(also, scroll down on that page. Enjoy.)
π₯15β€6
π Closing Bell - Question of the Day
Anonymous Quiz
75%
Your cost to enter the trade increases β you need a larger move just to break even
7%
Your cost to enter the trade increases β but wider spreads always guarantee better fills
8%
Your cost to enter the trade increases β though spreads only widen on exotic pairs
11%
Your cost to enter the trade increases β but stop losses are unaffected by spread changes
β€13π2
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Gold Trade Update & gameplan for this week. Please like this post if you'd like me to do these more often :)
1. Gold falls through lows: in this scenario, I will trail stops above past support turned resistance
2. Gold rallies, tagging my trailing stop. I will take profits and look for possible re-entries around the 4120 level. (short side, smaller size)
3. Gold rallies strong, trailing me out for a profit, breaking to retest $4200. Likely I will still have a macro bearish outlook, and will consider a slightly larger short trade here
4. Price fails to hold major resistance levels and stops me out of my ideas: admit I was wrong, accept I was wrong, and move on with small losses.
Currently floating a pretty big winner here. Thanks to macro fundamentals + price action trends!
- Nick
1. Gold falls through lows: in this scenario, I will trail stops above past support turned resistance
2. Gold rallies, tagging my trailing stop. I will take profits and look for possible re-entries around the 4120 level. (short side, smaller size)
3. Gold rallies strong, trailing me out for a profit, breaking to retest $4200. Likely I will still have a macro bearish outlook, and will consider a slightly larger short trade here
4. Price fails to hold major resistance levels and stops me out of my ideas: admit I was wrong, accept I was wrong, and move on with small losses.
Currently floating a pretty big winner here. Thanks to macro fundamentals + price action trends!
- Nick
π71β€28π₯6
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β€9
USD/CHF Is Now Rejecting Resistance as Seasonality Hits
USD/CHF is rejecting from the 0.81 resistance zone reached last week.
The catalysts are aligning lower. Seasonality points firmly lower through July and August. EdgeFinder ranks CHF and JPY second-highest on real yield β an institutional positioning signal that supports CHF on any USD softness.
This week's data favors that setup. NFP Thursday is expected to come in below last month's 172K print. ISM Manufacturing is forecast at 53.7 versus 54.0 prior β still expansionary above 50, but cooling. Warsh speaks Wednesday at the ECB Sintra Forum. Markets react to expectations vs reality, and any softening could question the crowded dollar long story.
The dollar long has been valid since January but is now mature. If broad dollar softness materializes, CHF is one of the cleanest counter-trend trades β a potential sleeper pick. A failure to reclaim 0.81 with weakening US data confirms the bearish setup.
read the full article here.
β Alan
USD/CHF is rejecting from the 0.81 resistance zone reached last week.
The catalysts are aligning lower. Seasonality points firmly lower through July and August. EdgeFinder ranks CHF and JPY second-highest on real yield β an institutional positioning signal that supports CHF on any USD softness.
This week's data favors that setup. NFP Thursday is expected to come in below last month's 172K print. ISM Manufacturing is forecast at 53.7 versus 54.0 prior β still expansionary above 50, but cooling. Warsh speaks Wednesday at the ECB Sintra Forum. Markets react to expectations vs reality, and any softening could question the crowded dollar long story.
The dollar long has been valid since January but is now mature. If broad dollar softness materializes, CHF is one of the cleanest counter-trend trades β a potential sleeper pick. A failure to reclaim 0.81 with weakening US data confirms the bearish setup.
read the full article here.
β Alan
π17β€9
Stocks Now Higher As Players Reload The AI Trade
The S&P 500 is recovering from last week's volatility with the broader uptrend structure intact. Three scenarios are in play. Scenario 1: continued strength toward ATHs. Scenario 2: a constructive retest of 7,300 support before continuation higher. Scenario 3: a deeper pullback to the 7,000 zone where the 200-day SMA converges from below.
EdgeFinder reads a strong bullish 8. The institutional activity bias is bullish with COT showing 9.76% short positioning being unwound. GDP, PMIs, NFP, and consumer confidence all printing above expectations.
Oil at pre-war levels has driven yields lower. AI positioning has repivoted to the long side β Nvidia, Microsoft, Amazon, and Meta all up ~2% today.
The mixed signals remain. Inflation bias is bearish with PPI at 6.5%. December hike odds still 80%. But the directional catalyst (war fading, supply normalizing) outweighs the residual drag at current price action.
read the full article here.
β Alan
The S&P 500 is recovering from last week's volatility with the broader uptrend structure intact. Three scenarios are in play. Scenario 1: continued strength toward ATHs. Scenario 2: a constructive retest of 7,300 support before continuation higher. Scenario 3: a deeper pullback to the 7,000 zone where the 200-day SMA converges from below.
EdgeFinder reads a strong bullish 8. The institutional activity bias is bullish with COT showing 9.76% short positioning being unwound. GDP, PMIs, NFP, and consumer confidence all printing above expectations.
Oil at pre-war levels has driven yields lower. AI positioning has repivoted to the long side β Nvidia, Microsoft, Amazon, and Meta all up ~2% today.
The mixed signals remain. Inflation bias is bearish with PPI at 6.5%. December hike odds still 80%. But the directional catalyst (war fading, supply normalizing) outweighs the residual drag at current price action.
read the full article here.
β Alan
β€20π6
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π16β€11π4
GBP/USD Now Faces Pivotal Test as Burnham Sparks Relief
GBP/USD is bouncing from the 1.3200 support zone toward the broken 1.3300 support-turned-resistance. The bump is real but faces overhead supply β the 200-day SMA sits at 1.3400 and the major resistance zone at 1.3500β1.3600 caps the broader range. A reclaim of 1.3300 is the first test.
Two separate forces are pressuring sterling. The dollar leg: USD hit 13-month highs on the Iran deal and Warsh's hawkish FOMC. The UK leg: Burnham's likely succession has built the largest GBP short since 2015, with gilts above 5% β the highest in the G7.
Today's speech was a reassurance attempt. Burnham committed to the current fiscal rules and "sound public finances." Gilt yields eased slightly as he spoke. Streeting dropping out makes a clean coronation more likely, removing the contested-transition tail risk.
The bounce needs to clear 1.3300 and the 200-day SMA to matter. Until then, the path of least resistance stays lower.
read the full article here.
β Alan
GBP/USD is bouncing from the 1.3200 support zone toward the broken 1.3300 support-turned-resistance. The bump is real but faces overhead supply β the 200-day SMA sits at 1.3400 and the major resistance zone at 1.3500β1.3600 caps the broader range. A reclaim of 1.3300 is the first test.
Two separate forces are pressuring sterling. The dollar leg: USD hit 13-month highs on the Iran deal and Warsh's hawkish FOMC. The UK leg: Burnham's likely succession has built the largest GBP short since 2015, with gilts above 5% β the highest in the G7.
Today's speech was a reassurance attempt. Burnham committed to the current fiscal rules and "sound public finances." Gilt yields eased slightly as he spoke. Streeting dropping out makes a clean coronation more likely, removing the contested-transition tail risk.
The bounce needs to clear 1.3300 and the 200-day SMA to matter. Until then, the path of least resistance stays lower.
read the full article here.
β Alan
β€17π5
DXY Now Must Face Thursday's Critical NFP
DXY is pulling back from the 101.80 high after a strong June rally. Price is retracing into the Fib zone β the 0.382 is the first support, with the 0.5 and 0.618 marking deeper retracement levels.
The dollar's rally is showing fatigue. TD Securities sees dollar strength "nearing a peak, absent reacceleration in U.S. data beyond our baseline of stability." Thursday's NFP is the test. A weaker-than-expected print would confirm the topping thesis.
The catalysts are stacked this week. NFP Thursday, ISM Manufacturing, and Warsh at the ECB Sintra Forum on Wednesday. Markets are still pricing rate hikes.
A hold above the 0.382β0.618 zone keeps the dollar uptrend intact for a continuation toward 102. A break below 100.30 signals the rally has topped and opens a deeper pullback.
read the full article here.
β Alan
DXY is pulling back from the 101.80 high after a strong June rally. Price is retracing into the Fib zone β the 0.382 is the first support, with the 0.5 and 0.618 marking deeper retracement levels.
The dollar's rally is showing fatigue. TD Securities sees dollar strength "nearing a peak, absent reacceleration in U.S. data beyond our baseline of stability." Thursday's NFP is the test. A weaker-than-expected print would confirm the topping thesis.
The catalysts are stacked this week. NFP Thursday, ISM Manufacturing, and Warsh at the ECB Sintra Forum on Wednesday. Markets are still pricing rate hikes.
A hold above the 0.382β0.618 zone keeps the dollar uptrend intact for a continuation toward 102. A break below 100.30 signals the rally has topped and opens a deeper pullback.
read the full article here.
β Alan
π18β€11
Gold trade update:
Still holding strong for now. Stops are locked in profit. Here's a few scenarios and how I'll handle them:
1. Price breaks through the lows: in this case, I will further tighten my stop and continue following the trend
2. Price breaks higher, but finds sellers at resistance. I will look for opportunities to re-enter shorts, likely with smaller size than my current position
3. Price fails to hold resistance. I will reset and re-evaluate my bias / outlook at this time if this occurs.
Great trading is about being prepared for all scenarios, taking educated guesses, and managing your risk when you're wrong.
- Nick
Still holding strong for now. Stops are locked in profit. Here's a few scenarios and how I'll handle them:
1. Price breaks through the lows: in this case, I will further tighten my stop and continue following the trend
2. Price breaks higher, but finds sellers at resistance. I will look for opportunities to re-enter shorts, likely with smaller size than my current position
3. Price fails to hold resistance. I will reset and re-evaluate my bias / outlook at this time if this occurs.
Great trading is about being prepared for all scenarios, taking educated guesses, and managing your risk when you're wrong.
- Nick
β€47π₯21π1
π Closing Bell - Question of the Day
When the AAII bull-bear spread hits a historical extreme, why do contrarian traders pay attention?
When the AAII bull-bear spread hits a historical extreme, why do contrarian traders pay attention?
Anonymous Quiz
26%
Everyone is positioned one way β but extremes always persist for months before reversing
9%
Everyone is positioned one way β though contrarian signals only work in bear markets
22%
Everyone is positioned one way β but AAII has zero correlation with forward returns
43%
Everyone is positioned one way β fuel for continuation runs out
β€9π1
Gold Now Faces Pivotal NFP Test
Gold at $4,090, up ~2% ahead of tomorrow's NFP. The metal just closed its worst quarter since 2013, down 14% from April to June, after setting a record in January.
The driver is real yields. A hawkish Fed, a firm dollar, and ~67% odds of a September hike have kept pressure on. Cleveland Fed's Hammack said this week she may back higher rates if inflation stays sticky, and ETF outflows are picking up.
Tomorrow's jobs report sets the next move. A strong print fuels the hike story and pressures gold lower. A weak print eases rate bets and gives gold room to recover. The structural read stays bearish until that changes.
A reclaim of $4,000 opens a bounce. A break of $3,942 continues the trend lower.
read the full article here.
β Alan
Gold at $4,090, up ~2% ahead of tomorrow's NFP. The metal just closed its worst quarter since 2013, down 14% from April to June, after setting a record in January.
The driver is real yields. A hawkish Fed, a firm dollar, and ~67% odds of a September hike have kept pressure on. Cleveland Fed's Hammack said this week she may back higher rates if inflation stays sticky, and ETF outflows are picking up.
Tomorrow's jobs report sets the next move. A strong print fuels the hike story and pressures gold lower. A weak print eases rate bets and gives gold room to recover. The structural read stays bearish until that changes.
A reclaim of $4,000 opens a bounce. A break of $3,942 continues the trend lower.
read the full article here.
β Alan
β€19π₯4π1
USD/JPY Is Now At The Mercy of NFP
USD/JPY at 162.47, holding near a four-decade high after touching 163.11. The pair pared gains after Warsh said inflation risks have eased, which pressured the dollar broadly. Price sits well above the 160.00β160.50 intervention zone that capped every rally earlier this year.
The driver is the rate gap. The Fed at 3.50β3.75% against the BoJ at 1.00% sustains a 275bp differential that fuels the carry trade. Warsh's softer tone trimmed September hike odds to 60% from 65%, but the gap still favors the dollar.
Japan's MoF looks more tolerant of yen weakness than in past episodes, helped by broad dollar strength and lower oil easing BoJ inflation pressure. Traders flag Friday's US holiday as an intervention window β thin liquidity amplifies any move.
Thursday's NFP is the catalyst. A soft print weakens the dollar and gives Tokyo cover. A strong print pushes toward 163 and raises intervention risk. Support sits at 160.00, then 157.50.
read the full article here.
β Alan
USD/JPY at 162.47, holding near a four-decade high after touching 163.11. The pair pared gains after Warsh said inflation risks have eased, which pressured the dollar broadly. Price sits well above the 160.00β160.50 intervention zone that capped every rally earlier this year.
The driver is the rate gap. The Fed at 3.50β3.75% against the BoJ at 1.00% sustains a 275bp differential that fuels the carry trade. Warsh's softer tone trimmed September hike odds to 60% from 65%, but the gap still favors the dollar.
Japan's MoF looks more tolerant of yen weakness than in past episodes, helped by broad dollar strength and lower oil easing BoJ inflation pressure. Traders flag Friday's US holiday as an intervention window β thin liquidity amplifies any move.
Thursday's NFP is the catalyst. A soft print weakens the dollar and gives Tokyo cover. A strong print pushes toward 163 and raises intervention risk. Support sits at 160.00, then 157.50.
read the full article here.
β Alan
π11β€7π6
EdgeFinder's algorithm is changing going into tomorrow's NFP π
A strong NFP with rising rate hike bets will add strength back into USD and continue the bearish gold trend.
While a weak number with easing rate hike bets will continue to knock off points for USD and support Gold.
Thank you EdgeFinder π€
β Alan
A strong NFP with rising rate hike bets will add strength back into USD and continue the bearish gold trend.
While a weak number with easing rate hike bets will continue to knock off points for USD and support Gold.
Thank you EdgeFinder π€
β Alan
β€35π₯5π4
π Closing Bell - Question of the Day
When net speculative positioning in a currency reaches a multi-year extreme, why can the subsequent move be violent even on minor catalysts?
When net speculative positioning in a currency reaches a multi-year extreme, why can the subsequent move be violent even on minor catalysts?
Anonymous Quiz
64%
The trade is too crowded β small trigger forces mass unwinding that amplifies beyond the catalyst
10%
The trade is too crowded β but positioning extremes have no impact on price velocity
15%
The trade is too crowded β though only macro shocks can reverse extreme positioning
10%
The trade is too crowded β but spec positioning always reverses gradually over months
β€16π1
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β€7π₯3
US 2Y Now Tests Key War Trendline
The US 2Y at 4.121%, down 4.6bps after June NFP came in at 57,000 β well below the 110,000 estimate, with May revised down to 129,000 from 172,000. The 2Y tracks Fed rate expectations more closely than any other yield, and it's now testing the war-start trendline that has held since March.
The soft print cut hike bets sharply. July odds fell to 19.8% from 28.9%; September dropped to 55% from 64.1%. The revision matters as much as the print β it says the labor market was never as hot as May suggested.
This eases pressure on Warsh, who has prioritized inflation over labor. With oil below pre-war levels cooling the inflation side, a softening labor market could pull the Fed back toward balancing both mandates.The trendline is the level to watch. A hold keeps the tightening bias intact. A break signals the market pricing the peak in Fed expectations, opening a move toward the 200-day SMA near 3.70%.
read the full article here.
β Alan
The US 2Y at 4.121%, down 4.6bps after June NFP came in at 57,000 β well below the 110,000 estimate, with May revised down to 129,000 from 172,000. The 2Y tracks Fed rate expectations more closely than any other yield, and it's now testing the war-start trendline that has held since March.
The soft print cut hike bets sharply. July odds fell to 19.8% from 28.9%; September dropped to 55% from 64.1%. The revision matters as much as the print β it says the labor market was never as hot as May suggested.
This eases pressure on Warsh, who has prioritized inflation over labor. With oil below pre-war levels cooling the inflation side, a softening labor market could pull the Fed back toward balancing both mandates.The trendline is the level to watch. A hold keeps the tightening bias intact. A break signals the market pricing the peak in Fed expectations, opening a move toward the 200-day SMA near 3.70%.
read the full article here.
β Alan
π15β€10