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Ridethepig

ridethepig | BOE & FED ComboThis is a quick update to do with pricing in rates, or what's already priced in rate market ... I wont try my best to keep it short and sweet. I have been receiving many PM's and comments around how do we know when the Fed cuts are fully priced in? For example the -50bps that the market forced earlier in the week...everybody knew they were coming, they just didn't know it would be a surprise before the meeting. When it comes to the fundamentals and pricing in rate cuts, the macro is slightly different on each side. The reason it's different is because of timing and placement in the economic cycle. On the UK side, when we walk forward, the further out you go in time, the more relevant Brexit becomes. Why? The market has been incrementally pricing as we've gone along... doing it in small pieces because that's how markets like to move. The market didn't sit at the highs saying well we've got a new fiscal budget coming with tax cuts on the horizon, the taps on full blast and BOE ready to bend the knee, so lets start selling GBP and suddenly GBPUSD was down 300 ticks. Then markets looked at the 1.275x lows and did another forward walk, this time saying there is no point in going lower because of Fed cuts via coronavirus short-circuit, these are not fully priced so lets take another test of the 1.300x highs as there is more money to be made in the slow train !!! The macro traders know this, a BOE intervention is only a matter of when and if they can wait till the meeting. We have the budget next week and a very aggressive Fiscal policy may offset the need to act inbetween although, another they will not appreciate another hammer in UK Equities so eyes there to begin the week. Mostly when talking about whats being priced in, it's on the incremental level. So you will remember the GBP devaluation we are trading via Brexit: This is the future, what the market will try and do is price it all in small increments. The biggest moves, the ones with real volatility will come only sessions before the actual fact of Brexit annihilation. The market is not interested in these small 50 ticks or 75 tick retracement, the further out you go the more relevant the macro becomes. You see here with the PM May resignation: Markets priced in a little before, but you usually don't know enough details until shortly before the fact. Then before the announcement, maybe price moved 100 ticks... then markets expect it to be hawkish ... if that's the case with Boris then it gets priced and if they do not deliver then it will be priced back out. For the technical 🗺 Steel Support 1.241x <=> Strong Support 1.258x <=> Soft Support 1.275x <=> S/R Flip 1.293x <=> Strong Resistance 1.310x <=> Steel Resistance 1.321x It's macro ... the titanic takes a long time to turn ... Good luck all those in GBP and UK assets, here tracking a pullback in GBPUSD via BOE intervention and -50bps front loaded cut. I don't think they will be able to wait till the meeting! Thanks for keeping the support coming with likes, comments and etc!!
Short
by ridethepig
7
ridethepig | Historic Moves In Yields !An insane move across Yields with historic outflows, I am expecting some relief over the coming weeks but we the lows are still open for a 5th wave sequence. This target will worryingly come into play at 0.20x! We have intentionally covered the Credit Spreads together here in order to see what is "challenging" in the US economy: Such compensation is frequently that the recession is forced as the economy ends up in some wilderness. Such an environment is however transformed into a garden of Eden if the transition away from Protectionist Public Sector flows and Governments is opened. The following examples will make my meaning crystal clear: After VIX exploded 250% !!! via coronavirus triggering the immediate mistake occurred in Monetary policy which sent shockwaves across all main markets. The Fed capitulating is a major blow to Central Banking independence, because the Whitehouse mismanagement and fiscal policies are being funded in broad daylight by Powell. The crossroads between a higher stock market and a higher dollar was always going to trigger the next round of easing and QE. Of course, Yields can be bought after the lows are set but that takes time. But buyers have no worries, since with a solid centre a loose Rates market is easy enough to defend. Even more than that, Fed's "Loose Gambit" will turn into a slow moving but safe instrument of attack on USD: And now that we have to some extent defined the logic between the wilderness markets are walking into via the demand and supply shock vis a vis the monetary policy measures referred to at the start of the segment. For the technicals 🗺 Steel Support 0.72 <=> Strong Support 0.81 <=> Soft Support 0.85 <=> S/R FLIP <=> Soft Resistance 1.08 <=> Strong Resistance 1.17 <=> Steel Resistance 1.24 It is extremely important to track this chart and understand that markets challenging Central Banks, though it apparently only looks like a spiteful play, in fact represents a problem in the underlying structure of protectionism in the US. Thanks as usual for keeping the likes and comments rolling!
TVC:US10YLong
by ridethepig
3
ridethepig | CHF Macro PlaybookThe pair is performing with little trouble for sellers, it has been absolutely hammered as Global Equities and Yields come under further pressure via Coronavirus impact. After a conversation with @FT_Lexicon we can discuss the importance of flanking and comparing with EURCHF is vital here, we can realise why there is not the same room for SNB intervention as there was in 2011. Let us now take a look at this two-stage manoeuvre in a swing without opposing forces: The 1.06 barrier is giving up, this will allow the move to follow through with CHF inflows. Here the CHF side must be occupied via risk-off positioning. The franc must be bought as long as we remain in this environment, a frontal attack on demand and supply and now markets are catching up. For all those tracking the previous USDCHF chart via generational US capital outflows we it is a good time to review the diagram: In the position; Sellers have already done the technical damage because the next soft support is not found till 0.900x which will hold temporarily before we move towards 0.85xx. The theory of our opposition is really lacking, FED cuts and US virus case numbers still ticking higher will all weigh heavily on USD going forward. The truth is simple; volatility was miles ahead and played its role as leader, here is the chart @ridethepig called back last year in VIX (Volatility): The application of the VIX in this context is helping us keep in sync with risk sentiment, as long as this remains elevated, all USDCHF rallies should continue to be sold. This shows the typical and ideal situation for us using CHF as a safe-haven. Their relationship is like those of real comrades, brothers standing side-by-side and must be taken into consideration at all times! The strength of their relationship will progress and demand a testing of the 0.85xx handle, their lust of range expansion will continue to drive the flows. On the technicals, 0.9525 is the closest s/t resistance and should be sold if it arises. Otherwise, well done all those holding shorts from the highs last year. As usual thanks for keeping the likes, comments and charts rolling in the comments below !!
Short
by ridethepig
2
ridethepig | BTC After Fed Capitulation..As confidence in CBs monetary system begins to collapse we are going to see strong demand for BTC and other major cryptos. Here tracking a breakup back to the highs after the recent Fed flop. Powell capitulating and surprising markets with a rate cut which helped risk assets although the caveat was panic. Markets are rightfully questioning what role monetary policy can play in this supply and demand shock, the FED mandate is and will always be the stock market as long as the Trump administration remains in the Whitehouse. Highly recommend those following from the previous BTC diagrams to dig deeper into the fundamental drivers in play as we will not be covering those here today: On the technical side, we are tracking a retrace leg inside an impulsive 5 wave sequence towards the $9,975 highs which is the minimum flow projection from a breakout. Two simple opportunities to go long in play from a purely price perspective. For the triggers... (i) Firstly we will wait for either a breakout of resistance and play the momentum rather than jumping the gun and risking getting caught in chop. (ii) A blind long on a test of the Monthly Open at $8,540. On the medium term flows as long as $6,213 is holding the uptrend remains intact. It is very strong steel support, a break above the highs in this swing that we are tracking will lock them for a very long time: Here the safety of the swing is protective and the advance becomes strong. And once more, the reason can be found in the qualities of decentralisation and the role it plays in the contraction of globalisation via protectionism (in particular the US & UK). So the truth seems to lie in the following facts: Just as our judgement of CBs developed on the basis of price stability and inflation mandates, there is an initiative for BTC to shine and play a major role in the new monetary policy while the stubborn refuse to adapt, those who are nimble will be rewarded. As usual thanks for keeping the likes, comments and charts coming!
BITMEX:BTCUSD.PLong
by ridethepig
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ridethepig | EUR Market Commentary 2020.03.05A playable break here in euro, with a more solid resistance found at 1.124x which seems to be the next target for buyers. Now DAX sellers are entering back into the picture which will keep EUR in bid and help us corner our opponent up slowly before a momentum break, though this attempt could be better seen in German Equities: The position which is reached is full of resources, such as: (i) ... EURUSD macro breakdown (ii) ... ECB Floor (iii) ... birds eye view then... breakout You should also take a look at the Dollar focus which arises via FED artificial devaluation of USD: The position we have here appears really simple and clean, but is actually rather complex given the dangerous environment. A break will allow buyers to occupy the flow and expose the 1.124 jurisdiction. In positions like this, play the momentum with extreme force. Thanks as usual for keeping the likes and comments coming, jump in with your charts and views in the comments!
Long
by ridethepig
22
ridethepig | EUR Market Commentary 2020.03.04Powell capitulating and surprising markets with a rate cut which helped euro crack the 1.12 handle. After a nice pullback we are right back to the starting point in time for the NY session. The drivers remain the same for now, (i) bearish on risk via virus impact, while (ii) bullish on risk via Sanders fading into the distance provides the pullbacks. The euro has covered an impressive amount distance in a short period of time and as US cases begin to tick higher it will certainly push EURUSD higher. I am buying 1.110x on the day for a 1.124x target and remaining nimble around virus uncertainty. As usual thanks for keeping the likes and comments coming! Jump in with any questions or charts below!
Long
by ridethepig
4
ridethepig | DAX 2020 Macro MapAs those following the latest Macro charts in Euro will know, the philosophy of EUR finding a strong bid will constitute good criteria for the devaluation of German Equities and rule out any possibility of setting new all time highs. This is crunching time for the Fiscal side in Europe, if Germany start to use the fiscal side then the logical follow up is EUR long: An ingenious swing move, which is extraordinarily difficult to trade without knowledge of the fundamentals in play. Bulls have all the time been operating in stealth mode, whereas bears starting to go overboard in a counter attack. Mother Nature is taking care of these errors, all at once. In most circumstances she would have turned a blind eye, although from time to time intervention is necessary with a gentle smile and turned cheek. The diagram in Bund Yields highlights the underlying issue: The sacrifice of the 12886 lows in DAX creates freedom for the waterfall manoeuvre. Otherwise sacrifices on the topside (only via a sweep) are still possible. See for example the following flows in CAC: The fact that this attack was able to clear the highs, shows the two different battlefields in play for Europe. The exchange of flows in Europe is particularly worth expressing via DAX shorts with 2020 outlooks all set and ready to go. In the long term, remember to consider the US Equities chart: To secure the position; invalidation and reassessment only necessary with a break above the highs. To the downside, initial targets enter into play at 10,500 ... we will cover and update the flows live here. As usual thanks for keeping the support coming with likes, comments, questions and etc! Feel free to jump into the conversation in the comments with your views/charts.
TVC:DEU40Short
by ridethepig
12
ridethepig | JPY Market Commentary 2020.03.04For risk markets, historic times with US10Y breaking through 1.00, the 50bp cut is really sends ⚠️ signals that things are not as healthy as they made out as ECB insist they have no room to follow the Fed. Buckle up and remain defensive guys, I am adding USDJPY shorts on the day with targets 106.9x and 106.5x below. Stops needed to be above 107.9x. For those tracking the 2020 macro map: It is clear the macro map was short-circuited by the USD spike to mark a medium and long term high in DXY. As usual guys thanks for keeping the likes and comments coming, jump into the discussion below for the intraday.
Short
by ridethepig
ridethepig | NMR Spot Commentary 2019.01.18A short update here essentially with one intention to shed some light over the pending impulsive wave for Numeraire. Bulls wish to occupy the retrace, a swing in order to deliver; but if he tries to crack resistance at 99.000 bears have time to prevent him doing so. So the correct move here is loading on the retrace into our loading zone, leading sellers into betting on momentum against support, because as usual most retail go overboard when they attempt a recapture. I am going to protect the support here and lend aid to buyers; the key point here is that buyers are strong here in one area, a simple retest is enough to provoke the impulsive swing, because our opponent cannot sense an invasion. At the very least, sellers will be forced into covering as we trip the highs. Good luck all those in Numeraire for the coming months, and, as usual thanks so much for keeping your support coming with likes, comments charts and etc !!
Long
by ridethepig
3
ridethepig | JPY Market Commentary 2020.03.02Risk markets are starting to form a temporary floor via BOJ stepping in and suture the wound. Volatility is set to remain high for the coming days, Asian stocks finding a bid from the usual dip buyers while USDJPY has started to bounce from last week’s move. Looking to sell any rallies into 109.2x as we have not seen the end of the storm in currencies yet. Historically intervention will occur on Wednesday... look to buy rallies into 109.2x for another selling opportunity! As usual thanks for all those keeping the support coming with likes, comments, charts and etc!
Long
by ridethepig
ridethepig | Fading euro rallies into 1.108xThe euro finding more demand overnight with Italy behaving and looking for help on the fiscal side. Risk markets are cooking a s/t rebound via co-ordinated global policy intervention; by no means is this the end of the virus but the underlying negative tone we have been witnessing across mainstream media is starting to soften this week. Global Central Bank co-ordinated policy action will be enough to keep risk markets elevated in the short-term and allow for a temporary rebound in risk (markets are now pricing -75bps from FED ... insane !!!). I am fading rallies in EURUSD today at 1.108x, markets have gone overboard in my books on FED cuts, the impact on global growth is still going to weigh on European data going forward. The lows are currently locked by the support at 1.097x, should we lose it then it will expose them and 1.06-1.05 underneath! Those who traded the leg in USDJPY will be able to pull the trigger again at 109.2x: Risk markets are starting to form a temporary floor via BOJ stepping in and suture the wound. Volatility is set to remain high for the coming days, Asian stocks finding a bid from the usual dip buyers while USDJPY has started to bounce from last week’s move. Looking to sell any rallies into 109.2x as we have not seen the end of the storm in currencies yet. Best of luck all those in G10 FX over the coming sessions, thanks for keeping your support coming with likes, comments, charts and etc!!
Short
by ridethepig
9
ridethepig | You Know The Drill ... BTFD !Even BTC could not avoid the exodus from risk last week. Positioning isn't the problem in this case as the market is back to Jan levels, a clean sweep of the soft hands to reset play ahead of the halving ... We can expect to see a broad recovery of Crypto this week on the back of co-ordinated CB policy intervention, I still favour trading BTC from the long side around these levels, for a move higher towards $13,500 and $16,000, as the liquidity punch bowl continues to be refilled. Momentum in the macro community is starting to gain speed as confidence in public sector assets deteriorates, this premise will be positive for cryptocurrencies broadly. In the medium term, potential Crypto hedges from risk will also come into focus as markets provision for losses in global growth and s/t EPS. Miners are in a bit of a tight spot with prices at these levels, there is a lot of liquidity being taken out the system in LTC at the moment which is help: I have been arguing that positive BTC fundamentals should see the highs inevitable taken, but it became clear last week that positioning was too heavily loaded on one side and induced the BTC sell-off. Happy to stay long and add on dips. Thanks as usual for keeping the likes, comments, charts and etc coming!
BITMEX:BTCUSD.PLong
by ridethepig
4
ridethepig | CADNOK Market Commentary 2020.03.02Eyes on the technical breakdown in CADNOK to kickstart the week, a few important updates to make here as intervention begins globally from Central Banks and OPEC. For those tracking Oil you will know we got the massive meltdown that we have been expecting in the chart-pack since last year: I am tracking a much larger than expected cut from OPEC at 1mbpd and would therefore recommend trading a bounce in risk markets. The view of a cut from BoC this week seems a done-deal too - this will start the round of global easing. On the technical side, targeting a fresh breakdown into the stops at 6.8xx. Invalidation is found above the recent highs. Thanks as usual for keeping the support coming with likes, comments and etc!
Short
by ridethepig
1
ridethepig | Flash Crash In Play For AUDCNH !!A major breakdown ahead of the open as markets catch up to the virus disruptions. AUD and global trade are set to suffer for sometime, it will take a brave man to step against this flow. On the monetary side, RBA tee'd up a rate cut in April with another in Q3 on the cards. Housing has already done the heavy lifting, will need A LOT more help from elsewhere to create a positive outlook in the near-term for AUD. PBOC in a 'whatever it takes' moment with the printer starting to overheat. On the technicals, the doldrum 4.7-4.9 range remained intact throughout 2019. Since the new decade we have broken the lower end in the range via coronavirus trigger, a screaming warning for what is cooking globally. We are sitting at key support 4.5 which needs to hold otherwise we have a flash crash in play towards 4.3 - 4.25. Unless buyers step in quickly we are set to lose support on panic. Continue to sell weakness if we lose support. For those tracking USDCNH : For those tracking EURCNH : Lastly, for those tracking Chinese Equities : Best of luck all those in CNH, risks come from further PBOC intervention although looks like they ran out of time! Thanks all for keeping the likes, comments and charts coming!
Short
by ridethepig
1
ridethepig | EURCNH Market Commentary 2020.03.01Here we go for a round of important chart update on the FX, Commodity and Equity board... I do not subscribe to the idea of this being the start of the euro reserve currency rally which we were tracking earlier in the year that failed from the Coronavirus short-circuit, although it is certainly moving with speed. Remember we have month end flows in play now too and to put the 🍒 on top the virus still not under control. I am expecting further downside in euro as the outbreak continues to delay the recovery in trade for Europe, now it is crystal clear if it wasn't already that the EUR really holds the key to pandora's box for those wanting to play the reflationary trade. This has been delayed till later in 2020 via the deflationary shock from COVID-19. Tracking 1.05xx-1.04xx in EURUSD. On the CNH side, the PBOC intervention is notable: Advise selling rallies in Chinese Equities for now, the demand for currency will increase as long as the virus shows no signs of abating. I expect this cross to grind towards the 7.40 levels where it would be very attractive for those mid and long-term macro players to buy the dip into 2021. On the technical side, Strong resistance is found at 7.73 / 7.75, use this to sell into and target the support at 7.40 / 7.38. Thanks as usual for keeping your support coming with likes, comments, charts and etc!
Short
by ridethepig
ridethepig | DE 10-Year Yield DailyI will try to keep this one relatively short, a very important update to the German 10-year benchmark yield. This is one to track as it is coming after a fresh attempt of a breakdown in EURUSD for the NY open. Here we can see important macro forces in play with extreme risk on the radar via Coronavirus with large sharks being forced to reposition and rebalance defensively for risk-off flows. European Equities (DAX) will do the same dance: Although we did find an all be it temporary but rather traditional bid from the 50% retrace ... the move is clearly running out of steam and softening the near-term optimism around a temporary rebound. This will attract sellers and those with soft hands to start taking European risk off the table. In my books the mid and long term pictures are far clearer for Europe. This will be a lot easier to see when I upload the Weekly DE10Y Yield chart with the close. In any case, the key levels in the map to play are as follows: Strong Resistance -0.15% <=> Soft Resistance -0.25% <=> Mid point -0.34% <=> Soft Support -0.45% <=> Strong Support -0.60% This will also carry important implications for the EURUSD chart so a round of chart updates on the FX, Commodity and to a lot lesser extent French, Spanish and Italian Equities front necessary over the coming sessions. As usual thanks for keeping your support coming with likes, comments and etc!
TVC:DE10YShort
by ridethepig
ridethepig | Green/CDU Grand Coalition Cooking in GermanyA fresh round of poll updates from Germany with CDU/Green coalition in play: => CDU/CSU-EPP: 28% => GRÜNE-G/EFA: 23% => SPD-S&D: 12% => AfD-ID: 11% (-1) => LINKE-LEFT: 9% => FDP-RE: 9% We are marking the highs as widely mentioned previously in the 2020 Dax Macro Map: Markets are unable to shrug off risk from Coronavirus and we are spreading into waterfall mode. PBOC stepping in to attempt stopping the bleeding but smells too little too late. No surprises EUR showing signs of marching in the opposite direction: Those following the latest Macro charts in Euro will know, the philosophy of EUR finding a strong bid will constitute good criteria for the devaluation of German Equities. This is crunching time for the Fiscal side in Europe, if Germany start to turn on the fiscal taps (too late anyway) then the logical follow up is EUR long. Thanks as usual for keeping your support coming with likes, comments, charts and etc!
TVC:DEU40Short
by ridethepig
3
ridethepig | AUD Macro Updates Via Coronavirus ImpactOn the macro chart we are still chopping around the same lows that will mark the ending of a currency cycle alongside a turn in commodities. The coronavirus expectation and impact legs are short-circuiting the reflationary trade that markets were so eager to jump on board with towards the back-end of 2019. Sadly numbers outside of China keep growing and economic impact is entering under the spotlight. As long as things do not improve on the virus front we are going to see a major flush down in AUD and continuation of the same USD bid. Tracking closely the open today, smells like Tokyo are going to ring the risk alarms. A rather wild week on the technical side after a significant break through the 0.670x support, this is unlocking a test of 0.645x RBA floor via rate differential. This move looks particularly vulnerable considering where we are with Copper and Iron ore: Good luck all those in AUD or looking to add positions. Actively looking to add shorts on any spikes into 0.670x or even front running with 0.668x, a waterfall breakdown is in play until we will see some local exporter buying interest which is initially found at 0.645x and 0.632x.
Short
by ridethepig
ridethepig | JPY Market Commentary 2020.02.26On the risk side, US10Y bouncing from the lows while Global Equities attempt to form a s/t floor. Central Bank co-ordinated policy is only a matter of time, markets have forced FED, ECB, BOC, BOJ, BOE and everything in-between to kiss the hand and keep rate cuts on the table. JPY is itching to resume dancing the same rhythm but given USD demand via month end rebalancing there will be room to sell USDJPY from cheaper levels later in the week. Look to fade any rallies into 110.7x with initial targets located at 110.3x and 109.8x. Invalidation of the view comes with a breach of 111.2x. Thanks for keeping the support coming with likes, comments, charts and etc!
Short
by ridethepig
2
ridethepig | EUR Market Commentary 2020.02.26Here we go for another important NY session … EURUSD holding the 🔑 1.09xx test of resistance ahead of the open as expected. Markets notably anxious of further outbreaks which (sadly) seems unavoidable now. I spotted a lot of euro supply from corporates this morning. Remaining short is perfectly reasonable assuming the current highs hold this PM, targets are located below 1.07. For those in Fixed Income the picture is a lot easier to see as usual they are miles ahead of the retail FX crowd. On EURUSD I am holding shorts from the initial 1.086x entry here for a leg towards the initial support at 1.077x. As long as the 1.09xx resistance is holding there is very little to see to the topside. The EUR weakness is a lot easier to see this morning in EURCHF, this 1.060x level is being defended by SNB: In EQ things are a lot clearer as the waterfall is in play already for DAX, coronavirus has short-circuited the global reflationary theme that market where so happy to latch onto towards the back-end of 2019: ...good luck to all those riding the pig. As usual thanks for keeping your support coming with likes, comments and etc! Stay tuned for a well needed round of chart updates coming across most asset classes.
Short
by ridethepig
1
ridethepig | US02Y Market Commentary 2020.02.25Play may go as far a 1.115%. A counterattack from FED needed to save Equities... BTFD always wins? Not this time...When major forces on both sides come together, it comes down to a sort of exchange case 1, which we shall call: " Selling life as expensive as possible " Buyers play ... Sellers happy to exchange at the resistance line, but since FED is condemned to death, it is quite understandable for those wanting to sell Bonds are the highest price possible. Generally speaking, such a telegraphed move is much stranger to the novice than an experienced: Virus worries and Japan confirming recession is trigger a move in vol, and it makes the US05Y-US02Y attractive. Treasuries will outperform for the coming months, Equities will remain soft until later in the year. Hesitant to build full sized positions till we have a technical break as we are aggressively outguessing the next move from FED. As usual thanks for keeping the support coming via likes and comments! Jump in with your charts below!
TVC:US02YLong
by ridethepig
ridethepig | EUR Market Commentary 2020.02.24A very important weekend across the globe. Italy, Iran and SK weighing heavy on virus sentiment as capital rushes out the doors. Any hopes of a Q2 rebound are starting to fade and that USD haven demand we’ve seen of late looks set to continue. All eyes this week remain on virus watch, a muted/slightly dovish Lagarde expected on the wires and here happy to sell any bounces into 1.085x/6x. A move through 1.0775 will trigger momentum. On the Bund side things are a lot clearer with a -12% day! Fast paced markets, tracking the 1.086x entry here for a leg towards the initial support at 1.077x. The waterfall is in play, good luck to all those riding the pig. As usual thanks for keeping your support coming with likes, comments and etc!
Short
by ridethepig
5
ridethepig | Gold Highs Of The Year? Smells Like It...Part I - Chapter 1 The Gold Swing 1. General remarks => The base of the swing => The idea of two clashing forces After the impressive leg: ...we have a completed Gold swing trade. The legs A, B and C are individual moves in the swing; a zigzag should be considered a retrace and in this case while inside a second wave that serves a function for the medium and long term macro chain. So the bottom of the swing, which we traded together below live here, will be called the base. Every retrace swing, in other words every ABC sequence running diagonally across the currency board meshes flows together, it divides the market incrementally into blocks, which are consisting of bids and offers opposing each other. For the sake of convenience, we will dig deeper into the basing process: The diagram illustrates an example of a transition in direction. The idea of building a swing Before you tackle what follows, you should walk forward and check that you are well versed in the ideas concerning Gold and event risk. If not you should refresh your memory here because this is necessary in order to understand what will follow. The question we need to answer if we 'know' our direction is up: after ABCDE and for as long as 1700/10 does not advance, Sellers have the possibility of directional change and can move here. Sellers did not disappear just because of coronavirus, or mediocre risk. No, they must still be there, in a macro sense from the Gold peak in 2011 which coincided with the transition towards BTC and negative rates via ECB & BOJ. Gold above all is a retail market, and the boat is fully loaded towards one side with markets trading as if the plague is here. Well, we all know what happens when markets exhaust and dislocate from reality. The powerful urge to continue hedging with risk will only expand, and thus what I have modelled are inflows into BTC to outperform Gold. Towards the breakout The ease of movement (in terms of capital) must be taken into account, the demobilisation between BTC and Gold will come from the inability to move large sizings of Gold around without raising flags anymore. BTC can advance and take full advantage of this handicap Gold now wields. Should buyers try to push Gold any higher here by attempting a breach of 1700 for the 3rd time (it will present yet another selling opportunity), my strategy remains to reunite with the sell side around currently levels in Gold and recommend those who are still long to start rounding up troops. Attacking the swing The attack from the base in Gold is both fundamentally critical and technically valuable for the logical justification of transitioning away from a commodity driven currency and more towards digital money. I have to attribute to myself the honour of having made a killing in the latest Gold rally, because the price drivers kept telling us to load more. It was not about the direction of the swing, but purely and simply about how cheap could we buy. The main thing is that the buyers from these lows should now be restrained! What was at that time my most revolutionary position (one to which I have come across by intensive work on the issues of reflation). Smart money realises that BTC is deflationary and will weigh heavy on Gold (traditionally inflation up was bullish for Gold). Critics will scream about how they knew it was overstretched... pull the trigger! That's the play! So, here is the chartpack mentioned above from the well-known @ridethepig tradingview portfolio, which I present in its entirety, with no changes and not a word in my own defence. I make only the comment well done all those who were long Gold from 1205, 1250, 1305, 1350, 1400, 1450, 1500, 1550 and even those greedily playing 1600. A flawless move that is now time to take profits and switch sides !!! Marking the highs as a strategic necessity Sweeping the highs in this nature towards 1700 in the opposing direction only happens in unsustainable rallies on a short-term sentiment belief in panic. This essentially reduces the sustainability towards the rally... we are almost at a 90 degree angle !! Recognising exhaustion comes from experience, it is cramping our enemy (late buyers in this case) and attacking it can be formulated as follows: Any traps should never be started with haste when direction changes are involved... The struggle for transitions and picking tops is one that retailers have struggled with and can talk about till the cows come home. The transition should first be aimed at forming a base (or in this case a top) by insisting and threatening to achieve denial of the highs (invalidation, rejection etc). So according to the rule, flows should immediately start to unwind as buyers reach their final targets and smart money should attack aggressively and that should be by 1680/1675, because the highs are more of an aesthetically pleasing ornament. After marking the highs, sellers will have different possibilities to plan and can see which path is clearest if buyers play somewhat naively, as though they have no idea that technology is deflationary, something like: That is the logical knee-jerk profit taking and positioning swing we need to develop: firstly the big exhaustion, and now the tree is shaken, smart money see's this miles in advance! Just like the hero in the films, stubborn traders will continue to buy, very simple. Those nimble enough can take the first one and knock him out, then turn to the next barrier and beat the living daylights out of them! Before gold bugs realise what is happening, the technical blow will be to severe ... Stay long BTC.
FOREXCOM:XAUUSDShort
by ridethepig
22