Looking for my next Forex trade
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Ain't it the truth...LOL!
Yep, that's why I waited, Jav. I'm currently short and ready to add later if needed at the zone above the current one.
Hey Kirby, good to hear from you. I haven't seen stocks as a good option for quite a while now so I guess you could say I'm still following my "early" pattern as I'm prone to do...LOL!
Just trying to shed some light on what's under the rug, Qui. It isn't pretty but it's real...LOL!
Sure. 401K and IRA funds are a huge part of the market. But you also have the retail investors either buying in directly or getting financial advisors to do it for them. They're also tweaking investment portfolios to up their percentage of deductions, etc.
The "fatigue" they mentioned is an interesting word for the beginning of a bear market run...LOL! Doesn't sound harsh at all does it...nothing like "get out because the bottom is about to fall out"...LOL! You'll find very, very few actually saying stuff like that in the professional investment world.
And everyone always looks to the Fed to rescue the market and it obliges like an owner throwing a bone out to the dog. Yellen's speech was no accident and you can bet it was carefully planned to help keep this first quarter afloat. That way, they can avoid being pushed to do anything else for at least another quarter. By then, the market will be in full blown bear market territory and they'll be looking to the Fed to throw another bone. But what can they really do? Take back the 25 basis point hike they just implemented in December? That won't help much. Actually, I look for them to eventually join the world stage and go to negative interest rates as a last ditch attempt to stop the dam from bursting. It's coming...just a matter of time.
The reason I mentioned Buffet is because he's one of a rare few that actually tends to get out of the market when everyone is bullish and get in when everyone else is bearish...more or less. Again, he doesn't try to time anything specifically and he's often early by several months. But the man is without doubt one of the single greatest investors of our time.
Insider selling...how about the man himself, Warren Buffet? Here's a list of all the selling he's done from last year until now. His record isn't perfect of course and he still dabbles in buying...but the amount of reduction and some all-out share close outs ought to be an eye opener for the retail crowd.
He's sold primarily companies that have to do with communications, transports, and oil....ring any bells?
http://www.gurufocus.com/StockBuy.php?GuruName=Warren+Buffett&cache=clear¬ifications&n=20&action=sell
Good deal. BTW, here's another cue that always happens at market tops...bullish retail investors. Pay attention to that last one.
And one more thing...pull up any major news site like Bloomberg or CNN or CNBC...tell me how many bearish articles you find vs. how many bullish articles. Bullish will outweigh bearish by quite a bit.
This is just a quick list of articles I found from last year till now...
http://money.cnn.com/2015/09/02/investing/new-investors-buy-stocks/
http://www.cnbc.com/2014/12/23/dow-at-18000-a-buy-signal-for-retail-crowd.html
http://www.thestreet.com/story/13403824/1/retail-investors-bullish-on-the-us-in-2016.html
A word of warning, Qui...don't put a single penny in your Forex account that you're not willing to lose completely. Regardless of how good or bad a trader is, you should never trade with money you're going to possibly need. The temptation with larger amounts of money is to overtrade...I've seen it happen all too often and it happened to me in my early years.
When you get totally proficient on your own, without any guidance at all, and you can nail 80% or better on your trade accuracy on winners, then you might consider adding to your trading account...but not before.
I don't really know of a site where you can view all of the corporate owners that are selling stocks in a compact list. This site has a list of all SEC filings that are required for company owners to sell stock...
https://www.sec.gov/edgar.shtml
Smart money leaving the station though is easy to see in things like transports and commodities. When you see transports (sea, air, rail, truck, etc) drop off sharply, the market lags behind it by several months but does eventually catch up. Last time it was the housing market...this time it was oil. The transports ($TRAN) can be looked up at stockcharts.com just like any stock.
DOW theory (not related to the DOW Industrial Average other than the name) actually states this in detail at the following website...
http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:dow_theory
Here's an important section of DOW theory you should pay close attention to...look at the highlighted section and see if that sounds familiar to what you see and hear now.
Primary Bear Market - Stage 1 - Distribution
Just as accumulation is the hallmark of the first stage of a primary bull market, distribution marks the beginning of a bear market. As the “smart money” begins to realize that business conditions are not quite as good as once thought, they start to sell stocks. The public is still involved in the market at this stage and become willing buyers. There is little in the headlines to indicate a bear market is at hand and general business conditions remain good. However, stocks begin to lose a bit of their luster and the decline begins to take hold.
While the market declines, there is little belief that a bear market has started and most forecasters remain bullish. After a moderate decline, there is a reaction rally (secondary move) that retraces a portion of the decline. Hamilton noted that reaction rallies during bear markets were quite swift and sharp. As with his analysis of secondary moves in general, Hamilton noted that a large percentage of the losses would be recouped in a matter of days or perhaps weeks. This quick and sudden movement would invigorate the bulls to proclaim the bull market alive and well. However, the reaction high of the secondary move would form and be lower than the previous high. After making a lower high, a break below the previous low would confirm that this was the second stage of a bear market.
I closed all of mine out a while back. I have absolutely nothing in this market in any way, shape, or form.
After this quarter ends and we get into the 1st week of April, maybe the 2nd week tops, the market will start selling hard and fast.
The correlation between the two time periods then and now is more startling than you realize, Qui.
2008 was an election year...2016 is an election year.
January to February 2008 showed market weakness and a bounce in March...January to February 2016 showed the same and the same March bounce.
March to the first week of April 2008 completed a big bounce...2016 shows the same.
As soon as the quarter ended in March 2008, April started the big selling streak...we're in the same pattern and the VIX had the same setup.
The Fed was cautioning about possible weaknesses in the market as a whole in it's March 2008 statement. Yellen is doing the same now.
Here's the statement from the Fed in March 2008...substitute a few things like oil instead of housing market, tweak a few odds and ends, and you have basically the same thing now. They already know what's coming but they can't come right out and say it. The problem is that this time, they don't have the tools that Ben did back then. He had wiggle room to lower the interest rates...the current Fed has practically none.
https://www.federalreserve.gov/newsevents/press/monetary/20080318a.htm
Here's another way to look at it, Qui. Remember I've said over and over how things run in 5 stages.
The VIX is no different. Look at the stages and then look back over the stock market charts relating to those time periods.
So we're wrapping up the Wave 4 "glad we dodged the bullet and everything is fine" syndrome.
The market is about to be very, very upset.
VIX...the volatility index or fear index as it's commonly called.
It runs in stages and it runs opposite to the market as a whole. When folks are happy and the market is going up, up, up, there's very little fear and the VIX stays in a dormant stage at the low end.
Then, the early stages of fear set in and the VIX starts popping, causing big market swings like we've seen recently...big point gains and losses, large percentage gains and losses, all in a short period of time.
Then, the market crashes afterward.
When you wake up a sleeping bear, it may take him a bit to get going but once he does, you better run for the hills.
Once again, we had a dormant stage with all the easy fed money, then fear set in and has caused the VIX to wake up. Once it's fully awake, the market collapses, everybody sells everything and runs to the safety of the US dollar and the yen.
So guess which stage is coming next?
I don't think I'll be tempted by any more small time frame trades for now, Qui. Volatility is set to surge big time and once these things grab hold of a downside market move, they're not likely to let up much.
Qui, you were touting to me the value of moving averages and how much they were respected...LOL!
I'm just messing with ya...not giving you a hard time...just trying to get you to see what I see using another method that you could more easily grab onto.
If you were in all cash and looking for a trade setup and that was any random chart that you happened to see on any time frame, you'd short it...plain and simple. Being convinced that this is a new major bullish run that's gonna leave you in the dust is a result of you being underwater in a trade and emotions have gotten the better of you. You're finding reasons why it's a bad idea to be short. But, at the same time, you haven't answered the key question...
Would you really go long right here anticipating a major bullish run topside? If the answer is no, then short is where you should be. If the answer is yes, then you should close out all of your losing short positions and take a long position...it's really quite simple. When you look at a chart and evaluate all the technical data that you have available, those are the two options if you're going to take a trade.
But whatever you decide, make sure it's not an emotional decision because that's a killer in every market.
Oh ye of little faith...LOL!
You're doing it again, Qui...you're looking at where it is now instead of where it's headed. That's retail mindset.
Would you really be a buyer this high up in the trend? Or, if you're big money and thinking about going long, would you wait for a substantial pullback to put professional money to work?
Buying into a rally long after the rally has started isn't the way bottoms are made...it's the way tops are made.
After looking at it again Qui, I think it's gonna be wrapping up the lowside very quickly here.
I'm just sitting here smiling to myself, thinking about how this final leg up is driving prices right into the retail zone. Yellen fueled this final rally leg on the market with her talk about holding off on the interest rate increases.
But when you fold back the curtain and look closely, she basically just confirmed the world is a crap pot where no one in their right mind should be buying stocks...LOL!
Take a look at this article on her speech and you'll see what I mean.
I'm sure the market will search for reasons as to why the market drop happened...but the charts are telling me all I need to know so I'll just sit back and wait quietly...still smiling.
http://investorshub.advfn.com/boards/post_reply.aspx?message_id=121549453
I don't think I'll be interested in any GJ long positions after all. There are still forces at work in the charts that could drive that sucker down hard so I'll let it pass for now.
Get ready, gang. The Yellen rally that is spurring these crazy final moves is going to come to a very abrupt end.
Well, I must be a glutton for punishment because I'm long again on USD/DKK here at 6.5920. Something tells me this zone is going to hold, fresh or not. And if it does, it's going to explode north in a big way.
I went ahead and closed the GJ long here Qui. It's probably gonna run north like a bat out of hell but it'll do it without me. I'm gonna wait for one of those 2 zones I have marked to get hit. Until then, I'm staying out of it.
Yep, hourly blow out is looking good here so far, Qui. I'm gonna keep a close eye on it though...no way I've letting this one out of my sight...LOL!
I'm just gonna hold this single long position for the larger move up regardless.
Here's what's got me thinking GJ is gonna pop hard to the north soon, Qui. The TDI has shown a huge pullback but the price has barely moved, relatively speaking. The 4 hour chart shows the same thing. It made a fresh new high peak on the TDI as well on the 4 hour but there's been no new high in price to set up a plausible negative divergence to short it from.
I think I'm gonna wind up holding this long for a while.
Here's the hourly chart...
The zone is no good, Qui. UJ is too bearish right now.
Well, that level just got obliterated too, Qui. With UJ still dropping, these minor levels aren't getting respected. The bad part is I had UJ pegged for further downside and I ignored it and tried to play GJ long when it can't rise with UJ dropping.
Just me being stupid...LOL!
It's probably just a large consolidation channel that's going to lead to one more massive move topside for a final high. But it's too early to tell yet where to enter to get in on that kind of move.
The yellow zone I had marked got violated so now we're left with just the final fresh zone. Sam is absolutely correct in taking trades ONLY at fresh, untested zones.
Funny thing is the hourly GJ chart says that this sell off is going to lead to a big pop topside to a new higher high most likely. Going to be interesting to see how it plays out.
Hard to know just yet, Qui. But since the daily zone isn't fresh anymore here, I wouldn't take any trades at this point. Even then, the lower zone also isn't fresh either, so really there's no verifiable fresh lower zones to trade long from for a while. But I wouldn't be short either so USD/DKK is basically a no-go for now. When we see one like this, it's better to just go find another pair to trade.
Night Jav. Have a good one.
Yeah, that's another key part of this whole setup...trade only during high volume times. That's why I should have taken the profit earlier and left it alone. Asian sessions are bad trading times.
I went through pretty much all of them, Jav. Watch especially for the Odds Enhancers. It basically plays nicely into the high odds trading setup I use...just different factors. But he does mention time of day as one of the key components which is on my list.
Yep, that's the 50 fib of the entire move down off of the highs but the 50 fib listed between the current zone levels is only 161.89 or so which puts us back at the top of the bearish channel. So I'll likely bail out there and wait to see what we get tomorrow morning.
Most of his videos repeat info, so pretty much any of them. He has a series of videos here that you can start with...there's a total of 51 videos at the top of this Youtube search...