Major Highs Cooking for Chinese Equities!📍 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 buyers had a simple win by testing the 2983 highs. The retrace idea was as follows; overprotecting a strategically important structure. The reward was to open up a retest of the support which was an all embracing struggle for the PBOC:
In the long run, the positional struggle from CB's will come down to a struggle between healthcare on one hand and restraining capitalism on the other. It is extremely important to strive for re-openings in sensible fashion since the virus is still in circulation and lusts to expand. Health crisis cannot be solved with throwing money at it... not enough time has elapsed so the Stan Erck pump and dump we are watching with Novavax is set to flop and sadly put the final nail in the coffin for Global Equities.
As usual thanks for keeping the feedback coming 👍 or 👎
Ridethepig
ridethepig | Liquidation followed by a bid for freedom📍 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 into 1500's and sellers had to let go of the barriers. All of this was only made possible because of the earlier preparation. Those hedging risk had the unpleasant task of marching back and forth to keep an eye on the support. It was done in an ABCDE sequence which was essentially a self-fulfilling army. Once the position had arisen which typifies the start of a value swing, it was a game changer:
You can see how buyers are eating sellers effortlessly. After a quick exchange, they are out the game. The point I am making is buyers are decisively in control of the flows; that is a fact. So the more distant retraces should be viewed as a gift; although the 🔑 @MEGALO1 made in the previous conversations was that they will be used sparingly. The diverting attention towards equities and the virus over the long weekend / early next week will be a prelude towards the march into $1,900 and $2,000. That in itself must be carefully prepared for.
Thanks as usual for keeping the feedback coming 👍 or 👎
ridethepig | A game changer break in play for Copper/Gold ratio 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 here to have seen the commodity shortages be avoided as more civil unrest will always follow. In a situation where monetary stimulus cannot solve a health crisis and no longer has the possibility at its disposal. We can conduct a whole new round of charts for commodities and look to play the currency exchange legs accordingly.
As usual thanks for keeping the feedback coming 👍 or 👎
ridethepig | GBP Market Commentary 2020.07.02📌 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 GBPUSD. Reassessment only required with a weekly closing below/above.
=> Restraint in the technical sense can be conceived with the presence of resistance; but real total defence which reigns over the whole G10 board and which gives FX markets breathing difficulties, is only possible when risk is in the air. Parking in USD will remain attractive as long as the VIX remains elevated.
=> From a risk perspective, to what extent, we may now ask, does one need to give their stop breathing room? It is not enough to state the highs will hold as NFP can easily capture the stops and will be highly unpleasant to defend. This means we need to give some room up towards 1.258x as we will have the 1.25 quarters and halves to protect.
⚡️ US DATA PREVIEW: Primary Dealer Nonfarm Payroll estimates
- RBC 8.0mn - Natwest 7.2mn
- Citi 5.5mn - Morgan Stanley 5.285mn
- BNP Paribas 4.5mn - Goldman Sachs 4.25mn
- HSBC 4.0mn - Scotiabank 4.0mn
- TD 4.0mn - SocGen 3.9mn
- BMO 3.5mn - Wells Fargo 3.3mn
- Credit Suisse 3.0mn - JPMorgan 3.0mn
- BAML 2.8mn - Daiwa 2.5mn
- Deutsche 2.5mn - Mizuho 2.5mn
- Barclays 2.0mn - Jefferies 1.95mn
- Nomura 1.5mn - UBS 1.5mn
- Dealer Median: 3.4mn
With this in mind, 3m is the headline to track.... undershoots will be positive for USD via risk whereas inline or overshoots will trigger profit taking from the recent squeeze. The ST flows in a technical sense are no less imaginative than the MT and LT swing we traded earlier in the year.
As usual thanks for keeping the feedback coming 👍 or 👎
ridethepig | NZD Market Commentary 2020.07.02📍 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 Brexit, not to mention bankruptcies around the globe skyrocketing. Dark clouds on the horizon despite how the politicians attempt to sell re-openings as 'independence'. NZD and High beta FX will struggle to rally as long as the market is still concerned about further lockdowns in Australia as NZ will follow their lead. Tracking the same “lines in the sand” with 0.677x AUDUSD and 0.637x NZDUSD.
⚡️ US DATA PREVIEW: Primary Dealer Nonfarm Payroll estimates
- RBC 8.0mn - Natwest 7.2mn
- Citi 5.5mn - Morgan Stanley 5.285mn
- BNP Paribas 4.5mn - Goldman Sachs 4.25mn
- HSBC 4.0mn - Scotiabank 4.0mn
- TD 4.0mn - SocGen 3.9mn
- BMO 3.5mn - Wells Fargo 3.3mn
- Credit Suisse 3.0mn - JPMorgan 3.0mn
- BAML 2.8mn - Daiwa 2.5mn
- Deutsche 2.5mn - Mizuho 2.5mn
- Barclays 2.0mn - Jefferies 1.95mn
- Nomura 1.5mn - UBS 1.5mn
- Dealer Median: 3.4mn
=> So if we can sum up by saying, RBNZ is preventing NZD of moving higher and is of greatest important when considering a macro positional flow. On the other hand, USD seems more appropriate as a place to park until the storm passes. What we are talking about is outguessing extreme risk for the long weekend with the NFP knee-jerk flow. A very advanced and extremely bold call.
As usual thanks for keeping the feedback coming 👍 or 👎
ridethepig | EURNZD July Macro Swing📌 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 any easy entries, the false break ruins those soft retail expecting an easy move! Actively looking to build full positions at 1.7325 for the coming weeks and month. A long journey ahead with 1.78 as the main goal, in order to support as best it can the slingshot will move with direction action (instead of a zig-zag).
ridethepig | CADCHF Market Commentary 2020.07.01📌 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 breakdown. Tracking closely the 0.695x support, we all know about the diversionary role that CHF plays in risk, so I shall refrain from further comment.
With the clash certainly decided over the coming 'hours' the configuration offers plenty of scope for manoeuvring from the sell side.
Thanks for keeping the feedback coming 👍 or 👎
ridethepig | Delights and Torments📍 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 recessions typically take 5 Quarters to play out, with the study of history it is not a bad thing to introduce one or two of those five quarters are retracements to introduce concepts of the trap. One must act in their best interest, recognise straightaway that this is a game of risk flows and stimulus which are both possible and likely via combinations of further lockdowns and coordinated CB intervention.
The only thing to result from all these demonstrations will be a massive breakup in Gold: the last three iterations have been natural; of course all exclusively live on tradingview. How can we continue to load?
📌 => Delights and Torments of Adding to Swing Positions
The typical retail error is over committing in size to positions; of course the fact that the first three entries are all sitting heavy in profit we are entitled to an ideal privilege. For, me the breakup is an active confirmation of momentum in the spirit of risk via Covid , Brexit and the pending Sovereign Debt Crisis.
Measures like this cannot be left out. Event risk must be taken and played with. Quite naturally, these bear character and influence. There is cause for hurry to occupy the $1,900 target within a few days and weeks. A journey where we can seek to settle and thus take profits before reloading without any effort for $2,000 and beyond in 2021. A huge economic shock... with VIX still sitting above Lehmen levels try as you may to believe this is a V shape recovery... I am not buying it.
As usual thanks for keeping the feedback coming 👍 or 👎
ridethepig | USDCAD Market Commentary 2020.06.17📍 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 panic selling.
With stimulus retreating before the labour market has healed, the pressures on homes will become a blunder. This is so obvious and would be a blunder to miss. Now we are tracking a return back home, to the mean in a good mood - If buyers resign on the retest we can see the wave truncated (we'll keep updating the charts for this one).
For those tracking EURCAD ...
ridethepig | Golden Cross for EURUSD📍 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 euro is going to have large hands on the bid and sellers cannot administer any traps.
📍 Monthly Chartpack:
📍 EURUSD Technical Flows
Whatever may be the case, the macro flows are beautiful, as beautiful as the legend of Hamilton. The trigger in 1790 was Britain, for Angela Merkel its Covid. European politicians needed to use a crisis to apply pressure at critical moments. This contact with federalising the debt is a game changing concept and will give euro strength until the dollar devaluation is exhaust...Getting back in touch with the technical flows and our original starting position which is just as miraculous.
Eyes on 1.13 today, taking it with NY will open up 1.15 initial macro targets. This should allow sufficient light on further development of the romance in waves. All the more so, since w have already dug deeper into the live flows and revealed the most difficult secret of all, namely the art of when to marry and divorce positions.
Thanks for keeping all the support and feedback coming 👍 or 👎 ...
ridethepig | BTC Market Commentary 2020.06.23BTCUSD 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 look cooked to outperform in a Sovereign Debt Crisis .
Well done all those riding this one.. a clean and straight forward move so far. Thanks for keeping your support coming with likes, comments, charts and etc!
ridethepig | Equities Breaking Down!📌 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 keep the pressure on we will see the usual talking heads; Fauci, Gates and the rest push for further lockdowns, but the correct flow was indeed called earlier in the month to switch from the 3,200 SPX which is when we went underweight US Equities. In the Dow, 26,500 is now acting strong resistance and will be difficult for buyers to crack that ahead of Elections; remember we also have no-deal Brexit and Covid all still to play for...
The unaware will continue to buy blindly, unpacking the scrabble box and load thinking its a one-quarter wonder recession - retail participation is shooting through the roof. It was a necessary ✅ to clear before we can see the Sovereign Debt Crisis. Smart hands are tracking the claims number and understand that recoveries DO NOT look like this:
Fortunately we were ahead of the weakness in Global Equities and Vol, but the rally has been difficult to defend:
This next leg lower can now be played. Seller's positioning after Witching with this little loosening move created the room to attack. In the immediate time; look to target a sweep of the lows before adding any US exposure for the next business cycle.
Notice how we still did not get into the 15,500 zone called earlier at the lows:
The courage to intentionally let retail hang oneself for weeks; just on account on a remote possibility of a second wave; is now sadly going to be rewarded. Look at defaults coming to our theatres very soon, sellers smell blood and have suddenly awakened to fresh activity!
We also have the VIX Panic Cycle entering into play right on time as forecast, it has been game, set and match for all of those trading VIX flows live:
Thanks as usual for keeping the support coming with likes, comments, charts and etc!
ridethepig | VIX Panic Cycle?📍 The main function of the VIX appears to be miles ahead of the relevant flows. In this sense, it itself tends to be mobile. And yet (for it has great vitality!) it is not rare to witness it display considerable activity. Namely:
1️⃣ From the initial ' Swing the Vix into Fed and Q close ' the Vix was prepared .
2️⃣ A certain elasticity, which shows itself in the 'Capitulation Waters' was appropriate to generate the energetic slingshot given the appropriate circumstance.
3️⃣ The journey looked so promising, connection breaks in Vol are usually one way express trains. Stay long.
4️⃣ If we can continue the advance in the absence of capitalism, we are set for a measured return on the expectation of normality but only with more clarity on the timing side. Once reality hits shore, the masses will realise they were sold a turd.
5️⃣ The home run!! A flawless (and serious contender for trade of the year btw) 600%+ swing from the 11/12 lows all the way to 85. Now to put the icing and sprinkles on top, we had to take care of business at the 85 highs.
6️⃣ ...here we are. After a round trip we are back to the strong support at 25 and just below the centre of the flow at 38. The power to develop knowingly here and systematically, unlike during the middle of Covid is to the buyers advantage. The effect of the cycle ending will convey more than one quarter's worth of damage. As soon as the stabilisers (stimulus) is turned off, we are heading for a Sovereign Debt Crisis .
ridethepig | Gold Signs Of A Break Out...I have been looking to position for the next chapter of risk flows via Gold, although it's proven expensive to get back in after the wide consolidation.
📍 On the technicals we are tracking for a break above the highs to unlock a clean sweep towards $1900! It would be a very easy move and can happen in a matter of sessions as there will be no more sellers defending.
And here buyers could make the most of the chop which sellers have neglected. As already been shown, by the failing to breakdowns now being sufficient.
ridethepig | EURSEK ST Micro Flows 2020.12.06We are entering into short-term technical flows for the weekly closing range after Fed flows come to an end. The growing concerns over rising virus cases will skyrocket over this weekend, expecting a flooding of negative news from mainstream media which will put Western European countries back into the crosshairs.
For the technicals, SEK is trading at a very low value the 2020 macro range called at the end of last year. Jurisdictions are clearly defined on both sides with support located at 10.4x and no interest in chasing this move any higher than 10.6x resistance .
ridethepig | BTC Market Commentary 2020.06.17📍 A highly interesting move for BTC would be followed by triumphal progress at the $9,000 lows again...
The main feature of interest to me is the lows played on 11th and 15th June. It has a strong bid as a barrier and was well backed up, by the 2nd June lows. The next climax to the attack can begin over the coming sessions, what we need to be asking ourselves:
What are the chances? Why would they buy that..? Start writing things down... If this goes up? Why would they sell it... write stuff down. You can build a powerful argument, getting under the back of a successful halving, confidence in governments and risk appetite etc.
I hope this gives you a good idea of how to find cheap discounts - if you are a buyer, you start to look below... look for context; where am I? You can say you will pass on $9,000 but instead stick a limit in at $8,900 ... sure something can happen outside of markets on the virus front and we may have to work it out, it might be bumpy, but we can pan the idea, as long as we keep a cool head you can ride through the bumps. Lets get it done.
I'll leave it at that....Hope it helps to make lives easier, keep at the grind and keep the feedback coming!
ridethepig | EUR Fast Flows 📍 Road to mastering 1.150x of Eurobonds play
(schematic representation of the macro swing)
1️⃣ Counter the false conception that every single risk-off flow has to produce an immediate USD effect; waiting moves and underlying MT / LT game changer positioning on the macro front are also totally justified now that Europe are making steps towards mutualising the debt!
2️⃣ Recognise the idea of a 'second wave' in the virus as being the key one in this positional swing! With this in mind, struggle to prevent freeing moves beyond 1.15 / 1.16 this year and in doing so any dips from disorganisation of our opponents, should be strategically bought.
3️⃣ Have tremendous respect for the Fed devaluation strategy; avoid any premature moves to counter downside (outside of EM and GBP) and try rather to operate under the watchword of momentum .
4️⃣ Aim for total mobility to the topside in 2021, but not for the individual mobility of every single cross.
5️⃣ Get used to considering the control of the bid as a " matter of importance "; do not let unaware sellers at the lows be decisive.
6️⃣ What is important for the macro positional flow is not the attack, nor even the barrier, but only compression .
ridethepig | Consumer Staples (Chapter 2)The following diagram illustrates the breakup of a globalisation advance:
Since the retrace in VIX has found a hard floor into the 25 lows, we may characterise the advance as an endgame for our economic cycle purposes.
Now the erroneous nature of Volatility advancing can be seen. The effect of demobilising the consumer will weigh heavy on Equities, not to mention how companies position capital more defensively going forward.
Consumers are uncomfortable (at least from Q3/Q4 onwards) right on time for the stimulus to fade.
The following swing, which will also be quoted in the previous leg in DAX is another example. I will go over the flows briefly at this point:
Equities have now lost all sense of reality, the concussion in addition to Fed conceding far too much mobility; so this may rightfully be classified as the end of an economic cycle, or at least until capitalism returns from its sabbatical.
ridethepig | TRY Market Commentary 2020.06.15📍 The panic leg here is because we are reaching the endgame in the economic cycle. There is a risk of Turkish banks defaulting on this leg so watch-out for any exposure to specific sectors. If the operation demonstrated is a successful attack, then we have the final ✅ for those trading the macro move called last year:
EM FX looks extremely vulnerable for any overshoots on the risk front, local banks have been attempting to protect the 6.80x, if we can hold for today then we will start to see momentum kicking in. Turkey looks awful on the fundamental front and political too, a complete disaster mismanagement of the crisis.
The main thing is that 7.80x should be restrained via Fed => the attack on the final base can be brutal .. let's see if it plays out.
ridethepig | A 'Harry Potter' Scar ⚡️A highly interesting move, the necessary preparation for the counter swing. Sellers are aiming to complete the ABC sequence and ideally sweep the lows into 2020 Elections. The main feature of interest to us is the role played by the latest protests and virus cases ticking higher. A "second wave" will act as another strong post / blockader between consumer confidence and the establishment . The cramping influence of social justice can very quickly turn into class warfare which polarises countries.
In the initial 'zig' part of the correction we analysed exchanges in DAX. In addition, we also exchanged the flows in VIX to avoid being forced into covering or retreating or to make a momentum-wasting attacking play (liquidating buyers stops with subsequent breakdowns).
Basically, Global Equities can be considered as a combination, as in any case we are in 'risk-on/risk-off' exchanges. In the "endgame" part of the correction the apparently desirable reopenings of the economy will act as opportunity for us to see the latest Robinhood traders money fall into our lap as if it were a ripe fruit. Just think back to our newly developed tsunami across the labour force:
The destruction goes much further because of its damage radius, the wide stretch of damage in confidence has created a territory which is centrally positioning consumers for a retracement after a decade long cycle. The simplest explanation would be the following 'Consumer Staples' diagram:
Here it is usually an ABC sequence which we are talking about: we have the choice of treating it with 3-5-3 zig and zag on both sides which mean soft hand buyers are now next to come under attack. The 🔑 point is that we will want to clear some at +/- 2570 initial target and leave the rest running for a destructive 2018 main swing.
Once we breakdown again there will be a psychologically difficult environment, it will create desirable swings for some cheap buying opportunities later in the year. Thanks as usual for keeping the support coming with likes, comments, charts and etc!
ridethepig | GBP Market Commentary 2020.06.15The long run positional struggle for buyers which comes from their immobility to find positives in the Brexit debacle. It is extremely important to note the coming years of UK growth are harmed via the presence of protectionism, the fundamentals have widely been discussed here:
With Brexit headlines entering back into play, focus will shift towards NDB repricing as there is little encouragement to see here. The GBP is getting hit badly as expected all last week with EURGBP flirting with the break above 0.90x again. Actively looking to add cable shorts on any rallies into 1.255x. Look to target 1.237x below with stops above 1.265x.
ridethepig | USDJPY ST Market Flows 2020.06.12Eyes on UMich today. Sentiment remains awful out there despite how talking heads are selling re-openings to the masses. A very dovish Fed has forced Global Equities to play ball and marked a meaningful top across risk markets. VIX exploding higher after testing 🔑 25.0x support and implying the next move coming is a lot more sinister. This ST swing does not change the long-term multi-year chart in USDJPY .
Let's map a quick cheatsheet for those trading the flows today in USDJPY . Here actively looking to start adding shorts using strong resistance (108.5x) <=> soft resistance (107.5x) <=> soft support (106.6x) <=> strong support (106.0x) for reference.
Thanks as usual for keeping the likes, charts, questions and comments coming. Good luck all those trading the weekly closing range.
ridethepig | GBP/AUD Outlook📍 Overview
This chart comes after a conversation with @Alamakota. Brexit move played in this game was triggered in Jun 2016, you will notice on the Q chart how four years after buyers demonstrated a full retrace, before sellers rejected the highs and there we have the winning move. The UK is entering into the house of economic bondage in the ST and MT. Covid has put additional pressure on the pursuit of UK weakness; buyers were forced to flee and risks of a no-deal are rising again.
As we discussed together earlier in the year in this Brexit chapter will make it difficult to conjure any reason to hold GBP and as such investors would rather avoid the unnecessary risk. The GBPUSD outlook will be also a function of how much artificial USD devaluation we see from global CB's to help keep EM alive. This makes the preferred vehicles of expressing weaker GBP clear, the connection between GBP vs EUR and JPY will be unprotected.
Despite the risk associated with NDB, Downing Street have managed to get this across the line and pushed the UK into the blackhole. This "trap" in wave ii was much praised. The fact that it is a strategic goal to pump and dump the currency was not really considered by anybody. But the goal is and will remain to shake out soft retail hands and not allow any easy entries for the central knee-jerk reactions, while in the long run the crumbling continues.
Risks to the thesis come from:
=> UK softening Brexit tone and looking for possible extensions
=> China-Australia trade protectionism
In our case, short-term and medium-term / daily and weekly charts will come over the weekend as we dig deeper into the set-up. Hope I am wrong but looks like the UK is at the start of a difficult and costly journey. A more natural continuation is expected.
