Category Archives: Trader Wisdom

“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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Gold how low in the short term can we go?

Written By: Pauly Franco, Twitter: @spz_trader

With today’s release of FOMC minutes the market expects a “hawkish” tone among the notes. With those expectations the dollar is moving higher as the case for Central bank divergence begins to resonate.

Last week we saw Gold take a true beating as it has failed to spark upward price movement despite the advantages of Central Bank Quantitative Easing galore, Brexit, political unrest, and the list goes on & on.

So, we find ourselves wondering how low can it go after a $65 dump from 1313 area I pointed out last Tuesday ( mini tweetstorm) for the market to “go down like a submarine”.  Well, lets look at the 2-hour chart. We have what I believe is a range extension of the June to September prices which suggest at target of 1239 which coincides with 1239 “bias pivot”. An overshoot to 1230 is quite possible.  The market has been quiet for the last two days as it appears we have knocked some longer term bulls out of the ring.

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How Far Does 30yr Go?

Written By: Pauly @SPZ_Trader

ZB has enjoyed a fantastic recovery since finding support at 64’14  38% (45’25/75’29).   Certainly, Yellen’s “get out of jail” card got the ball rolling.   I would have thought the subsequent rally would have stalled at 168, but a funny think happen on the way to the palladium.  Deutsche bank which has taken on more body blows than a Donald Trump political rival has put a fire under the bid for Bunds as well as Bonds. 

Markets have a way of moving beyond expectations which takes us to how far can ZB go?  The attached 4h chart has a defined range 68’08 to 72’10.  My take is I see a move into the mid-zone 70’01/70’21. We have two fibonacci targets confluencing  69’30  78% (64’12/71’16) & 70’05  50%  (64’12/75’28).   The zone represents a supply area and would result in a six point rally from lows set on September 21.  From here I would expect a move towards 66’25.

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It’s All About the Reaction

Written by:  Anthony Crudele

Today we focused on trading Crude Oil because based on our strategy, CL had the cleanest look for trade opportunities. I’ve said many times before that we don’t live and die by our Beacon levels. We know that there is no holy grail and the key is to know what markets to trade on our Beacon strategy on any given day. This goes for any strategy that you’re using.

If you use Fibonacci levels, do you trade off of every level? Of course not. You pick and choose when you’ll trade a Fib and when you wont. Same goes for us. The key for us when trading Beacon is to see how the market has responded to our levels.

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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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Beginning of a Larger Move, or Already Overdone – Bonds ZB

Written By:  Pauly @SPZ_Trader

Friday’s continued sell-off in the bond market caught the attention of all traders no matter your trading vehicle of choice.  Yes, Virginia the bond market’s tentacles are quite lengthy.

The sell-off started about a week ago with the disappointing action following a weaker that expected Non-Farm payroll report (151k, coupled with .1 wage-gain growth).  The bonds spent the early part of this past week retracing NFP Friday losses, and briefly eclipsed those highs perhaps in anticipation of a little more juice (Quantitative Easing) from Mssr Draghi at Thursday’s European Central Bank meeting.  Well, Draghi did not provide what the market had hoped for; at the very least extension of QE beyond March 2017. Most realize the ECB is handcuffed when it comes to available assets to purchase, so the market was counting on a definitive extension of the program. Bunds felt the impact and summarily Bonds too.

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