Archives of “October 8, 2019” day

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EIA cuts world oil demand growth by 100K BPD

  
Analysis, Crude
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Cuts 2019 will demand growth by 50 K

The EIA is out with world /US oil demand and production forecasts
  • cuts forecast for 2020 world oil demand growth by 100 K BPD,.
  • Sees 1.3 million BPD increase in 2020
  • cuts forecast for 2019 world oil demand growth by 50 K BPD.
  • Sees 0.84 million BPD year on year increase
  • projects US crude output to rise 1.27 million BPD to 12.26M BPD in 2019 (versus 1.25M BPD increasing forecast last month)
  • sees US crude output to rise 910K BPD to 13.17M BPD in 2020 (vs rise to13.23M BPD forecast last month)
  • US petroleum and other liquid fuel demands to rise 40K BPD to 20.54M BPD in 2019 (vs 140K BPD increase forecast last month)
  • US petroleum and other liquid fuels demand to rise 220K BPD to 20.76 M BPD in 2020 (versus increase to 20.85M BPD forecast last month).

Trump directly threatens lira if Turkey launches ‘unnecessary’ attacks

  
Analysis, Forex
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Lira fell 2% yesterday

Trump is responding to criticism about abandoning the Kurds in Northern Syria as Turkey launches attacks near the border.
We may be in the process of leaving Syria, but in no way have we Abandoned the Kurds, who are special people and wonderful fighters. Likewise our relationship with Turkey, a NATO and Trading partner, has been very good. Turkey already has a large Kurdish population and fully understands that while we only had 50 soldiers remaining in that section of Syria, and they have been removed, any unforced or unnecessary fighting by Turkey will be devastating to their economy and to their very fragile currency. We are helping the Kurds financially/weapons!

Erdogan will visit the White House on November 13.

White House blocks key figure from testifying in impeachment hearings today

  
  Analysis

More fighting in Washington

The White House has blocked Gordon Sondland, the United States ambassador to the European Union, from speaking at a deposition scheduled a few hours from now.
Sondland was at the centre of efforts to coax Ukraine into announcing an investigation of Joe Biden in exchange for military aid and a visit to the White House.
The New York Times reports the story and says that “House Democrats have repeatedly warned that if the administration tries to interfere with their investigation, it will be construed as obstruction, a charge they see as potentially worthy of impeachment.”

European indices down as Dax falls under 12000

  
Analysis, Global Indices

Europe down

Europe down 
  • Dax: -1.05%
  • UK FTSE: -0.13%
  • Euro Stoxx: -0.77%
  • France 40 (CAC): -0.74
  • IBEX:-1.00%
  • Italian FTSE:-0.94%

Brexit risk, US/China talks looking bleaker have all weighed on sentiment. Meanwhile, gold and silver up +0.60% and +0.50% respectively. GBPUSD approaching key support at 1.2200. The USDJPY yen sold off on risk off flows (JPY strength) through 107.00 and AUDJPY making its way down to 72.00 and key daily support.

The Trader and the Trading System Must Meet

  
Analysis, Education
  • Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible.
  • My original system was very simple with hard-and-fast rules that didn’t allow for any deviations. I found it
    difficult to stay with the system while disregarding my own feelings. I kept jumping on and off—often at just the wrong time. I thought I knew better than the system.
  • Also, it seemed a waste of my intellect and MIT education to just sit there and not try to figure out the markets.
  • Eventually, as I became more confident of trading with the trend, and more able to ignore the news, I became more comfortable with the approach. Also, as I continued to incorporate more “expert trader rules,” my system became more compatible with my trading style.
  • As I keep trading and learning, my system (that is the mechanical computer version of what I do) keeps evolving.
  • Over time, I have become more mechanical, since (1) I have become more trusting of trend trading, and (2)
    my mechanical programs have factored in more and more “tricks of the trade.” I still go through periods of thinking I can outperform my own system, but such excursions are often self-correcting through the process of losing money.
  • I don’t think traders can follow rules for very long unless they reflect their own trading style. Eventually, a breaking point is reached and the trader has to quit or change, or find a new set of rules he can follow. This seems to be part of the process of evolution and growth of a trader.
  • A trading system is an agreement you make between yourself and the markets.

What Trend Trading Is (Ignore Fundamentals)

  
Analysis, Education
  • Reliance on Fundamentals indicates lack of faith in trend following.
  • For Trend Traders, understanding the markets is typically optional, often counter-productive.
  • When an up-trend happens, the price is moving up.
  • Trend Traders get a signal and pull the trigger without regard to the result of any individual trade.
  • Playing for comfort and searching for meanings are both counterproductive to Trend Following.
  • Trend Following systems do not speak about entry and exit prices.
  • Trend systems do not intend to pick tops or bottoms. They ride sides.
  • I don’t implement momentum; I notice it and align my trading with it.
  • There is no such thing as THE trend. Some of the shorter indicators are down while some of the longer ones are still up.

What’s the probability of a Fed cut now?

  
  Analysis
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Fed cut probability for October

Fed cut probability for October

The chance of a rate cut currently at 68.7%, which is well done from a figure of 90% last week. The CPI data will be important on Thursday for the US and any upticks in inflation will reduce this rate cut probability further. A miss in CPI and the Fed will be seen as more likely to move to cut rates. Also, we have Fed’s speakers in the mix too. So, we are back to watching data and Fed speakers to get a handle on the next direction of the USD.

Order flow levels across major pairs.

  
Analysis, Forex
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Orders in the market seen across major pairs

  • Sell orders on NZDUSD on 0.6480/90 and 0.6360/70
  • Sell orders on AUDUSD at 0.6800/10 and 0.6910/20
  • Sell orders on EURJPY at 120.40/50, 118.70/80

and buy orders at 116.20/10

  • Sell orders on USDJPY at 108.70/80, 108.30/40

and buy orders at  106.00/90 and 105.00/90

Sell orders on GBPUSD at 1.2680/90 and 1.2530/40

and buy orders at 1.2000/90

  • Sell orders  on EURUSD at 1.1010/20

Currencies in focus: AUD and NZD strongest against the USD

  
Analysis, Forex

Positive risk tones

In yesterday’s US session the news that China are ready to deal on parts of the agreement both sides agree on gave a risk on tone to the markets.
The mood has continued and AUD and NZD are the strongest currencies on the day against the dollar and the safe havens CHF and JPY are the weakest. So, joining that risk tone direction makes sense this am, keeping an eye out for any negative headlines of course. Optimism is the mood of the moment.
Positive risk tones
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