With so much talk about trade, trade wars & protectionism it pays to be informed about the detail of a country's imports and exports. In UK we obviously have the ongoing Brexit argument, but a quick look at the numbers vis a vis Europe are very revealing. I stumbled across this site & it's very visual and easy to understand.
Yen buying has really ramped up this morning, with all the pairs falling heavily, after yesterday's pause point. This often happens ahead of strong moves, and is where patience is required, which is difficult because as traders we want to be in the market as much as possible. But as Jesse Livermore once said : 'It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!” He could also have meant staying in when the market is correctly heavily, but both interpretations are equally valid.
Yen buying, of course, does not bode well for indices and equities, so this week's close will be important.
From a trading perspective, just great we have had some movement & good range.
Eurjpy's move also preceded by some classic VPA on daily chart where we had 2 narrow spread candles with lots of volume, suggesting a correction/reversal was always going to happen. Today's price action has also taken the pair to the 4th Camarilla pivot line at 120.18 where we have seen some buying. With Camarilla any break and hold beyond the fourth levels (resistance or support) is usually seen as a valid break, so this level is now key for eurjpy. ... See MoreSee Less
A question I am often asked in my emails is why markets do not always respond to fundamental news in the way they are supposed to. And there are a number of reasons for this. First the data may have already been factored in. Second, the news release in question may not be directly relevant to the economic cycle, even though it will still appear as a tier one release on the calendar. Third the market believes it to be a rogue number - the Philly Fed this afternoon would be an example where the index has surged beyond what would be expected.
And to this we should also add the USD, which despite all the comments from various FED members, and Janet Yellen herself saying interest rate rises are on their way, has failed to halt its recent bearish slide lower. And the only reason I can suggest is the market is simply ignoring these comments given the FED's past rhetoric and performance on interest rates. If we remember in 2015 and 2016 the FED waited until their December meetings to raise rates, which was more of a face saving exercise in both cases. So talk about March being on the cards for a further rise is being taken with a very large pinch of salt.
And as always one of the main beneficiaries of a weaker USD is gold which has had a very good day moving through the 1240 per ounce price point and looking to test the resistance at 1244. ... See MoreSee Less
If you only like to trade one or two pairs, always keep an eye on daily range and volatility. You can check this easily with the tool at investing.com which will tell you immediately if there has been a drop off. It also tells you when a pair is most active - it is common sense, but always nice to have it confirmed.
And also gives you the days when pair is most traded - which is useful.
Looking at range and volatility can, not only help to put the price action into perspective, but also highlight why it is becoming more difficult to take a trade.
Markets really are something else, and such a great reflection of emotion, particular fear and greed. But what is fascinating is how these two emotions are often inverted at market tops and bottom. For example when we are in a long trade fear can often creep in as prices rise and we begin to fear losing our profits. By contrast when a trade is going against us, we hope the market will stop falling, and our trade will reverse!
And we can sense the same process today, as market mood becomes a little nervy and jumpy as US indices march higher. This is also reflected in the VIX - which although still low, has not moved into single figures.
In forex this is all reflected in the USD/JPY which having found some solid support at 111.58 came off yesterday just shy of the 115 price point, since when it has been in retreat.
On the daily chart the pair is now just above our volume point of control which sits at 113.28 which is not only the fulcrum for the pair, but also represents the fulcrum of sentiment for the broader market.
What is also significant is that the VPOC is in play from the hourly to the monthly charts for the USD/JPY, emphasising how finely balanced the market is at present - or nervy!
Moving forward we need to wait for the start of the US session for some firm direction for this pair. ... See MoreSee Less
I wrote this at the end of January for the VIX which is moving into worrying complacency levels, and reflecting the strong performance of the indices. We are not quite at single figures - but came perilously close yesterday at 10.74, so this afternoon's US session will be interesting. We also have to bear in mind that the index can stay low for an extended period of time, ie years, but as Wyckoff's second law of cause and effect tells us - the longer the complacency, the greater the reaction when it comes.
Since my last gold post Camarilla pivot levels very much in play in the last few sessions with buyers coming in at the 1217 support region. And with yesterday's session closing above the 3rd resistance level has given gold some bullish momentum. This has taken the price to 1239.10 which has also been helped by a softer USD.
For a continuation of the current bullish move gold needs to take out this resistance, as well as the 1244 price point, after which the 4th Caramilla pivot awaits at 1250.
As I have mentioned previously the Camarilla pivots on the daily charts will remain for the rest of February. If you want to plot these levels on the faster charts - up to 30 mins - take yesterday's HLOC, and you will have to update these daily.
For the hourly & 4 hourly charts take last week's HLOC, and these values can remain for the rest of the week. ... See MoreSee Less
1244 proved to be a bridge too far for gold which has corrected from the level in response to a strengthening in the USD, as well as equities moving higher. This is now the key level for any continuation of its recent bullish trend. The move lower has also taken it back through the third camarilla pivoit at 1230.59 and additing some interim resistance to the move higher. To the downside 1223.64 should provide first line of any support, and thereafter we are looking at the VPOC on the weekly chart at 1217.60. So this afternoon's US session may help to clarify how the precious metal wants to end the week.
In the background we have the ever present IMF/eurozone/Greece soap opera which is once again centre stage as Greece has an debt payment coming up, which it cannot find. And which should, in theory, send market participants scurrying back to gold. Sadly we've had so much brinkmanship & cries of wolf the market may no longer be listening which is always dangerous. ... See MoreSee Less
Gold has been taking full advantage of USD's recent correction with the metal putting on an impressive breakaway from the VPOC at the $1200 region on the daily chart. This has acted as a springboard for gold to take out three Camarilla privot levels at 1216,95, 1223.69 & 1230.42.
Price is currently attempting a break through yesterday's high at 1244.47 & if through here 4th pivot level awaits at the all important 1250 level. Any push through here will need good volumes, and continued weakening in the USD. ... See MoreSee Less