SB Trade Desk Highs and Lows: 9/30/2017

Highlights include EURUSD, 30 Yr. U.S. T-Bonds, GBPUSD, and USDCAD.

Each weekend, we’ll share a few examples of our work from the prior week.  Many in this business scream to the high heavens when they make a good call and conveniently ignore when they are wrong… they are charlatans.  Our goal with ‘Highs and Lows’ is to review what we got right and more importantly, what we got wrong.  The following examples are from the Swing Updates, published Sunday to Thursday (here is a Swing Update tutorial).

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Highs and Lows for the Week Ended 9/29/2017 

HIGHS

EURUSD 4 Hour

9/20 – Has EURUSD turned for a drop to at least 1.1700?  Low so far is right on channel support.  The red parallel (not the median line), which has been support since July, is now the candidate for resistance near 1.0960.  The 10 day average, which has also been useful for several months, is near the parallel.

Aftermath – We shorted 1.1950 and exited at 1.1735 (just above the blue line) for 215 pips.

30 Year U.S. T-Bond Weekly

9/21 – We’re going ‘top-down’ (long term to short term) on the U.S. long bond today.  My interest in shorting bonds (rally in yields) is piqued due to this headline from Bloomberg today.  This is one of the best kinds of headlines to fade because the headline includes a prediction.  Technically, bonds have turned down from a long term parallel (25 line of the channel from the 1981 low).  This parallel has been major resistance and support over the last 9 years.

Aftermath – The long bond tanked on 9/27.  In fact, last Wednesday’s decline was the largest daily drop since 3/1.

LOWS

30 Year U.S. T-Bond Weekly

9/26 – GBPUSD has dropped into the zone for support and the drop from the FOMC spike consist of a corrective 3 waves (a-b-c).  The 3rd leg of that drop (wave c) itself consists of 5 waves (see 4 hour chart below).  The evidence suggests that the drop is complete.  Now, a more drawn out corrective process is certainly possible, especially given the extent of the preceding move, but a bounce at minimum is expected. 

Aftermath – Went long at 1.3435 and was stopped out at 1.3375 for a 60 pip loss.

LOWS

30 Year U.S. T-Bond Weekly

9/26 – USDCAD traded up to 1.2313 today and rolled over so focus is lower.  I’m leaving an order to short under the high hourly close of 1.2383.

Aftermath – Went short at 1.2380 and was stopped out at 1.2420 for a 32 pip loss (40 CAD pips = 32 USD pips at a 1.2420 rate).