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Now we know why...! Print
Written by Site admin   
Friday, 14 July 2017 12:43

fri14thjuly

A picture tells a thousand words.

Lat month the Fed and Janet Yellen's comments, led the market to belive we were on the hawk trail to higher interest rates, 'normalistion' they called it. With that, commentators were falling over themselves to call the end of QE, actual tapering would be just a few months away...lardy dar, etc.

This month, and today, realism just kicked in. Now we know why, during her testimony to congress this week, Janet switched tack, moving well away from hawkish comments to those of the Dove. The mealy mouthed statement and Q&A did nothing to clarify but showed up even greater Fed confusion. Or was it confusion, no, she knew what today's numbers would show. 

The reality is that the US economy in is deep do-do. The Fed have been in denial over the last couple of years, presenting massaged numbers to the world while the average Joe and Josephine were living through higher costs of living with squeezed wages and lower full time employment available.

As the numbers just came through, Gold jumped (a nice Hikake pattern we traded), the DXY, US Dollar Index, dropped through it's June supports (4 hr chart Harami play). But what of the stock market? No worries here, the Dow is almost through it's all time highs. Sure, the economy is shot, but the Fed has our backs. Normalistion, not a chance, this must mean more cheap money coming our way!

DXY Harami from TMEST

dxyharami

goldhikake

Gold play from TMEST

 

 
Yellen - as clear as? Print
Written by Site admin   
Wednesday, 12 July 2017 17:54

muddled

Markets have been on a roller coaster ride this week with New Zealand earth quakes, the latest Trump's son revelations and then it was Janet's turn today as she attempted to clarify matters US economic to Congress. If you have nothing better to do right now (for the next three hours) you can watch the Youtube video here. This statement sums up her new (lack of) clarity about interest rates:

Fed Chair Janet Yellen surprised markets again, when after weeks of a hawkish setup, she suggested that the Fed is not only uncertain "about when - and how much - inflation will respond to tightening resource utilization”, but warning that the federal funds rate may "not have to rise all that much further to get to a neutral policy stance."

Various commentators have described the entire three hours as balnd in the extreme, this one from Goldman Sachs suggests intetrest rate normalisation will take a long, long time and the flip flop between hawkish and dovish sends out the strong signal of how muddled the Fed's thinking is about what the economy is actually doing! 

"We read the paragraph about the neutral rate as slightly dovish for the longer-run outlook, particularly the comment“…the federal funds rate would not have to rise all that much further to get to a neutral policy stance.”Chair Yellen confirmed that she still expects the neutral rate to rise somewhat over time but remain below levels that prevailed in previous.

And the most likely direction for the US dollar as the "fed funds rate rises..............to a neutral policy stance":

updown

 
Canada tightens... Print
Written by Site admin   
Wednesday, 12 July 2017 16:01

 We just had Canada pop their overnight interest rate up from 0.5 to 0.75%, a 25 basis point rise as they say in the trade. It's taken them 7 years to do it and marks the end ultra cheap money that kicked off the crazy housing market with valuations way above the reach of the average Canadian.  Now they are confident the economy is sound and the oil price, on which the economy largely depends, has stabilised in recent months. So much for the announcement, you can read the story here, but it's the chart USDCAD that has been looking very interesting for some time.

cad12thjuly17

We traded in and out of the waves on the run up from 2012 through to late last year making hundreds of pips each time. The trend then cracked down. Wave theory tells us that after five up waves we should see three waves down. More correctly an 'a' wave down, a 'b' wave that atempts to get back to the high but fails at around 61.8% and this is followed by the downwave 'c' that should go to at least the 2014 lows. As you guessed, Traders Class members are running the short trades having sold the USD against the strengthening Loonie!

 
It's not Rocket Science Print
Written by Site admin   
Wednesday, 12 April 2017 10:24

  Detective Clipart 25573Just some detective work as a discretionary trader. It's not slavishly following a 'cast in stone' algorithmic style, the type of system that only considers a never changing set of criteria that is much better traded by a computer than a human.

Detective work takes a look at the chart to find those clues that just might build a case to put on a trade.

One of our recent Traders Class trades was the New Zealand vs Japanese Yen. The evidence started with a classical charting pattern, a Double Top.

Read more...
 
Crude Oil & the Dollar Print
Written by Site admin   
Sunday, 29 January 2017 19:44

Crude Oil and the US Dollar have a long term correlation, it's inverse, so as the Dollar goes up, Oil goes down.

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From the blog

What's going on?

Notice how, on the run up to major news announcements, market commentators, almost collectively, form a consensus view and then extrapolate that view to what is usually a cataclysmic end result.

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