Press review - page 410

[Sergey Golubev]

S&P 500: intra-day ranging within 100 SMA/200 SMA reversal area for direction (adapted from the article)

H4 price is located within SMA with period 100 (100 SMA) and SMA with the period 200 (above 200 SMA and below 100 SMA for the ranging bullish market condition) waiting for the direction for the possible breakout or breakdown.

• The key support levels for this pair are 2075.00 and 2053.00.
• The key resistance levels are 2092.00 and 2112.80.
• "The price action since Monday is ‘shapeshifting’; the once rising channel has evolved into a symmetrical triangle above the low 2080s support. Given the S&P’s ability to hold support and converging price action towards the apex of a triangle, the path of least resistance will remain higher on a breakout above the top-side trend-line of the triangle. Should it break to the down-side and clear below 2080, then our focus shifts to the down-side."
• "Given the proximity of price to the apex, it should break soon, like today soon. So we may see one more ‘reliable’ move before tomorrow’s UK vote and Friday’s outcome. On this end, looking forward to the return to a more "normal" trading environment."
  

If the price will break 2092.00 resistance level to above on close H4 bar so the bullish trend will be continuing with 2112.80 target.
If price will break 2075.00 support so the bearish reversal will be started.
If not so the price will be ranging within the levels.

Resistance	Support
2092.00	2075.00
2112.80	2053.00

[Sergey Golubev]

U.K. Brexit Referendum: Polls Open (based on the article)

• "In a vote to leave, GBP would come under significant pressure, while risk currencies (CHF and JPY) benefit. Potential policy responses limit the degree of strength. We expect the effects on EUR/USD to be relatively muted."
• "The payout for Bonds is asymmetric. In a vote to remain, yields would rise but not significantly, and mostly in the Euro-area core. Upon “Leave”, the path of least resistance is for yields to drop substantially, especially in the UK & the US."
• "The bond yield/policy cushion, combined with the healthy distance from the macro shock, implies less downside for the S&P than for the FTSE or Eurostoxx upon "Leave". Upon "Remain", the S&P could plausibly make fresh highs."
• "Euro-area periphery yields and corporate credit spreads have significant room to widen in a decision to leave, although temporarily perhaps before a policy response is triggered. The upside is capped in an event to "stay".
• "Risk sentiment swings may affect emerging market assets, but much less so relative to Euro-area and UK assets, given the cushion from lower US yields."
• "Lastly, we anticipate limited pass-through to Oil prices. The broad decline in US real rates creates more upside than downside in Gold prices."

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EUR/USD M5: 17 pips price movement by Brexit Referendum: Polls Open news event

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GBP/USD M5: 67 pips price movement by Brexit Referendum: Polls Open news event

[Sergey Golubev]

Adjusting Your Trading Expectations In Volatile & Possibly Illiquid Markets

• Liquidity vs. Volatility
• The Key Premise Of Trading With Technical Analysis
• The Enhanced Risk Of Thin Markets And Their Origins
• Adjusting Your Expectations For Extreme Event Risk
• How To See The Difference of Volatility and Liquidity
• Why Volatility Is Increasing In The Age Of Algorithms

[Sergey Golubev]

U.K. Voters Back 'Brexit,' Will Leave European Union (based on the article)

• "The U.K. is poised to leave the European Union after a historic referendum, vote tallies showed early Friday, setting the stage for an unprecedented and messy untangling with far-reaching implications."
• "As of 6:05 a.m. local time Friday (1:05 a.m. ET), NBC's British partner ITV News put "Leave" at 51.8 percent with "Remain" garnering 48.2 percent, with the "Leave" campaign racking up the necessary 16.8 million votes to win."
• "The results in favor of an exit — or "Brexit" — sent shockwaves through global markets. The pound plunged to $1.35, it's lowest level since 1985."

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EUR/USD : 465 pips price movement by Brexit Referendum Final Results Expectation

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GBP/USD : 1,639 pips price movement by Brexit Referendum Final Results Expectation

[Sergey Golubev]

The Brexit Result Will Have China Worried (adapted from the article)

• "Brexit means that Beijing will lose its strategic access to Europe through Britain."
• "Chinese Foreign Ministry spokesperson Hua Chunying tried for a balanced approach on Friday afternoon, according to Chinese state media, noting that China respected the British people’s choice while also hoping that the U.K. and E.U. could reach a successful agreement."
• "Still, on Friday Chinese state media stayed away from the large-font Brexit headlines that dominated much of global press coverage."

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USD/CNH H4: bullish breakout. The intra-day price is on breakout with the bullish reversal: price broke Ichimoku cloud to above for the primary bullish market condition with 6.6514 resistance level to be crossed for the bullish trend to be continuing.
By the way, the daily price is on bullish breakout to be started today on open D1 bar, and the weekly price is on primary bullish market condition with 6.6152 resistance to be crossed to above for the close weekly bar for 6.7681 possible target.

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Hang Seng Index H4: bearish breakdown with the ranging to be started. The price broke ichimoku cloud to below for the primary bearish market condition. Price is testing 19,749 support level with 19,566 bearish target and with descending triangle pattern to be formed by the price for the bearish trend to be continuing.

[Sergey Golubev]

The 5 Most Important Things You Need To Know About The Brexit

It will take years for the full ramifications of the Brexit to unfold. In the meantime, here are the five most important things you need to know about this historic decision.

1. The stock market is reeling, but no one yet knows what the ultimate impact will be.
2. The British pound is getting hammered, which is good for vacationers but could have a longer-term effect on trade.
3. Banks and ratings agencies are lowering their outlooks for European GDP growth.
4. The vote was not legally binding.
5. There could be a domino effect.

[Sergey Golubev]

Weekly Outlook: 2016, June 26 - July 03 (based on the article)

The Brexit decision had huge market implications with a crash for the pound, falls for other risk currencies and gains for the dollar and the yen. Apart from the Brexit aftershocks, we have US and Canadian GDP data, US Consumer Confidence and other events. These are the major events on forex calendar.

1. US GDP( final Q1): Tuesday, 12:30. U.S. economic growth was upgraded to 0.8% in the second release for Q1. Q2 looks much better but the future is uncertain with Brexit.
2. US CB Consumer Confidence: Tuesday, 14:00. Consumer confidence is expected to improve to 93.2 this time.
3. US Crude Oil Inventories: Wednesday, 14:30. 
4. Canadian GDP data: Thursday, 12:30. Canadian GDP for April is forecasted to rise 0.1%.
5. US Unemployment Claims: Thursday, 12:30. The number of new claims is expected to reach 269,000 this week.
6. Chinese PMIs: Friday, 1:00 for the official one and 1:45 for the independent Caixin one. The Caixin manufacturing PMI already looks worse: a minor rise from 47.8 to 47.9 is on the cards.
7. US ISM Manufacturing PMI: Friday, 14:00. Manufacturing  PMI is expected to climb to 51.6 in June.

[Sergey Golubev]

Brexit - "Investors overreacted," University of Michigan business professor Erik Gordon said Friday in an email (adapted from the article)

• Eric Wiegand, senior portfolio manager at U.S. Bank Wealth Management: "With last night’s result, that’s certainly unwinding. It caught the consensus on the wrong side yet again. Complacency had crept back into the markets."
• Bob Stovall, U.S. equity strategist at S&P Global Market Intelligence: "Falling prices will unveil long-term buying opportunities, particularly for mid- and small-cap stocks. In the short term, markets will trade on emotion, so make sure you don’t end up becoming your portfolio’s worst enemy."
• Quincy Krosby, market strategist at Prudential Financial: "Look for gold to do well as part of the safe-haven trade in addition to the move into treasuries."
• JBC Energy analysts: "While we would argue that the British economy and its currency have not really lost 5 to 10% of its relative competitiveness overnight on a sustained basis, the level of uncertainty in the shorter term is definitely very problematic, and bets on any type of reversal do not sound like a good idea to us until the actual effects of last night’s decision become more tangible and quantifiable."
• U.S. Bank Wealth Management's Wiegand: "In a low-growth environment, uncertainty or increased concerns really do create tremendous volatility."
• Axel Merk, president of Merk Investments: "One could argue that the U.K. will remain in the EU for a minimum of two years, as formal notice that triggers the two-year countdown to leave most likely won't be given for months, but the markets don't wait. Instead, they are concerned about a disintegration of the EU, (and) they are concerned about a waning influence of the U.S. over the EU."

Dax Index - daily bearish breakdown, weekly bearish reversal:

• Daily price broke 9420.0 support level on open D1 bar to be reversed to the primary bearish market condition. If the price breaks this level to below on close D1 bar so the bearish breakdown will be continuing, otherwise - ranging bearish.
• Weekly price is testing 9420.0 support level to below to be reversed from the primary bullish to the primary bearish market condition. The price will be turned onto the long-term bearish condition by this level to be broken to below on close weekly bar for example.

Bovespa Index - daily correction, weekly ranging to the bearish reversal:

• Daily price is located above 200 SMA and near above 100 SMA for the bullish market condition: the price is on secondary correction for 50,350 support level to be testing with 48,185 bearish reversal level as a nearest daily target. If the price breaks 48,185 level to below so the reversal of the price movement from the bullish to the daily bearish market condition will be started; if the price breaks 52,830 resistance to below so the bullish trend will be continuing; otherwise - the price will be on ranging bullish condition near bearish reversal area of the chart.
  
• Weekly price is on ranging located near 100 SMA/200 SMA reversal area waiting for the direction of the terend to be started. if the price breaks 48.185 support level to below on weekly close bar so the long-term bearish trend will be started; if the price breaks 52,830 resistance to above so the primary bullish trend will be resumed; if not so the price will continuing the ranging condition near reversal area.
  

SILVER (XAG/USD) - daily bullish breakout, weekly bear market rally:

• Daily price is on bullish breakout by 17.99 resistance level to be testing for the bullish trend to be continuing. Alternative, if the price breaks 17.09 support level to below so the secondary correction will be started with 15.80 level as a bearish reversal target.
  
• Weekly price is on local uptrend a a bear market rally: the price broke 100 SMA to above with 17.99 resistance level to be tested for the rally to be continuing. Alternative, if the price breaks 15.80 support level to below so the rally will be starped with the primary bearish market condition to be resumed on this weekly timeframe.
  

[Sergey Golubev]

Forum on trading, automated trading systems and testing trading strategies

Press review

Sergey Golubev, 2014.03.04 19:07

How to Direct Your Strategy based on Market Condition (based on dailyfx article)

• Traders should look to focus their strategies in appropriate market conditions.
• Multiple time frame analysis can offer a ‘bigger-picture’ view of a market.
• Traders can choose to trade trends, ranges, or breakouts based on their analysis.

Trends show a bias that has been displayed in the market place; and when a strong trend is available, the trader’s job is simple: To trade in the direction of that trend. If the trend is up, the trader should look to buy; and if the trend is down, the trader should look to sell.

Unfortunately trends don’t always exist; and when that often entails congested, range-bound price movements as bulls and bears both fight to take over control of the market in search of the next trend. These range-bound environs can be more dangerous, and given the limited upside that might be available, many traders will often eschew trading the range; instead waiting for the inevitable breakout that may end the range and lead into a new trend.

The Benefit of Multiple Time Frames

The value of being able to get a ‘bigger picture’ view on a market cannot be understated. To think of the value of multiple time frame analysis, think of trading in a currency pair like buying a home.

If you’re going to buy a home, you’re likely going to want more of an overview than simply driving by and getting a quick glance. This is like trading a currency pair when only seeing one time frame.

When buying a home, you’ll likely want to get out of the car and walk around to ensure that the back yard isn’t in complete disarray. You want to check the foundation to make sure that you’re not going to have exorbitant repair expenses in your future. You want to get as much information as is feasibly possible to make the most intelligent purchasing decision that you can.

Trading in a market isn’t all that different, the more information you have the more of an informed decision that you can make.

Multiple Time Frame Intervals for Trend Diagnoses/Entry

And if the four-hour time frame is being used to enter positions, the daily chart can be used to gauge the trend (or lack thereof); so that the trader can ensure they are focusing the optimal approach on the prevailing market condition.

Or perhaps a longer-term trader wants to use the daily chart to enter trades. Well, then the weekly chart can be used as the longer time frame to guide the trader’s decision-making processes.

The benefit of using a longer time frame in the decision as to which strategy to utilize is that the trader can take more information into account, getting an idea of the ‘bigger picture’ before executing on their strategies.

Gauging Trend Strength (or lack thereof)

Once a trader has determined the time frame with which they want to look to grade the prevailing trend, focus can then be diverted to investigating the strength of that trend.

Price Action is a popular mechanism for doing so. Traders can simply look as to whether a market is in the process of making ‘higher-highs’ and ‘higher-lows.’ If this is taking place, then the trader is witnessing an up-trend, and can look to move down to the shorter time frame in an effort to buy as efficiently as possible.

Another popular way of grading trend strength on the longer-term chart incorporates the ADX indicator. ADX, or the Average Directional Index is an indicator created by J. Welles Wilder that was designed specifically to grade trend strength. The downside of this is that it doesn’t show which direction the trend might be moving, only whether the trend is ‘strong’ or ‘weak.’

Traders can use the ADX indicator on the longer-term chart to determine whether or not a trend is being seen in the market. If values are reading over 30 on ADX, then traders will often look to execute trend-based strategies.

Now that the Trend is determined, what’s next?

The shorter time frame is where the trader will often look to enter into the market based on the analysis on the longer time frame.

If a trend was found on the longer time frame, the trader’s job is to find a way to enter in the direction of that trend. On the lower time-frame, the trader can look to buy up-trends cheaply, or to sell down-trends expensively. This can be done with price action; or traders can look to incorporate indicators to offer a ‘trigger’ in the direction of the longer-term trend on the shorter time frame. Some common indicators for triggering positions on the shorter time frame are MACD, Stochastics, and the Commodity Channel Index (CCI).

If a Range-bound market condition was seen on the longer time frame, the trader has another decision to make before deciding how to enter: Does the trader want to trade continuation of the range, or the eventual breakout?

The logic of the range-bound entry and the breakout is directly opposite: Trading ranges entails selling highs, and buying lows (in anticipation of the range continuing), while trading breakouts involves buying new highs and selling new lows (with the expectation of the breakout bringing new highs or new lows into the market).

If trading for the break, traders can look to place entry orders slightly outside of support or resistance levels so that once a new high or low is printed, the trade is entered and the trader can look for new highs or lows.

If traders are looking to trade the range, an oscillator can be used similarly in the way that a trader would buy or sell in a trend (with the notable exception that up-side is limited). In both trends and ranges, traders want to look to ‘buy low’ and ‘sell high.’ The same types of tools can be used to determine when to buy and when to sell; MACD, Stochastics, and CCI are all popular mechanisms to trade in range-bound market conditions just as they are with trends.

[Sergey Golubev]

Fundamental Weekly Forecasts for Dollar Index, USD/JPY, GBP/USD and USD/CNH (based on the article)

Dollar Index - "Moving forward, the ‘risk’ aspect of the Dollar’s fundamental appeal is likely to grow while the ‘return’ quality will diminish. There is little yield to be made in the market generally, and the exaggerated emphasis on a 25bp hike from the FOMC versus the diminished efficacy of stimulus programs from the likes of the ECB and BoJ was losing traction regardless. With the global risks more prominent and the greater risk of a slowing of world growth, a rate hike in 2016 is even less likely. Fed Chair Yellen will weigh in next week. Perhaps the greater pressure would come from central bank intervention, but that is likely to have as limited influence as monetary policy." 

USD/JPY - "In turn, risk trends may largely influence USD/JPY ahead of the key data prints scheduled for the week ahead, with the longer-term outlook tilted to the downside as price and the Relative Strength Index (RSI) largely preserve the bearish formations carried over from the previous year. However, positive data prints coming out of the U.S. may generate a near-term bounce in the dollar-yen exchange rate should they put pressure on the Fed to further normalize monetary policy sooner rather than later."

GBP/USD - "We’re shifting to a bearish forecast on the British Pound for the week ahead as markets wrestle with the prospect of what a post-EU U.K. might actually look like. Uncertainty is expected to reign supreme, and this is something that investors will generally respond to by simply avoiding risk."

USD/CNH - "Keeping the Yuan stable to the basket does not mean unchanged. With such dramatic moves, the PBOC has to balance the impact to the Dollar/Yuan pair and the Yuan Index. It is almost inevitable that the Dollar will strengthen against the Yuan due to safe-haven demand. If the Central Bank wants to even-out the Yuan’s huge gains in the index against the Pound and Euro, the Yuan has to weaken even further against the US Dollar. Yet, this could drive capital flows out of China while China’s foreign reserves have continued to decrease. The drop to foreign reserves in May erased all of the gains from the previous two months and dropped to $3.1917 trillion, the lowest level since December 2011. Thus, in the coming week, the PBOC’s moves and global investors’ risk appetite will be the key drivers to the Dollar/Yuan pairs. Post-Brexit responses from European countries as well as Japan will add considerable volatility to the Yuan as well. Traders will want to continue to be very cautious."