Forex/Futures ST for Week 5/20-5/24

greenback

Let's have our weekly review as usual with the weekly chart ...

Overall bulls are again very strong: We have observed four bullish trend bars by now on the weekly charts. This is very strong trend. We have also have the weaker indices, DAX and Russell to break out from their bases. These all support the broad risk-on rally. So intermediate-term wise, bulls are fine. However, I want to sound the same warning as in last week's recap. The weekly bar has broken out of the BB band, which "usually" indicates some consolidation in the coming weeks if not a small pullback. So bulls want to be careful.

There are two strategies we trend followers can do if futures are used in trading. We may sell our positions after a new high and put a buy stop above it to wait for a breakout if any. Apparently there is cost here because nothing is perfect. Or we set a trailing stop which will most likely be triggered if you want preserve your maximum profit by setting a tight stop loss.

If you are trading funds with EOD prices, then buy and hold is still warranted since we should never go 100% in or 100% out as we have shown in the portfolio. In effect, we have taken partial profit by rebalancing on last Fri.

greenback

Bond partially support the consolidation view. US 10yr and German 10yr are showing reversal intentions at ma20.

JGB 10yr is sliding hard, supporting our bullish trades in NKD and USD/JPY.

US 30yr is breaking down from ma20.

So overall the bond actions are bit supporting the near-term consolidation/pull back view in US/EURO equities, which will at best causing NKD to consolidation if no pullback.

源济

非常感谢！周末愉快！

greenback

There is a breakdown of the usual correlation between EURO and equity, which is quite reasonable if you follow macro data from both US and Europe. Currencies, after all, are strongly related to relevant countries/regions' economic performances.

Overall, USD was continuing its strength from the week before after reversal at ma20.

greenback

Energies:

Crude is still side way; NG still looks like it wants to go to ma20 for a visit.

greenback

Metals:

GOLD indeed is visiting the low, and COPPER is still testing the S/R ... Let's see how they turned out.

greenback

See you tonight on soft commodities ...

NG_NM

衷心感谢。

棋王

非常好的图，谢谢。

DCE

befriend

greenback

NKD just made a revisit of the high without making new high, so it's a good time to close the longs and set a stop above it. I set it 20 points higher than the high to resume the trend following IF it can break out again. However I think a pullback will start soon. See the JPY chart next.

greenback

JPY had a scary bar at open due to a Minister of Economy's comment that JPY has weakened enough earlier today. I think the low will be revisited again sometime during European or US trading times. So I have close my 6J short and look for a new entry somewhere at the end of that bar.

greenback

Here is JGB daily chart, it's down again and its slide has got Japanese MOE head worried along with his comment on JPY.

greenback

Fed's Evans: Need more time to assess job gains

WASHINGTON (MarketWatch) - There has been "good progress" in the labor market, but questions remain over whether the gains are sustainable, said Charles Evans, the president of the Chicago Federal Reserve Bank, Monday. "I think we need a little more time to assess that," Evans said in a speech to the CFA Society Chicago.

His comments suggest that Evans is not willing to support tapering the Fed's bond-buying program at the next rate-policy meeting on June 18-19. Evans, a leading supporter of the bond buying program, is a voting member of the committee this year. Evans was upbeat on the outlook, saying the economy has been very resilient, especially in light of "headwinds" from fiscal policy and a weak global economy. "I am very optimistic about how we're doing," he said. After several years of head-fakes, Evans said that he thinks this will be the year that "we really turn things around." On inflation, Evans said he would like to see the price index rise closer to the Fed's 2% target.

greenback

greenback 发表于 2013-5-20 02:10 PM
Fed's Evans: Need more time to assess job gains

WASHINGTON (MarketWatch) - There has been "good p ...

So the market thinks the job data will become better later this year, which implies Evans will support tapering QE later this year.

This would be a surprise to the street consensus that wants the tapering QE to start next year.

greenback

greenback 发表于 2013-5-20 02:12 PM
So the market thinks the job data will become better later this year, which implies Evans will sup ...

Since we still have Bernanke coming up on Wes, so this interpretation is subject to further revision.

I have to say that maybe FED has planned ahead to disappoint the street with that memo last Thur. So Bernanke may indeed want to taper QE this year if data warrants it. Nevertheless, he will also reiterate the flexibility first introduced during the last Fed meeting, i.e. Fed may also increase QE if data warrants it.

All in all, stocks should start to rely on their own fundamentals to go higher. Can they??? This is a big question.

greenback

Anyway, we still have the stop buy above the NKD high overnight ...

And we have decided not to bet JPY and ES any more until all this FED guessing gets settled.

quietplayer

greenback 发表于 2013-5-20 01:18 PM
Anyway, we still have the stop buy above the NKD high overnight ...

And we have decided not to b ...

Good strategy! Thanks!

greenback

First a recap ... we have doji everywhere. It can be either a continuation or a top, so let's wait for tomorrow.
We have exited all futures positions and have stop buy above NKD, this is for 1/2 loading only. However, the leveraged long fund positions remain.