policy Not on Preset Course -Yellen: Economy Continues to Expand, Led by Solid Growth in Household Spending -Yellen: Range Of Reasonably Likely Outcomes For Fed Funds Rate 'Quite Wide' -Yellen: U.S. Economy Nearing Fed's Goals Of Maximum Employment, Price Stability -Yellen: FOMC Continues to Anticipate Gradual Increases in Fed Funds Rate Will be Appropriate Over Time -Yellen: Even If Average Rates Remain Lower Than In Past, Monetary Policy Will Be Able To Respond Effectively Under Most Conditions -Yellen: Fed Studying Many Issues Related To Policy Implementation
TVC:DXY
by QuantumLogicTrading
SHORT SPX: THE GRAPH SAYS IT ALL - 2145 IS RISK-FREE SELLING?SPX 1. Correlation/ Technical analysis - SPX has set up the most predictable price action I have ever seen - confirmed by two EXACT 0.55% moves higher and the last 4 moves have been almost exactly 2weeks. 2. Price action currently shows exhastion has set in and there will either be 1) another bull exhastion leg 3 (+0.55%) to 2206 OR 2) A sell-off will begin from here to 2147 - the market will test risk sentiment - if bulls win we will then move higher past 2194 previous highs, and the bull trend continues, but imo 80% most likely bears will win and we will break through 2147 and move to AT LEAST 1990. 3. IMO a daily and weekly close BELOW 2140 means selling is RISK-LESS as given this set up there will be no more bids until we hit 1990 (as shown by the price action and empty/bidless space). - More aggressive sellers will sell here at 2182, risk-free sellers will wait to sell on the weekly close below 2140.
FX:SPX500Short
by QuantumLogicTrading
17