And I'm back!
I took an extended leave. I was planning on starting up on the 6th, but decided that sleeping in for a week was going to be more fun. I wasn't wrong, but I definitely missed a couple of good trading opportunities. Oh well! Live and learn!
So, I'm starting back up tonight. We'll see if I can shake the rust off quickly, or if my first couple trades are going to be disasters.
Top down!
Treasury yields: Bearish divergence over the longer timeframe (from August - now the 5 year and 2 year failed to make higher highs, while the 10 and 30 year successfully made higher highs). Yields go down, USDX goes up (flight to quality and all). This makes sense, since seasonally we are in a time that is fairly bullish for the USD (and bearish for foreign currencies).
We also have bearish divergence on foreign yields, which makes sense - again, yields decrease, people go invest in cash - best cash market? USD.
COT: The only thing really catching my eye here is how overwhelmingly bearish the commercial traders are on the Cable. I have a feeling we're going to see a serious move downward in fairly short order.
Again - seasonally, we're in a time where things are bearish for foreign currencies, and bullish for the dollar - look for shorts on foreign currency!
The Cable:
1.6620 and 1.6750 are still the levels I'm watching on the higher time frames - I would be absolutely stunned if price didn't test at least one of those levels (if not both!). I am, overall, expecting a raid on the stops above 1.6750 before price falls downward (only 300 pips away - could be reached in a couple of good days!)
Drawing fib extensions from previous price swings, I'm seeing a lot of confluence at the 1.6700 level (extensions, 200% extensions, measured moves, etc). Just to sweeten the pot a bit.
Getting into the smaller time frames, it looks like we have an OTE short happening on the 4 hour, although I think that might be a bear trap on the way to moving higher (it looks like a pretty ugly bear flag, let's put it that way). If we bust above the 1.6470 level, I imagine we'll have a pretty easy time heading further north on the cable.
On the lowest time frames, the thing that really sticks out to me is the fact that we have been totally unable to break and hold below the 1.6350 level. I think that was the resting point on the way to the weekly highs at 1.6620 and 1.6750.
My plan is to take any longs that appear on the cable - if I do go short, it's going to be a very quick scalp. Once we reach the highs noted, I'll start switching my bias to short.
The Fiber:
Not seeing much interesting on the weekly -I'm not married to either direction. the 1.3830 level is one I'm finding interesting - maybe 1.4150 beyond that. I don't have much faith that the Fiber is going to head up that far though. I think it's probably going to hit that 1.3830 level and trade softer.
Going down to the daily - it looks to me like the 1.3830 level has already had everything cleared out. I think it's pretty much all downhill from here.
On the lower time frames, I'm basically looking at the 1.3720 level to take a position short. That seems to be about as high as I think the Euro will be able to push.
That's my analysis! Hope you enjoy it. Let me know if you have any suggestions or comments or anything.