Markets Slowing as Holiday Season Nears, Nov. 26, 2014
As The Holidays Approach Trading Gets More Risky
As the holiday season approaches the markets typically slow down as traders take a needed break from the markets, volumes decrease significantly and any major impact news or potential tape bombs can cause wild swings in price making the risk in taking entries go through the roof. Therefor in order to avoid this potential volatility I will be ending my trading for the year after the second week of December. As I was talking to a member yesterday I was telling them that usually everything slows down after Thanksgiving with is tomorrow in the US. However considering the increased uncertainty there is a good chance that the big boys will be forced to hold of and keep at least one eye on the markets throughout this time period. Having said that it doesn’t provide any guarantee that the swings will be less violent on data or tape bomb releases. My advice would be to take advantage of this time to educate yourself and use the Forex Testing software to gain more confidence in your trade plan to start off fresh next year. I do not recommend taking entries after Dec 15. 2014 and the safer thing to do is stop at the end of November.
Things That Make You Go Hmmm…
Just the day after I was talking about Grant in the London training session I get my issue of the last TTMYGH before Grant turns it into a subscription service. I admit I am a little disappointed I will have to pay from now on for it but in reality it will be well worth the price and the quality of what he does warrants some return for his efforts.
The reason I bring this up isnt because hes going to be charging for it from now on but the great story he tells in this issue at the beginning. Of course its about gold and the upcoming referendum but told in a past tense view from an old man telling his 10yr old grandson a story of how it happened and why. Its a very good read and I recommend it to all who read this commentary. However I do want to point out some potential holes in the fictional story that could throw the results of what the old mans future is.
First is the potential for the Swiss gold referendum passing. Of course I would really like to see this happen but as I was mentioning yesterday the big boys particularly in Switzerland are dead against it. To the degree of even though they are not legally able to campaign against the initiative, they are doing so without any repercussion. SNB Jordan along with businesses and others have been given air time to rant against the referendum. This says something, on top of the fact I told members yesterday, considering this there is great incentive to rig the vote from these powers as well. Not that it would be as easy since they do use paper ballots and hand count the votes but still has potential.
Second is the view on China. I do agree that the Chinese are secretly buying stocks of gold but since they have printed more of the RMB than all western countries combined over the last 6 years, thinking they will be able to peg it to gold any time soon dont make sense. On top of that, does any body think the Chinese government can be trusted to all of a sudden say they have all this gold that they have been lying about for the last 20+ years? Not that western governments are any more trust worthy but you get the idea. The last wrench in that theory is something I havent seen anybody mention in the press or otherwise. It seems that I am one of the few who know that the Chinese are the worlds largest producers of gold plated tungsten. The first question I asked when I saw that was, why? Why would there be any demand for such a thing? The only answer is, anybody willing to buy that is looking to fool somebody else into thinking they have gold when what they have is tungsten. I wont even get into all the 5oz gold bars that have recently been found laced with tungsten rods.
Lastly I will say that something is afoot and probabilities are increasing that eventually there will be a correction and most likely a new world monetary system. However the chance of going back to a gold standard without serious world wide credit write downs is just about impossible and will be stopped at all costs by the powers that be. Japan has been at it for almost 30 years and still in the game. The west has just begun to get really scared about deflation so using Japan as an example there is possibly another 20+ years the west can fight deflation as economies shrink. Just food for thought and yes the Swiss referendum could be a game changer if it passes which is why they are fighting it so hard. On to the charts.
EUR/USD Makes Second Intraday Push
With the next intraday push to the upside and tightening ADR on the EUR/USD I will be looking at this pair with a bias for the next push up today. With price movement I wont be looking for a longer run but if I can catch the long from 1.2458 or 1.2444 during the London session then seeing at least a 50+ pip run has good potential. I will be open for the short from 1.2486 but will need to be convinced enough they wont let it pass. The reason is longer term this could be considered a first push according to the rules but they have done this before and the two pushes up are much clearer.
GBP/USD Intraday Pushes But Holding Range
The GBP/USD is in a little different situation with the two intraday pushes its showing. The rejection at the top of this range dont give me much confidence for a break to the upside so I will be a little more open for the short from 1.5727 put would prefer to see the stop run to yesterdays highs and take a low risk entry just in case they do break on USD weakness. Otherwise the best place for a long is at the hourly 200 during the London session. There is a lot of confluence with the psych 1.5700 just below and that 200 has gotten much respect lately. Having said that it would be best to see the Asian lows test there as well and see them hit the breakout traders first.
EUR/JPY Hold Off On Second Push
The move on the EUR/JPY yesterday don’t qualify as the next push so there is still the higher probability they will do it today. However it has gone down and I will be more open for the short from 147.29 as well. They have already shown some conviction south so will likely test the 146.63 level before any move to the upside so if price holds here and dont move to test it then I will be open for the short from the Asian highs during London. If they dont offer up the short then I will look for the long at 146.63 during the London session once they test it. The setup will need to be clear and entry close to 146.63 since they may hold back on pushing the Yen weaker considering the statements from the BOJ recently.
Forex News Today
The calendar is slow during the London session with only UK GDP figures. Expected to be flat I doubt there will be much of a miss but I will be watching for any set ups the hour before the release just in case.
Things get busier during the NY session due to the Thursday releases getting pushed forward because of the Thanksgiving holiday Thursday. First is Durable Goods data expected to improve but still stay below zero with the inclusion of transports. As long as they don’t miss big we shouldn’t see much movement but if Core figures slip below zero again then we should see more USD weakness. At the same time is Unemployment Claims, even though it should be higher impact the jobs data from the US has largely gone ignored since the Fed don’t really use it much for policy anymore. Next is Michigan Consumer Sentiment most likely a non event and later New Home Sales expected better than the last release. In order to guage the probability for a miss here will be a large miss on the Durable Goods data. If it disappoints big then the probability that New Homes Sales will to are high since house hold items make up a large chunk of the Core Durable Goods.
MY APOLOGIES FOR THE BROKEN VIDEO OF INSIDE JOB IN THE COMMENTARY. I DIDNT THINK I WAS COPY WRITE INFRINGING WITH AN ITALIAN VERSION ALREADY ON YOUTUBE. HOWEVER YOU CAN STILL WATCH IT AT THIS LINK. STILL A MUST SEE!
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