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Victor Adair: Political Uncertainty - Stand Aside

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Posted by Victor Adair - Live From The Trading Desk - Live From The Trading Desk

on Tuesday, 21 November 2017 05:22

I have a longer term Pro-USD bias...perhaps because I’ve made money the past few years being short currencies against the USD...but right now I’m unsure what to do so I’ll stay out of the currency markets. Victor outlines opportunities in Gold, Crude Oil and the Stock Market

LIVE FROM THE TRADING DESK - NOV 18TH TRADING NOTES

Choppy price action in currencies: The September 8 Key Turn Date launched the US Dollar on a 2 month rally against most other currencies...the US Dollar Index rose 4.5%...but the past 2 weeks the price action was choppy with Euro, Yen and Gold all higher against the USD while AUD and NZD fell and CAD went  sideways. My core short term trading idea since the Sept Key Turn Date has been to be long USD but for the last 2 weeks I’ve been on the sidelines...unsure what to do.

Some analysts make the argument, and they may be right, that the recent 2 month USD rally was only a correction in the downtrend that started in January when the US Dollar Index was at 14 year highs. Interest rate premiums clearly favor the USD (at the 2 year point of the yield curve the USA is premium Germany by 242bps., premium Japan by 192bps.) but those premiums have not deterred a good rally in Euro and Yen the past 2 weeks. The ECB says the Euro area needs continuing monetary stimulus while the Fed says they will be “taking back” previous stimulus and raising rates...while the BOJ remains “peddle to the metal”...but still the USD looks wobbly.

Perhaps the USD is weighed down by “political uncertainty” in Washington relative to the “political certainty” (don’t laugh!) of the Euro zone.

Other analysts make the argument, and they may be right, that the recent 2 week decline in the USD is but a brief correction in the early stages of a developing USD rally.

I’m aware that I have a longer term Pro-USD bias...perhaps because I’ve made money the past few years being short currencies against the USD...but right now I’m unsure what to do so I’ll stay out of the currency markets.

Gold: I bought gold this morning. A small position, and I’ll be gone if it falls back below yesterday’s close, but today’s price action looks good. I’ve noticed that YTD trading volume in the gold futures market is already higher than any previous year...and there’s still 6 weeks to go in 2017. That seems counter-intuitive given the sideways price action we’ve seen in gold while open interest remains well below last year’s levels. It’s as though gold has been “churning” below the surface...just waiting for a breakout one way or the other.

 va18

 

Larger Chart

WTI: I’ve been out of the crude market for the past 2 months or so...waiting for an opportunity to get short. I’ve missed a great opportunity to trade the market from the long side because I’ve got a bearish bias...likely due to the fact that I’ve made money the past few years being short crude! Anyway, I waited and waited while the market rallied...apparently embracing the story that the cut back agreements by OPEC and some non-OPEC countries were not only “doing the job” but would be extended at the OPEC Nov 30 meeting. The “political uncertainty” in Saudi Arabia seemed to provide the “cherry on top” of hugely bullish sentiment and WTI rose to $58. I decided that this was “As good as it gets,” for WTI and got short. Prices fell $2 but then turned around and began to rally. I covered and went flat.



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Currency

Bitcoin Price Will Go To Zero As Bitcoin Will Struggle To Remain The Dominant Cryptocurrency

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Posted by Ruzbeh Bacha via Seeking Alpha

on Thursday, 16 November 2017 06:45

Summary

Blockchain and cryptocurrencies are here to stay.

Bitcoin, however, is a testing ground.

Bitcoin is overvalued with a limited chance of success and will most likely be replaced by a better cryptocurrency.

Back in 1999, I was in my final year of graduate school in finance and economics. Most of the students in my class and/or their families were involved in the Indian stock markets. The game was simple – apply for shares in an IPO and sell them at a multiple when the company lists. It was a “safe bet” and nothing could go wrong…until it did in 2000! Again in 2007 when I was completing my MBA, we had a similar situation with stocks, property and most asset classes providing phenomenal returns. What brought us down in 1999, 2007 and several times before is the greed and the herd mentality. As Warren Buffet says, be fearful when the markets are greedy.

A decade later and the astronomical price gains in cryptocurrencies has drawn speculators, technologists, the public, and now regulators. With major economies like Japan approving the use of Bitcoin for transactions coupled with large companies like Expedia and Microsoft accepting Bitcoin, several believe that the crypto could replace fiat currencies – at least in a limited sphere of transactions. But will the currency live up to the hype, or is the entire concept just a fad and a bubble?

Here is how people get trapped in bubbles:

saupload main-featured-bitcoin-article-image-1 thumb1

Before we jump into the details, let think about some of the quotes from wise men that the investing community follows.

The four most dangerous words in investing are: “This time it’s different”.

                                                                                         Sir John Templeton

Rule number one: Don’t lose money. Rule number two: Don’t forget rule number one.

                                                                                                        - Warren Buffett

The stock market is filled with individuals who know the price of everything, but the value of nothing.

                                                                                                        - Phillip Fisher

Know what you own, and know why you own it.

                                                               - Peter Lynch

See more quotes here.

Background

Cryptos have been around for a while, and we’ve even written about them before (How to buy Bitcoin, Ethereum, Cryptocurrencies, and What to Watch Out for and Cryptocurrency – Bitcoin, Ethereum, Ripple, Litecoin – Everything You Need to Know in 2017). The two largest, Bitcoin and Ether, have shown spectacular returns over the last decade. For reference, a $100 investment in Bitcoin in July 2010 would be worth over $11,000,000 today (give or take a couple million, as the price is notoriously volatile).

....continue reading HERE



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Currency

Bitcoin is History

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Posted by Mike Maloney

on Wednesday, 15 November 2017 08:31

Bitcoin is monetary history in the making. But as Mike Maloney points out in this latest video, many of the investors in cryptocurrencies are new to the arena. Unfortunately, most have no idea how important monetary history is. The technologies may change, but the human emotions that power the markets - greed and fear - do not. 

 

MHxKV4g



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Currency

Bitcoin Cash Spikes To Record High As Bitcoin Collapses Over $1000

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Posted by ZeroHedge

on Friday, 10 November 2017 07:42

Following the surge in Bitcoin's USD price after the suspension of the SegWit2x hard fork, the cryptocurrency has collapsed as traders exit 'fork dividend' trades.

Dennis Gartman had a few words of praise for the bulls right before the collapse...

Well “bully” for Those Who’d Gotten It Right: Our “position” on Bitcoin and the other cryptos is clear: we shall have nothing whatsoever to do with them, but “good on” those who’ve been long and right; but be careful… all Bubbles eventually end in tears.

bgc

As bitcoin fell, Bitcoin Cash - a clone of the original that was generated from another split on Aug.1 - surged, trading up as much as 35%, ahead of this weekend's launch of Bitcoin Gold.

....read more HERE

...also from ZeroHedge:

"This Looks More Frightening": Global Stock, Bond Selloff Accelerates Amid Risk-Parity Rumblings

 



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Currency

DXY Index Eyeing Test Of Two-Week Range Lows

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Posted by Daily FX

on Thursday, 09 November 2017 06:56

 

During a quiet like this one, traders may begin to experience déjà vu, that is, each day seems like a carbon copy of the last. Such has been the case for the US Dollar, as it remains within the two-week range carved out since the end of October. The range, between 94.29 and 95.17, has little reason to break one way or the other, given the lack of drivers on the immediate horizon.

Chart 1: DXY Index Daily Timeframe (July to November 2017)

DXY-Index-Eying-Test-of-Two-Week-Range-Lows body 110917 DXY

For now, particularly in the run up to the Thanksgiving holiday in the United States in two weeks time, the prospect of tax reform legislation will be the key source of influence for the US Dollar. Speculation around the Fed is lower down the totem pole as a major influence; markets have been pricing in a 100% of a 25-bps rate hike in December for the past two weeks.

As it were, the DXY Index remains between two key levels, 94.29 (the neckline of the inverse head & shoulders pattern, as well as the July 26 bearish outside engulfing bar high) and 95.17 (the July 20 bearish outside engulfing bar high). Given price action today across individual USD-pairs, in particular EUR/USDUSD/CAD, and USD/JPY, it seems the most likely outcome in the near-term would be for a test of the 94.29 range low in DXY.

See the full DailyFX economic calendar here.

 



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