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Ridethepig

ridethepig | Australian Yields breaking out? Smells like it...I would have preferred it if Aussie Yields could have sought the break for the close last week, the decision to hold up here, rather than forcing the pass is notable that Yield curve control is really coming through. Which is an appendage to the following position in AUD: Those aiming for this macro swing position are effectively trading the artificial Fed control over USD supply side . As long as the printers are on full blast, the move from Fed towards a more lenient Yield curve control playbook will be done in broad daylight, as I have been saying for some time, they were faced with a decision as to whether they wanted a stronger currency or stronger equity market. After witnessing the Whitehouse policies being funded by Keynsian economics it is a disaster for confidence in the LONG RUN for the US. Capital is beginning to slowly migrate towards Europe and Asia. Get used to China and Russia having a larger seat at the table; hence we need to keep a close eye on Australia - China relations as the elephant in the room. What is important in the positional play is not the attack, but rather how price responds at support levels. We are wanting to only add exposure in periods of consolidation, calm waters. Do not let the loud noise and sharp spikes affect your decisiveness.
TVC:AU10YLong
by ridethepig
1
ridethepig | EURCHF Long-Term Marco Map📍 EURCHF On the CHF side, we had started to see a lot of plumbing from SNB at the lows 1.06xx-1.05xx and for those following the flows it was the 🔑 level we were to tracking in Q1. It is no surprise that we are reaching the end of ' Phase 1 ' and constituting a very powerful base that we can now use as an attacking weapon. The purpose of the sweep was to shake the tree and put out of action early buyers and late sellers. The concept of Eurobonds is more than enough to capture the highlights of this establishment, a consolidation that will undoubtedly be endurable. Well done all those riding this pig, a move that will be difficult to defend against. A nice late breakfast while EURCHF trades levels not seen since 2019. Although CHF is going to benefit from risk off flows versus USD, I am bullish on the euro and could not step against this train. A break of 1.10 will send the message.
Long
by ridethepig
1
ridethepig | EUR Long-Term Macro Map📍 EURUSD Principal rule: Consolidation or 'compacting' for a more politically correct term of debt across Europe is the ONLY way to save the currency. Covid challenged this, and France & Germany combo stepped up to the mark. A complex concept, which regardless of the amount is a step in the right direction and was enough to begin to chip away at some of the longer term macro tail risks. A very good time to update the before and after charts in EURUSD: Here the static weakness of the USD via artificial Fed devaluation is a heavy one that will play out over the following Months and Quarters. Now consider the position in 'DXY' below taken from last year. Greenback sellers have been encouraged and smart hands haven taken advantage of Europe being hijacked via the virus for long-term macro positioning. I am certain that in a few years, nobody will consider surrendering their euros for dollars. The disappearance of dollar dominance will open the way for a new and brilliant development of Europe and - the east.
Long
by ridethepig
3
ridethepig | A Decisive Break in BundsThe positional strength in Bunds was just too strong to contain, the rest is obvious. Now play the topside, retraces into buyers jurisdictions at -0.35 and -0.50 will attract a lot of selling interest in bunds (hence pushing yields up) and triggering the capitulation. We are still set for an emphasis of consolidation across Global Equities, this is still all part of the 'knee jerk reaction' phase. Many large hands were caught badly on the sharp moves lower, a legendary retrace is offering the opportunity for final repositioning flows for a secondary leg lower into 2021/2022. Before we can then move higher for the rest of the decade. For those tracking German Equities, the overshoots in DAX were very bad: Strong Resistance 0.15% <=> Soft Resistance -0.15% <=> Mid point -0.30% <=> Soft Support -0.35% <=> Strong Support -0.50% This leg higher in Yields is no surprises for those tracking the conversations on the eurobonds. The breakup in Bunds will also carry important implications for the EURUSD chart and 'Eurobond' positional flows: " So we are gradually getting round to what is an important component in the process of formation in the currency. Like a trojan horse, Eurobonds are being pushed in from the mounting political and geopolitical pressure. The initial 500bn EUR will still require approval from the block, and may not be a huge sum considering a historic crash, however it is an incremental step in a positive direction. It is not really about the effectiveness of the implementation, and this is decided from completely different factors and distribution is not that clear. " The market loves it...there is no question, we are seeing Europe strike a major expression on the world during this crisis and forming a protected outpost from an economic standpoint. The charming twist to this story, will be to track the pressure this applies to rates.I do not like the 'business as usual' story because of the reply: Clearly things are looking awful on the inside awful despite how politicians and media are selling the reopenings...I have never seen anything like this in my life, the unpleasant feeling that we will see a second round of cases in the Northern Hemisphere remains and that will need to be given some elbow room... Consumer confidence remains the one to track; the glimmer of panic appearing and equities will snap, the same move we have been tracking. All pullbacks should attract buying interest and outlook for Bunds remain in " Buy ". As usual thanks for keeping your support coming with likes, comments and etc!
TVC:DE10YLong
by ridethepig
5
ridethepig | NZD Long-Term Macro Map 📍 NZDUSD Long Term Macro Map An ingenious saving move from buyers, which is extraordinarily difficult to defend. The slingshot, you should also note is an advance momentum play. These come around only once or twice in a cycle, in cramped positions you cannot afford to give opponents free tickets and allow them to make an easy ride. The shakeout was flawless, now buyers are in a much better position from the lows as anticipated: On the NZD macro side, it's the same story everywhere with consumer confidence in the red and credit card spending low. RBNZ bazooka doubled their purchasing program to 60bn NZD last month, while rates are starting to find a floor and look cooked here till 2021. Arden is a breath of fresh air, the handling of the crisis was superb - as New Zealand begin unwind the social distancing we can see the Kiwi find strong demand as her leadership has not gone unnoticed! Updates comes to the AUDNZD chart tomorrow, those who wish to make their fortunes in the crosses will have to wait till later in the week. The limits of 10 charts a day on @tradingview are proving restrictive in getting the entire board updated. In any case, the supple, flexible and sometimes sincere NZD targets for 2020 remain at 0.675x and 0.755x for 2021 respectively.
Long
by ridethepig
2
ridethepig | DXY Long-Term Macro MapThe attentive readers have been asking can USD still devalue in this race to the bottom! The simple answer is that this is a good ploy in in such a restricted monetary environment although this move would be considered a bad one nowadays from a strictly fundamental perspective: the weakness of the dollar is necessary in order for equities to continue the advance. US were faced with a 'choose your side' between a weaker stock market or a softer currency; and opted for the weaker green. 📍 On the positioning side... The fate of the game now depends on the retrace leg in macro charts. If the dollar is driven off the cliff, then as G10 & EM FX are already committed to the short-circuit the flows will be very simple to track. This is a nice illustration of the Quarterly theme "aggressive dollar devaluation". The move in question is transparent and therefore a good illustration of the theme and how to officially mark an outpost on the 'B' wave. So the correct play is to complete the ABC sequence before adopting a wait-and-see approach. In order to get in as quickly as possible and at any price, we must begin to dig into the inner swings on lower time frames. Today we 'know' that the satisfactory requirements have been met at 102.5x, the plan from last year: The longer term chart shows clearly the move(s) we are tracking and expecting. " => The move towards 102 is still corrective and within the bigger picture this is a large B wave of an ABC since the cycle highs in Jan 2017. " ✅ " => In theory we can expect another 5 wave decent to match the logic of the previous 5 wave move, ideally this will kick start the flow from 102-103 range highs. " ✅ The manoeuvre from sellers becomes crystal clear, a devaluation cycle, they wish to seize the 75 and 50 targets in the multi-year correction before raising the stakes later in the decade once supply shortages enter into the picture. But the move cannot be said to have positive value on volatility, since expansions and contractions in vol have a case to play : 📍 On the technical side... Here I had been expecting the sell-off (at last!) from the 102.5x highs and had prepared a nice problem for my opponent, namely the EURUSD explosive move to the topside and now threatening the ultimate break of 1.15xx. It is relatively easy for someone who knows about the CB intervention on such a line and how it must be put under pressure. The 87.4x in Dollar is a minimum target for our 'C' leg that we are tracking, anything beyond this would imply that the impulsive leg towards 75 and 50 is underway. In what follows from the comments, I will give me feelings and views to the next moves, so we can follow what is happening. Thanks for keeping the support coming with likes, comments, charts and etc!
TVC:DXYShort
by ridethepig
2
ridethepig | DXY Market Commentary 2020.06.05A quick update to the DXY chart which is essentially intended to cast some light over G10 FX as we prepare for NFP. In order to understand the dangers of pursuing a weaker dollar too energetically, we shall in what follows begin to point out the inner wave flows in which short-term moves become indicated. The process of short-term swing trading is automatic for macro players, having a clear understanding of the direction and which side occupies control ensures us of control over individual strategically important swings and the apparently desirable opportunities where retail begin to go overboard will become clear places for us to do profit taking and trap them in the opposite directions. Lets review a sketch of the Middle and Long game with Dollar: Clearly sellers wish to occupy the flow, in order to deliver an impulsive wave to the +/- 75 targets; but if they try moving too far too soon they will exhaust and allow buyers to prevent the attack. So, sellers will play the macro swing in incremental waves ... 1 ... 2... 3... 4... 5... The correct sequence is to play both the impulse and retrace exchange, and, in the current case, we are reaching the main impulse target so its time to leave late sellers no room to protect with NFP because they have to cover. For the Technical NFP flows: Steel Support 93.8x <=> Strong Support 95.8x <=> Soft Support 96.7x (we are currently here) <=> S/R FLIP <=> Soft Resistance 97.83x <=> Strong Resistance 98.8x <=> Steel Resistance 99.9x When major forces on both sides come under attack, it comes down to a sort of exchange / expansion in vol which we shall call: "Sellers trying to sell their lives for the highest price possible". Anyone with the slightest TA knowledge can tell sellers are gunning for the lows, they want to condemn bulls to death, it appears understandable given the domestic US issues on social and political unrest to want to sell your life for as much as possible. Imagine for a moment you are soldier, down to your last clip and you are surrounded... You would need to take as many enemies out as possible so you will pick your moments. Smart sellers will defend in the most important areas! Coverage resuming as usual here after @ridethepig returns back to London...Thanks as usual for keeping support coming with the likes, comments, charts, questions and etc!
TVC:DXYLong
by ridethepig
3
ridethepig | Eurobonds Positional PlayThe latest news from Germany and France " federalisation of the debt " - a prerequisite for survival of the euro. The trigger for Alexander Hamilton in 1790 was Britain, for Angela Merkel its Coronavirus. So we are gradually getting round to what is an important component in the process of formation in the currency. Like a trojan horse, Eurobonds are being pushed in from the mounting political and geopolitical pressure. The initial 500bn EUR will still require approval from the block, and may not be a huge sum considering a historic crash, however it is an incremental step in a positive direction. It is not really about the effectiveness of the implementation, and this is decided from completely different factors and distribution is not that clear. The isolated highs in USD which we have been tracking illustrates the future direction for the greenback : After the latest news I am switch sides in the short-term bearish view, rather starting to track the breakout to the topside. A move through 1.10xx highs will unlock the topside and put scaffolding around the short-term bullish view. The MT and LT outlook could see us grind all the way back towards 1.20xx in a relatively short period of time. I am certain that in a few years, nobody will consider surrendering their euros for dollars. The disappearance of dollar dominance will open the way for a new and brilliant development of Europe and - the east. Let me say a few more words about the birth of the view; it is closely linked to the collapse of Globalisation... Vaccine optimism is flooding the wires, the dedication of politicians to sell the re-openings is very telling of the extent of damage that has been done. All rainbows and empty promises from the consultations I've had with experts in the field. The following chart shows how devastating the economic damage has been on the US labour market, Equities rallying all the way back in such a short period of time in a V shaped bounce is not an accurate reflection of reality:
Long
by ridethepig
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ridethepig | A closer look at US EquitiesA timely update to the US Equities chart after a month of consolidation/chop. The energy building up here is immense, before you tackle what follows, you should quickly check that you are well versed in the notions concerning the retrace leg, the ABC sequence and passed crashes. If not you should refresh your ideas on these, because both of the following legs are necessary for full understanding for the next swing. The question we are tracking is as follows: After the 61.8% pullback from the sell-off, assuming equities do not advance beyond 3177, sellers have the possibility of opening a final leg lower opening the capitulation in the global economy. By playing the 5th wave lower, sellers release tension in the congested areas as naive short-term specs continue buying for no apparent reason. So why do these levels matter? Well, the 2892 is the measured target in the ABC sequence from the March 23rd lows, could buyers break back up as re-openings unfold? Not really possible as another test of the lows would be much healthier from a bulls perspective. It gives more time to load and re-position, even if in some modified form. The next cycle down in the economy looks set to last into 2021, in other words all those expecting a V shaped bounce and running from the lows as quickly as you can are dividing the flows into two halves. For the sake of convenience we shall call this a "dead-cat-bounce". Remember we are tracking the two important fundamental charts on the macro side: "It's Time" "Alpha Protocol: Seeking Immediate Extraction" Further pockets of shutdowns and social distancing measures will weigh heavy on consumer confidence, it looks unavoidable for the Northern Hemisphere Winter (December 2020) while in the background cooking there is a powerful urge to move away from Oil that seems to be unfolding. After the inconsiderable disadvantage US producers were put under via Russia, China and S.A, the battlefield has emerged: But moreover, thanks to protectionism China and US are moving towards escalation. Foreign policy will provide the narrative for this final leg lower, Trump will attempt to establish lines of communications later in the Quarter with Xi although the damage has already been done. Follow the flows... capture the final leg lower in global equities, while the rest panic and begin to think its doom and gloom forever we can obtain the lows with cheap bids to exert pressure on soft buyers and later sellers (we can update the charts as we get down there later in June). As usual thanks for keeping the support coming with likes, comments, charts, questions and etc!
OANDA:SPX500USDShort
by ridethepig
16
ridethepig | Thoughts and Themes in TurkeySwings and position building We have witnessed a tremendous amount of profit taking after clearing the 7.23 targets in USDTRY and are arriving back into major support territory. The pick-up in local activity was notable as banks were forced to defend the TRY. Many clients I speak to are happy to continue buying USDTRY , the picture looks gloomy for Turkey and real money continues to sit on the bid. On the monetary side, the CBRT cutting by 50bps was widely expected although wont make much difference at this stage. EM FX will remain under pressure if we see a broad risk-off environment this week. Keeping a close ear to the wires for any updates on swap lines, those looking for positioning in USDTRY should always think about loading in a safe place. Such a shelter will render us a superb shelter when the storm hits shore... A massive 30% macro swing after an obvious mistake from Erdogan. Turkey will remain sluggish until they expose the issues underneath, the correct idea would be to put pressure on CBRT which is what markets are doing and show no signs of stopping in the Short-term. Here 7.80 would be the measured target in the shelter then profit taking can begin again. As with any swing, it is important we assess the downside to see if we find something which is to our advantage. The dollar devaluation is the only technique that the Fed can construct, the only defence left in the toolkit is -ve rates and like a scout putting up his tent we must prepare. Depending on how quickly markets begin to price negative rates in USD, we may fail to complete the mission towards 7.80.
Long
by ridethepig
3
ridethepig | Gold Market Commentary 2020.05.26It seems an appropriate choice of the moment to advance the discussion on Gold. As in the previous swings, seems to me more in accordance with the needs of protection from governments than anything else: Once we cleared the initial swing, the attempt to mount another attack at all time highs has been challenging. The profit taking from buyers who look to cover losses via liquidations in equities and CB printers on full blast has denied the penetration of $1,800. The opportunity for another round of buying is here, risk is threatening on all fronts. My impression is as follows..given the latest escalations from China and HK and with US Equities S&P taking 3,000 back it is an important ☑️ for the headlines ... means time to start paying attention. Unemployment soaring while equities rally...This leg higher should help us recognise the relationship between Gold and risk. For the technical side, here tracking for the ending of wave (v) and a beginning of another 5 wave sequence to the topside towards an initial $1758 flow target. To the downside, $1712 support will keep moves lower limited.
FOREXCOM:XAUUSDLong
by ridethepig
9
ridethepig | NZD Market Commentary 2020.05.26It is evident that a general round of profit taking for buyers is called for, it will act as a catalyst to kickstart a fresh leg into USD and provide a helping hand from markets to put -ve rates back on the table for Fed. One more time it is all eyes on Equities, if those betting on a quick V-shaped recovery lose their tempo we can see blood on the streets. The squeeze higher in NZDUSD is healthy into month end from a strictly positioning perspective. The USD Long boat was heavily loaded to one side and needed a shake-up. The sweep lower in AUD and NZD will demonstrate the exploitation of Keynsian economics. By pushing the USD bid the obvious collateral damage in EM FX and High Beta FX can easily lead to pressure on the inelasticity between Whitehouse / Fed combo. Watch-out for wild swings ahead, we can cover the flows live below.
Short
by ridethepig
4
ridethepig | AUD Market Commentary 2020.05.26On the commodity currency front, looking for risk markets to reject the move quickly this week and trigger the flows towards USD. I recommended standing aside last week, and here I have been actively adding full sized AUDUSD shorts in the 0.660x handle. The healthy cleanse of USD longs in the antipodeans will make things a lot easier to trade with the next leg lower in S&P (see chart of the day below). It will immediately be clear once equities turn and the 'V' crowd are flanked that everything was not as it seemed. Sellers have to make an attacking move at the highs and defend the possible occupancy from buyers in the jurisdiction. A sustained break in AUDUSD through the 0.665x highs will remove any cover provided from the RBA panic cut. On the other side, remember we are tracking the 2's 5's curve which is signalling loudly that we are not out of the woods! This is a brutal squeeze for USD longs, a lot of pressure applied but we are reaching boiling point. Such a wilderness will not transform into a full bloomed garden despite how politicians sell it...
Short
by ridethepig
2
ridethepig | Dovish SARB On Deck!We are reaching the lows in the range right on time for SARB today. Markets are expecting a 50bps move, a little bird tells me that we are set for more... Remember the domestic story in South Africa is only going one way; sadly it's the same outcome as Turkey. On the technical side, tracking closely the 18.00 support to build longs outguessing a dovish SARB. Look to target the 18.5x and 19.0x highs and lighten up below 17.7x. Good luck.
Long
by ridethepig
1
ridethepig | The isolated euro The dynamic strength of the block is itching to expand and further in the circumstance that this debt mutualisation is unlocking and making possible federalisation without the UK. SNB's outpost at 1.060x is - at least in the medium term a pivot level that offers full compensation for those investing in the euro as an investment. Buyers can show that political unity and monetary unity will be more keenly effective than any alternative in the next decade. This is because it is clear that Eurobond will be backed by strong demand for the euro which puts the opposing greenback across the Atlantic under severe pressure, and what is more urgent that a devaluation of the dollar?! An examination of the capital flows involved thus gives an undoubted plus to the East over the coming decade. Critical for an evaluation of the issue is the acceptance of the 27, however, the almighty Germany has put their foot down, there is no longer any likelihood of resistance from the dutch. On the technical side, I am actively buying dips towards 1.055x and expect a lot EUR more demand to continue in the coming sessions. To the downside, if sellers somehow managed to penetrate the 1.050x lows I will step aside as it will pull back into play the flash crash towards the 1.030x lows.
Long
by ridethepig
ridethepig | TRY Market Commentary 2020.04.29All eyes on risk markets and the recent rebound reaching its final stages of exhaustion. USDTRY not giving any gains back, continuing to attack the 7.00 important psychological resistance. Buyers calmly finishing their preparations for an appropriate welcome of the next risk headline, while local banks try everything they can to defend. Happy to sit long USDTRY, if we do not see concrete measures around the Fed swap line then expect macro players to stick the knife into Turkey once more. There is little to see to the downside, I will actively look to add longs on any dips should we see them towards 6.90xx otherwise to the topside we have very very soft resistance at 7.00. A break above will open 7.235x and 7.80x main targets. The move played is a demonstration of a winning macro one, the main line comes down to the pursuit of safety; capital is forced to flee a dictatorship, but the flight itself can be beset with difficulties as more and varied restrictions are conjured. Tread extremely carefully for those invested in Turkey. Thanks as usual for keeping the support coming with likes, comments, charts, and etc!
Long
by ridethepig
ridethepig | The Elements of AUDJPYBuyers made the completion of an ABC corrective sequence to end the move with today's NY session. Europe are now leaving their desks with defensive superiority at the 70.2x highs. Next comes a test of the lows as the next customary inventiveness of swings across risk markets enters into play. The promises of a vaccine any time soon sadly look like unicorns, politicians will do anything to sell the re-open. After the preparatory manoeuvres complete at 0.650x, AUD sellers are keeping an eye on the weak fundamentals. Covid delivered massive blow to Australia, and with little immunity on the health front further pockets of lockdowns look a matter of when rather than if. Now the RBA is a bridge builder, although PBOC are in retreat and sheltering until the storm passes. It means the "Giant Panda" will no longer be on the AUD bid for the next few Months, and Quarters. AUD is surrendering the 70 handle with the close of shop today. Why? Well, because once the bid expires without breaking the barriers ahead, the lust to expand which was missing until then, is well and truly gone now. Early buyers cutting their longs into resistance, and macro players happy to park in JPY in this environment to prevent any breakup. Reassessment in the bearish view will be required above 70.2x as the nature of the move will be considered impulsive. For now expecting it to wend its wearisome way back towards the lows. It will be interesting to see how buyers flee for the close.
Short
by ridethepig
3
ridethepig | RBNZ To Cut!All eyes on RBNZ tonight, Equities globally are running out of steam and high beta FX looks set to suffer badly... the Governor has been very vocal around negative rates and protection via debt monetisation if necessary. Markets have quite the habit of unpinning Central Bank promises of late by choosing to apply maximum pressure. RBNZ will have to satisfy the following logic with a 15bps cut to seem credible. On the technical side, a simple breakdown in pure price can be played from the 0.610x handle. I am comfortable going into the meeting short, 0.618x is strong resistance and will keep stops protected, while to the downside 0.600x will serve a suitable initial target. The risk to the thesis comes from the RBNZ being unable to set the dovish stage correctly at this point in the game, the process of unpinning can be seen from quite a different angle. Good luck.
Short
by ridethepig
3
ridethepig | AUD Market Commentary 2020.05.12A normal move, but one which has a deeper meaning after the Chinese ban on Australian beef. Here tracking closely 0.650x resistance to mark another important high here. It is a clearly loud signal on the foreign policy side of their relationship considerably weakening, the Giant Panda (PBOC) who was once always on the AUD bid has taken cover. While Australia may be better positioned than many in terms of case numbers, it is in no way advisable to emphasise this too much. We are still tracking the same forecasts set out last month: " Inline Case - US and Europe opening in July with clear preparations for further rounds of social distancing programs that will come into play again at year-end through Q1 2021 as the virus migrates back in the Winter months. Opens up another calculated leg down in risk markets to sweep the current floor in place and early buyers It looks like we are set for a re-opening this summer and for schools in the West to go back in September. We will keep a close eye together on whether the inflows dry up, and will it be for long? We'll see. For now keeping a defensive stance, when equities roll over we will have a clearly defined swing and range in play for the rest of 2020. " Remember any hell-bent strategy on buying AUD, without taking into consideration the risks around the fallout of the West with China and their own domestic relationship will end badly. Protectionism, like a garden of weeds, will continue to force globalisation into retreat and wreak havoc! On the technical side, 0.650x is strong resistance and with US Equities S&P sitting under the 3,000 level we have all the 'green lights' for a second selloff in risk markets. I am actively adding AUDUSD shorts at 0.650x with stops above the double top at 0.660x.
Short
by ridethepig
6
ridethepig | NZD Market Commentary 2020.04.28Across the commodity block, NZD is looking the weakest and most vulnerable with negative rates entering into the picture. This looks unavoidable now and makes NZD the more preferred short across G10 crosses. The resistance is weakly protected as we enter into FED fact territory, the market was a little too long USD and I understand the need for a healthy cleanse, however, the move looks overdone here as I am not expecting any further cuts tomorrow. Equities will hate the bad news, and high beta FX will be first out of the door... last orders at the bar!? On the technical side, strong resistance is located here at the 0.605x - 0.607x region and is the one to track for those wanting to position for FED and a further leg lower in risk markets. The goal for sellers is in protecting these highs and defending any real seizure of the advance, an initial target at the mid point to pay for risk at 0.600x and an extension towards 0.592x is in play for a simple range clear with the CB event. A break below the 0.592x lows will call into question the macro slingshot target at 0.49xx.... INSANE!!! From a macro perspective as soon as your CB unlocks negative rates or foreign asset purchases its game over! You have taken on a well hidden exchange sacrifice. Smart money will exploit it, a slingshot is in play later in the year but will require another sweep of the lows via Covid panic flows into USD ... For those waiting to buy the bird from a long-term perspective, not recommended till the end game in this current leg should we pay any attention towards the development arise. Good luck all those positioning across G10 FX for FED flows, thanks as usual for keeping the support coming with likes, comment and etc!
Short
by ridethepig
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ridethepig | Back to the lab...This purely defensive swing (betting against risk) is all the more surprising because, after the "energetic" advance from early dip buyers, anything other than a trap would have been expected. This powerful switch that is in play between buyers and sellers is what makes the combination a totally controlled 5-3-5 pattern. So buyers do not believe in the solidity of the shock and see the stimulus measures chosen will make things better. Sellers who are in full control of the move down now threaten to undermine those naive early bulls on the 61.8% retracement; after that they will be ready to occupy the lows and extend towards 1700. The aim of this idea is to build a timeless classic marking the beginning of the next leg in the economic cycle . No more, no less. Yields are the one to watch; the inversion leaves any recession helpless against the stimulus because of the lagged effect. The lasting damage from "The Great Lockdown" will threaten credit markets for at least the rest of Q220. The inversion had to break off the journey lower and now the cycle perishes, history repeats without having got any closer to the 'solution'. From a very long term perspective, once the dust settles after this crisis (+/- 16,000 lows in Dow) we look set for a collapse in confidence of public services looks on the horizon. For those with a background in behavioural economics you will know this will trigger further capital flight out of Bonds and towards Equities which brings in long term targets into 2023 at +/- 30,000. Trump cutting funding to the WHO is a game-changer so it looks like we are set for another rush towards private assets via artificial devaluation of USD into 2035 which is the same target date for China's big tech strategy. To put simply, this is a dip worth buying in Equities eventually though, in my books expect further pain to come. Now the 2's5's curve returns home, satisfied and in a good mood. The destruction, a final leg lower and a final cleanse of all the early risk buyers. A short, fast and violent swing. Full of dramatic events, the continual support from FED has not changed in appearance but it has been an expensive floor for them to put in. A quick update in the odds of scenarios we need to track on the Fundamental virus side: 1️⃣ Bullish Case - Northern Hemisphere curve flattening with US and Europe opening early June. Will trigger direct legs back towards all time highs across the board in Equities (17% odds). 2️⃣ Inline Case - US and Europe opening in July with clear preparations for further rounds of social distancing programs that will come into play again at year-end through Q1 2021 as the virus migrates back in the Winter months. Opens up another calculated leg down in risk markets to sweep the current floor in place and early buyers (was 68% odds). 3️⃣ Bearish Case - How fast the consumer comes back and managing these expectations is the one to track and it boils down to whether people have the confidence to return to hotels, travel, shops, bars, restaurants etc… If ‘business as usual’ does not return as masses remain afraid then we can enter into a depression (15% odds). It looks like we are set for a re-opening this summer and for schools in the West to go back in September. We will keep a close eye together on whether the inflows dry up, and will it be for long? We'll see. For now keeping a defensive stance, when equities roll over we will have a clearly defined swing and range in play for the rest of 2020.
OANDA:SPX500USDShort
by ridethepig
48
ridethepig | India Closing the ChapterIn this positional chart, the INR is entering back into the game, whilst USD is nearer the end and thus already well-developed. That is decisive. So the more distant EM currencies like INR actually will act as a trump card and assist in diverting flows from the king, but like all trumps we must use them sparingly: do not jump the gun is the rule. The diverting exchange of Covid flows was simply the prelude to the king (USD) marching home, which will follow in the coming weeks/months. Indian Equities were denied the advance as anticipated, the trip towards the lows was somewhat time-consuming and the travelling companion INR was too dilatory....As the currency devalued as did local stocks... In any case, the correct procedure is getting our companion (INR) and using it as a weapon to wield influence and thank holders for their loyalty. We should make good use of the cheap currency and the move that now follows by looking to sell the highs in USDINR for a move not too late after. The trip we are planning for should be carefully prepared before pulling the trigger, if possible make use of any overshoots in USD (remember we still have the 1.05/1.06 unlocked in EURUSD for reference on G10). All that before playing the diversionary swing! Softer oil will help Indian significantly as the deprecation pressure on INR was starting to crack through the economic defence. India will need an appetising fiscal policy and less reluctance from the CB to intervene. These are starting to enter into play and can be a major game changer for India in the coming months.
Short
by ridethepig