It’s going to be a wild Friday it seems. Retail sales and CPI data disappointed earlier this morning, causing yields and the U.S. Dollar to head straight for the basement while gold of course is heading higher. I guess gold could be trusted after all, but hindsight is always 20/20 and you never know how the numbers get shuffled. Of course the NQ is soaring as I’m typing this as bad news is good for equities – back to the old QE script I take it. Unfortunately my long term outlook on not seeing a meaningful interest hike anytime this decade seems to be playing out as feared. Or as the saying goes: Don’t try to bullshit a bullshitter
Another difficult lesson to be learned as an aspiring trader or investor is that trending markets are either the easiest or the hardest to trade. Clearly it’s great if you got in early and your positions are flashing bright green. Otherwise it very much depends on your trading style and of course whether or not you managed to get a seat on the bus. You may prefer to wait for a confirmation retest before hopping on an unfolding trend, you may not get filled (it happens!), or perhaps you simply got kicked off just before it took off.
I’m sure it hasn’t escaped your attention that the Dollar has been getting it on the chin lately. Just a few weeks ago I proposed that the Euro was about to break out of its recent floor pattern and accelerate higher. Unfortunately that perspective turned out to be correct and I have been watching my EUR/USD exchange rate degrade relentlessly over the past few weeks.
During my time away it didn’t escape my attention that you guys very much enjoyed Scott’s excerpts on tape reading. As you all know I am very much a systemic trader at this point but at the same time still enjoy following a variety of charts on a discretionary/analytical basis for three reasons: First I happen to be good at it as my thinking process follows a mixture between the analytical and the creative. Second it gives me opportunities for campaigns I would miss out on just focusing on my systems. Third reading the tape actually gives me ideas for building new automated systems. For all these reasons and more I decided to do one post exclusive to tape reading every [...]