Week 46 - Trade 3: France40 ShortA bit oversold and should be aligble for retracement. Testing short to around 5800.
FRA40 trade ideas
Posible venta FRA40 Relacion 2:1Confirmaciones Ruptura TL alcista, divergencia, zona de cambio, Fibonacci, Pullback..
Current euphoria based on higher risk premium ... Patrick Artus affirms that European Markets should maybe be priced 25% higher from current levels based on a 3% risk premium differential.
US markets are mostly inflated by share buybacks because this is how the stockholders are remunerated, whereas in France for instance, dividends are on the order of 3.5%.
Fractal wedge vs PullbackThe weekly trend is down. Pullback or not, it's easier to short with a closer stop.
MIF2: Fixing - High volume anomaly and manipulable dry market This is actually a concern. 41% of daily volumes take place toward the last 5 minutes of the trading day. This dries up liquidity and create weird patterns during the day. Price discovery is less efficient in many cases in my opinion. Algos follow last minute execution. Costs are supposedly reduced thanks to some tweaks but this probably leads to some imbalance in the markets.
This game should cease when the situation si reversed.
Document by the AMF (French "SEC") about this matter in French:
www.amf-france.org
Short the 78.60% of the fractal pattern target - Island ReversalThis has been a new norm for momentum targets and some patterns. Flags keep overextending all the time though, so pay attention to weird handle patterns such as in overextended Cup and Handles, and potential Inverted Head and Shoulders. When this game of greed and short squeeze ceases, QE or not it will be down extremely atrociously in my humble opinion.
Machine Learning - Algos trying fractal Cup and handle patternsYou can clearly see the difference in terms of relative strength. The market is easy manipulable ... the algos in pattern recognition are squeezing shorts by creating and following previous patterns that are in "vogue" (Inverted IH&S), sort of bullish flag that are in fact a hidden handle in a Cup and Handle pattern and so forth.
Pay attention to the manipulators, do the opposite of your initial thoughts and see if the algos will squeeze by trying new (old) patterns out ....
The market then indeed went back to 5878 after it bounced back from the current low of the day (need to check smaller time frames)
Contrarian CAC40 Long to 5877.5Let the algo play it out.
Let the algos do the o p p o s i t e of what it written
The CAC40 is clinging to algorithmic patterns and targets (bias)My current opinion is that European markets are losing steam. Many highly correlated markets reached multi-month targets. We are very close to a reversal.
The patterns are to be confirmed for a breakout to the downside (current bias)
