Markets Open Mixed On ‘New Deal’ – July 13th 2015
Markets Open Mixed With Continued Euro Uncertainty
Overall market opened mixed with a potential ‘new deal’. I feel like is been deja vu over and over for the past few weeks. It will be nice when they finally do kick the can down the road so we can move on for the time being. After all, common sense would tell us that no sustainable deal will be made unless the market forces it. Greece will eventually sign a deal to continue the heist until the market finally says enough is enough. Until that time the cirrus will continue.
And another point of manipulation…I mean basic market function. Chinese equities open undecided amid further joke level market intervention. One headline reads, Regulators “Bust Illicit Stock Seller”. Ok so let me get this straight. Selling an completely over run market is illegal but what the government does isn’t. I feel like I’m living in the Seinfeld bizarro world where up is down, and left is actually right. On to the charts.
Euro Opens Unchanged
For the last few weeks the Euro has been very reluctant to pick a direction and stick with it. Obviously this is due to the current situation in Greece. Like the rest of you I hope for a climax to the current situation so we don’t have to worry about a tape bomb hitting the market. I also feel like the market will be anti-committal until something concrete is reached. Again, a deal that simply continues the facade is the most likely option. At least this will give the market a decision until the next deadline arrives, in which case we will do the dance all over again.
Right now the Euro is right in the middle of a larger range and therefore the I’m open on direction when it comes to the next move. For those who are not members of Day Trading Forex Live, what I say next is hugely important. WE DO NOT TAKE TRADES BECAUSE OF MARKET CYCLE. The reason we take trades is because we first identify a manipulation point, and then second once the price reaches that level it satisfies our criteria for entry. The entry IS NOT simply taken when a level is reached. Going back to market cycle. Market cycle is a filter. When we have a clear cycle then we obviously look to trade directionally. When we do not then we are open to take longs from lower levels, and take a short setup from upper levels. The vast majority of the time we are trading without a cycle bias and simply letting the market pick direction based on any valid setup from a key level. I wanted to cover this as there seems to be a great deal of confusion in regards to the importance we place on market cycle.
Will The Pound Strength Continue?
The Pound had one of its best days vs the dollar last Friday with almost a 200 pip push to the upside. Overall things this week have taken a sharp change via the COT report. Last week shows a sharp increase in the net short position on the Pound with smart money. This leads me to believe that Friday’s push up was more of a dead cat bounce than a real short term trend shift. The line in the sand for me is 1.5545 as of now. Should the market break and hold above this point then we are likely in for further upside. If we remain below this level then more downside is the higher probability in my opinion.
Forex News For July 13th 2015
Like most Monday’s the economic data today will be very light. The only thing that could provide a substantial move in the market would be piece of Euro news. As you will see on most new outlets there will be Euro meetings going all day. This has been continuous over the last week and will likely be the same until a “deal” is reached.