A nice response to last week’s blog: -
THERESA MAY WILL RESIGN IN NOVEMBER 2018
Some very interesting views and we all have opinions, so they were gratefully received. One or two people thought I was a little disingenuous towards Theresa May and that I could see a huge splatter of egg on my face... life is so hard!
I wasn't really too sure what it all meant but if a payback was coming my way, let me tell you I‘ve had it via my trading account.
I was well and truly taken to the woodshed last week over my CAD trades. I was away from the office when the real pain occurred and out of internet coverage, but if the truth were known I should have addressed the trades 24 hours earlier. I did not; I was stubborn and that cost me a chunk of change and about 700 pips.
The stellar start to the month of 1,000+ pips in the first week, bounced back to reality very quickly, annoying and most of the pip and $$$ losses were avoidable...argh!
Interesting though check out the following tweet.
Interesting times, I am not sure what another series of resignations would do apart from make her position untenable.
Theresa May has a dinner date with the EU27 and a full day meeting on BREXIT to follow this week. Will she be attending?
What a week. The quote of the week has to be: -
“I know more about Monetary Policy than the FED”
Yes, TRUMP is back again. Americans are so lucky to have such a perfect knowledgeable President in place. Move over GOOGLE, YAHOO and BING, and let’s have a new search engine “ASK TRUMP”. He has an answer for every situation and is completely faultless on everything.
What a ridiculous statement to make about the FED.
All I see is Americans apologizing for TRUMP. I do not want to politicize in this blog, but at times this guy is just completely beyond the limit of every aspect in both personal or business life. Teflon coated absolutely and absolutely unbelievable.
That’s all I want to say on this subject.
Moving on again...
I have to mention ITALY.
I insert below the key dates for the process around the populist governments BUDGET submission to the EU in Brussels.
This is going to be a major confrontation in the EU between Brussels and the Italian government. I thought last week some of the most humorous tweets that went back and forth between the parties were from Pierre Moscovici, EU Commissioner of Economic and Financial Affairs, Taxation and Customs, holy crap that would be a super-sized Business Card!
When Moscovici was in French Politics, he was ex Trotskyist and Socialist. At that time, he could NOT give a rat’s hairy ass about budget compliance. Poacher turned gamekeeper and prize bullshi**er to boot. He will go far in the EU.
Moving on once again...
WHY DID EQUITIES CRASH LAST WEEK?
I was half way up a mountain in Nova Scotia last Wednesday getting fresh air trying to get rid of my cold once and for all from the previous two weeks. For the record, I did NOT succeed. All that did happen was that I missed day one of the U.S. Wall Street sell-off.
Upon my return to my screens I wrote to my WEEKLY FX PREMIUM subscribers saying that I could not see what caused the move lower. I have said of late in various communications that the determination to find out why moves happen etc. can be an obsession rather than a requirement in all cases.
We had a small pullback, based upon the prior levels of the indexes. Admittedly, the S&P had fallen 6 days on the run prior to Wednesday so there was downside pressure evident.
The gurus on the street say that TECHNOLOGY stocks started the cash out flows into bonds and that snow-balled.
We had two days of a sell-off (Wednesday and Thursday) and a consolidation on Friday.
I look a little deeper and fundamentally for my thoughts vis-à-vis the sell-off.
Both the U.S. and CHINA are tightening, it would be fair to say that there is a bit of a cash squeeze and therefore in my eyes an equity sell-off was inevitable. We have World markets now and everything is so inter-connected.
Commentary from TRUMP about claiming his FED board are “MAD and LOCO” does not help either. This all adds to the mix, translations across the globe can lose interpretation.
We were, on Wednesday, 48 hours away from the start of the latest batch of quarterly earnings from U.S. companies. From my perspective, the pressure on U.S. companies maintaining or, growing both top and bottom line numbers is intensifying.
I have long believed that the U.S. stock market is over-valued and a deep correct is due. The one-way move higher in the nonstop BULL MARKET is a correction waiting to happen.
Last week we had a pullback; not a correction not by a long way. A 20% pullback is what I am looking for.
So, taking all the above into consideration, I could not then (last week), nor can I today point my finger at a single catalyst for the move lower. What I can say though is that I expect more of the same to occur as we move forward. The TRUMP way of politics encourages this uncertainty in the markets especially given the length of the BULL RUN in equities. Traders are bound to be jittery not wanting to be left behind on a big move.
1. FX - FORWARDS, BACKWARDS & SIDEWAYS:
1.1. THIS WEEKS TRADE INFORMATION: ECONOMIC DATA:
NOTE: Only the items that interest me are listed here.
1.2. THIS WEEKS TRADE INFORMATION: GEOPOLITICAL EVENTS:
1.3. BIAS CHART - USD MAJORS SUPPORT and RESISTANCE:
1.4. USD INDEX (DXY) OVERVIEW – MY THOUGHTS:
Longer-term into early 2019, I do see the DXY tacking the big 100.00 level. Between now then we have BULLS and BEARS fighting for control at previous resistance around 95.80. I wrote this last sentence last week and my opinions have not really changed.
I still see at push to 100.00 taking place but for now we are in a range of 94.40 to 95.80 as highlighted with the purple horizontal tend lines on the chart below. I also have 94.43 as an area of strong support within the larger range.
I see chop ahead. There is so much geopolitical uncertainty in the world plus the TRUMP attacks on his own FED add to the uncertainty.
Cards on the table the FED will win out and Central Bank Divergence I believe will be a trade. For this reason, I see a 100.00 attempt on the cards.
1.5. USD MAJORS - TRADING CHARTS and MY THOUGHTS:
The monthly chart below shows that the EUR/USD is in a down sloping channel. My short-term macro thoughts are than the single currency is heading lower, primarily on the back of ITALIAN news. In my opinion, this should keep the pair pressured lower.
From a trading perspective I was hoping for a higher level to short from, closer to 1.1720 would have done very nicely indeed.
As you can see on the chart via the purple horizontal trend lines I have the levels of 1.1720- and 1.0907 highlighted. We also have a down sloping channel within the longer-term channel and the pair has been roughly keeping to its parameters so far.
Just to keep everyone on their toes I have no less than 3 Fibonacci retracements on this chart. As you know, I am expecting quite a sizeable pullback with the cable. My thought process at the moment assuming we see a pullback is to around 1.2700 initially. This would coincide with 23.6% (BEIGE) at 1.2680 and 38% (GREY) 1.2694. If this level does not hold we are in round number territory and 1.2500, followed by previous support of 1.2150 stands out.
Some institutional traders have spoken about 1.1000. In my mind that would be a BLACK SWAN, ARMEGEDDON, CAPITULATION, GENERATIONAL move. Great if we get the bounce back across all GBP pairs, it would be awesome awesome, awesome.
Focusing longer-term on the upside, 1.3600 is a major Fibonacci confluence area, then 1.4200 and then 1.5000.
Between now and all that we need to wait, watch and be ready. Above all be patient with GBP/USD it is liable to huge swings in price on headline news and is now a simple news driven pair. Be careful.
Last week, I wrote that this pair was my favourite looking opportunity to trade. Guess what? I did nothing about it.
We are in a down sloping channel as shown on weekly chart below. I would just love a sell into strength short around 0.7300. I am just not confident of a pullback to this level once again.
On the chart I have marked my objective low at 0.6995 (0.7000) and my high at 0.7330 (0.7300). Basically, a 300-pip range. Patience is required... play the range.
Lots of multi-year trend lines on the weekly chart below.
I am looking for a pullback to 0.6700 to short, but just not 100% sure we will see this level. The lower trend line from November 2000 with lows of 0.6100 last seen in 2005 is my short target longer-term.
I was taken to the woodshed and spanked good time by this pair last week. I still hold a small short position and like many people who are short this pair it is on the back of anticipated hawkish moves by the BOC by raising CAD interest rates.
Not sure but 1.3157 looks like it could be a target area for BULLS and from the other side of the trade a great spot to try a short trade from.
I am looking at a BULL FLAG pattern with a measured move to 1.0230. I have really missed out with this pair this year primarily due to the markets “Flight to safety” reasons. It used to be a permanent feature of my live trades.
The recent move from 0.9550 to 0.9950, 400 pips was stellar.... this dummy missed it completely.
You can see on the weekly chart below, that went out to subscribers that the measured move from trend line resistance at 114.58 (114.60) to 109.98 (110.00), was highlighted and the trade is half way completed. Obviously, I did not take the trade!
2. THE WEEKLY FX PREMIUM TRADING SUMMARY:
2.1. INTRODUCTION...SOMETHING TO CONSIDER:
- Trading with me via the FX PREMIUM option is a relative low-cost option to give you some or all of the following: -
- Confirmation of what a trader who actually trades his trades, thoughts and ideas is doing and thinking in real time.
- I am a long term “POSITION” style trader at heart. I believe in FUNDAMENTALS first.
- If you are a TECHNICAL trader first this could be a good fit. I have a proven record.
- I DO NOT trade if I do NOT see a trade.
- I am a disciplined trader. I have my TRADING PLAN, plus my RISK, MONEY and HEAD MANAGEMENT rules that I stick to.
- If your trading is NOT as smooth or rewarding as you would like, even if you just captured just 50% of my trades due to geographical location issues, you should still cover the cost of a subscription if you traded single mini lot trades in a year.
- I tell it as I see it. I am not interested in bullsh*t.
- I have losing trades. I cannot be right 100% of the time. However, I have many more good trades than bad trades and good days rather than bad days.
- You can get on board and join my FX PREMIUM subscribers and subscribe to the “10,000 pips a year” group from as little as CAD$10 for the first 10 days and then CAD$150.00 per month, currency conversions for CAD$150 are roughly as follows: -
GBP £90 per month
EUR €100 per month
USD $115 per month
JPY 12,500 per month
AUD $160 per month
NZD $170 per month
CHF 115 per month
Go to my website weeklyfxdrivethru.comfor more details under the TAB – “SUBSCRIBE”.
2.2. WEEKLY FX PREMIUM PERFORMANCE HIGHLIGHTS:
October 2018 so far: 371 net profitable pips
2018 to date: 12,037 net profitable pips
2.3. WEEKLY FX PREMIUM PERFORMANCE SUMMARY:
(Incorporating the last 5 WEEKLY FX PREMIUM TRADES)
3. WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
3.1. TRADING REVIEW:
3.2. OPEN TRADES... HOW WILL I TRADE THIS WEEK:
3.3. MYFUNDAMENTAL & MACRO THOUGHTS THRU THE YEAR:
3.4. BREXIT RELATED TRADES:
3.5. LIVE TRADES and LIMIT ORDERS:
3.5.1. LIVE TRADES:
3.5.2. LIMIT ORDER TRADES:
4. THE FINAL SHOT:
Nothing more to add here, I have said enough except,
Always remember longevity in Forex trading can only be achieved through trading with good RISK and MONEY MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility.
The Pip Accumulator
BLOG VERSION: #296 FREE NEWSLETTER
DATE: 14thOctober 2018