’18 Thought of the Day

Chart of the Day

| 50Pips
“Faith consists in believing when it is beyond the power of reason to believe.” – Voltaire
As discussed, it’s hard to understand why anyone would want to be aggressively long risk in this kind of environment. Escalating trade tensions, event risk in the Middle East, difficult situation with Russia, more turmoil from Washington, weaker back-end September seasonals, buyback blackout period… just to name a few things. Markets remain extremely complacent.
ICYMI, you can check out our latest Weekly Outlook Video.
All about the Chinese response to the latest round of tariffs and overall follow-through today. Let’s see what we get.
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Wishing you a great day ahead.

Chart of the Day

| 50Pips
“Adopt the pace of nature: her secret is patience.” – Ralph Waldo Emerson
As markets continue to grind around at ATHs, we continue to believe that the next aggressive move will be to the downside. In today’s session, we will go through both recent warning signals and new warning signs that are appearing under the surface. The are more and more flashing lights and participants really have to be careful in what could easily end up being another vix-style-debacle.
On the currency side, as we have been discussing, the most interesting development is that the DXY short trade is trying to get some traction. The weekly closes will be key, not on in FX but also in the commodity complex. As we stand, the bulls still have reason to hold on to their view but if we get a little more downside traction, a lot will have to re-position.
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Wishing you a great day ahead.

 

Chart of the Day

| 50Pips
“Knowledge is an unending adventure at the edge of uncertainty.” – Jacob Bronowski
As we navigate headline risk and get ready for the BOE and ECB decisions, there is no change to what we discussed in our latest Weekly Outlook Video.
Equities continue to chop around at highs as we wait for the next catalyst for a proper move and once again, we reiterate, something has to give as this divergence between the US and the rest of the world will not continue ad infinitum.
The most interesting recent development is the DXY trying to get some downside traction as we continue to focus on the failure in the 96s and expect a retest of the 50WMA before we get more clarity on the bigger cyclical direction. We remain open to what price will tell us but as for now, we are still leaning to the downside.
Remember that there are a lot of stretched positions that still need to unwind if this DXY downside gets traction. Apart from the commodity complex, notably we had highlighted CHF and NZD with the former having played out and the latter still very much in play.
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Wishing you a great day ahead.

Chart of the Day

| 50Pips
“Nothing defines humans better than their willingness to do irrational things in the pursuit of phenomenally unlikely payoffs. This is the principle behind lotteries, dating, and religion.” – Scott Adams
No real change to what we discussed in our latest Weekly Outlook Video. We still have to see what we get out of the BOE and ECB as Global markets continue to trade with a heavy tone.
The easiest way to get a feel for where we stand is just to plot the daily charts of pretty much any market around the world and you will see that they are trading heavy below the 50/100/200 DMAs while US indices are still sitting close to ATH. As you can see in the chart of the day, the ‘two generals’ are still working hard to prop the US up.
Something has to give and we suspect that it will probably end up being down to some kind of headline but one thing is certain, this divergence between the US and the rest of the world will not continue ad infinitum.
If you are interested in a more structured way of tackling the business of trade, attending a live daily morning call or a more detailed discussion on the charts we post / trade ideas, don’t hesitate to check out our Premium content.
Wishing you a great day ahead.

Chart of the Day

| 50Pips
“Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things only hoped for. ” – Epicurious
ICYMI, please check out our latest: Weekly Outlook Video.
Once again, we expect this week to potentially be pivotal in confirming or invalidating the current cyclical moves that are trying to get traction. A lot of data on deck coupled with a busy Central Bank schedule and mounting headline risk should be the ingredients for some very interesting action.
Focus remains on the DXY and the tech sector where Apple and Amazon will continue to be in the spot light.
If you are interested in a more structured way of tackling the business of trade, attending a live daily morning call or a more detailed discussion on the charts we post / trade ideas, don’t hesitate to check out our Premium content.
Wishing you a great day ahead.

 

Morning Update

| 50Pips
“The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading.” – Victor Sperandeo
Heads up for NFP but especially for more headline risk, especially on the tariff front from the US and China, without forgetting the Middle East, Russia, Brexit, NAFTA, Washington-gate, etc…
Markets continue to look tired and especially tech is due for a proper correction. We still feel that there is not enough talk/awareness around how poor liquidity is and as discussed yesterday, we anticipate another ‘no bid’ event in the near future. Once again, we see no edge in trying to hold any risk-on positions through the weekend.
If interested in the Tesla debacle, make sure you check out Elon on the Joe Rogan podcast. It’s actually pretty fascinating even if you are not interested in Tesla per se.
For those interested in the video updates, you can find a list of the content we have covered to date in yesterday’s update.
As always, there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Wishing you a great day ahead.

Chart of the Day

| 50Pips
“The main focus in my life now is to open people’s minds so no one will be so conceited that they think they have the total truth. They should be eager to learn, to listen, to research and not to confine, to hurt, to kill, those who disagree with them.” – Sir John Templeton
If you missed it, you can listen to our DXY review in our latest Outlook Video.
Markets are not looking too perky as tech continues to trade with a heavy tone. As already discussed in detail, unless we see some sustained weakness in Amazon and Apple, it will be hard to see a proper correction but we still maintain that these low liquidity ramps higher are bound to end badly, in a way that will make the VIX-debacle we saw at the start of the year look pretty tame and orderly. Remember that a lot of market commentators and participants today have ‘no concept of’ and ‘have never witnessed’ a ‘no-bid’ scenario.
Focus still remains on a lot of possible headline risk: Tariffs, NAFTA, Washington, Middle East, etc. However, as we have repeatedly said > the charts and levels hold the missing piece of the puzzle. Anything else has the potential to accelerate the ‘velocity’ of moves but the charts don’t lie and over a big enough sample, there is no reason to make things harder than they should be by not focusing on what price is telling you.
Note for active 50Scouts members: *make sure you read out latest update* and keep an eye on your inbox for a free pass to Friday’s daily webinar session (make sure to check your spam folder too).
As always, there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Wishing you a great day ahead.

Chart of the Day

| 50Pips
“Whenever you find yourself on the side of the majority, it is time to pause and reflect.” Mark Twain
So Jeff Bezos adds a cool 67 Billion, yes with a ‘B’, to his net worth in 2018 alone as Amazon keeps on moving to new highs. No matter how you look at it, if you stop and think, this is really incredible; history is being made and we are witnessing a truly incredible bull run with Amazon and Apple leading the way. We have talked about this before and as long as these two generals don’t show weakness, it is going to be very hard for the market to correct in any meaningful way.
As discussed in our latest Outlook Video, this is going to be a key week for the USD, especially with mounting pressures in EM. Don’t forget ongoing event risk from Washington, China and NAFTA headlines.
Note for active 50Scouts members: *make sure you read out latest update* and keep an eye on your inbox for a free pass to Friday’s daily webinar session (make sure to check your spam folder too).
As always, there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.
Wishing you a great day ahead.

Chart of the Day

| 50Pips
“The minute you get away from fundamentals – whether its proper technique, work ethic or mental preparation – the bottom can fall out of your game, your schoolwork, your job, whatever you’re doing.” – Michael Jordan
Risk continues to build across the globe with Emerging Markets leading the way. As discussed on Twitter yesterday, as long as markets continue to press higher, there is going to be no reason for the Fed to step back and as long as we are printing new highs, Trump is going to continue to feel invincible and continue to press China and Europe on the tariff side.
Keep an eye on the 7 mark in USDCNH and USDTRY. Remember that as far as USDTRY is concerned, most models highlight that Turkish banks essentially become insolvent if we print and hold inside the 7.10 to 7.50 range. If we get forced liquidations, thing are likely going to get very sporty, very quickly in European financials.
Once again, risk continue to build across the board, not only on the EM side but also on the Tech Regulations side, in the Middle East and with the Muller Investigation. Markets will continue to do what they have to but we would definitely not want to be going into this labor day weekend being Long Risk.
If you are interested in a more structured way of tackling the business of trade, attending a live daily morning call or a more detailed discussion on the charts we post / trade ideas, don’t hesitate to check out our Premium content.
Wishing you a great day ahead.