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EURUSD falls to new week low and below lower trend line

  
Analysis, Forex
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Falls below Thursday low at 1.11851. Close risk.

It was just a short two or so hours ago that the EURUSd was breaking higher above 1.12256 and running to the 100 hour MA (currently at 1.1255). The price stalled against that MA level (it did the same on Wednesday) and then fell back below the 1.12256 level again.
Falls below Thursday low at 1.11851. Close risk.
The selling has not let up as the clock ticked toward the London fixing at 11 AM ET/1600 GMT.  That took the price below the low from yesterday at 1.1185 and a lower trend line at 1.1178. The low reached 1.11673 and has since bounced back higher.
It’s Friday. It’s the 4 PM London fixing which can lead to increased volatility and liquidity issues. Nevertheless, the holding of the 100 hour moving average just a few hours ago and the subsequent fall continues to show that the bears are more in control. Resistance at the 1.1200 to 1.1206 area now.

Some oil news ICYMI – US shale producers to boost oil output by 500,000 bpd by month-end

  
Analysis, Crude
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Reuters report on what analysts & some in the industry are expecting

  • Larger producers are re-opening the taps in low-cost plays in Texas, but also in expensive shale basins in North Dakota and Oklahoma.
  • “With prices where they are now, if they stay above $30, I wouldn’t expect any significant curtailments from us in Q3 or beyond,” Devon Energy Corp Chief Executive David Hager said at a J.P. Morgan energy conference on Tuesday.
This would be a rapid (albeit partial) bounce back from prior supply cuts in shale. It’ll add pressure back onto OPEC+ who recently agreed to extend their their output cuts. Supply coming back on line as prices rise … pretty textbook economics this.
Here’s the link to Reuters for more
Reuters report on what analysts & some in the industry are expecting

Dow ends 526 points higher, extending win streak to three days

  
Analysis, US Market
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U.S. stocks closed higher Tuesday, but off the session’s best levels, after Federal Reserve Chairman Jerome Powell suggested more fiscal stimulus may be needed as the American economy may only make a slow recovery from the COVID-19 pandemic.

Rising coronavirus cases in several U.S. states are also are concern for investors, even though retail sales and industrial production data show the economy is slowly recovering, and progress on the development of potential therapeutic drugs has been reported.

How did benchmarks fare?

The Dow Jones Industrial Average DJIA, +2.04% rose 526.82 points, or 2%, to end at 26,289.98. The S&P 500 index SPX, +1.89% added 58.15 points to close at 3,124.74, a gain of 1.9%. The Nasdaq Composite Index COMP, +1.74% advanced 169.84 points, or 1.8%, to end at 9,895.84.

All three benchmarks extended their win streak to three straight sessions, but finished below their best levels of the day.

IEA says oil demand won’t fully recover until at least 2022

  
Analysis, Crude
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IEA comments on the oil market in its latest report

Oil
  • Floating storage of crude oil in May fell by 6.4 mil barrels m/m to 165.8 mil barrels
  • Global oil supply fell by 11.8 mil bpd in May
  • Helped by OPEC+ countries reducing output by 9.4 mil bpd
  • Sees oil demand next year to rise by 5.7 mil bpd, but still lower than in 2019
  • Oil demand next year to remain 2.4 mil bpd below 2019 levels
On OPEC+, IEA says that they made a “strong start” and delivered 89% of its pledge to cut output but warns that rising prices could pose a problem:

“The market may present producers with an opportunity to ramp up more quickly than dictated by current OPEC+ policy, or US and other non-OPEC production could recover more strongly than forecast.”

With oil prices having moved up back close to $40, nobody – even US shale drillers – will want to miss out on the party.

Fed says it’ll expand its “main street” lending program even further – to provide credit access for non profits

  
  Analysis
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Improved credit access for non-profits – are they referring the vast majority of hedge funds?

That is a joke folks, K?
Here we go, headlines via Reuters:

Fed proposal to expand its main street lending program to provide access to credit for nonprofit organizations

  • says it is seeking public comment on its proposal for nonprofits by Monday, June 22
  • proposed expansion would offer loans to small and medium-sized nonprofits in sound financial condition before coronavirus pandemic hit
  • interest rate, deferral of principal and interest payments, and five-year term are the same as for main street business loans

There are further T&Cs but I won’t go into them here.

Conquering Your Fear

  
Analysis, Education
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So, what can you do about the fear that keeps you from following your trading plan and maintaining your commitments? How to overcome fear that keeps you from following your trading plan. Well, let’s begin with what causes fear.  Fear stems from a perceived threat that may or may not be real. Threat begins as a perception and a thought.  In other words, when we have interpreted that an event is threatening our physical, mental, emotional, social or spiritual well-being we have given that event a meaning.  Now, meaning is a crucial process that controls not only what you perceive but how you perceive it. For example, that price action is moving toward my stop and that means that I’m going to lose in this trade (the movement of the price action may or may not take you out and at this point it is only an opinion but it is often treated as a fact).  In other words, the meaning here would be activated by a limiting or irrational belief about the inevitability of losing, and this in turn would prompt another limiting belief about what that says about you; i.e., “I’m a very poor trader and a loser because my stop loss was hit.”  It often continues to spiral downward from there.  So, what you are thinking is the genesis of the emotion that you experience…the fear.

Secondly, fear determines what you choose to do.  This is where you become immobilized or act in erratic illogical ways that increase your risk and destroy your desired results.  At this point it is important that you identify the thinking/beliefs that are fuelling the fear.  Here is an important question to ask; “What must I be telling myself or believing to feel this fear.”  This introspective inquiry will help you ferret out the underlying fear based programming that created that belief and in-turn developed the fear response in the first place. (more…)

Stress Capacity Should Be Gradually Increased Through Stress Exposure and Recovery

  
Analysis, Education
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  • High pressure and stress is a part of the trading environment. Stress reduction is not a viable strategy. The approach instead is to build a person’s resilience and ability to cope more effectively with the pressure and stress that they are encountering.
  • This is done by a process of exposure to the stressful events, and then recovery. The recovery process will prepare you to engage again but with a higher stress threshold.
  • Build your stress exposure over time by gradually building the demands on your trading — slowly increasing your position sizing, complexity of trades, diversification, etc.
  • Use relaxation techniques to enter a restorative state where your mind and body can recover.
  • Look after your nutrition, exercise, sleep, get balance in your life with friends, family, other hobbies.
  • Consistent performance is achieved when you have a healthy oscillation between positive peak performance states, and periods of recovery.

Broad indices squeeze higher as sanctions on China are less than feared

  
Analysis, US Market
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Dow has best performance in 7 weeks. Second straight week of gains for the major indices

The major US stocks and see some squeeze higher into the close as sanctions on China are less than feared.  The NASDAQ led the way with a gain of 1.29%. The Dow ended lower as investors shifted back to the technology growth stocks.
The final numbers are showing
  • S&P index up 14.58 points or 0.48% at 3044.31
  • NASDAQ index rose by 120.88 points or 1.29% at 9489.87
  • Dow industrial average fell by 17.53 points or -0.07% to 25383.13.
In Europe today the story was different with most the indices closing near their session lows.
Dow has best performance in 7 weeks. Second straight week of gains for the major indices_For the trading week, the Dow industrial average led the way with a 3.71% gain in the US. The NASDAQ index lagged as earlier in the week the flow funds were into the more beaten down industrial stocks. Nevertheless the NASDAQ gained by 2.21%. The S&P index rose by 3.25%.
In Europe, the France’s CAC rose by 5.64% and the Spain’s Ibex nearly rose 6%. The UK FTSE was the under performer with a 1.02% gain.

Emotions In Trading -Anirudh Sethi

  
Analysis, Education
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For many traders emotional trading is a problem and it stops them from being consistent in the market. We see what causes emotional trading in this article and I share six steps to greatly help reduce it, or stop it entirely.

Emotions in trading have always been one of the main causes of losses, and at the same time − the main driving force for all types of money. Remember the classic idea: buyers push the price up because of greed, and sellers sell because of fear of losses?

It still works perfectly in any market.

Popular training materials on market trading almost do not pay attention to managing emotions. This is understandable: any broker is the first participant in the trading process, which is vitally interested in having you leave your deposit to the market.

That is why most newcomers, especially those who passed the super-fast and super effective training in various brokerage kitchens, remain psychologically unprepared for trading. And even good technical training will not help such players save their money.

Assessing and reacting to market risk is one of the most important things you’ll have to do as a trader. Sadly, human being as a whole are so mediocre at this task, investors and traders reliably make decisions that economists consider “irrational.”

So obviously these are commonly more referred to as emotional trading.

 

Six Steps to Help You Stop Emotional Trading

Financial markets are a by-product of modern era and, in the grand scheme of things, our brains have evolved over millions of years for survival out in the open. They haven’t had the time to get good at making sound and perfectly rational financial decisions.

We have brain processes; an emotional one and a logical one that are constantly competing against one another for our future expression in the market. And normally, for the trader that has little to no market experience, who trades money they can’t afford to lose, or who has a short fuse overall, the stage is set for an incident.

But also more seasoned traders tend to make emotional trading decisions that they consider stupid in hindsight. Perhaps less often than inexperienced traders do, and with minor consequences, but those errors do happen.

Many a times, although we know with the logical part of our brain that we will get better results if we follow our trading rules, so many of us do exactly the opposite, despite clear knowledge of what we should do.

We remove stops, we cut winners short, we go in with too big of a size… I mean, we’re clearly

not purely rational beings ― and we can’t be because that would make us robots, not humans.

(more…)

China’s Wuhan has officially banned the eating of wild animals

  
  Analysis
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Wuhan was the epicentre of the coronavirus pandemic in China. Its a big city, with a population of around 11m people.

City authorities there have officially banned the eating of all wild animals,
  • Wuhan will become a “wildlife sanctuary”
  • virtually all hunting of wild animals to be banned (exception for “scientific research, population regulation, monitoring of epidemic diseases and other special circumstances”).
  • also introduced controls on the breeding of all wild animals
  • prohibiting any to be reared for food
The coronavirus spread from bats to people in wet markets in the city.
Wuhan was the epicentre of the coronavirus pandemic in China. Its a big city, with a population of around 11m people. 
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