“I find it fascinating that most people plan their vacations with better care than they do their lives. Perhaps that is because escape is easier than change. “ – Jim Rohn
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FOMC, Apple and Tesla
“Life is accumulative – Either our errors accumulate to what we don’t get, or our wise decisions accumulate into what we do get.” – Jim Rohn
As we wait for the FOMC, focus will be on how AAPL trades and closes the day from what will probably be a gap up open. Remember, it’s not how we ‘open’ but rather how we ‘close’ the day that matters. We still feel that there is a lot of complacency, hope and FOMO out there and suspect that these participants will get a wake-up call in the near future.
As a reminder, here is our bigger picture view on AAPL > no change to our outlook or levels.
We’ve had a lot of questions on what our preferred risk-off positioning is, especially in light of the ramps we have been seeing in equities and the subsequent difficulty in holding aggressive shorts there. As always, there are various way to tackle this like sizing or expressing the view through different derivative strategies but for the purpose of this post, we will reiterate that out favorite way to play this theme is through USDJPY. We’ll go through an in-depth discussion of this in today’s video update.
Remember to get your popcorn and favorite beverage of choice out for Tesla earnings out after the bell today; as always, should be very interesting to seen what Elon decides to pull out of his hat!
bigger picture view, discussed in our latest Outlook Video:
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Wishing you a great day ahead.
Liquidity and Complacency
“In the beginner’s mind there are many possibilities, but in the expert’s there are few” – Shunryu Suzuki,
Over-night action confirmed what we have been discussing for a long time now: Liquidity and Complacency are a very big concern. If you are new to the blog, we would suggest you go through recent posts and Weekly Outlook Videos to get up to speed with our thinking.
Our bigger picture call for USDJPY into the 100 mark remains unchanged but for the time-being downside targets on the recent swing are done and we will review this in today’s webinar.
No change to AAPL too. What many called a ludicrous roadmap is moving along nicely..
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Into ECB
“Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent.” – Calvin Coolidge
At this stage, we just have to be patient and get through the last ECB and FOMC meetings of the year.
Nothing much has change in terms of our bigger picture view. We still feel that markets are being extremely complacent and that we are currently in a distributive phase of the cycle. Naturally this does not mean that we could not move back higher but our belief is that the risk/reward is still on the ‘sell into strength camp’ both from a tactical and cyclical perspective.
Following on from our bigger picture Pivotal weaker DXY theme, here are 3 key charts that we will be discussing and reviewing:
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Early Morning Update
“Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength.” – Arnold Schwarzenegger
As we discussed, there was absolutely no sign of fear in the markets and expected recent lows to be taken out and we are still focused on unfinished business at yearly lows. Once again, the pivotal bull/bear lines proved to be extremely useful in assisting us and we will continue to focus on them. Naturally we would never play for any market to move in a straight line and even if we get a flush and tradeable bounce, those levels will remain our key strategic guides. Primary downside targets are still 4-6% away on most of the indices for these current moves.
We also continue to expect both Nikkei and USDJPY to catch up to recent moves and expect to see plenty of two-way trading opportunity inside these ranges on the way to the bottom-end supports.
The other key chart going into this week, ECB and the upcoming FOMC meeting will be the DXY. We would be very cautious about trying to be aggressive trying to fade ans sustained move and continue to focus on EURUSD. Don’t forget to properly understand Euro weight in this and remember that in an aggressive risk-off environment, especially in the context of China frictions, AUssie and Kiwi will struggle. No change in our base-case outlook.
If you are interested in a more structured way of tackling the business of trading, 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 all a great day and week ahead.
Early Morning Update
“What we can or cannot do, what we consider possible or impossible is rarely a function of our true capability. It is more likely a function of our beliefs about who we are.” – Anthony Robbins
Most gaps from the Sunday euphoria are done. As discussed in yesterday’s webinar, you have to be suspicious when every talking head, pundit and punter is absolutely certain of any given outcome. As a general rule, we have and will continue to fade these situations.
Our main focus remains on price and on how markets react are specific levels. Remember that this week will likely prove to be pivotal in setting the tone for action into year end.
Here are some of the charts we will be updating and discussing today (charts can be loaded by clicking on the bullet title):
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Nikkei and USDJPY breakdown, range and inflection point.
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Bigger picture Bull/Bear lines in ES/NQ/YM/RTY.
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GOLD $ DXY.
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EURUSD 1.13 rotation + seasonal pattern.
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ZB cyclical support inside chop zone.
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SPX still in range.
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NDX key inflection point.
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Crude, the 200WMA and waiting for OPEC.
If you missed our latest update heading into this weekend and our discussion focusing on the possible repercussions on equities and the dxy, you can watch the recording > HERE.
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).
If you are interested in a more structured way of tackling the business of trading, 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
Charts of the Day
“And yes, you should lose, and I know I can lose and should lose, it’s just a question of quantity. If you lose more than you should have done, that’s when you get into trouble. It’s a lack of discipline in sticking to what you decided you were going to do that causes difficulties. A lot of traders don’t focus on their targets and fail to block out emotions like hope, fear and greed.” – David Kyte
Key inflection points across the board as we continue to experience good conditions for traders. Here are some of the Key Charts that we will be focusing on and reviewing today.
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Still hovering, our focus remains on the weekly close > Weekly DXY.
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Key structural level and psychological support > Euro Monthly. Don’t forget to keep an eye on action around the 1.13 mark.
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Keep an eye on action around the 114 mark in light of recent flows on equities. USDJPY can move quick inside range.
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Market is still very long USD especially against NZD > unwind still in play.
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Kay test for AUSDUSD > heads up for general risk flows.
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Consider primary move done in Crude > Key Support.
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SPX back in the middle. No change in expectation for retest of yearly lows > still in broader range.
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AAPL > unwind still in play.
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And many more…
If you missed it, you might be interested in watching our Latest Weekly Outlook Video.
If you are interested in a more structured way of tackling the business of trading, 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.
Charts of the Day
“The victory of success is half won when one gains the habit of setting goals and achieving them. Even the most tedious chore will become endurable as you parade through each day convinced that every task, no matter how menial or boring, brings you closer to fulfilling your dreams.” – Og Mandino
Another key day in the markets as the cavalry came in and saved the day right at those key marks on ES/YM/NQ. Once again, we cannot stress how important those levels are from a day and week closing basis. We have been discussing and detailing this for some time but even if you haven’t been in the sessions, the price action should be self explanatory.
If you missed if, check out our latest Weekly Outlook Video. In response to a few questions that came in and to make sure the release schedule is clear, please note that, for the time being, the outlook video is available to 50 on Markets subscribers into the Sunday open and then posted on the blog after the Monday US open.
We have attached 3 of the most important screens we are focused on at the moment. Finally markets are moving again and giving us plenty of opportunity. Remember to focus on the bigger picture, especially now that traditional correlations are starting to come back into play.
If you are interested in a more structured way of tackling the business of trading, 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.
Charts of the Day
“There’s a big difference between probability and outcome. Probable things fail to happen-and improbable things happen-all the time.” – Howard Marks
Key week shaping up as we continue to hold key inflection points across the board. China came back from golden week and as expected, markets are trading heavy. Japan came back from the bank holiday and as expected, markets continue to trade heavy and today we’ll have to see what the Bonds do following Columbus Day. All-in-all we would expect to see a bit of a pause across the board but untimely, more follow-though to come in.
Make sure you check out out latest Weekly Outlook Video. We covered and referenced a lot…
If you are interested in a more structured way of tackling the business of trading, 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.
