Category Archives: Euro Currency

“Risk-Off” – Overdone?

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Written by: Pauly @SPZ_Trader

Since last Friday’s bombshell announcement by FBI head Comey advising a further look into Hillary Clinton’s email issue the markets have been on a “Risk-Off” ride that has continued to gain momentum with nary a sign of slowing down.

How things change so quickly. Last week the dollar was riding high, and equities could not make up their mind whether to stand pat or rally into an expected Clinton victory.  I would argue at the time the dollar was way overdone to the upside and conversely the Euro extremely oversold due to new positioning. We all heard about Euro 105.   Gold was holding its own constantly flirting with the 200ma around 1265.

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EUR/USD on the Precipice of a Downside Move – Pauly @SPZ_Trader

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Written By: Pauly (Twitter: @SPZ_Trader)

Today, is FOMC (Federal Open Market Committee) day where the expected decision is a “Hold” (no rate hike).  The economy is not blazing ahead, but certainly one can make the case that a second rate hike since last December is warranted.  Job growth of the last three months 287k, 255k, & 151k provides a three-month average of 231k.  The issue has been wage gain growth which has encountered a tough time gaining traction. Thus a “hold” seems in the cards.

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Dollar and Euro Correlations Lead to Big Trade

Confirmation.

I say it in every webinar, all of my morning commentary, on twitter, in live events, and everywhere else I speak about trading.  I’ve said many times before that if you are just looking at your one market you are missing everything.  Today’s action was mostly driven by the Dollar.

The Dollar got weak and that pushed a lot of markets higher, including the Euro.  The Euro was on our radar for a short around 1.1130-1.1146 area.  Support in the Dollar was coming in around 96.05-95.93.  When we got to our resistance area in the Euro, we immediately looked at the Dollar.  The Dollar was the market leader because everyone was reacting off of their action.  So we look at the Dollar to see if they are at support the same time we’re at resistance in Euro for CONFIRMATION!

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Trading the Dogs Days of Summer…

Trading the dogs days of summer…

This used to be a time in which I would most likely over-trade and lose money because I would be in a big hurry to trade and make money.  After years of making the same mistakes when the volume and the volatility get really low, I finally figured out how I needed to trade on these days.  Trade smaller and risk less.  It was just that simple.

If you’re a trader who is new, or just a 1-3 lot trader, then this market is probably not for you.  I always take the worse case scenario and go from there.  There is nothing worse for a trader than a situation when you get stuck half or more of your normal risk per day on a day where you know it will dry up after the morning trade.  Now you try to make a little back and most likely you lose a little more and with more fees now stacking up.  At some point you may even lose way more than you would on a busy day just because you got frustrated.

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Breakdown of Divergence Creates Clean ES/NQ Trades

This morning on Twitter and in our member area I spoke about the divergence going on between Biotech & Energy.  Biotech was leading the Nasdaq higher while Energy was the weakest sector in the ES (S&P), keeping the ES at the bottom or middle part of their range.

When we see divergence in sectors, this tends to keep the ES in a range bound scenario until one of the leading divergence markets reverses and works with the other market.  The key for us is to watch our Beacon strategy to see if we get alerts at the same time.  If we get an alert at the same time, that is confirmation that both the NQ and ES are hitting resistance at the same time.  This is the type of trade we will look for because it confirms that they may work together and get away from being divergent.

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All 3 Confirmations Line up in Euro – Trade Setups 6.23.16

In this mornings brief to our traders my focus was on potential trade scenarios in Crude Oil, Euro, and Yen.  The Euro was the one that ended up giving us the strongest signal to trade off of.

As I have mentioned many times in the past, the markets that have the strongest confirmations are the ones that I focus my energy on.  Confirmations for us come in forms of moving averages, MACD or Stochastic Divergence, and our number one confirmation is when our short term beacon strategy lines up with our 60 minute beacon levels.

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Strong Confirmations to Short Euro – Trade Setups 6.7.16

We constantly talk about the importance of preparation and how now, more than ever, it has become essential for day traders.  I’ve talked about the first decade of my career being all about the E-mini S&P, However, over the past 7 years I have branched off into other markets because there has been many days where the ES is too slow or there are no confirmations to trade.

Now that I’ve made the commitment to trading multiple markets it gives me the ability to go where the strongest confirmations are.  Today that happened to be the Euro.  The Euro kept knocking on the door of resistance while the Dollar was knocking on the door of support.  When those two markets are hitting key areas at the same time, that is very strong confirmation for us.

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Correlations in the Dollar Giving us Opportunity in Gold – Trade Setups 5.26.16

This morning we were once again focused on the Dollar to be the leader. Lately, we’ve been seeing our Beacon Indicator levels showing us the dollar moving in opposite directions against Gold and Euro. Today we had opportunities in both Gold and Euro to line up for shorts while the Dollar was at support. It is important for us to see these types of correlations line up for confirmation, because it solidifies our reasoning for a trade. The more confirmation we have, the more confidence we have in our execution.

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What Rallied E-Mini S&P (ES) Today, 15 Ticks in Euro (EC) – Trade Setups 5.24.16

This morning I talked with our traders about the bullishness I was seeing in equities, in particular the E-mini S&P.  I have been tweeting the past few weeks about the flattening of the 2/10 and 5/30 year yield curves.  This flattening typically means bearish action and ES futures ignored this action. ES also ignored the rally in the Dollar, which is also typically bearish.
When the cash markets opened today ES drifted higher.  There was no real way for us to get into a trade because we did not get a setup to trade off of.  You don’t catch every move, even if you believe you know the direction of the market like we did today in ES.  

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Rotations in the Euro Based Off Volatility in the Dollar – Trade Setup Wed.4.20.16

Today we used the continued volatility in the dollar (@DX) to focus on the euro (@EC). We expected more rotations and stronger technical looks from these two markets.

We stayed on the sideline of S&P because it was floating in the key range of 2106 and 2087. Here’s a quick look into the live Euro trade.