ECB & Fed: Checking The TurnWave 3 - Chapter I
Introduction and general comments
After clearing ECB & FED it is well known that hikes are cooking very creditably and the monetary side appears to be quite helpless in the endgame. The most well-handled analogy from poker is "checking the turn", both Powell and Lagarde showcased the ability to play this with skill. It may be in the nature of things for markets to gather first plenty of participation in the opening, but this problem for bears must be tackled as soon as possible. You must be aware that from the very start of June we have seen one way traffic for sellers, there are now stale leftovers compared with the feast that is cooking for buyers. The realisation will soon kick in that not enough time has elapsed for sellers to pack and defend the ladder appropriately, meaning a material occupation of control from buyers will trigger a slingshot higher as they cover quickly.
Example 1 :
Buyers were the most important actor present during the Covid Compression. They headed for the apex and at the same time eurobonds protected the base and propelled the swing into 1.20+.
Example 2 :
Here too from the zoomed out picture we can see how buyers control the flows and choose a 5 wave sequence, first targeting the 1.20xx main area which we cleared in the tweet, and second, the 1.25/1.26 area which can now be made more enterprising in Q3.
The next move in play here is an impulsive wave from 1.185x => 1.25xx/1.26xx. Since the immediate expectation of inflation is now being forced via Fed, this is an exchange the ECB will lose. Breaking below 1.17xx will imply an imbalance between sellers and buyers.
Ridethepig
Positional PlayA quick update to the Euro chart here after clearing the well known ECB positioning. This was the last thing we needed to mark a significant floor; anticipation of 1.176x (Strong Support) holding has clearly applied and for those building their own positions internally, protection is defined below March lows (1.168x) while targets above come into play at 1.217x and 1.250x.
Admittedly we overshot the wave (2) slightly more than I thought, however, as has already been mentioned in the previous chart(s), we were neither tracking buyers nor sellers, rather what was essential this time around in my books, was macro positioning. What was needed was a fresh and energetic low to draw participants in before enough time elapsed for the fundamental side to materialise. If we set aside for a moment, a quick recap of the previous chart for the new readers here, this is what we were previously tracking, to set into motion the "teeing" off.
So the positioning players now have picked their sides, buyers clearly are looking to make a freeing swing towards the 1.25xx handle and post their profits for the year, while sellers are now poorly positioned in terms of risk:reward, and those looking to breakdown need it to happen in such a way as to open the next leg lower in EURUSD in 2022 and beyond. In saying this, we must not get too far ahead, the move here we are tracking is a slingshot towards the topside with Dollar under severe pressure once more.
Altamira Gold (ALTA) Unlocking ApiacasThis has been a superb ride since 2019.
In terms of the review, let's consider the following parts:
Altamira
Gold
Copper
↳ On the Altamira side...
Apiacas is the rainmaker, for context, after five years of waiting they were awarded this massive land package in the largest producer area in the belt. According to very good sources they have at least 1m/oz cooking here. Induced polarisation is already underway (this is where they pump a current through the rock and it comes back quicker if there are sulphates etc). For those who read the latest press release you will have seen very interesting readings there and positive signs, and with drilling starting this month drilling into 100-150m depth and they will look at gaging how far this goes down and start the next chapter.
We are +650% from the lows with both targets above cleared. A home-run for 2020 was the expectation, and a home-run was what was delivered from the Altamira Team. Very well done to those who " swung the bat " and are still holding from 4c/5c !!!
It ought to be known by everyone that is following the flows here that we have a final slingshot move cooking towards $2 in play over the coming Quarters. Highly recommend tracking 25c which is going to be STRONG support over the Summer, we look set for a quick test before a slingshot towards our final targets. For those asking about Gold (which I will come onto next) and if prices drop there, cost of production for these guys is around circa $500/oz, so it's irrelevant for the most part.
↳ On the Gold side...
We were tracking the highs in 2020 for Gold coming miles ahead of inflation, which is important, because the position only appears to be a temporary one, whereas in reality it can be opened up at any point via risk and further contractions in globalisation. This is true for almost 80% of private assets as we are witnessing a decisive move of capital from Public to Private markets.
All the cases of CPI overshoots just show that the function of Gold is not simply consisting of inflationary expectations, rather respective to confidence in the Public Sector. I would recommend looking to the work of Martin Armstrong - for those who have insomnia, a few pages of his work around inflation before bed time is the perfect cure.
After the test of $1,680 we successfully completed the 4th wave targets, before attempting a quick test of the highs in Wave 5, which was more skilfully rejected by sellers on the CPI overshoots. A very wide range is now in play which will be enough to take out the amateurs (and in some cases, masters too!!). For those wondering whether to start withdrawing troops, I will be updating a detailed Gold chart separately this week, as mentioned earlier, is really irrelevant from an Altamira perspective.
↳ On the Copper side...
Sure ok @ridethepig but why is Copper here and what does that have to do with anything?
Santa Helena is the third leg to the stool, this is where they have a lot of copper and other minerals. They have just put a lot of Subject Matter Experts (SME's) out there to put together the exploration program there to target the high grade gold veins, and secondly the copper source. This is also at Apiacas, I think there is probably a lot of Copper there too, will keep an ear to the ground there and keep this one updated.
The financing they have achieved is going to allow them to eventually spin off Apiacas and etc into different vehicles but not till we finish the moves in Copper. For those tracking the Copper chart, it is pulling back from the highs as widely expected. We are going to mark the Wave (4) lows somewhere around $3.30 in Q3 right on time for Santa Helena in Q4 for a move into $5.
Thanks as usual for keeping the feedback coming!
ridethepig | Copper for the Yearly Close📌 Copper for the Yearly Close
First with an immediate review of the flows.
We were tracking for the capitulation low which was our moment to advance...
It was a great choice of moment to load the longs.
Extending the belief in commodity shortages which have been entering into play all year long. The highs are worth striving for, all factors remain the same with the macro picture still equal. The main cases where this will play an additional note too at China and Australia flows which is something to consider.
After clearing our first targets it's time to aim for the 4.5 main impulsive zone. A flyaway break is in play with such a bullish close, which is generally not very common. Of course the last time this happened was in the early 2000's; and we exploded.
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ridethepig | EURCHF into 1.14The concept of this complete or at least partially supported euro structure
In this swing, there are three actors:
1 . the support which is acting as a pivot
2 . the opposing resistance which is being targeted
3 . the breakout trigger which will provide momentum
The breakout here is attacking the soft resistance at 1.14 which is +/- 4% from current levels and 1.20 next year. So buyers are standing in deep value levels with the two targets mentioned. The structure underneath is generally of royal blood, buyers put a lot of time into the plumbing of these levels and are not fearful of hiding behind one another - thus the short space between strong and soft support.
If this lacks the mobility to break out and is an absolute chop fest then we can make the executive decision to make no move of any sort. If on the other hand, the momentum kicks in as I am expecting, we can move to 1.14 with little pushback over the coming weeks and months. The diagram illustrates the long-term map.
Here the flow towards 2018 highs is underway with the European rebound and we are only "partially" into wave 3. This means we can confidently lean on the macro direction as Swiss outflows are set to continue with CHF cooked as a low yielder for the next few years. For those tracking the SNB reserve activity closely, they are going to get a lot more active in Q3 (a lot similar to Q1).
ridethepig | CAD for the Yearly Close📌 @ridethepig G10 FX Market Commentary - CAD for the Yearly Close
A very good time to update the CAD maps as we approach the key 1.27xx pivot areas. For six years this level has been relevant and has convinced me it cannot easily be done away with. Since the overwhelming pressure on USD remains, what we are talking about here is likely a flash crash of some kind, I maintain that the positional sweep towards 1.20xx and 1.14 is within reach and losing this key pivot will make it easier to come to terms with.
For those who remember the infamous Oil breakdown, the chart is always worth looking at for collateral moves in energy and commodity currencies. CAD in the wider sense will have large inflows from the Biden victory as an immediate and defensive position. The move somehow brings 2022 into the spotlight as very major low forming, the result of that will grind Canada to a halt for a number of years.
You can see on the technical side that again we are keeping things simple, a breach of the pivot will open a waterfall towards initial targets of 1.206x and extensions below at 1.138x. We will dig a lot deeper into the macro pictures and charts once we get these maps out the way with.
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ridethepig | NZD for the Yearly Close📌 @ridethepig G10 FX Market Commentary - NZD for the Yearly Close
Here we are tracking the weak points in the structure which are strategically important points in every map. They are usually protected and once broken and be rewarding with non-stop moves. The handle to track here is 0.74xx which is well placed and comes to undertaking other duties of preventing the flow back towards 0.883x.
Now the early strength of this can be seen with the latest breakup, it is a monthly closing in drastic fashion - a veteran soldier ready to march. A breakdown in Dollar for 2021 is a 'good deed' for the rest of the world but actually we will cover a whole chapter around how it is the only monetary option. After a Biden victory we can expect them to rush through a digital dollar and trigger defaults, things will develop quickly so time to start paying attention for the 2021 flows now.
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ridethepig | TSLA on the Fairway📌 ridethepig | TSLA on the Fairway
An illustration of the consequences when surrendering the support and when your opponent grabs the break.
It's trailing time for those who have been following the surrender. In order for us to execute more on the position I will want to see a final break of the temp lows, in order to somehow catch one final momentum play.
Sellers are clearly on the fairway and this swing has been a very large one.
An express train!
With simultaneous plays down to structural support -40% from the highs, breaking through is an extreme. I expect 330 will be the final destination here unless buyers manage to somehow bring in more resources. A quick leg down before finding a base? Smells like it.
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High of the Quarter?📌 ridethepig | BTC High of the Quarter?
A short iteration update here after the wild moves cleared the board and left a lot of confusion behind. The beauty of abstracting to volatility trading, or elasticity trading or trend following is that you take all of the noise in the inner waves out, and just trade time and probabilities .
Well done all those who are already short from above and managed to book some profits on the test of 46,000. For those looking to add back to positions or jump in then all we need to do is trade in our window and capture the overlap. A daily closing below our $55/54,000 pivot is contentious and shows buyers are exhausting . A pullback towards the 42,000 Tesla breakout looks in imminent , before we can ultimately gather enough energy for another slingshot.
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ridethepig | Variation of Flow & Profit Taking📌 ridethepig | Variation of Flow & Profit Taking
When in the much disputed variation of covering partial longs, we can look for some shorts to play the pullback towards +/- 48,000 of an incomplete (iv) in a 5-wave sequence.
This point of view is based on a complete and understood notion in the concept of an underlying impulsive nature to the move. For this, we need to simply stick to the fib itself: the 261.8% has been our impulse target, so we need to track for signs of a turn which is the current situation at the top of our map. This is important and should be used as an area to do some profit taking/covering under any circumstances for those holding from way below.
The significance of resistance here in a situation where we are at approximately 60% bull market in the macro chart is a (3) wave temp high inside a (5) wave sequence. As well as creating energy for another slingshot later in the year, it is intimately linked to the manoeuvre handled by sharp sellers outguessing a temp high.
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ridethepig | Silver Slingshot📌 ridethepig | Silver Slingshot
Attacking the highs several times • The protecting sellers get in each other's way! • How to maintain the momentum • The birth of fresh strength • Reassessment as an invalidation
Since after:
The move has been very promising, buyers should, as has been emphasised a few times, have played the momentum trigger. What is the importance of this you may ask? Well, in a nutshell, it renders the 22.5x strong floor as an outpost and fixes it in place in a well defined map. Previously buyers were unable, for good or ill, to break through the highs in one sweep, which is now possible and defines our slingshot.
We must also recognise that 26.0x (our pivot level in play for this exercise) contains recognition from both institutional buyers and the WSB crowd dreams of forcing their opponent into capitulation. When both sides align, it's time to swing the bat - it is no surprise that Silver is catching a bid - the people's coin one again being defensive and passive. The goal is an ideal one; the 27% posted targets (see 33.2x).
The continuation in nature might be very similar to the playing before:
This slingshot shows us the dark side of multiple protection of dollar devaluation which puts the inflation side in the spotlight. You should take with you the idea that underlies this move, in order to be able to maintain the pressure, one must not allow the noise from politics and etc to break your short dollars development. Instead we are going to use the market structure as our guide to clear up any information asymmetry, i.e, if sellers take 18th Jan lows (24.0x) in a sustained breach it can show early signs of the momentum fading and will call for reassessment in the bullish view.
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ridethepig | VIX Exploding 📌 ridethepig | VIX Exploding
Morning all... a short post, but one that is full of dramatic events. The 'discovered naked short' from wsb is a wildfire burning...the cleanest place to see the damage is in vol. This discovered vector in GME clarified the damaged relationship between central banks and market pricing while QE infinity provides a cover a 'risk free' environment. It's very similar to the round trip explosion we traded last year from 12 to 85 and back again.
When you pin shorts (the root of all evil), whether its GME, BB or VIX... it has enormous mobility. The magic of reddit has exposed Melvin Capital, Blackrock (own +/- 10% of GME) et al, while Citadel cheerlead in the background and will of course be fine and make money either way.
Let us take a closer look at the possible moves with the VIX; I find that the 44 pivot which is in the crosshairs can do one of two things;
a) The offer can evaporate rather quickly, even if it was previously nailed by barrier, which will trigger a momentum gambit towards 85.
b) We can attack and our opponent (sellers) without any anxiety step back in to occupy the control since it is their jurisdiction, i.e. one ladder that is controlled by your opponent.
Now consider the latest chart update:
Here a) was very much dependent on the October 2020 highs. Bear in mind how unafraid the buyers which are moving with force are. The wildfires are capable of satisfying a healthy appetite from retailers. with that in mind we are going to see capitulation across some more names.
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ridethepig | The Capitulation📌 ridethepig | The Capitulation
Very little to update after a quiet European and NY play. Buyers are clearly in the superior position, as you all know, just a matter of time before we get the capitulation let now.
A very quick leg towards $57,000 is in play , we have the open ladder after clearing 161.8% extensions and our enemy is without a shield. This is getting embarrassing for sellers.
Depending on the decisiveness of the breakthrough in the swing, it can allow us to start moving our scope to six figures. Satoshi understood money over IP, he understood inelastic supply, he knew not to touch the wallet while outguessing the societal move towards a post trust world... a true genius. For those who haven't had the chance I would highly recommend digging into the old emails / forum posts.
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BTC Flirting to Break $50,000 📌 BTC Flirting to Break $50,000
This illustrates the perfect gift for valentines , but also touches on the problem of magical technical targets. An impulsive leg, avoiding the 161.8% target for our wave (iii) because it could lead to it being pinned by sellers.
Now buyers are better than the textbook move for our , firstly when you think of development and secondly observing sellers and noticing that the boat is still not fully loaded to the long side. So a capitulation move towards +/- $57,000 is urgently required. Moreover, lets also consider 216.8% to be an easier area to defend than 161.8%.
Admitting the weakness of sellers defence, worth considering that the path of least resistance is still to the topside. The threat is hard to find, only regulation will trigger the surrender (not expected to enter in play till summer 2021) and with a positional advantage here we must continue riding the pig .
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$57,000 in the Crosshairs📌 ridethepig | $57,000 in the Crosshairs
Satoshi's vision is coming true... Trump impeachment noise going on in the background providing the ebb and flow while the reality beneath the political waves is that the more you clamp down on freedoms, the more the masses realise. There is a significant coming to consciousness occurring, the rate at which shoes are dropping for everywhere for people is remarkable.
Tokyo are opening soon, and buyers are flirting to take the $50,000 crown with the leaps and bounds in mathematics. Tech is like.... meh... what underpins the tech is the math and that's what interests me... what we go with has to be decentralised, we need the innovations of Satoshi to take down barriers in a game of adverse incentives. Stay long, if we breach below the recent pivot level we can reassess.
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ridethepig | BTC Breaking to Fresh Highs📌 ridethepig | BTC Breaking to Fresh Highs
Buyers taking the highs after the news, I have my eyes and now it is time to aim for the home run and initial ideal target at $47,500 - see the yearly close chart below. I managed to carry out some nice bids on the pullback although we failed to clear the $27,000 which was the well-known (C) target in our wave 4 pullback .
Excellent moves, I hope this has been a healthy exercise for all to follow. The key now is to ride the momentum, here happy to hold longs while looking to add on a test of $41,000 as the most important pivot below should we see it... Unreal to think that $220,000 is in play for Q4 this year .
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ridethepig | BTC Market Commentary 07.02.2021📌 Clarification of the manoeuvre designed to show the third liberating impulsive leg
The following position was reached after Buyer's attack on the log chart created room for a momentum break. I chose the 'log chart' break (which was a game changer in the opening phase) as the one to track so that we could make use of the whitespace above. The way Buyer's play allows them to completely paralyse their opponent in majority . And now, I ask you: Why do Sellers permit the freeing move?
Sellers refrain from stepping in. Correctly so, because here would be the typical example of liberation . The linkage was known in the classical school of Elliot , which believed in absolute freeing momentum moves on the log breaks and surprise surprise we got it with our wave 3 impulse. This coming to consciousness via Covid is accelerating the need for cryptographic sound money.. Let me recommend to you my Yearly closing chart:
If you know the thoughts on swing chains , it is easy to outguess the concept of our opponent and understand which levels in the ladder they are naturally going to consider defending. In this particular case, we can see $53,400 as the next level to follow for Buyers.
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ridethepig | EUR Market Commentary 28.01.2021📌 ridethepig | EUR Market Commentary 28.01.2021
In this position, we have managed to build a solid floor at the 1.207x area and as widely expected Buyers fought like a lion to defend their jurisdiction. The ECB on the wires attempted to talk down the currency via threatening room for rate cuts, classic jawboning from Knot in attempt to provide shelter. They will not cut again and time to call bs; here actively buying dips in the euro - this charming position is proof of the wonderful beauty of technical analysis.
Looking back to the initial start of this move, it has taken a lot longer for the flow to play out than I would have liked, however, nothing has changed and there is no reason to be alarmed. If we lose the floor and breach 1.200x, then we KNOW we are WRONG and need to reassess the view. Fed artificial dollar devaluation is here to stay and a move back towards the top of the range is the path of least resistance.
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ridethepig | EURGBP Finding a Floor📌 ridethepig | EURGBP Finding a Floor
After the preparatory manoeuvre, passive sellers are keeping a close eye on the 0.882x ABC target and already starting to cover. Sharp Buyers were aware of this and made the transition to attempt a base formation. With ECB / FED now cleared there is the customary inventiveness to continue with the rally. What we are trading here is the expectation of BOE cuts and calling bluff on ECB holding pattern.
On the GBP side, we have been given a data from Johnson for March where kids will return back to school. Taking it with a pinch of salt once more and recommend resisting temptation to park in GBP. BOE has room to cut rates and with Brexit impact starting to enter into play, the flows will become clearer. Technically taking 0.893x will open the floodgates for a momentum gambit towards the highs, while to the downside 0.887x/0.882x area will continue to be the loading zone.
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ridethepig | Jan 4th Low are Hanging!📌 ridethepig | Jan 4th Low are Hanging!
Buyers were hoping to play a ' manoeuvre ' on the pivot level (worth considering that sellers were not having any of it!) the rejection was a flawless setup and quite rightly trailing our stops with some breathing room was the right move .
In order to establish a breach of the Jan 4th lows permanently(?) on this next move, sellers had to achieve this at the cost of a pullback but can now force continuation , for the win. All perfectly natural and inline with our trailing stops. With 'A' already taken in our ABC , the 2021 lows on Jan 4th are now hanging. A simple break of minor support at $30,900 will be enough to open the momentum .
Clearly this final swing is getting slippery, so we need to define some parameters for reassessment .
↳ If we cannot break below the $30,900 minor support over the coming sessions, it will indicate the start of an impulsive leg cooking towards $39,200.
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ridethepig | EURGBP for ECB📌 ridethepig | EURGBP for ECB
Now that we are trading back at the lows in the range in EURGBP, the game is roughly level going into ECB today and we can begin to look for positions once more. In a situation which is very similar to the previous flow that we played from the pivot in December.
Continuing to build EUR exposure at 0.885x and looking for ECB & BOE to start diverging in expectations from today onwards. BOE are going to play the whole -ve rate endgame with wonderful precision and genuine artistry. Pound devaluation is the way to go in my opinion.
A quick recap of ECB expectations for today:
> Global inflation is starting to show signs of creeping higher ( see the explanation ) so expecting Lagarde to be slightly bullish EUR on inflation , neutral on growth, no changes in rates and the usual 'watching the currency closely'.
Looking to make use of the 0.885x lows for a move back towards our 0.900x pivot and 0.922x highs.
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ridethepig | EUR Market Commentary 26.01.2021📌 ridethepig | EUR Market Commentary 26.01.2021
An important chart update for euro here, which does not require to create a decision, but shows how price rolls forwards undr the direction of price drivers. It advanced quite far and cramped the highs. Finally there is another opportunity for loading on the 1.212x pivot.
For the risk cocktail we have Conte resignation , covid varients , vaccine execution and delays to Biden stimulus all entering into play. These are unusual markets and volatility expansions (e.g. yesterday) are still showing that the USD remains the safest place to park capital when the storm hits.
I am still of the view that we will clear initial targets , but clearly there are risks entering into the picture and trading pragmatically is important with risk in the air. For those holding longs in this swing, it's time to sit on our hands with a lottery ticket , trail our stops and take of the exposure.
Thanks as usual for keeping the feedback coming on these short-term flows 👍 or 👎
ridethepig | Chinese Yields Struggling📌 A Pullback for Chinese Yields
This illustrates the notion of development in a change in trend for China's sovereign bond market . Sellers avoided a breakout and are aiming to test 3.00%.
On the fundamental side , China is outperforming as expectations are skewed towards favouring their management of the virus and recognisable weakness of the West!
Strong LT push factors remain in play, putting the renminbi into SDR was a g ame-changer , as with the Saudi's allowing issuing Oil in CNY contracts; 2020 was the year of the Yuan while 2021 looks more like a game of two halves. H1 2021 we have another deflation storm cooking while H2 2021 rate markets are showing early hints of inflation and rate hikes.
On the technical side, sellers now have the attacking position in the highs. This is a definite advantage . Here the weakness comes from a breach of our diagonal resistance (light blue). With this move, sellers see themselves as obliged to continue by playing an initial test of 3.00% which will unlock a sweep of July 2020 lows at 2.83%.
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