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  • #301
  • Jul 18, 2019 2:40pm Jul 18, 2019 2:40pm
BOOM! - Made Gold Pop right now....
  • #302
  • Jul 18, 2019 2:47pm Jul 18, 2019 2:47pm
Quoting EventsTrader
I predict next week we will regress to the mean.
We know the Fed doesn't like to surprise the market... If they're going to cut 25bps they're going to need to reshape market expectations first. We should see some (relatively) hawkish speeches coming up next week.
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #303
  • Jul 18, 2019 3:40pm Jul 18, 2019 3:40pm
Quoting Ef5
{quote} We know the Fed doesn't like to surprise the market... If they're going to cut 25bps they're going to need to reshape market expectations first. We should see some (relatively) hawkish speeches coming up next week.
I agree but don't forget about the blackout periods. You can find it at the St. Louis Fed site:
Quote
Federal Reserve policy limits the extent to which FOMC participants and staff can speak publicly or grant interviews during Federal Reserve blackout periods, which begin the second Saturday preceding a Federal Open Market Committee (FOMC) meeting and end the Thursday following a meeting unless otherwise noted.
Starting on Saturday, we won't hear from the Fed until after the release. Here's the 2019 schedule:
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We must learn who is gold, and who is gold plated
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  • #304
  • Jul 18, 2019 3:51pm Jul 18, 2019 3:51pm
I'm not sure how expectations are going to change outside of data, and we only have a couple key data points left prior to the meeting.

  1. Advance GDP q/q
  2. Core PCE Price Index m/m

I don't see the data or evidence that supports a 50 basis point rate cut. 71% think we are getting a 50bp rate cut? Shocking:

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Additionally, the majority in the market are pricing in 75 basis points lower by the October meeting.
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We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #305
  • Jul 18, 2019 4:17pm Jul 18, 2019 4:17pm
Quoting Ef5
{quote} Wow, thanks for sharing. I was just looking at the CME watchtool a few hours ago and it was 30% for 50bps and 70% for 25bps. Things certainly have changed! You're probably right about gold falling on a 25bps cut. The thing is, we might get a 25bps cut AND the Fed announcing an early end to the balance sheet runoff so gold could still rally in that case. Also, if they hint at a lower rate path going forward gold could take off. The next FOMC meeting will be tough to trade. I'm looking to fade a 50bps cut and bet on 25, but I'll probably trade...
Yeah, it's probably a better idea to trade the 30day Fed Funds Futures then gold on the rates release. If there is a 50bps cut(which i HIGHLY doubt), i'm sure gold will raise(but perhaps not much, given the current agressive rate cut price in?). Even in case of a 50bps rate cut, the FOMC future outlook will be in the center and has the potential to diminish the cut effects or reinforce them even more.

And if there is a 25bps cut, i'm sure it will have a downward spike at least for a moment (unless the rate bets change dramaticaly) and then afterwards as you said , their report will be very important and could open way for gold to raise (probably not much considering everything)... the future outlook is much more important.

but still shorting xau/usd after a rate cut is never a good idea in my opinion.

I'm probably going to sit this one out... the risk around a rate cut has not been this big in a long while... or at least i don't remember it being.
Through the light of enlightenment, darkness unveils the path of truth.
  • #306
  • Jul 18, 2019 4:29pm Jul 18, 2019 4:29pm
Quoting EventsTrader
I'm not sure how expectations are going to change outside of data, and we only have a couple key data points left prior to the meeting. Advance GDP q/q Core PCE Price Index m/m I don't see the data or evidence that supports a 50 basis point rate cut. 71% think we are getting a 50bp rate cut? Shocking: {image} Additionally, the majority in the market are pricing in 75 basis points lower by the October meeting. {image}...
That's just insane... there has never been a market driven by hope as much as this one... I wonder why this is happening from a psychological aspect?

The blackout period is the reason why there is so much risk around this rate cut, there is nearly nothing FED can do to calm the markets, and they might be "forced" into doing a 50bps rate cut which could create a huge bubble.

However the FED are mostly experts in economy and they understand that this might happen, so i think right now what they're doing is they're weighing the risk of a 50bps rate cut (which might create a bubble) and a 25bps rate cut (which might surprise the markets...even though it shouldn't be a surprise...).

All in all, i'm not really sure what is happening right now regarding rate cut expectations... there seems to be so much hope and so little to uphold that hope, but yet somehow it keeps rising like some kind of disease.

I'm looking at data for this rate cut and previous data and i'm asking myself: "How can anyone who knows anything about economics predict a 50bps rate cut!?"... and now a 75 by october?

Just 2 months ago both JPMorgan and Wells Fargo said that they're not expecting FED to cut rates until Q4 2020... and now the markets are expecting a 50-75bps rate cut by Q4 2019...

'Chairman Powell admits that really it is fiscal policy that has any possibility at all of stimulating the economy,not, by the way, that you need to stimulate the economy when you’ve got a 3.7% unemployment rate. I think they’re worried about independence. I think they’re worried about getting too criticized by the administration

The Fed is being overly aggressive here. In all likelihood, the economy is not doing as poorly as some people think, and we’re probably going to overshoot in terms of providing too much stimulus.. and that’s a slippery slope. We may not get to 2% inflation. Does that justify October? Does that justify December? You could go all the way down to zero on the Federal Funds Rate and not get to 2% inflation.'
Through the light of enlightenment, darkness unveils the path of truth.
  • #307
  • Jul 18, 2019 4:48pm Jul 18, 2019 4:48pm
Quoting Vorenzd
All in all, i'm not really sure what is happening right now regarding rate cut expectations
You and me both!

Quoting Vorenzd
The blackout period is the reason why there is so much risk around this rate cut, there is nearly nothing FED can do to calm the markets, and they might be "forced" into doing a 50bps rate cut
Very good point.

Quoting Vorenzd
I'm looking at data for this rate cut and previous data and i'm asking myself: "How can anyone who knows anything about economics predict a 50bps rate cut!?"... and now a 75 by october?
The data isn't there. Beige book was surprisingly positive this week too.

I agree with everything you said. Here's something to consider, remember the Trump-Powell private dinner (no media allowed). That was Feb 4th. Since then there's been a clear pivot. In fact, the very next rate statement 'promised' no more rate hikes in 2019. I know it sounds conspiracy theoryish, but at this point I'm throwing mud at the wall to see what sticks because anything more than a 25bp rate cut hasn't been justified by any data, Fedspeak, or economic downturn. 50 basis point moves in the interest rate in the past 20 years have only happened on rate cuts, and have been in response to the recession in 2001 (where Greenspan fell behind in lowering) and in response to the 2008 crisis. Other than that, 50bp don't happen. It's a measure reserved for dire times in the economy.
We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #308
  • Jul 18, 2019 4:48pm Jul 18, 2019 4:48pm
Quoting EventsTrader
71% think we are getting a 50bp rate cut?
Yeah I can't imagine it.

I'll be closing a lot of my gold longs next week not because I think the rally is dead but because the market has to have some correction for this before it resumes doing anything else.
careful not to step in a pile of it
  • #309
  • Jul 18, 2019 5:28pm Jul 18, 2019 5:28pm
[BREAKING NEWS]

New York Fed: "Speech Today By PresidentWilliams Was Academic And Based On Research; Was NotAbout Potential Policy Actions At The Upcoming FOMCMeeting"


... what a chance to short sell gold!

If the market doesn't go down on this then i don't know what will take it to bring the price down... now i'm certain FED will do a 25bps cut, and this is what they're trying to say to prepare the markets.

Quoting EventsTrader
{quote} You and me both! {quote} Very good point. {quote} The data isn't there. Beige book was surprisingly positive this week too. I agree with everything you said. Here's something to consider, remember the Trump-Powell private dinner (no media allowed). That was Feb 4th. Since then there's been a clear pivot. In fact, the very next rate statement 'promised' no more rate hikes in 2019. I know it sounds conspiracy theoryish, but at this point I'm throwing mud at the wall to see what sticks because anything more than a 25bp rate cut hasn't been...
I also have a feeling that something happened at that dinner, FED shifted to the other side too fast. It does sound like a conspiracy theory, but yeah, as you said, anything more then 25bps is overkill... i'd even argue about the 25bps being needed.
Through the light of enlightenment, darkness unveils the path of truth.
  • #310
  • Jul 18, 2019 5:31pm Jul 18, 2019 5:31pm
Quoting Vorenzd
[BREAKING NEWS] New York Fed: "Speech Today By PresidentWilliams Was Academic And Based On Research; Was NotAbout Potential Policy Actions At The Upcoming FOMCMeeting" ... what a chance to short sell gold! If the market doesn't go down on this then i don't know what will take it to bring the price down... now i'm certain FED will do a 25bps cut, and this is what they're trying to say to prepare the markets. {quote} I also have a feeling that something happened at that dinner, FED shifted to the other side too fast. It does sound like a conspiracy...
Yeah just saw this too! Time for expectations to come in line... just in time for the blackout period
careful not to step in a pile of it
  • #311
  • Jul 18, 2019 5:36pm Jul 18, 2019 5:36pm
Quoting Vorenzd
[BREAKING NEWS] New York Fed: "Speech Today By PresidentWilliams Was Academic And Based On Research; Was NotAbout Potential Policy Actions At The Upcoming FOMCMeeting" ... what a chance to short sell gold! If the market doesn't go down on this then i don't know what will take it to bring the price down... now i'm certain FED will do a 25bps cut, and this is what they're trying to say to prepare the markets. {quote} I also have a feeling that something happened at that dinner, FED shifted to the other side too fast. It does sound like a conspiracy...
Wow. This was a strange time to release this news and it feels like it was done because they needed to issue some guidance before the Fed's blackout period. This is bigger than the moves suggest IMO.
We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #312
  • Edited 6:22pm Jul 18, 2019 5:42pm | Edited 6:22pm
My theory is: The liqudity is low, it's easy to manipulate markets and "stop hunt" in current conditions and that's why it didn't plummet straight down...it's the same thing that happens each january during holidays and then they call it black swans.

Any upward movement after this is just a bait for average retailers, and many will see this as a chance to enter long and probably end up losing their money.

Look how the odds shifted in under an hour... from 71% to 48%
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Through the light of enlightenment, darkness unveils the path of truth.
  • #313
  • Jul 18, 2019 9:04pm Jul 18, 2019 9:04pm
Wow, he didn't waste any time walking back expectations! Looks like there's still a lot of money to be made fading the 50bps guys.

Quoting Vorenzd
{quote} That's just insane... there has never been a market driven by hope as much as this one... I wonder why this is happening from a psychological aspect?
I think you bring up a good point. The market has a tendency to get caught up in certain sentiment from time to time. I'm not talking about AAII sentiment or something like that, this is a little different. I've seen a few cases where the market just really wants to sell and looks for any reason it can to do so. The ebola panic of 2014 is a great example of this in the stock market. To a lessor extent I think this happened last winter too as there was never really a conclusive reason for all the turmoil.

I've never been able to quite pinpoint how this works exactly. Currently we might be on the bullish side of this sentiment cycle, which might explain what all the hope is about going forward.
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #314
  • Jul 19, 2019 12:25am Jul 19, 2019 12:25am
The price of Gold - DH update using the Sentient Trader (Hurst Cycles) platform:

Sixer


Inserted Video
  • #315
  • Edited 5:38am Jul 19, 2019 4:16am | Edited 5:38am
Quoting Ef5
Wow, he didn't waste any time walking back expectations! Looks like there's still a lot of money to be made fading the 50bps guys. {quote} I think you bring up a good point. The market has a tendency to get caught up in certain sentiment from time to time. I'm not talking about AAII sentiment or something like that, this is a little different. I've seen a few cases where the market just really wants to sell and looks for any reason it can to do so. The ebola panic of 2014 is a great example of this in the stock market. To a lessor extent I think...
Yeah, we probably are in some bullish cycle... i think that many investors forsee an even bigger boom and they are trying to agressivly boost stocks/other assets... investing more and more capital in a market that might form one of the biggest bubbles and cause a huge crisis if rates are cut 50bps now and 75bps by the end of the year. (at least i believe so).
it's just silly how people forget to look at facts and start trading by emotions in large quantities... but all i see there is great profit potential for us cold headed traders who know what they're doing.



The markets price in a very agressive rate cut of 50 bps and possibly 75bps by the end of the year... but will that really happen? Probably not, but here's what is considered apropriate:
(Source: www.wellsfargoresearch.com)
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Through the light of enlightenment, darkness unveils the path of truth.
  • #316
  • Jul 19, 2019 6:14am Jul 19, 2019 6:14am
COT-data:

The Commercials (Insiders) are always wrong.

Sixer
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  • #317
  • Jul 19, 2019 2:15pm Jul 19, 2019 2:15pm
Quoting Vorenzd
it's just silly how people forget to look at facts and start trading by emotions in large quantities... but all i see there is great profit potential for us cold headed traders who know what they're doing.
Absolutely.

As a guy who trades based on fundamentals, my whole ability to make money is simply from having a more accurate forecasts than the rest of the market. Half the battle is coming up with a good forecast, the other half is sticking to it no matter how irrational everyone else gets.

By the way, people being wrong about the Fed is actually the norm. Check out this chart from Deutsche Bank showing market expectations of the Fed at different times:

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Self-sufficiency is the greatest of all wealth. - Epicurus
  • #318
  • Jul 19, 2019 3:32pm Jul 19, 2019 3:32pm
Quoting EventsTrader
71% think we are getting a 50bp rate cut? Shocking
Because everyone knows the Fed is whipped by the Trumpster!!!!!!!!!!! Regain your independence....It's pathetic. And, these cuts are not justified!

So, Gold right now is the place to be! Gonna let it sell back off down in the lower 1400s then I'm hopping back in - hopefully after the weekend.
If in doubt, paddle out!
  • #319
  • Jul 19, 2019 3:55pm Jul 19, 2019 3:55pm
Quoting Ef5
{quote}Half the battle is coming up with a good forecast, the other half is sticking to it no matter how irrational everyone else gets.
Exactly, I find the second part harder and more stressful, but hey, it works.
Interesting to see it all in one chart... i guessed they'd mostly get it wrong, but didn't think the chart would be so dramatic.. well, It's better for us if the market is wrong about rates or fundamentals in general, i just see more money to be earned.

Most people unfortunately don't understand fundamentals.

Like today... i was just waiting for a big drop on gold, i knew it was going to happen since NY FED said Williams' statement was only academic... during the night the market went sideways, and then around the opening of the US session (aroun 16:00 MT4 Server time) gold suddenly soared up. I laughed because I knew it was some kind of bait for retailers, or something along those lines... and turns out it was, just 30 minutes later the market went down just as expected.
Through the light of enlightenment, darkness unveils the path of truth.
  • #320
  • Jul 19, 2019 4:36pm Jul 19, 2019 4:36pm
Quoting Vorenzd
since NY FED said Williams' statement was only academic...

RIGHT NOW I wonder how Williams is enjoying his timeout from Papa Powell

Another wild week in the books! Cheers to everyone. See you all on the other side.
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