22 April 2015

USD/CAD : Trend Reversal?

  • Technical outlook changed. Buying on dips is no longer appropriate.
  • Weekly and daily chart reversed course, now looking bearish.
  • Is a sell on a pullback towards 1.2350 neckline on the daily chart.
  • CAD highly correlated to crude oil. Reversal partly triggered by recent rally in crude and chart suggests more upside to crude (now $56).

18 April 2015

17 April 2015

GBP/USD : WTF ?

  • Stopped out short cable. Bearish technical picture completely destroyed by strong price action. WTF?
  • Monthly smashed through the strong ceiling at 1.4813.
  • Weekly candle looks like going to be a key reversal tonight.
  • Daily : Could not have imagined that this series of up-candles possible beforehand.
  • Having given up shorts, would not be surprised if this now turns around and trades back down towards 1.4750.

15 April 2015

Manchester Derby : A Masterclass in Football Analysis


I really like this.
Manchester United vs Manchester City Analysis with Gary Neville and Jamie Carragher
Manchester United vs Manchester City Analysis with Gary Neville and Jamie Carragher | Super Highlights------------------------------------------------Join Super Highlights for the latest Goals and Highlights
Posted by Super Highlights on Monday, April 13, 2015

14 April 2015

The Alchemists by Neil Irwin

Not particularly recommended reading, but I find this a useful review of recent financial markets history and events.

Quote (from chapter on the King's Speech)

Over the years, the governor has sometimes posed a question to his audience at the start of his annual Mansion House speech, offering his answer at the end. In 2010, he inverted the practice. The answer, he announced to the financiers, was “23.” He would tell them the question only at the conclusion of his speech: 
To what question is 23 the answer? Several plausible answers come to mind. First, 23 is the number of players in England’s World Cup squad in South Africa. Second, it is of course 23 years since England last won the Ashes “down under.” But neither of these are the right answer which is that 23 years is the age difference between the Chancellor of the Exchequer and the Governor of the Bank of England. In case there is any doubt, George is the younger. This age difference is highly desirable because the appropriate incentives are to allocate the responsibility of determining monetary policy to the older generation, which has a real interest in preserving the value of money, and the responsibility for fiscal policy to the younger generation, on whom falls the burden of excessive debt. . . . Given those incentives, Chancellor, I look forward to a harmonious coordination of monetary and fiscal policy

Unquote

10 April 2015

USD/CAD : Messy. Avoid.

  • Long USD/CAD was once my favorite trade, especially when it broke the daily triangle at 1.2600 in early March.
  • No longer. The daily chart has morphed into something else entirely. More like a rectangular chop now.
  • Avoid until a clearer picture emerges. Better fishes to fry out there.

09 April 2015

EUR/USD : Sell Stop-in @ 1.0712

  • Monthly and Weekly bearish charts unchanging.
  • Daily : Recent consolidation between 1.05 and 1.10 seems to be over. A very unconventional triple top of sorts (loosely) at 1.1050 broken neckline at 1.0713. Sell stop-in triggered at 1.0712. Target 1.0374. [But of course big picture downside objective is much much lower].
  • Watch recent low at 1.0462 as well.
  • Most crowded trade in the world so extreme caution warranted. Stop close back above neckline. 
  • Such a coincidence to get 2 trade signals on first day back. 

Liu Xiao Bo

Came across these powerful words by Liu Xiaobo (Nobel Prize winner 2010) in "Age of Ambition: Chasing Fortune, Truth, and Faith in the New China" by Evan Osnos. Good read.

"I look forward to the day when our country will be a land of free expression: a country where the words of each citizen will get equal respect; a country where different values, ideas, beliefs, and political views can compete with one another even as they peacefully coexist; a country where expression of both majority and minority views will be secure, and, in particular, where political views that differ from those of the people in power will be fully respected and protected; a country where all political views will be spread out beneath the sun for citizens to choose among, and every citizen will be able to express views without the slightest of fears; a country where it will be impossible to suffer persecution for expressing a political view. I hope that I will be the last victim in China’s long record of treating words as crimes."

Was reading the book round about the time LKY passed away and the Amos Yee saga blew up. How apt.

GBP/USD : Last Man Standing

  • Back in Singapore. Not much by way of trades done past 2 weeks while away from blog access.
  • Out of Copper before I left, the USD/CAD also died on 03Apr. A bit ill disciplined on the latter, should really have been out on re-entry of triangle below 1.26.
  • Left only with short cable now. Running small risks everywhere was correct strategy. Still hanging on, and thankful to be alive given recent volatility and abrupt reversals after reversals. Even so, the various stop-outs is frustrating.
  • Finally have a signal to increase the short cable position on the margin. Daily triangle consolidation breakout on the downside at 1.4800. Signal acted on. Deem this new additional position as non-core and exit if we close back inside triangle.
  • Sell more on break of 1.4634.
  • Oh, btw the downside objective of the triangle is 1.4269.

24 March 2015

Change in Risk Management

  • Last post before 2 week absence again.
  • Change in risk management and trading approach here. Rather than running decent sized positions and run higher risk of getting stopped out due to capital inadequacy, am these days trading in much smaller sizes and giving trades plenty more leeway of success. Rather have better chance of making less but sure money than higher chance of making more but getting stopped out more often.
  • Holding on firmly to the stronger USD view, technically and fundamentally, and thus cut back to very small risk and giving myself every chance of not getting squeezed out by flash crashes etc.
  • Chart here to illustrate the firmer USD view is cable. Look at trading ranges on daily chart since FOMC (18Mar), characterized by wide ranges, and abrupt reversals after reversals. Am convinced that after shakeout, bear trend (cable) will resume. Maximize my chance of remaining engaged by reducing risk now and hope to ride out the volatility.

19 March 2015

GBP/USD : FOMC Trading = Madness

  • Cable range yesterday. Low before FOMC 1.4634. High after FOCM 1.5165. 5 big figure range on the day.
  • How to survive with long/short position intact? Impossible. Either very very lucky or very very ill disciplined. Long die. Short also die.
  • Will have to put unfortunate experience of being involved yesterday down to bad luck. Get over the trauma and start again. Shit happens. Stop feeling sorry for yourself and fight back.
  • Nevertheless, big picture view remains the same. Fed will lead the world in rate hikes, bullish USD intact.

17 March 2015

Copper : Patience

  • Technically the best looking short out there, but taking a lot longer than anticipated. Patience counselled.
  • Monthly and Weekly : Self explanatory. Best bear potential.
  • Daily : Looks like consolidative rally to relieve oversold conditions almost over now. A close back below 260.65 would be a good first indication of bear resumption.

14 March 2015

GBP/USD : Major Collapse

  • Cable closed the week at 1.4735.
  • This is below the 2 very significant lows at 1.4951 (daily) and 1.4812 (monthly/weekly).
  • Thus, am looking for a major collapse in cable here, order of magnitude of tens of big figures.
  • As always, vital not to get carried away with too large a position size. 

USD/CAD : Triangle Breakout

  • The triangle breakout on the daily chart has performed from the get go. Upside objective is at (1.2799-1.2351+1.2597) = 1.3045.
  • This coincides nicely with significant previous 2008/2009 highs at 1.3063 (monthly chart).

11 March 2015

GBP/USD : Pyramid Short -1.4949

  • Having survived the earlier squeeze to 1.5552 (by reducing position size on the way up and increasing again on the way down), the short cable trade is now looking very good. Deep in the money.
  • Recent low at 1.4951 has now been breached. 
  • Added to short position at 1.4949.
  • Watching 1.4813 next significant low.