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The Charts That Matter In FX Next Week
We have a bone to pick with Goldman's John Noyce. Last week Goldman's (quite respected) strategist, when discussing his specialty, the EURUSD, said that "selling a bounce toward the middle of the consolidation at 1.3250 would seem attractive." Well, in typical Goldman fashion it didn't take his colleagues in the tactical division even one full week before pulling the rug from under all who listened to John, and putting out their own EURUSD target of 1.37. Either way, for those who enjoy decoding dodecatuple reverse psychology, here are John's latest charts that matter next week.
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Weekend Charts
EURUSD http://99ercharts.blogspot.com/2011/01/eurusd_15.html
ES http://99ercharts.blogspot.com/2011/01/es_16.html
http://99ercharts.blogspot.com/
I'm investing in dollars.
got a few honderd $US with a
nice lady on it.
got a few hondred aus$ with
all sort of nice animals on it.
got a few hondred can$ with
leave on it.
Could this be the real $$$$$$$$$$$
The only thing that matters next week will be how much POMO the Fed dumps on the markets. Even I am starting to believe that not even technicals matter anymore.
Mirror mirror on the wall, when on earth will the Euro fall? After we see more upside and a saner attempt at pricing in blatant European stability my queen, as the focus returns to the fundamentals in an instant, for they rarely disappoint of late and lets face it you old hag, have been slightly overlooked....next stop 1.4250, ka-ching!
sharp rise in yields back stopped by the ECB, ya think that helped EURUSD????
time to short USD and CHF against GBP and EUR this week
It's pretty much a lock that many gamers have seen their accounts destroyed the last few weeks:
- Forex Gridbot bucket shop using insane amount of margin.
- Forex Megadroid "watch the money roll in" computer programs.
- Gold hoarders who bought boatload of calls expecting gold and silver to "go to 'da moon" when JPM fails.
Options and futures trading is a total scam. Note how most FX Bucket Shops actually pay you money to deposit money into their accounts, with schemes and scams like free commissions, rebates, etc. for opening an account.
No different than the myriad number of offshore sports betting parlors, who actually pay you money to open an account, and also pay all wire, Western Union fees as well.
Forex trading and options trading is a complete waste of time. Just look at all the Lind Waldock ads trying to get the sheep herded into the pens to trade gold and oil futures. Very few succeed with it.
Trading liquid S & P 500 stocks correctly is far easier. No need for those stupid double and triple ETF's either. Gunning those is a fool's errand, unless you are disciplined to get in or out only during extreme overbought and oversold conditions.
I'd have to disagree with you regarding Forex . It's an extremely liquid and very accessible market . I trade it myself every day . It's a waste of time certainly if you utilize the insane degree of leverage some brokers offer ( one firm I researched was offering 200 : 1 ) , fail to do proper research and jump in without a sound trading plan . If you approach it professionally then there's no reason that you can't be profitable .
In some of your other posts you've mentioned the billions being spent on sports betting and the potential for those gamblers to start rolling into the stock market . I'd say currency trading has far more potential to draw them in . The Forex market is more liquid/accessible . Over here in Ireland/UK it's an incredibly explosive industry . There are advertisements on radio , television and two of the teams in the English Premier League are now sponsored by an FX broker . The success rate is abysmal , which probably explains the rapid growth . I was talking with a guy back in August who was heading the development of FX software for a major bank in the UK . He told me the vast majority of accounts are wiped out within 90 days and that many firms don't even bother to hedge against their retail clients anymore .
I'm actually curious as to whether there is a similar advertising blitz for Forex over in the US ?
Disagree with your opinions re futures and fx. Few succeed probably for mostly the same reasons few succeeed with stock trading.
Stock trading is not that hard. As long as you:
- Trade only the biggest liquid stocks
- Avoid gunning and chasing the IBD Top 100 stocks
- Avoid knife catching weak single digit midgits
- Avoid the biotech sector and other news driven areas entirely
- If you are on the right side of the market, making a mistake on an improper entry is usually corrected easily with time.
- Always wait for confirmation of market turns, never try to be a hero picking tops or bottoms
For the super disciplined, you can stay out of the market most of the time, and jump after a reversal from extreme oversold conditions, grab your 15% - 25%, then get out. Do this 5 - 6 times a year, that's all that is really necessary.
You write great stuff, and stock trading probably is not that hard.......for you. For others, probably a different story. Too bad your posts attract the overwhelming negative commentary which stiffles constructive dialogue imho since I think you have a LOT to offer as a reference for being on the right side of price discovery for the much less experienced not to mention seasoned professional traders.
As for futures and fx the same principals apply; liquidity, global market, correlations ,price discovery, risk transfer, position sizing, risk management, overbought tops/oversold bottoms, range trading, trends, technical/fundamental/news trading........
I especially like the part you wrote about discipline..........I always study what you write.
Fx trading is zero-sum game.
The spread,fies,commission eventually
makes 90%+of the fx gamblers loose
money.Fx trading(futurs,options) was
to hedge currency risk for companies,
it's now a rigged casino.
is it really a zero-sum-game?
Basically I agree.... but different to a pokergame, in forex markets you have (central)banks that can create money out of thin air, no?
The zero-sum isnt so zero-sum anymore then...
Yanks burned their hands again with eurusd shorting that was not based on any fundamental analysis.
Breakouts Down Under:
Looking to short GBP/AUD
China has a good chance of crashing next week. Do they have a PPT!?
http://stockcharts.com/h-sc/ui?s=$SSEC&id=p25236165419&def=N&a=162535441&listNum=11&cn=95
I see the definition of a head and shoulders top has changed again in regards to gold. Every week, someone sees a new head and shoulders top. Honestly, I don't see it this time at all.
The best news for the gold bulls is that the CNBC Fast Money boys are ultra bearish right now, all talking the "head and shoulders" top.
On top of that, before Friday's "General Jim Deadline Massacre", the Hulbert sentiment index was already headed towards the lows.
http://www.marketwatch.com/story/a-contrarian-read-of-the-gold-market-2011-01-12?reflink=MW_news_stmp
Which means after Friday, the sentiment is probably approaching all-time lows.
Looks like to me that late shorts into the gold sector are about to get "shampooed".
That is why I NEVER go short in ANY sector when the NYSE and Nasdaq Summation Index is still climbing.
So how long does it take for the tape to turn ? If its not a flash crash is it something that happens intraday that makes you pull out or go short ?
I know you watch the banks but what else are you looking at ?
Banks and retail will top out well before the overall tape does.
Gary Kaltbaum does an excellent podcast every day. He's unbiased, goes long during bull runs and goes to cash during bear phases.
Says to avoid munis, gold, silver, and coal.
Very positive on banks and semiconductors.
http://archives.warpradio.com/btr/InvestorsEdge/011418.mp3
Thanks again for everything. I hope you post up top again like your " confessions of a former bear ". The comment section was great, I wish it was like that more often. But most of the people never posted anything after that ....
When this new blog started, you would talk with 10 traders every day but now ... Man, its like you killed sheepdog's cat ... Lol' Everyone ... I wish RAS' would post on ZH that would be fun, its not CB is it ... ?
Can anyone tell me offhand what is the longest period the CAD has remained at (above) parity with the USD?
02/2007 USD/CAD fx traded around the 1.17 area (83 currency futures give or take).......
by 09/2007 it reached parity and then for 2 months USD/CAD traded down to 0.9100.....
from Nov 2007 it returned to parity and traded along that line until it exploded higher starting 10/2008.
it reached 1.30 the same month and then traded along resistence at the 1.30 area until it peaked and started a reversal in March of 09 around the same time as the FED publically annnounced its intention to print.
Hey, thanks!