Trading the Trend

[qldfrog]

Hum a quick look at the major indices and it seems like carnage
Gold and silver down by a lot vix up indices in red.will check with more details in a couple of hours

 

[ducati916]

Hum a quick look at the major indices and it seems like carnage
Gold and silver down by a lot vix up indices in red.will check with more details in a couple of hours

Mr Frog,

Re. w/e analysis, nothing to get too concerned about, VIX was always 'likely' to test resistance, which means a pullback for stocks

So updated VIX, now of course the VIX needs to be monitored. But it also needs to be analysed in context. I'll update the context later.

jog on
duc

 

[ducati916]

So 'vaccine' update:

As opposed to:

jog on
duc

 

[ducati916]

And Gold/Silver

jog on
duc

 

[Chronos-Plutus]

If you are actively investing or trading, then it is very much 'your' (our) problem. If you do not understand accurately, or choose to ignore what and how the Fed. is organised and its purpose, you will fundamentally misunderstand how the world's financial markets operate.

There is an old adage: 'Don't fight the Fed.'. Never was a truer word spoken. You may not like it. You may oppose it on ethical, legal and economic grounds, but don't make the mistake of betting against it.

2008/2009 was a far worse test of the Fed's. power than COVID. COVID is a nothing by comparison. The Fed. managed, from behind the 8-ball, to step in and literally save the world's financial system within 5 hrs over collapse: nothing was clearing through the banking system. I traded this (or rather watched) as trades were unable to clear for about 4hrs, while the system was literally collapsing before you.

My advice: long path, study the Fed. Short path: trade in the same direction as the Fed.

jog on
duc

Yes, I agree as far as trading and investing accordingly.

I am saying that the problems aren't our problem to deal with.

 

[Chronos-Plutus]

The problem with sweeping generalisations, as already stated, is that they are generally inaccurate, misleading or simply incorrect.

So the Federal Reserve:

View attachment 107367

These are the member Banks.

View attachment 107368

What they are (supposed) to do:

View attachment 107369

How they execute FOMC:

View attachment 107370

What it constitutes:

View attachment 107371

Through the Primary Dealers:

View attachment 107372

jog on
duc

The legal representative of the FED is on the record before Congress openly stating that the FED purchase assets through the commercial banks.

Make of that, what you will; if I have time to find the testimony for you, I will.

 

[ducati916]

The legal representative of the FED is on the record before Congress openly stating that the FED purchase assets through the commercial banks.

Make of that, what you will; if I have time to find the testimony for you, I will.

Clearly you haven't bothered to read what I posted. If you had you would know not to bother wasting your time.

jog on
duc

 

[ducati916]

Yes, I agree as far as trading and investing accordingly.

I am saying that the problems aren't our problem to deal with.

Surely that is so fundamental, that it does not even need to be stated.

jog on
duc

 

[ducati916]

So I find myself with some extra time as Auckland re-enters Level 3 lockdown. I am considered an essential worker, but, nothing essential today. So:

At resistance for the 20EMA. It suggests that we will pullback tomorrow.

The 50EMA went through resistance, but again, suggestive of a pullback.

TRIN already registering today's pullback, will continue into tomorrow. Now it may bottom out quickly tomorrow, which means we may see a lunchtime reversal. Keep an eye out for that.

My tiebreaker also indicating a pullback.

Short term VIX suggests that the pullback is over based on trendline.

Longer term VIX suggests more to come until we test resistance and it holds.

The play will be between TRIN and VIX, which may resolve around lunchtime, absent any bad headlines which might create a little further paranoia and spook the newbies, whom the MM will fleece. Normally, they would extend the selloff (especially if the newbies are silly enough to go short and then on the turn of a dime, reverse the market sharply higher) to catch as many minnows as possible.

jog on
duc

 

[Chronos-Plutus]

Clearly you haven't bothered to read what I posted. If you had you would know not to bother wasting your time.

jog on
duc

It doesn't strike you as strange that the Federal Reserve Bank need commercial banks to purchase assets on the various exchanges?

Clearly you are lacking attention to detail and analytical depth if this hasn't crossed your mind.

You think the commercial banks will not front run the FED?
Dream on Duc

 

[ducati916]

1. It doesn't strike you as strange that the Federal Reserve Bank need commercial banks to purchase assets on the various exchanges?

2. Clearly you are lacking attention to detail and analytical depth if this hasn't crossed your mind.

3. You think the commercial banks will not front run the FED? Dream on Duc

1. I see that you still haven't bothered to read my earlier post. So here is the relevant part:

So my answer to [1] is: no it does not strike me as strange as that is how the process is designed.

2. Well not only did it cross my mind, but I actually (back in the day) researched it. Something that you clearly haven't bothered to do.

3. Really? To what purpose?

jog on
duc

 

[ducati916]

Re. Gold Miners (as a sector):

Divergence. Always a very strong signal.

jog on
duc

 

[Chronos-Plutus]

1. I see that you still haven't bothered to read my earlier post. So here is the relevant part:

View attachment 107404

So my answer to [1] is: no it does not strike me as strange as that is how the process is designed.

2. Well not only did it cross my mind, but I actually (back in the day) researched it. Something that you clearly haven't bothered to do.

3. Really? To what purpose?

jog on
duc

This is my point: why does the Federal Reserve Bank need to go through dealers, when they can go directly into the market themselves to buy and sell what they like.

 

[Chronos-Plutus]

1. I see that you still haven't bothered to read my earlier post. So here is the relevant part:

View attachment 107404

So my answer to [1] is: no it does not strike me as strange as that is how the process is designed.

2. Well not only did it cross my mind, but I actually (back in the day) researched it. Something that you clearly haven't bothered to do.

3. Really? To what purpose?

jog on
duc

So my understanding is the FED tells bank X (primary dealer) to buy asset X for the FED. Bank X goes into the market to buy asset X for the FED.

Just like how you tell your broker to buy your shares.

 

[ducati916]

This is my point: why does the Federal Reserve Bank need to go through dealers, when they can go directly into the market themselves to buy and sell what they like.

The Fed. Bank of New York, has a trading desk that directly trades with the Primary Dealers (Money Centre Banks). The purpose is to control the Fed Funds Rate, from which the curve takes its information, through Bank Reserves, which the Banks use in the Repo market for overnight money and settlement. The little guys (Retail banks) come to the Money Centre Banks (Commercial) for overnight Repos.

If you look at the list of Primary Dealers, you will see they are all major money centre banks. The Fed is not going to deal with your local branch of ANZ or whatever.

Sitting at the top of the tree is the Fed.

jog on
duc

 

[ducati916]

So my understanding is the FED tells bank X (primary dealer) to buy asset X for the FED. Bank X goes into the market to buy asset X for the FED.

Just like how you tell your broker to buy your shares.

Incorrect.

See above.

jog on
duc

 

[Chronos-Plutus]

The Fed. Bank of New York, has a trading desk that directly trades with the Primary Dealers (Money Centre Banks). The purpose is to control the Fed Funds Rate, from which the curve takes its information, through Bank Reserves, which the Banks use in the Repo market for overnight money and settlement. The little guys (Retail banks) come to the Money Centre Banks (Commercial) for overnight Repos.

If you look at the list of Primary Dealers, you will see they are all major money centre banks. The Fed is not going to deal with your local branch of ANZ or whatever.

Sitting at the top of the tree is the Fed.

jog on
duc

Steady-on son. That's for overnight money markets.

What about mortgage backed securities and corporate bonds.

 

[ducati916]

Steady-on son.

1. That's for overnight money markets.

2. What about mortgage backed securities and corporate bonds.

1. Incorrect. It is for the Fed Funds rate: which is in addition, the Repo market.

2. GSE securities are/can also be purchased from the Primary Dealers. Now Corporate Bonds are where the Fed. went rogue and outside its remit. The Corporate Bonds were largely purchased directly via the LQD ETF.

jog on
duc

 

[Chronos-Plutus]

1. Incorrect. It is for the Fed Funds rate: which is in addition, the Repo market.

2. GSE securities are/can also be purchased from the Primary Dealers. Now Corporate Bonds are where the Fed. went rogue and outside its remit. The Corporate Bonds were largely purchased directly via the LQD ETF.

jog on
duc

Now what about treasury notes and treasury bonds. Does the FED buy and sell these directly with treasury or do they go through the primary dealers?

 

[ducati916]

Now what about treasury notes and treasury bonds. Does the FED buy these directly from treasury or do they go through the primary dealers?

For someone who thinks that they know everything, you really know very little. DYOR.

jog on
duc