Thread: Closed: Discuss EUR/USD News with a DailyFX Analyst

Hi,

What do you think about my analysis?



Thanks

Originally Posted by psperos

Thanks i did not know about this index, i was only following fxcm and oanda for sentiment.

well, I didn`t know about oanda`s index - thanks

Patryk

Originally Posted by fazi

Actually it stays at -21.s for 90 minutes now - so it probably is a good bullish sign.

After EUR/USD topped at 1.3485 in the beginning of March, there were like 36% long and 64% short and from there the EUR dropped 400 pips in a couple of days even if SSI was indicating strong buy.
I don't have the statistics but it would be interesting to see the outcome of a pair after SSI has fallen to indicate the right direction. To me it seems that the SSI failure in such conditions(36% to 64%) indicates a very bearish outcome. That's why a statistic would be good to see.

Originally Posted by ThomasNotas

A lot volatility today

panic...

Originally Posted by vturtoi

After EUR/USD topped at 1.3485 in the beginning of March, there were like 36% long and 64% short and from there the EUR dropped 400 pips in a couple of days even if SSI was indicating strong buy.
I don't have the statistics but it would be interesting to see the outcome of a pair after SSI has fallen to indicate the right direction. To me it seems that the SSI failure in such conditions(36% to 64%) indicates a very bearish outcome. That's why a statistic would be good to see.

I don`t have the statistics for SWFX - tops/bottoms are always (almost?) made during extreme sentiments. The recent rise in short positions happend after the EU formed a corrective zigzag down - that strongly supports contrarian bullish position.

BTW - SWFX gets extreme when reaches 50-60 - and sometimes a 200 pip move barely changes its readings.

Patryk

Originally Posted by fazi

I don`t have the statistics for SWFX - tops/bottoms are always (almost?) made during extreme sentiments. The recent rise in short positions happend after the EU formed a corrective zigzag down - that strongly supports contrarian bullish position.

BTW - SWFX gets extreme when reaches 50-60 - and sometimes a 200 pip move barely changes its readings.

Patryk

The bottom line with all the sentiment out there including COT data, the market has been net short for months now. Even during declines in the euro, the sentiment has failed to "trick" traders into buying the dip and going net long. Until this happens, dips can be bought. EURUSD is still UP for the year despite all the drama.

Originally Posted by psperos

The bottom line with all the sentiment out there including COT data, the market has been net short for months now. Even during declines in the euro, the sentiment has failed to "trick" traders into buying the dip and going net long. Until this happens, dips can be bought. EURUSD is still UP for the year despite all the drama.

very true.

SP500 delta - there is a pretty good chance we have ITD8 bottom today (38.2 fibo from MTD10/ITD6 bottom). ITD 9 is due 2-3 days ahead of the fullmoon (06.04.2012). This is a final MTD in LTD sequence so caution is advised. MTD/LTD top may come with an early ITD9. Should it be late - ITD11 (3rd in a row, mid april) must be MTD/LTD top. Since this is 11 point solution, the odds are that big moves will come between ITD11 and ITD1.

Patryk

lost: been trying to get a handle on VIX:to use for MOM, well its in unchartered waters. nothing but dark void area on either side.can only assume ( 0 ) would mean $S&P is in overbought area. trying to use this tool with Forex , but cant seem to get a handle on its personality.

not sure about FXCM, but Oanda has the short positions growing and growing. maybe we'll rocket next week if Europe doesn't implode

Attachment 119668

jul 2010
Attachment 119670

now...
Attachment 119671

Last Friday wasn't very trendy - did not follow through with the selling. But Friday is usually trendy, so if it decides to go up, I'll play along

Another 4 trades for 45 pips.



Perhaps I should stop? I think so, not much "volatility" left. Is it going down? Let's see next Monday

Originally Posted by Spyros

jul 2010
Attachment 119670

now...
Attachment 119671

Just got that joke - very good indeed.

Originally Posted by Clivewaverider

Just got that joke - very good indeed.

Originally Posted by MysticMegatron

not sure about FXCM, but Oanda has the short positions growing and growing. maybe we'll rocket next week if Europe doesn't implode

Attachment 119668

OANDA...SCHMOANDA :S

I'll be attending a trading seminar this weekend, and TAFool earlier gave me some reading recommends, but I am also getting some great education here. What an excellent batch of responses! My apologies if I miss someone:

Originally Posted by Paul Chin

# 71815
Seek and you shall find. Everyone knows how bad euros is. Everyone is shorting euros. Almost everyone. Who do you think are buying from you? Santa Claus? You want to fight the market makers with your fundamental knowledge, or join them? Keep fighting and you'll bust a few more accounts...

The reason it matters who is buying is for the information that gives about which direction the market might go next. Are they "buy-to-play" or "buy-to-hold"? If they are buying to play, they have to sell sometime and undo completely the rise in the market. If they are buying to hold, it is important to estimate whether there will be a continuing flow of buy-to-hold that will reinforce, rather than undo, the rise in the market.

Originally Posted by vturtoi

# 71849
After EUR/USD topped at 1.3485 in the beginning of March, there were like 36% long and 64% short and from there the EUR dropped 400 pips in a couple of days even if SSI was indicating strong buy.
I don't have the statistics but it would be interesting to see the outcome of a pair after SSI has fallen to indicate the right direction. To me it seems that the SSI failure in such conditions(36% to 64%) indicates a very bearish outcome. That's why a statistic would be good to see.

The SSI is capturing how much buy-to-play there is, but unfortunately only among small to medium players. A Big Boy (Goldman Sachs?) manipulating the market by buying up a batch, hoping to trigger a rally and get out at a profit, won't show up there (until GS suckers all their clients into the rally). My initial reaction to the March 16 spike was that it could be a "Ponzi" of this sort. The durability of the rally has made me think otherwise, but left me scratching my head about the identity of the buy-to-hold players, who needed to be on the scale of ~3 billion per day of investment influx: IMF shifting a large percentage from $ to euro? The Saudi royal family?

Originally Posted by fazi

# 71827
Here are 96B reasons to buy the EU:

Asian Banks Go Deal Shopping - WSJ.com

Let me reverse your question - why in the world would you buy USD?

What is the number of USTs to be issued this year? Who will be a buyer?
When is the next debt ceiling hike due?(2 months ahead of the ellection?)
What about a next round of MBS purchases ?
How much the FED must not (wink,wink) print to keep the US (the EU too) afloat? Especially in the wake of totally upredictable (wink,wink) situation in the Hormuz Strait?

Thank you! Yes, there's the ~3 billion/day I was looking for. And Paul Chin: it may not be important to you to be able to "name the enemy", but to me, it feels better to know. fazi, I strongly concur (and have said so before) that this fall we should expect to see the Fed make a large Obama campaign contribution... er, "prudent quantitative easing"; and buy-to-hold players must of course look as far down the road as they can. But I disagree that the Fed turning on the printing presses would help keep "the EU too" afloat: it is a beggar-thy-neighbor game. It is the ECB which has to print up euros, if the euro is to be brought down (the Jan/Feb low, around the equilibrium price or even a little below, followed such ECB action), but the ECB (run by Germans, not by the southerners who need euro depreciation much more badly) isn't doing so and Big Boys evidently don't foresee it doing so. In fact, the article suggests it is ECB regulations on the banks which are driving the sale of assets to Asia, and thus appreciating the euro when it "needs" to go the other way; I would read that more as law-of-unintended-consequences than malicious intent to punish the south, but who knows?
EDIT: Bloomberg video on how the euros the ECB tried to pump into the economy just ended up parked back at ECB; maybe they couldn't depreciate the euro right now even if they tried?

Originally Posted by stryker

# 71816
From a techie point of view it is simple........ DX finally rolled over and choose to leave the wedge to the south side........ and I bet the mkt was watching a firm clue from the DX.. the rest was all as expected...

GL...

Originally Posted by Luxuriant

# 71818
Maybe this will help. Your not considering the other half of EUR/USD. Your trading US dollar strength when you short the EURO. Its coupled at this time with US futures. US stocks go higher. US dollar weakens.

Originally Posted by TAFool

# 71828
It isn't so much people buying Euros as they are selling USD. Don't forget, when you trade a pair you have to look at BOTH halves. Stryker and Luxuriant nailed it for you.

And here is a pic of the USD with the lemming drop:
http://www.tafool.com/Charts/usd0323121hGapChart.png

What it shows is wave (B) down is almost done with the yellow bottom line being the max down side. Once it ends, up it goes in wave 5 (ie. EUR/USD down unless the Euro rises faster than the USD). The final gap fill would be nice but is not necessary at this particular time

The USD-bear, as opposed to (anything else)-bull, side of the equation was visible in the initial March 16 seahorse as well, but again this time, as I noted after March 16, the spike was concentrated more in the euro market than anywhere else (GBP/USD spiked, then settled back where it was, for example). Do you want to know what's even more tragic than me re-shorting EUR/USD last night? For leverage-level reasons, I paid for it by taking down the USD/CAD longs I had been holding patiently for a while: it was near The Level God Intends (1.000000) where there is always strong resistance, but I was humming the Doors "Break on through, to the other side, break on through, to the other side!" and of course it did, after I was out of it.

So, not all currencies are being bought at the expense of the dollar, specifically, we are seeing a shift of some sizable percentage of global investment capital into the euro as a reserve currency. Is that wise? Well, the guys who have made that decision did not ask me.

Originally Posted by jogold18

# 71824
haven't been trading the EUR, been sticking with the yen. fundies dont take in everything. i for one dont know much about economics, but i can tell you, i would not be able to track all the pairs that i trade if not for the charts (technical analysis)...... my view is learn techs first cuz they give you more information " on the chart" compared to fundies, but hey everyone is different and do things differently......

if we manage to break pivot we could see a monster move towards 1.35. got other resis at 1.3308/17 where we could pause.

Unlike March 16, when I was missing the pattern on the charts completely, this time it was my reading of the charts (and what I could gather from others reading the charts) and the signals that told me the euro would finally drop: although my gut was telling me this was certain to be wrong! stryker too was having a gut-feeling that the bullish interpretation of the charts was more likely: is it fair to say that "objectively" the charts on EUR/USD have been more ambiguous than in most other markets of late? or maybe it's just me, but in the little-dollars and yen markets I've been getting a better feel for it, more bets right than wrong. It is only the $500 bet on EUR/USD that has been so terrible: yes, laugh if you want, but this is about $500 (what I was willing to spend on "tuition"), or rather-- this is about the fact that I am the most brilliant person in the world, a genius who masters difficult subjects at a glance, penetrating the future with my crystal gaze, so that the mighty of the world would do well to seek my wise counsel! Or... not.

Originally Posted by Ikee

# 71813
Has been ["the most overvalued currency"] for 2 years. Stick to chart patterns. forget the hype. Cheers.

Concisely put. Out of curiosity, I dredged up some old trade data to see when the imbalance was last at a worse level than now, and looked where that fits into the Big Picture EUR/USD chart (month scale back a decade):

It was February of last year (seasonal energy costs are a big component; this year's component of manufacturing contraction is a different concern), and you see it was a little doji candle, ending on the blue side, and failing to prod the market into going down for the months that followed.
If you are curious about my calculational methodology for the equilibrium price, it is essentially the method that is formally known in the field as "posterior extraction" ;-)