Busy Day Tomorrow

[milliard]

	Quote:	BlowFish
	As an aside, I hear anecdotally (so it may well be BS) that the currencies can be more 'technical' and trend better than index futures. I wonder if there is any truth in that?

They have their moments Blowfish.

They sure can shift through the gears when they have a mind to. A lot depends on the flavor of the fundamentals as to how heavy a particular pair or cross will get whacked through the handles.

Stop driven trade is a pretty tasty carrot as a pair vibrates around key swing levels. Liquidation traffic can be acute at times & makes for good bonus profits, especially if you’re participating from a slightly longer timeframe than intra-day.

Euro & Yen (2 big dog constituents of the Dollar Index) trade well from a technical perspective for sure. Liquidity will help your cause if you’re a pure technical player, so you might want to proceed with a little caution if you’re studying & planning ops around some of the cross instruments. They'll definitely travel light (volumes) on the CME.

Even via the cash there are times you'll need to show a little patience if you're attempting to work an order thru the pipes. Generally they attract less attention than the majors, & can be a tad fickle.

Again, we can’t assist on the comparison basis, but I’m sure one or two folks who partake in indx ftrs as well as currencies will either confirm or deny that slant.

[cowpip]

I have a question for the audience at large, and especially for those with a little more knowledge in the fundamentals.

Not very long ago, the market was fixated on asset backed commercial paper. As I recall, it was contracting and was causing a lot of worry. That topic then died out over time as the sub-prime mess spread into other newer areas of concern.

But a report out of Reuters today states that this last week, commercial paper shrunk for another week (that makes the 5th week running) and asset backed paper shrunk again as well (making it 4 weeks for that stat).

I'm curious if anyone here believes this old can of worms might come back to haunt the market? Milliard - are you guys paying any attention to these fundamentals?

There are rumors that the commercial paper may be shrinking due to concerns regarding auto and related loans - which is currently thought to be a possible "new shoe" to drop.

[milliard]

We tick most of the stuff which flickers across the page Cowpip, but the market isn’t biting on that info, therefore it’s back pocket material.

Dealers are more concerned that heavy stops below 5550 in EU got snapped on the back of cushioning-non deteriorating U.S data & nervous Eurozone growth prospects (hampering ECB forward rates bias).

Fed watchers are beginning to price in higher percentage probability that they’re done easing for now.

You got to mentally filter your (psychology) priorities each trading day & shuffle the pack weighted to prime reaction material. Just think bout what primarily drives these candidates & who is taking note of the main drivers.

Interest rates (yield)…Inflation (growth)….jobs/housing/mortgage/capital inflows-outflows/export-import generation…..

They’re the primary concerns of most of the Central Bank & Treasury heads. Everything else ranks secondary.

Watch Euro for reaction then haul up Swiss alongside it for a temperature check confirmer. You can run your rule along Yen, Cad, Sterling etc for back up (v/s the Dollar).

The ancilliary stuff will only come into view once the dominant (& regular price drivers) gear begins to blur on the frame.

[cowpip]

Thanks Milliard. I know it's back-pocket material, but wasn't sure if it might become front-pocket material in the future. But really, you're right. That doesn't matter right now. It's being largely ignored right now, so ignore it.

The dominant themes you pointed out are definitely the focus. It will be interesting to see if the euro can regain control above 5550. It may take a horrific NFP number to knock reality back into the heads of equity and dollar bulls. I'm not at all convinced this is anything but a medium-term dollar rally. There are so many fires smoldering in the forest, it won't take too much of a wind to fan the flames into another fire that burns away at the dollar.

But for now (at least for today), they're buying dollars, so we follow.

[Anna-Maria]

If you’re trading +hourlies Cary & you got yourself a core position then the intra-week money flow drivers can be better adjudged in a relatively calmer environment..

It can cause angst & more than a little panic if you’re attempting to digest & form a view of the chatter/data/priorities when trading from an intraday timeframe.

Once you manage to get your core base you can utilize the data & the ebb & flow of the market currents caused by the drivers, to feed into your position.

You’ll notice (if you haven’t already) that a pair will begin to acclimatize to it’s key levels as it meanders back & forth on the back of it’s main fundamental influences. When events quieten down & the data cupboard/fundy flows are light, it’ll revert to technical trade.

These are often where your previous levels of supply-demand & the stop activity buffeting them, come into play.

The GBPCHF was offered up as an example this week, same scenario played out on the other pair mentioned earlier in the week, EURGBP. The re-visit to .7935-.7950 yesterday epitomized this behaviour too.

Price shifted down (long Sterling) on continuing disappointing Eurozone chatter. Sterling was balancing out & traders had priced in the fwd rate calibration & were focusing on dire Eurozone output.

Chatter quietened down & neutralized Monday & Tuesday whilst EU demand (stop) activity bounced it back up the ladder where it found overhead supply at the exact spot which kicked it down last Friday.

Thing is, nothing changed this week regards the key fundamentals which weighed on EU v/s Sterling. Technical trade came to the fore, & once the realities re-surfaced & traders shook the sleep from their eyes, that level which housed a previous supply-demand imbalance, clicked into gear again.

If you’re short & feeding in from further up the ladder, the intraday vibrations don’t register very highly on the radar. You use the ebb & flow to prepare to add-in again as prices meet overhead supply. You’re buying yourself time to confirm that your view remains correct…………for now!

Pull up a 240 & you’ll see it’s clearly highlighting the lower highs & lows behaviour on this pair…just look at the bar prints on the way down compared to the activity on the way back up?

We got an initial zone of potential demand lurking back at .7750-780 & we got previous lower high markers on your 60m to offer a guage to 1st level Euro strength on any reverse in the fundamental flavours from here. Job sorted.

Thing is, you got time to assess & prepare for a 2 way eventuality. You got your upside-downside levels ticked & crossed. Your profit trail stops can be calmly calc’d & you can adjudge the potential reaction of any impending data still in the can ready to print.

You got time to watch all the psychology going to work on the price, & time to gather all the relevant chatter regards stops/option barriers/fix activity etc relevant to your orders if you so wish.

You can also take a piss without stressing whether a rogue print is going to smack you in the mouth & erase your angst ridden mornings profits

[torero]

This week and last week has been nothing but noise, I managed to stay out until today. I made a point to stay out of trading during last 2-3 days of the month as you folks have pointed out big guys to repositioning their inventories, thus the non-direction. Somehow yesterday coincided with Fed news day so I can assume the move, but I stayed out anyway. Sitting tight sure was tough but was worth the wait, don't have to dig my way out like I used to do.

One other note I wanted to mention was I used to stay out of trading Fridays but it's been quite trendy on these days, not sure why they've been good to me.

I'm currently on a position on GBPCHF from a breakout this morning and dare I hold it until 2.12? I see it's a pretty drop and assume the pretty pop up as well without much congestion.

[Sledge]

	Quote:	torero
	I made a point to stay out of trading during last 2-3 days of the month as you folks have pointed out big guys to repositioning their inventories, thus the non-direction.

Hmm... I would like to know more about this from anyone who may be able to elaborate. Is this an even larger picture in force? This is news to me. Would like to hear more about this.
Sledge

[Art Krantz]

It will only really affect you if you’re trading intra-day.

End of month/quarter/half year, etc can throw up excessive volatility as funds & key players shuffle their inventories & sweep back & forth on their book adjustments.

You’ll also sometimes witness erratic price activity on & around the various fix (especially the 13.15 & 16.00 gmt) prints, as large orders & counter trade matches clear thru the system.

A good deal of the time it’s nothing too much to worry about, you just need to be aware of the times & periods in relation to triggering orders, booking profits & managing your positions.

If you're oblivious to that kind of activity you can get washed out pretty quick punting off a 5min chart, or get caught up on the tail end of a rough spike or two.

[Sledge]

	Quote:	Art Krantz
	You just need to be aware of the times & periods in relation to triggering orders, booking profits & managing your positions.

Art-
Thank you sir, awareness is key. This information I would most likely utilize, as I do the news- which is that I am aware of a news release, but I don't utilize it as an entry point or opportunity to get into a position, in fact I stay away from it and may close out early if close to target if not already hit prior to the tornado of volitility to come. Generally, I'm out of my position and buttoned up for the day prior to the NY 8:30 News times if at all possible.

But this information regarding End of Month is something I will most definately be looking back to see some examples of.

Much Thanks for the clarification.
Aaron

[Sledge]

	Quote:	milliard
	1. Horizontal grids 2. An awareness of the key supply-demand zones, 3. A check on the main drivers (fundamental flavors) 4. An eye on the wires is about all that’s required to feel your way round the table to be honest.

Milliard-
I was going back over the thread and wondered if you could explain the Horizontal Grids you mentioned in #1 above? Do you simply mean in the "Gann" sense you are looking at the charts as plotted and using a trained eye to judge angle (i.e. faster it shoots, quicker it will be overbought or oversold?)

Thanks,
Aaron