Category Archives: Blog

Classical Friday

30 minute atr

240 minute atr

daily pivots
weekly pivots

upside retracements

downside retracements

regression channels

support and resistance
On the economic calendar:-
10:00 Atlanta Fed Business Inflation Expectations
11:00 Kansas City Fed Manufacturing Index (Consensus 8 v Prior 7)
Speaking today:-
10:00 Charles Evans
12:30 Jeffrey Lacker

 

She Meant What She Said

The Fed set out on its “Openness” Journey in 1999 with the ascension of Roger Ferguson to Vice-Chair. Greenspan’s persona of global central banker to the stars and “man who saved the world” over shadowed the great work and good intentions of Ferguson. After decades in seclusion (and popular books like Secrets of the Temple), Ferguson was charged with opening and clarifying Fed communication and transparency. After Sept 11, he compiled what is essentially the Central Bankers Handbook – The International Journal on Central Banking. Although several “appendix” have been added in the post-crisis era, many Bernanke detractors would have been better served if they read instruction guide earlier.

My objections to the Ferguson Agenda have been well documented in this space. I believe openness reduces policy efficacy. Ironically, a St Louis Fed white paper of the mid-90s leaned against openness also. The paper concluded that policy  levied in “surprise” fashion and of greater degree than market pricing was the most effective at achieving desired economic outcomes. The summary was “Do more and do it when they don’t expect it.”

Back in my day, when dinosaurs roamed and trading was conducted by hand signals in pits, certain wise men were given the task of tea leaf reading Fed activity. They were called Fed Watchers. Oddly, as the Fed has increasingly educated any and all who are willing to listen as to there views and operational actions, a cottage industry of re-explaining has boomed. Yesterday’s statement and presser – THEY EVEN DO PRESS CONFERENCES ! – lit up the industry once again. The gist of what I’ve read goes something like this – with decoder ring :    1)     “The statement was “clumsy”- meaning? The statement did not read as I would have written it.

2) “Patient is 2 meetings but Considerable Time is 6 months” meaning? I’m making things up that jive with the readily available prices in STIR strips.

3) It was “Hawkish/Dovish” meaning? Insert adjective that aligns with my/firms position in equity/FI/commodities. OR, allows me to continue ranting about the Fed.

Here’s what I think – She meant what she said. Stop worrying about the Fed. Keep watching the term structure between 1 and 5 years, it’ll tell you everything its telling the Fed. The long end was clearly trying to “Go it alone” and that rarely works out.

Happy Holidays from Joe, Hooper and me.

USDCAD – trade video

One thing I’d like to mention which I missed clarifying in the video was I had no idea if the trade would work..and more importantly.. I didn’t care..zero emotional attachment..Why?

I’m very comfortable with my trade selection ability (practice) to know that I can win 50% of the time.. also Im comfortable with my risk reward parameters ..Risk 1 to receive Reward 3 .. if ..or IF.. I can live within those parameters (win rate /risk reward) I have an edge.  Then I only need enough trades so this edge can kick in.. so if this is one trade of 50 for the month … it has no great emotional or psychological importance. That… all together is my strategy.

Have a great holiday season ..all!

Classical Thursday

30 minute atr

240 minute atr

 

daily pivots

weekly pivots

upside extensions

downside retracements

regression channels

support and resistance
On the economic calendar:-
08:30 Jobless Claims (Consensus 295 K v Prior 294 K)
09:45 PMI Services Flash (Consensus 57.3 v Prior 56.3)
09:45 Bloomberg Consumer Comfort Index
10:00 Philadelphia Fed Survey (Consensus 25.0 v Prior 40.8)
          Leading Indicators (Consensus 0.6% v Prior 0.9%)
10:30 EIA Natural Gas Report
11:00 3 Month Bill Announcement
          6 Month Bill Announcement
          2 Year Note Announcement
          2 Year FRN Note Announcement
          5 Year Note Announcement
          7 Year Note Announcement
13:00 5 Year TIPS Auction
16:30 Fed Balance Sheet
          Money Supply

Classical Tuesday

30 minute atr
240 minute atr
daily pivots
weekly pivots
upside extensions
downside retracements
regression channels
support and resistance
On the economic calendar:-
07:45 ICSC-Goldman Store Sales
08:30 Housing Starts (Consensus 1.038 M v Prior 1.009 M)
08:55 Redbook
09:45 PMI Manufacturing Index Flash (Consensus 55.5 v Prior 54.7)
11:30 4 Week Bill Auction

Events:-

FOMC Meeting begins