Don't bother yourself with the reasons, only accept and trade the facts, which are visible on the charts. And the fact is markets switched to serious risk off mode. No matter why it is happening. You don't have to understand the background and you don't have to read the news to make money. Anyway it would be impossible to understand all pieces and implication of the macro matrix at once. You only have to understand what PRICE is doing, or what the prices of the risk complex are doing.
SP500:
- Broken and Bearish. Serious damage on the weekly chart too. However the move was very sharp, so the bear has to take a breath. I also doubt it will totally collapse before the September FED FOMC, however I still believe spikes will be sold, and eventually we will see a deeper correction in comeing months (1600 +/-?)
- Technically the move was sudden, and in last two days we started tosee some "consolidation" in a very wide range. Not surprising, as haDelta reached extreme low. Dip buyers and perma bulls stepped in, so did bears (like myself) started to cover some of their shorts below 1900. Heikin Ashi pattern shows consolidation in progress,which can end up in a retest to bearish support ard 1980, or in a next painful leg down (not yet clear)
- Big picture remains bearish until price is below 1980 and 2040
EURUSD:
- Clear bullish break happened on daily chart with massive stop run above 1,1150. It was a bit too much and too quick(extra high haDelta print). Market started to consolidate here (with still very high intraday volatility). A retest to bullish support ard 1,1250-1,13 is possible.
- "ECB has been printing"... so what??? Look at all other EUR crosses where have those moved since ECB started its completely useless QE program. "FED will hike".... will they? if they do, will it be a cycle? If they do hike, what will that cause long term? If they don't hike, what will that cause long term? Who knows? I don't. I have ideas and thoughts, but I don't know what market reaction will ultimately be in any of the scenarios. I tell you a "secret": no one knows it, but I know something else: I want to follow the reaction! I don't want to guess the move and the direction in advance, I just want to participate in it from good risk/reward entry points
- Look for buy signals at supports as the big picture seems to remain bullish.
Crude Oil:
- This was the first in line, which signalled serious problem in global real economy. Collapsed, recovered some early this year, then got next hit down. No one knows where the bottom will be (pls read my prev posts abt WTI), but sooner or later a correction will have to happen.
- Heikin Ashi candles yesterday and today may signal the start of a pull back, but as I wrote before, we need a close above Tenkan Sen and a SAR point hit, as minimum confirmation criteria.
Gold:
- Neutral with bullish bias.
- As I wrote yesterday, the pull back has started, support is ard 1125-1130. The question is if we see next buy signal there or if it resumes bearish.
- Gold is very important indicator. I have experienced four global crises and stock mkt meltdowns in my life, but I have never seen any one of them without increasing Gold prices. So basically the real fear will come to markets when and if Gold turns bullish too.
Summary:
The 4 drivers clearly show we are in risk off mode. The race has started. It may take a pause now, but I think we'll see serious acceleration in the next round(s).
The only thing you can play with is reduce or increase net bearish position in this complex. For now I reduced half of my SP500 shorts (built at 2090 avg price long time ago), closed all my USD shorts, still hold Gold long. I will try to buy some WTI if I see pull back starts (not more than 0,5 trade unit), but most importantly if we get to strong supports, then in line with my basic bearish strategy I will again short SP500, USD, and will long more Gold!
SP500:
- Broken and Bearish. Serious damage on the weekly chart too. However the move was very sharp, so the bear has to take a breath. I also doubt it will totally collapse before the September FED FOMC, however I still believe spikes will be sold, and eventually we will see a deeper correction in comeing months (1600 +/-?)
- Technically the move was sudden, and in last two days we started tosee some "consolidation" in a very wide range. Not surprising, as haDelta reached extreme low. Dip buyers and perma bulls stepped in, so did bears (like myself) started to cover some of their shorts below 1900. Heikin Ashi pattern shows consolidation in progress,which can end up in a retest to bearish support ard 1980, or in a next painful leg down (not yet clear)
- Big picture remains bearish until price is below 1980 and 2040
EURUSD:
- Clear bullish break happened on daily chart with massive stop run above 1,1150. It was a bit too much and too quick(extra high haDelta print). Market started to consolidate here (with still very high intraday volatility). A retest to bullish support ard 1,1250-1,13 is possible.
- "ECB has been printing"... so what??? Look at all other EUR crosses where have those moved since ECB started its completely useless QE program. "FED will hike".... will they? if they do, will it be a cycle? If they do hike, what will that cause long term? If they don't hike, what will that cause long term? Who knows? I don't. I have ideas and thoughts, but I don't know what market reaction will ultimately be in any of the scenarios. I tell you a "secret": no one knows it, but I know something else: I want to follow the reaction! I don't want to guess the move and the direction in advance, I just want to participate in it from good risk/reward entry points
- Look for buy signals at supports as the big picture seems to remain bullish.
Crude Oil:
- This was the first in line, which signalled serious problem in global real economy. Collapsed, recovered some early this year, then got next hit down. No one knows where the bottom will be (pls read my prev posts abt WTI), but sooner or later a correction will have to happen.
- Heikin Ashi candles yesterday and today may signal the start of a pull back, but as I wrote before, we need a close above Tenkan Sen and a SAR point hit, as minimum confirmation criteria.
Gold:
- Neutral with bullish bias.
- As I wrote yesterday, the pull back has started, support is ard 1125-1130. The question is if we see next buy signal there or if it resumes bearish.
- Gold is very important indicator. I have experienced four global crises and stock mkt meltdowns in my life, but I have never seen any one of them without increasing Gold prices. So basically the real fear will come to markets when and if Gold turns bullish too.
Summary:
The 4 drivers clearly show we are in risk off mode. The race has started. It may take a pause now, but I think we'll see serious acceleration in the next round(s).
The only thing you can play with is reduce or increase net bearish position in this complex. For now I reduced half of my SP500 shorts (built at 2090 avg price long time ago), closed all my USD shorts, still hold Gold long. I will try to buy some WTI if I see pull back starts (not more than 0,5 trade unit), but most importantly if we get to strong supports, then in line with my basic bearish strategy I will again short SP500, USD, and will long more Gold!
