RidetheMacro| DOW Jones📌 Wall Street closed deeply in the red on Friday and the S&P and Nasdaq linked a third weekly decline, as sharp losses in the tech sector continued. Shares of Big Tech dropped steeply led by Apple (-3.2%), Amazon (-1.8%), and Microsoft (-1.2%). On the earnings side, US Steel rallied 9% after the company reported a smaller-than-expected quarterly loss. On the policy front, Democrats and Republicans are still far from a deal on the coronavirus aid follow-on bill to the previous $2 trillion package. The Dow Jones lost 245 points or 0.9% to 27,657.
🏴 the loss of the technical structure seeks compensation. Still Need a Clear Break of Trend Area also MA death cross help to give a clear view to add shorts with Confidence.
⚡ U.S.-China tensions simmer
Tensions between China and the U.S. also dampened sentiment on Friday after the U.S. government said it will block all TikTok and WeChat downloads in the country on Sunday. Oracle, which is trying to take a minority stake in TikTok-parent ByteDance, fell 0.7%.
Major Technical Areas to watch.
Risky for longs above 27,35x
Risk for shorts above 28,25x
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Until next time,
Ride the macro
Powell
#XAUUSD IN A NO SENSE CHANNEL WAITING FOR A DECISIONWAITING FOR A DECISION ABOUT THE TREND, MAYBE MONDAY WITH POWELL CONFERENCE AT PM16:00 GOLD TAKE AN IMPORTANT DECISION FOR THE TREND
ridethepig | USDJPY Market Commentary 2020.09.12📍 JPY
Buyers are threatening to breakout. After 107 comes 110 and then 112.x. But sellers have other trump cards, for example covid.
My impression is as follows: as the dollar firms and finds a temporary floor therefore can be considered a bounce into the elections which can be somewhat double-edged. If the preconditions are met, namely if we get a continuation of Abenomics with the leadership elections, and effective parries into the Yen are restrained, then beginning the advance towards 150 may be justified.
But we should consider the development here to be EARLY/OPENING game. In light of this, we should take longs on a leash and if the market starts paying we can add more size. The technical breakout would lead to buyers occupying the flows. Equities may felt even more the heat if we see a paralysing effect via temporary USD inflows.
Thanks as usual for keeping the feedback coming 👍 or 👎
Contracting Triangle for gold with targets 1815 & 1735We have an ABCDE contracting triangle on gold with targets 1815 & 1735. Our SL for this setup is at 1973
ridethepig | EuroThe ECB as a weakness
Two possibilities exist for the terrain ahead, one for the continuation or one for the breakdown. This very much amusing position from a markets perspective stems from the initial Eurobonds positional play.
The position is reached as a touchstone for the fact in the thesis. We have already covered the macro and explained the fundamentals in play so we shall now cover that here today. Instead we shall consider the bear case and understand the conditions in play, namely:
(a) the presence of a breakdown
(b) a monetary vocal defence from Lagarde which could be directly attacked as weakness in the currency
Our swings so far have played out favourably. Although this time the decision is more challenging, the weaknesses Lagarde sent has opened up the downside and sellers can now threaten a retest of support levels at 1.15 - 1.14. Just a threat, the diagonal support breach is toying with the idea and it is quite understandable, indeed the dollar has come along way in such a short period of time and the risks are no longer idiosyncratic to the US as cases sky rocket in Europe.
Buyers have shown up but for the time being I am going to bring things closer to home and pull back on the bullish euro view. We are at the edge of the board and a continuation although is technically in play towards 1.225x - 1.250x it will be hard to manoeuvre with a round of risk-off. Combining a pullback and leveraging continuation at 1.14 / 1.15 would be the winning move.
Consider selling a breakdown next week or trailing longs very aggressively. Logical analysis concludes that a pullback is in play as there is definitive weakness on the monetary side in Europe.
As usual thanks for keeping the feedback coming 👍 or 👎
EURUSD before FOMC!If you have active positions, close them!
If you don't have one, don't open it!
This applies to anyone who does not want to take the risk of being active during the news. The Fed's decision on the interest rate will be announced today, and it is expected to give direction to the USD before the November elections.
We expect this to cause serious movements, so if you are not convinced of the trade you have, you better wait.
What will be the direction? - Probably only Jerome Powell has a clear answer to this question :)
What we want to see is where the movement will go and in which direction it will break. Be especially careful here for fake movements!
Then we will get involved in trades.
Still, our main scenario today is to see a decline and pressure to 1.1709
Good luck and don't forget to like and comment!
Ascending triangle, needs to close above 1957Major support at 1900. There has been October/November options flow purchased last week for gold stocks; WPM, GOLD and GLD. FOMC decision is on wednesday and expect more dovishness from JPowell. Longer lower rates, until a vaccine is approved. Trump wants a lower dollar as well, so its all working out for his election needs.
ridethepig | S&P📍 S&P
This illustrates the total downside unlocked in S&P in the 5-3-5 sequence, but also note how unlike the Down the lows are set to hold. An innovation play. Tech avoids the development of destruction because 2,368 looks pinned and unavoidable for a test. As you can see the small caps => mid caps => large caps as usual in the end game flows.
Dow:
Russell:
It is very much the same flow across the moves, the exchange of risk. We have already discussed the fundamentals in play for US Equities, we will need to start building an archive thread while helps keep track... more details on this coming soon.
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ridethepig | TRYBuyers have made the transition towards capitulation. This leaves Turkey with a huge problem, and the process of the cleanse in local banks will continue. CBRT will defend with its 'customary inventiveness' very soon as they keep a stern eye on 7.8xx.
It is an unfortunate position that Turkey are in. We have exploited it for some time and as soon as the banking collapse makes it way onto Bloomberg and etc it's time to start looking at closing out. Well done all those who sent their troops to the buy side, a massive +30% swing so far and counting.
After the break through 6.78 it has continued to grind its way to the wearisome target. This is the real point in the manoeuvre, which forces us to stay alert and protect profits as we approach the final targets in the unstoppable macro advance. A superb live example.
Thanks as usual for keeping the feedback coming 👍 or 👎
ridethepig | Momentum Gambit with ECB 📌 The best move, since the idea of Eurobonds and an early development of the rally is to continue working against structural dollar weakness. The +/- 200 tick pullback from 1.20xx highs in EURUSD to current levels is an attractive level for us to start adding bullish exposure.
As will become clear, buyers are in full control on the macro direction and sharp speculators are playing the euro as a funding currency. The social idiosyncratic problems in the West are not going to be covered here today although are playing a major roll in the election cycle and USD. The way the dollar has completely paralysed Fed is in plain sight for all to see. And now, I ask you; what tolerance will the current administration have for a weaker dollar into the elections versus a weaker stock market?
You get my point... an honourable (???) Powell bending the knee to Trump with a typical CBanker desperation move to create artificial weakness in USD and hold stocks is managing to create a wave of problems in Europe. As much as they would like to, there is little chance of ECB intervening at these levels, meaning for trading and speculator purposes we can squeeze and squeeze until they finally cough which wont be for another +10%. We will cover the ECB together in detail although here preparing for a very dismissive Lagarde this week which will reverse any considering intervention.
A strong move here would be very useful as we can complete the MT and LT breakout targets from earlier in the year. I am expecting bulls to come out with their trump card, still eyeballing the same 1.25xx targets before year-end and 1.30xx / 1.35xx are on the menu for 2021.
What we are learning from this move in the euro is firstly how to distinguish between genuine and false fundamental moves. After clearing targets at 1.20xx it attracted both profit taking and also some early birds looking to outguess a hand from ECB on the currency. For this week, what we are tracking is the deprivation of those looking who jumped the gun to give us energy to move higher. The pullback they have laid over the past week should also be kept in context with the long-term macro view:
For the techincal flows, the 1.186x is finally getting attention. But just at that point, it is hard to predict that the radius of ECB volatility expansion wont send us into the opposing camp at 1.170x. Hence the textbook way to play this, is to load on a momentum gambit through 1.186x or load in the market manoeuvre zones. Invalidation for bulls comes below 1.170x as it will unlock 1.15xx.
Thanks as usual for keeping the feedback coming 👍 or 👎
ridethepig | Bitcoin Market Commentary 2020.09.01Heading into the office this morning to find Cryptos stronger after a holiday weekend. BTCUSD is now less focused on risk and finding more USD devaluation players getting involved. With all of the weaker summer seasonalities behind us, it is pragmatic for players to look for value in scarcity.
The long-term macro chart constitutes a formidable comfort; the purpose of understanding the long-term direction of an asset is to put your mind at ease. Focus on the long-term to navigate the short-term flows with endurable strength. The $21,000 and $36,000 ready to accept bids, buyers will be kept busy. Eyeballing a tasty desert for all Crypto enthusiasts.
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ridethepig | ADP/NFP Combo Play📌 What we are trading here is an event risk play.
This swing illustrated combining both ADP and NFP prints. It is also characteristic for the fearlessness with which USD sellers can to a certain point neglect their own weakness.
The loonie with some broad based USD profit taking as widely expected after clearing initial targets. I am looking to recycle USDCAD shorts on rallies into 1.315x providing initial resistance. It looks like this move lower can at least test 1.295x.
To avoid jumping the gun, shorts are only worth considering at 1.315x (soft resistance) as we are trading an internal structure that must inspire flows. We are trying to nip any rally with ADP prints in the bud with the still latent power of the structural USD devaluation.
As usual thanks for keeping the feedback coming 👍 or 👎
ridethepig | EUR Market Commentary 2020.08.29📌 In spite of the summer lull, EURUSD continue to hold and buyers are threatening to win the 1.20xx handles. Sharp speculators understood the powerful attacking force of debt mutualisation, but the icing on the cake comes from Fed artificially flushing USD.
The king continues its march lower.
To maintain the buy side in EURUSD is pragmatic. Any direct attempt to step against this flow will be compromised while we remain above 1.178x and 1.161x strong pivots with 1.14xx the stronger level on a quarterly basis. An interesting move will be to complete 1.225x and 1.250x this year before consolidating sufficiently.
The moral of the story, is stay long EURUSD. We have discussed the fundamental coverage in detail, there are other things which warrant attention from speculators, I can hear you asking, what things are these then? ...Positioning! This next diagram demonstrates how we can advance and capitalise on expectations transitioning to facts. On a very high level the theme here appears, with a holistic view of the macro direction. This resembles a move towards 1.28x and 1.42x as investors make the most of the advantage, and the 'freer manoeuvrability' of the fiscal side.
As usual thanks for keeping the feedback coming 👍 or 👎
EURCAD - Trade Idea.EUR/CAD Cup & Handle Formation...!
As I am sure you are aware, from the previous posts I've written and I will say it again: longer time frame indicators short time frame movement.
I am long term bullish on EUR, since around 1.13 half to 1.14 areas.. By seeing this formation, makes me even bullish, but I want to get in at a cheap price, because that's what will give you the greatest R/R. Now today we have Powell speaking, which could shift the market in either direction. I won't be trading whilst this even occurs, as it could go either way with increasing amount of volatility.
Technicians: Bullish formation
- Cup and Handle formation
- Bullish Flag forming
- Keep support areas to keep an eye on
Be sure to follow your trading plan, add your own technical analysis indicators.
I'd wait for key pull back or break out of the bullish flag forming then pull back then add further risk towards the bullish momentum occurring.
Just a trade idea, not a recommendation.
All the best,
Trade Journal
Breakthrough and triangle! Hello, today is an extremely important day. We are waiting for the press conference of Jerome H. Powell and the movements he will provoke.
One option that looks good is USDCHF. Here we have a break of the downward trend and then the development of a triangle. This triangle will most likely be broken today! We expect to see a rise, as trades are recommended to be made after a breakthrough.
Resistance levels:
0.9212
0.9309
0.9361
Of course we are ready for surprises!
Be patient!
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ridethepig | DXY Market Commentary 2020.06.15A quick update here for those tracking the entire swing in Dollar:
It would be more natural to develop in this structure with a test of 99, since the impulsive sequence (if it is such) must eventually test 92.92 to complete the move. To keep up the pressure on USD the social focus will instead switch towards Atlanta and health focus on virus cases which sadly are shooting higher once more.
To exploit the USD "weakness" the positions are more of one:
📍For those tracking Short-term flows:
📍 For those tracking the Long-term Macro chart:
As usual thanks all for keeping the likes, comments, charts and questions rolling!
ridethepig | KRW Q3 Macro Flows📌 A short update here for those tracking USDKRW ... It has been a very slippery pig since the last update:
Here buyers stormed into control and chose to occupy the bid protecting 1140 via Covid flows. The relieving of this profit taking has become a bit more enterprising possibly via the idiosyncratic spike in cases for the U.S.
The next moves are cooked and almost ready to go... since the centralisation of EM FX has taken place, the board is forced to exchange in the same swing. Vaccine headlines are coming in from all angles, more fiscal and CB stimulus are also there for the last few days of July for markets to get stuck into.
Typically we will see the ebb and flow in risk start by August, thin and choppy liquidity markets in the middle of summer make forr useful loading zones in calm waters.
Thanks as usual for keeping the feedback coming 👍 or 👎
ridethepig | AUD Market Commentary 2020.06.15For this one we are talking about an extremely disruptive swing that will continue to cause high beta FX outflows in the immediate term. The nice problem we have on our hands with this, is that we are now entering into a new long-term bullish trend for AUDUSD. So we 'know' this pullback will have a minimum flow towards the 0.650x handle before bulls have to deal with a completely new decision point.
Since I considered the said bounce from the lows, a complete 5 wave sequence right on time for Fed and called live here, the strategic rule that one must now to cover and protect. In the long run, the positional struggle comes down to a struggle between USD devaluation via FED and restraining tendencies towards high beta fx. In this all embracing dance with risk, though an important strategy in itself is to remember it is only a means to an end.
ridethepig | TRY Q3 Macro Flows 📌 The buyers constitute a formidable opponent holding the breakup and putting sellers out of action. The moves are ready, to fend off another wave of risk looks impossible now and Turkey will suffer a major hammer that may be unendurable for local banks. A break above 7.20xx will unlock the widely track 7.80xx since last year.
If buyers hold (and it looks a done deal now) for this monthly closing pattern it means we are ready to march forward in August and September to cripple EM FX. But if sellers hold at the end (seems very difficult with USD shortages entering back into play) then buyers are kept busy.
Naturally continue to follow the macro strategy, on account of the 2020 macro flow map:
Another move that would be difficult for Turkey to defend against. If you are bearish, continue sticking the knife in via buying USDTRY because it would no longer be possible to prevent the settling above 7.20xx.
📍 The other important note to make is the lack of foreign inflows... rather the opposite, heavy outflows continue with overseas participation in Turkish bonds now at record lows, as is usually the case in the end of dictatorships.
There is nowhere for the CBRT to hide.. they will have to devalue the TRY to offset the loss in access to markets. Take a look over at EURTRY which is still up at ATH's ... this retrace is profit taking in the dollar train rather than Turkey stabilisation. Stay long, look for 7.80xx as the main macro target by year-end.
As usual thanks for keeping the feedback coming 👍 or 👎
ridethepig | GBPUSD Market Commentary 2020.07.20On the GBP side, all quiet on Brexit news with cable and EURGBP stuck within tight ranges defined last week. Here actively selling cable with the European close at 1.262x, risk is entering back into the picture via virus anxiety we will see USD better bid than it 'should' be. I suspect we will have BOE on the wires at some point later in the week talking down the moves and keeping things tight.
Better outflows for GBP will start once Brexit enters back under the microscope. I still think the UK will receive another major hammer towards 1.15 and 1.10 along with consumers drowning via inflation.
The strategy remains, continue to sell GBP on rallies as the dark storm clouds approach, tracking closely 1.262x resistance for sellers loading (we are here) and fading 0.908x lows in EURGBP.
As usual thanks for keeping the feedback coming 👍 or 👎
ridethepig | Quarterly Updates in the Dow📍 The Pinned Buyer
=> The move lower is justified, since Equities at these levels are as good as forced. After Fed and other CB intervention has stopped, it will inspire anything but confidence.
=> So a health crisis, thirsting for a vaccine allowed Equities to outperform last Q as a haven for the bizarre 'Keynesian stimulus'. The correct move was a dead-cat-bounce and early buyers were slight! Now that we have cleared the knee jerk phase, what will follow is an elegant catastrophe.
Let us look at that DAX chart for reference to the dead-cat-bounce:
After overshoots to the downside Buyers defended their game in an entirely rational manner, but now they commit a mistake which enables a snap decision for risk bears. Even those who are bullish on the ST outlook can admit these levels are unattractive in view of the fact that a second wave will oblige surrender on the activity. Remember re-openings are political fairy-dust, confidence is just not there and a quick look at VIX sitting above Lehman levels tells us this.
Here many roads lead to home. Unfortunately thanks to the presence of real risk into US elections and year end flows. Thanks for the support coming with likes, charts, questions and etc.
As usual keep the feedback coming 👍 or 👎
