📍 In this position, after clearing the knee-jerk reaction from covid flows we are starting to enter into chapter II, heavy protection. The flows have shown strength in drastic fashion; the apparently bottomless wallet of keynsian economics - suddenly showing a surprising amount of animation! You can see the impact of PBOC on Chinese Equities here: ...and now...
📌 Surrendering the resistance => Buyers taking the highs here would be unpleasant for any bears e.g those betting on the double top and everything is roses on the risk and economy front. From a timing perspective, with witching cleared and value Quarterly/Monthly end rebalancing underway we can be comfortable with the link to Gold. In this position which has...
📍 Changing Directions... Let us first look at the previous charts for the flows we were tracking in the typical Copper flows inside a crisis: a) Confirming the correction, which is set from an abc retrace b) Momentum is in play here In the lows at 2.1 - 2.3 the clear move was loading on the lows. This was followed by an immediate slingshot out as...
📍 The effect of Remdesivir... The power to unlock the all time highs via Covid is systematically, within reach rather fast, due to the nature of drug prices which are inelastic. The effect of Gilead being treated as utility is heightened by DT putting the big orders in. Compare the following two diagrams: Phase III trials & Chinese red carpet ...
📍 The outpost After sellers shamefully abandoned their outpost at 1765 in June, whenever a gust of risk gains some traction, buyers are able to exploit and win the battle. Let us start by looking at the original breakup. The difference between a protection swing and a momentum play can be seen in the following examples: Buyers open fire on the pullback...
We can experiment with the opening here in the copper/gold ratio as commodity shortages begin to make the rounds as widely expected. 📌 Probably the most sensible response is to prepare for a slingshot into Copper with reversed flows in and out of Gold. Shortages/ It seems to be an inflection point at an early stage in the crisis. I would have preferred...
📌 The affinity between 'resistance' and 'overextension' Light and summery flows continue with GBP in purely technical moves. Very little to update on the fundamental here; a weak macro and political picture persists as activity remains incredibly low in the absence of confidence. There’s a lot of support stacked on the 0.90 🔑 pivot in EURGBP and 1.252x in...
📍 NZDUSD : NFP Positional Play This is an example of an erroneous defence. In similar style to that of the GBPUSD position, the highs 0.652x can be defended, since it unlocks an impulsive position which is somewhat cramped via RBNZ adding more free money to the pot. Buyers attempt at breaching the highs should be opposed, we have risk in play via Covid and...
📍 USDCAD Prepare for a flush in CAD with the ever-present threat of Canadian tariffs from Trump. Protectionism is excellent at the best of times...let alone in the middle of a pandemic... right 🥺 The unwinding is picking up speed - RSI on track for the decline and pressure looks set to carry us into the 70 handle. => A possible breakdown can also now be met...
📌 Here tickets are very cheap for those wanting to exploit the NZD weakness via dovish RBNZ. While on the European side, a direct consolidation of the debt, sacrificing Merkel to save the currency. Complex but totally tradable flows. => After the textbook move in EURUSD Euro crosses can almost equalise. In cramped consolidation, you cannot afford to give...
📌 Marking the start of Short-term flows with CADCHF... The initial move down was grandiose which, however, was not strictly able to test the 0.690x lows. Sellers would have won the battle easily and continued the breakdown via weaker CAD fundamentals. => Instead luring unaware buyers into a compression range to later suffer from an embarrassment of a further...
📍 EURGBP What are we trading here? A counter any false conceptions that we will see a Brexit deal. All headlines produce an immediate effect for trading: wait patiently and quiet and justify fades: Here the static weakness of GBP can clearly be recognised. Any idea of pullbacks into support will be short-lived. These remain our key loading zones with...
📍 By now I am sure you all have grasped the basic premise: from the very start of the March dead cat bounce we are calling bluff and looking to play the fade, fighting the Fed does work on occasion despite the rumours, and lastly have formed enough energy after this quarter for a huge swing down in global equities as Long bonds complete the cycle. Most...
📍 USDCAD On the Canada side... This flow has become particularly interesting over the past few sessions, large macro hands front running BOC and piling into corporate debt and helping CAD hold at these levels. The risk to Canada really comes from the housing market, as soon as the stimulus stabilisers are off there will need to be another miracle to avoid...
📍 EURUSD G10 FX Strategy The analysis of this starting position shows us two important triggers to conduct additional entries to our long positions. => A flanking manoeuvre is underway, but also a quick-witted fundamental swing; the euro's transition towards a funding currency and eurobonds saves it from collapse. As long as this expectation exists, the...
📍 EURUSD breaking out of the consolidation/chop and starting to tactically move higher. As you all have noticed, volumes are a lot lighter as markets catch their breath back. The two clashing forces on the risk front remain set to hijack the flows at any time: 1️⃣ an increasing R0 / case numbers and; 2️⃣ re-openings / economic surprises. Overshoots on...
BTCUSD with an underlying bid tone trickling slightly higher and completing the second targets in the sequence. For now though, I am happy to continue fading intraday dips in BTC and look to re-instate longs around 9360/9400. The unhealthy collapse in consumer confidence in the public sector will continue adding to the brighter picture for BTC. Gold and BTC...
📌 Flows to illustrate end-game cycle chains -> Here we are tracking a very advanced flow, the struggle for Long Bonds to complete the final ⚠️ breakdown and trigger capitulation in debt . This would be more natural to develop ahead of US elections as it would imply maximum pain giving enough energy to help form a base on 'surprise' Trump victory. To...
