Forex Market Commentary
False!
Whilst the rest of the world is his huffing and puffing and chugging along and all the analysts are crying for a market top in the worlds biggest stock market;nothing can be further from the truth. One US rate hike - discounted, US GNP slow down - accounted, global equities quagmire - noted. Now add on three more seasonal earnings reports in the US equities markets and whilst nervous traders talk for the great bear market, the smart traders are looking to push the Dow and the S&P a little bit more up each and every day like a relentless earnings machine.
Every hedge fund trader does not act as a Jack of all trades but builds a carefully constructed matrix equation for trade interplay through out the year 2016 very similar to the formula which I use below:
In my global macro analysis the major barometers I am look at for 2016 are as follows:
US Dollar - 94.191 -0.323 -0.42% - the global base currency
Every hedge fund trader does not act as a Jack of all trades but builds a carefully constructed matrix equation for trade interplay through out the year 2016 very similar to the formula which I use below:
In my global macro analysis the major barometers I am look at for 2016 are as follows:
US Dollar - 94.191 -0.323 -0.42% - the global base currency
EUR/USD - 1.139700 +0.003345 +0.29% - the 2nd liquid currency
GBPUSD British Pound 1.411600 +0.006200 +0.44%- the 3rd liquid currency
30 DAY FED FUND May 99.630 0.000 0.00% the basis for US rates
DJI 17,576.96 + 35.00(0.20%) the body for US equities
S&P 500 2047.60 +5.69 +0.28% the core engine for US equities
VIX 16.70 - 0.57 - 3.30% - the volatility of US stock options
Crude Oil WTI - 39.66 +2.40 +6.39% - a barometer of world trade
Gold - 1240.535 +2.450 +0.20% - a hedge against inflation
Summary Review -
In studying currencies many people actually fail to understand what the GBP/USD is for example. What it is not is a product like gold and crude oil. It is a relative measure of two different currencies reflecting the strength vs weakness of the pair. This being said contrast the UK and Euro zone with the US economy and you will have a basic perspective for 2016 that so long as yields diverge between USD and GBP and EUR then the stronger currency will rise considering respective GNP, inflation, employment, retail and housing sectors, manufacturing data etc. It is hard to justify GBP rising to 1.50 and EUR to 1.20 so watch out for massive shorts in the event of such event. Within the context of a struggling global economy for 2016 it would be hard to justify a rapid spike for bullion and crude oil and so watch the shorts at the 1280 again for bullion and 45 for crude oil WTI. The Dow marches relentlessly and jerks back every now and then but the march is with a quiet relentless purpose. Fund manages across the world know that only US equities are going to perform in 2016 hence the insatiable demand that could take the Dow to 19,000 by Dec 2016 and hence the rational for USDX on the dips.
Pieter Bergli - Trader X16
Gold - 1240.535 +2.450 +0.20% - a hedge against inflation
Summary Review -
In studying currencies many people actually fail to understand what the GBP/USD is for example. What it is not is a product like gold and crude oil. It is a relative measure of two different currencies reflecting the strength vs weakness of the pair. This being said contrast the UK and Euro zone with the US economy and you will have a basic perspective for 2016 that so long as yields diverge between USD and GBP and EUR then the stronger currency will rise considering respective GNP, inflation, employment, retail and housing sectors, manufacturing data etc. It is hard to justify GBP rising to 1.50 and EUR to 1.20 so watch out for massive shorts in the event of such event. Within the context of a struggling global economy for 2016 it would be hard to justify a rapid spike for bullion and crude oil and so watch the shorts at the 1280 again for bullion and 45 for crude oil WTI. The Dow marches relentlessly and jerks back every now and then but the march is with a quiet relentless purpose. Fund manages across the world know that only US equities are going to perform in 2016 hence the insatiable demand that could take the Dow to 19,000 by Dec 2016 and hence the rational for USDX on the dips.
Pieter Bergli - Trader X16
A non-profit commitment to provide education on the properties of currency markets. Forex market commentaries and media reports for free
Disclaimer - U.S. Government Required Disclaimer - Commodity Futures Trading Commission
Futures and Options trading involves risks of losses. No representation is being made that any reader and account will or is likely to achieve profits or losses similar to those that are being discussed on this blog http://forexeducationperspective.blogspot.com/. The past performance of any trading system or methodology discussed is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All trades, patterns, charts, systems, etc., discussed in this blog http://forexeducationperspective.blogspot.com/ are for educative and illustrative purposes only and not to be construed as specific advisory recommendations for actual trades. Disclaimer - http://forexeducationperspective.blogspot.com/ bears no responsibility for the trading actions of its readers.
* European Union laws require European Union visitors to this blog to know that cookies are used by Blogger and Google, including use of Google Analytics and AdSense cookies and in reading material from this blog do consent to the use of such cookies
