Sunday, February 25, 2018

Week Ahead 9

Indices continued the recovery last week leaving the correction lows well behind. NQ was the strongest marching to the level that broke before the correction. It seems that the 7k high is the only meaningful resistance ahead.

DAX was the weakest, it could retrace less than 50% of the selloff.

SP500 should break a resistance before facing the all time high as the next target.

The 10y US yield peaked at 2.27%, the 10y at 2.95%. The German US yield spread is at -2.77% new low.

Commodities also exhibited a strong recovery, mainly driven by strong oil.

Gold seems to seek direction despite the rising inflationary pressure in the US. 

Gold miners are near of confluence of support levels.

USD Index made a triple bottom but could not retest the break of the 3 years range.

The weakest last week was the NZD. 
It broke the 0.7300 level though the follow through was not particularly impressive.

Wednesday, February 21, 2018

Changing Your Trading (or any) Psychology

Trading problems often caused by bad habits that time to time hijack our thoughts. There is a great post from Brett Steenbarger on how to change those bad habits. The key points are:

1. Identify when our "automatic routines no longer serve a useful purpose, when yesterday's solutions, carried forward to a new reality, become today's problems."
2. Exit the comfort zone.  "That means standing outside our patterns and actively viewing them as problems."
3. "Change begins when we view our problems as our problems."
4. "Actively rehearse that pattern in your mind--visualize it, feel it--while you remind yourself of all the ways that it has hurt you." "Imagine how many times you've flushed money down the toilet, how many ways this problem has stood in the way of your success."
5. "Visualizing old ways of thinking, feeling, and acting that now bring us pain and allowing ourselves to fully feel all the disgust, guilt, remorse, and anger associated with the consequences of those patterns completely changes our trading psychology.  We no longer fall into comfortable habits, because we no longer feel comfortable with those habits.  We have turned them into enemies.  That is powerful."

Sunday, February 11, 2018

Week Ahead 7

On Friday indices exhibited some signs of capitulation, though lower lows were made and the fierce bounce back in the last three trading hours could have been only short covering before the weekend.

The 2550 SP500 level does not seem to be particularly strong resistance. The 2400-2500 area seems to be much more relevant.

On the other hand DAX have touched the 12k level that is a strong resistance.

US 10y yield made new high whereas the 2y contracted steepening further the curve.

The 2y spreads might be bottoming.

DBC broke important resistance.

US oil was held by the 59.00 resistance.

Agriculture was not part of the selloff.

Gold touched important resistance but bounced back, though the move was not particularly impressive.

Gold Miners and Gold divergence is strong due to the equity selloff.

USD index bounced back to previous low.

JPY was the best performer as a risk off trade, touching important level.

Sunday, February 4, 2018

Week Ahead 6

This week we saw the fist meaningful correction for a long while. On Friday the selloff was very intensive suggesting that it is not over yet.  

US yields are rising especially the long end. It seems that these levels are starting to tangibly hurt stock valuations.

This holds true for Europe as well.

Commodities changed very little relative to stocks.

Gold formed a double top while failed to reach the Jul '16 high.

USD showed some sign of  life on Friday but still well bellow important resistance levels.

AUD was the worst performer last week.