Forex/Futures Outlook 07/26 - 07/27

greenback

Sorry for being lay back last week, but there is really nothing much happening. We on the way back to where we were one week ago. As I said, I don't want to play bearish ST bets, simply because we never know when and how the central bankers are going to do, especially towards the later weeks of a correction. It's better stand still than lose money. There are always easier money to be made in a trending market.

One week ago, we were saying that a pull back was imminent after reaching the previous high and it did, but the surprise is that it was quite large: it basically revisited the previous low, causing quite a bit of damage to the bulls. Stocks are now in a trading range. Apparently traders/investors alike are waiting actions from the central banks. Maybe it's a time to stay on the sideline until clarity returns to the market.

The confusion can also be appreciated by analyzing four covered assets below.

greenback

Bond traders are saying "wait a sec, we are not sure what the central bankers would do".

Both ZB and ZN are potentially in the process of forming a head-and-shoulder top, but before breaking down, you can't bet against them. Last week, they did not break down after forming a top. Instead they break out upwards. So trading breakout is the key, but I don't recommend these trades. You may want to long risky assets instead.

greenback

Precious metals/commodity traders think there would be more easy money.

GOLD finally broke out of the triangle and it's testing previous high. I don't think you want to chase GOLD by looking at its track record as shown in the chart. Buying dip would have better risk/reward.

CL pulled back along with other risky assets, but it only retraced to fibo61.8%. This one of the best among all the assets covered in this post. The another one is AUD, apparently.

However, it is hard to bet further bullish moves based on the current price pattern. This is also consistent with the overall confusion of the market.

greenback

As mentioned above, AUD is doing great. However, it has to break out. Otherwise, we are having a perfect back test of the high and it would be time to try the down side more seriously.


EURO also says "let's wait and see what's in ECB's sleeves". Maintain the view that we should stay away after showing further strength by breaking the 1.23 level first.


JPY is still heavy, bearish for risky assets.


GBP the next strongest currency after AUD, now above the previous breakout line ... 1.58 would be the next if all risky assets break out upwards.

greenback

Finally, let's look at stocks. As summarized at the beginning, they are in a trading range. Andrew's fork seems to summarize their patterns well so far. Note too NQ is weaker. TF is even weaker. These are not friendly signs. Get ready to pull out your stock holdings should FOMC meeting disappoint again. I plan to leave only a very small position right before the August 1st FOMC announcement. Of course, will add back to 50% and higher if easy money finally starts to flow again.

西安

老大，怎么没有ES哪？

MFTHT

西安 发表于 2012-7-26 08:15 PM
老大，怎么没有ES哪？

看图不仔细，5楼第一张是什么？

greenback

西安 发表于 2012-7-26 08:15 PM
老大，怎么没有ES哪？

Yes ... It's in the post.

kdkboy

老大终于回归了，这几天，我一直参考旧帖子，惨啊

silicon_beaver

re-visited. eventually read ES chart.
(wasn't there early)

九天

I hope,
At first EURUSD has a back test at 1,2042(100%), 1,2152(61,8%), 1,2185(50%).
Then up to 1,2623.

时时是好时