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This Chart Proves Risk Sentiment Dynamics Rule Forex AtmAs the trading war between the US and China edges closer, as Canada and the US struggle to hash out a NAFTA deal, as emerging currency markets implode, the markets are taking note of such fractious times by behaving based on risk sentiment. What this means is that in the short-term, if one monitors our risk-weighted index, which takes into account 9 risk-sensitive assets, all equally weighted, it will help you gauge the next potential moves. The increase in correlations (daily on a 30-day period) in risk-sensitive pairs such as all Yen crosses or G4 FX vs US Dollar is evidence that the market's main theme and upcoming ebbs and flows will be determined by a sense of higher or lower risk aversion, therefore, by adjusting the risk index to your most suitable trading timeframe, you will be able to get some powerful clues as to where sentiment stands at any time to provide potential trading opportunities if divergences are spotted.
SEducation
by FlowState
This Chart Proves Risk Sentiment Dynamics Rule Forex AtmAs the trading war between the US and China edges closer, as Canada and the US struggle to hash out a NAFTA deal, as emerging currency markets implode, the markets are taking note of such fractious times by behaving based on risk sentiment. What this means is that in the short-term, if one monitors our risk-weighted index, which takes into account 9 risk-sensitive assets, all equally weighted, it will help you gauge the next potential moves. The increase in correlations (daily on a 30-day period) in risk-sensitive pairs such as all Yen crosses or G4 FX vs US Dollar is evidence that the market's main theme and upcoming ebbs and flows will be determined by a sense of higher or lower risk aversion, therefore, by adjusting our index to your most suitable trading timeframe, you will be able to get some powerful clues as to where sentiment stands at any time and therefore, provide potential trading opportunities if divergences are spotted.
S
by FlowState
Risk-Weighted Index: Violation of 100-ema Heralds Trouble AheadThe risk-weighted index, mainly driven by a sharp decline in the EM MSCI index, further anchored by a fall in US 30-yr Treasury yields and strength in the Yen and Swiss Franc, is communicating that the outlook for risk appetite looks quite poor this Friday and heading into next week's trading. The hourly chart has broken below its 100-hourly ema, which has been an accurate measure to assess the positive/negative dynamics in the overall risk sentiment. The sudden collapse in risk below the moving average is a red flag that suggests the likes of the Japanese Yen and the Swiss Franc may find further capital inflows. On the broader context, we present a weekly chart, to understand where we are in the risk cycle. The index is retesting the origin of the GFC supply imbalance, struggling to make further gains, and most importantly, an ascending trendline, which has been a precursor of capitulation in risk, has already been breached.
SShort
by FlowState
USD/JPY: Diverging Away from a Worsening Risk ProfileDivergences taking place between a cheap Yen and the deterioration in risk flows. While it may struggle to muster gains against a bullish USD, expect the Yen to regain ground, especially on the outcome of a breakout of the trendline. Monitor the breakout of the trendline closely. Note, the index encapsulates the most risk-sensitive asset classes, which when combined, allows us to make sense of the actual risk on/risk off profile in the FX market, with some subtleties that we will explore in coming days and weeks. For instance, is the index driven purely by USD strength? There might be some outlier days, but by and large, it's a great predictive index to use when trading risky FX pairs the likes of the Yen, Franc, US Dollar of metals such as gold.
Short
by FlowState
The Risk-Weighted Index Pain(t)s a Gloomy Picture With regards to the constructive risk profile, pay attention here. It’s important not to be too complacent as the short term recovery in the risk-weighted index occurs within a wider negative context. From a top down analysis, we've drawn a few trendlines to represent the perils that entail for risky assets each time a violation occurs, which since the GFC, tends to signals a topping phase in risk, and if history is any indication, it heralds an eventual market capitulation as the chart illustrates. By drawing ascending trendlines in the risk rallies seen since the GFC in 2018, we can notice that everytime the market has breached the line, the capitulation, in a larger or smaller degree has ensued. As we point out, expect a potential outperformance of currencies the likes of USD, JPY, CHF going forward as the risk rally phase fizzles out.
SShort
by FlowState
2
Hogs and pesosIn this screencast I focus on 'lean hogs' and the Mexican Peso v Sterling. The core issue is the ranging pattern on the daily time frame (over the periods I'm looking at). In general these two instruments are highly volatile and risky. However, the pattern creates expectations (not predictions). In other posts I pointed out that certain instruments have a certain personality to them. They behave differently in their volatility compared to others. One other that I did not put in the video is CADNOK on the daily or weekly time frame. I'm not saying that everybody should trade these instruments. They are certainly not for everybody because the sort of stop losses required on entering on these are very high indeed. So are the potential gains. Extreme stalking, timing and patience are required with these ultra-volatile charts. Success in the markets also involves finding and exploiting instruments that have their own particular patterns. Go forth and explore. :) :)
Education
by Captain_Walker
Risk on/Risk off, XLY:XLP ratios, THE Real money flow indicator.Was recently shown this little gem of a ratio chart that will help gauge strength to certain markets such as the stocks and other financial instruments as the S&P, Dow Jones etc So what does it all mean?? The ratio of two diametrically opposed asset classes often provides insightful clues about what investors are doing. The XLY:XLP ratio is a perfect example. Its not a hypothetical as it uses real money data based on what investors are DOING and NOT what they maybe thinking or projecting... XLY represents the Consumer Discretionary Select Sector SPDR ETF. XLP represents the Consumer Staples Select Sector SPDR ETF. XLY is the ETF which tracks the consumer discretionary sector XLY’s top 5 holdings are... Comcast (CMCSK), Walt Disney (DIS), Amazon.com (AMZN), Home Depot (HD), McDonald’s (MCD). XLP tracks the consumer staples sector, with top holdings of... Procter & Gamble (PG), Coca-Cola (KO), Philip Morris (PM), Wal-Mart (WMT), CVS Caremark (CVS). So how does this affect markets? When the chart value rises its a clear indicator that people are happy to spend freely and without caution, investors will look to increase risk, where as if the value starts to go down and decline, people are spending more on everyday essential items and thus stock markets are in shrinkage, decline and investors are taking LESS risk. we can clearly see how this chart reflects current highs on the stock indices if we compare to the current S&P500, Russel, Dow Jones and so on If this article has helped or you have any further questions, please leave them in the comments below.....
AMEX:XLYEducation
by majorlee
1
Scenario: up or down? Scenario: up or down? Ethereum didn’t exactly do as we thought it would. We didn't get a clean break of our breakout level, and went down quite violently while bitcoin remained steady. Let’s stick to the charts and see what they tell us to do. DAILY First of all, We see the giant downwards channel we’re working on. We’re hanging on to the median line, and we want to see that hold to consider bullish trades Second, price is moving in an upwards channel. Second, ichimoku indicates that the downward move is consolidating, as all indicators move into equilibrium. How to treat this? Our setup remains valid, although we don’t think the move to be as strong as we initially expected (as bitcoin pushed through to the max target, ethereum didn't make it past the breakout level). Now if we get a clean break of the breakout level we’ll probably reach the max target around 565 . Let’s get a better look on the 2HR chart 2HR There’s a few interesting things going on here. Let’s break it down. First, look at the breakout of the prior breakout level. We broke out with an enormous hammer, followed by another enormous hammer, and then down. This was not a clean break, and we did not get in here. Traders getting in on conditional orders should be holding through, as our setup has not been invalidated, and are still on our way to our target. Now when do we get in? As we can see price is above the kumo, and tenkan and kijun are too. One possibility is getting in off a kijun bounce or kumo bounce around the 465 area. Another possibility is getting in on a clean break of the breakout level around 495, which will give us a much higher probability of reaching our target than entering now. Especially as we’re about to touch the kumo on the daily chart, possibly pushing the price further down in stead of up. If we do head downwards towards invalidation we may set up for a short trade, but more on that when the time comes So, again, and again, and again, we wait. We know our breakout level, we know our target, and we know our risk. We’ll see where price moves, do as it tells us to do. Breakout level: 495 Max target: 565 Invalidation 438 We hope you enjoyed this trade, and as always, remember, Be patient, only time will bring you profit. p.s. we regularly update our scenario's, follow us and receive to receive those updates!
BITSTAMP:ETHUSDLong
by DariusZen
VIX / 2H : Volatility expected to grind back up...Hope this idea will inspire some of you ! Don't forget to hit the like/follow button if you feel like this post deserves it ;) That's the best way to support me and help pushing this content to other users. If you want to see my chart more closely, click the share button below that video.. You will be able to have access to the chart used in that video. Indicators used in this forecast are PRO Sinewave BETA & PRO Momentum . You can check my indicators via my TradingView's Profile : @PRO_Indicators If you have questions about the topics discussed in that video post a comment with "@PRO_Indicators" handle. Kindly, Phil If you want to learn more about the basic rules to trade with my indicators here's the educational video link :
TVC:VIXLong
by PRO_Indicators
EURUSD Short at supply areaOn the EURUSD we are currently bouncing between the two red 4hr supply and demand areas. As we are currently in a downtrend and in neither an oversold or overbought area, we have a short bias. On the 4hr we are moving into a supply area (yellow) which we didn't trade last week due to the entry being triggered pretty late on friday. This luckily gave us a better entry point and so we are entering now instead. Hopefully we can get a small bounce for a 1:1 Risk:Reward, as indicated on the chart. Remember to trade with the probabilities. No single trade determines our performance, we will all have a loser once in a while. Take care, TheSupportResistanceTrader
Short
by TheSupportResistanceTrader
USDCHF long at demand areaUSDCHF is moving up between higher timeframe supply and demand zones, far from overbought levels. It is also in a 4hr uptrend which leaves us with a bullish bias. We are currently moving out of a 4hr demand area which has previously shown big strength, breaking the top on 9/5-2018. Due to the new week, I wanted to wait for a couple of hours for the market to stabilize before trading. I think the market is now fairly stable and so I go long from the current price. Hopefully we can get a quick upmove for a 1:1 Risk:Reward, as indicated on the chart. Remember to trade with the probabilities. No single trade determines our performance, we will all have a loser once in a while. Take care, TheSupportResistanceTrader
Long
by TheSupportResistanceTrader
UFO revelations could rock the world's financial markets. This is under the category of 'Beyond Technical Analysis'. It is about systematic risk i.e. something previously unrecognised that causes major upset in markets. What's *UFOs* got to do with this? Just about everything. Your world has been built on a sense of security that we are alone in the universe. People's religious beliefs, their sense of who is in power and so on has depended on that for the last few hundred years. Now as World *UFO* day - 2nd July 2018 - approaches there is emerging evidence that *UFOs* are real. I do not say that everybody will suddenly change their belief systems overnight. What a lot of people do is, avoid or ignore hard evidence - especially the kind that causes them anxiety. But some people in a minority are different - they are swayed by evidence. What does it mean if *UFOs* are real - and no longer a joke. For starters it means that there is a power greater than governments and financial institutions. That is then likely to cause fear and uncertainty in the minds of some. What if the *UFO* people decide to take control - for example - is a thought that will cross the minds of some. Read around and see how secret files due to be released from the National Archives were withheld. Further references: See this article: Are we alone? Scientists revisit the question of aliens before National UFO Day And Secret dossier reveals British spies spent half a century trying to catch a UFO so they could use its alien technology to build SUPERWEAPONS Dr David Clarke's guide - 15 pages cross-referenced to the National Archives. There's something going on out there and they don't want you to know about it.
BITSTAMP:BTCUSDEducation
by Captain_Walker