The Capital3x Performance till April 20 2012 is visible here: 1700 pips in April
You must realize that you are swimming in shark infested waters if you are trading forex. Its a dangerous place and my endeavors over the last few months with my subs has been to protect their backside before loading in on the winners. They are not easy to come by but when they do, you must have enough dry powder to shoot. There is a reason why we differ from the all “mom and pop” signal service who can in all their effort can only come up with something like: “Buy EURUSD with stop at xxx and target at yyy” with not the slightest effort to explain. Some will make some feeble effort. They are there to take your money. Am sure my subs will appreciate, we are a different league.
We have always differentiated by not just the performance but also clear cut analysis which are often ahead of the price action. In fact running a live trade room and monitoring fundamental data and cross asset price action is not a kids game. It is demanding and I will request the same dedication from my subs. This is not a free lunch where you can just copy a few signals and make it work.
To survive in shark infested waters, you at least need to feign to be a shark (which in itself is hard work) otherwise sooner than later you are meat.
Fundamentally things are falling in place to explain the price action. In the case of EU, prices have not yet fallen but the reason for that is not anything else but the inherent fear factor of SNB coming into buy EUR/CHF which is close to break down the barrier at 1.2 My gut call is that they will defend it and then pull it up to 1.25.
Risk aversion is back on the table. The much defended weekly support 1366 is gone and albeit a late rally to test it, we are headed lower. My update here may look a bit repetitive given the number of times I have repeated these things in the Live Trade room. The German auction today once again ratified that money still found those yields attractive and safe enough to take down the entire amount rather than chase high yield assets. The French auction continued its disastrous performance and sooner than later rating agencies are going to take note. The PMI data was another nail in the coffin. If you were short SPX (like we suggested at 1373) then those numbers would have been sweet music to your ears. The dutch PM resignation is another dance in the show.
So to my loyal and understanding subs, here are a few charts and setups. Kept a few to be free for the free-riders and those who have been desperate to take a peek into Capital3x. Capital3x is not for everyone and its definitely not for the casual visitors so hopefully the free riders will take a look at some of the analysis and the drivers of forex moves and may be introspect on what they are missing.
The Italian German 10 year spread is widening. The BTP futures fell below the 100 mark again but once again managed to pull back above 100 at the time of writing. It must be noted, that BTP looks weak and a close below 100 will spell further downside for EUR/USD. The situation on the Italian bonds is worsening with yields well above 5.5% and widening with respect to the German yield. The Spainish 10 year yield is closing in on the 6% mark.
With Bunds stretching to all time highs, BTP breaking down and Spainish yields closing in on the 6% market
the EU SCHATZ has broken 110.50 level. This was exact reason why Capital3x shorted EUR/JPY at 107.8
and AUDJPY at 84.7. Our trades are not a coincincdence but carefully planned and researched. Of course
you may still choose to go your own way. Read what we said last week “If a sustained break of 110.5 happens, all yen pairs can be shorted”
This is what we said on friday:
“USDJPY has made a run for 81.5 but UST2year prices have barely nudged. If UST2Y stays above 110’07 expect USDJPY to make late climbdown as it dissappoints traders who thought it would bounce aftre a fall like that. ”
Look where USDJPY trades today. A solid 70 pips below friday high. USDJPY prices are determined by UST2Y and not by some airy fairy tales of resistances and supports. Tonnes of analysts including analysts who have never traded forex were on record (check their twitter feed) talking about how EUR.JPY was headed 108.3 and USDJPY headed 81.8 and 82.5.
The breakout on UST2 is very real. Take note. There is clear flow of capital on the short end of the curve and the long end of the curve. So money is flowing on both ends of the yield curve. They are questioning the short term and long term thesis of equity marekts.
With bond markets constantly fading the equity rally of last week, it was only a matter of days if not hours, for the dumb money to lose it on the risk assets. Not only the bond markets, but even the laggards of commodity markets (CRB index, copper) had faded the rally and even accumulated short positions. The ES is trading at 1361 and broken down key levels at 1366. The next support comes in at 1357 and then it is free fall. Take note of the volume hole at 1330 which is where we target the next move down. Capital3x has been short SPX Emini futures from 1373 on our portfolio. An alert was sent well in time to load the short in ES.
You need to be a member with us to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio.
Forex Setups
And finally to my favorite section (Kept this section for freeriders for today)
There is no point of all the above analysis and charts if you cannot apply them to real trading. If you are trading forex (As we are) then we share a few setups derived primarily from our internal model, indicators and mostly from the bond market analysis.
AUD.JPY
The setup was beautiful. The level to watch was 84.7 and we waited till second half of NY session on Friday to see if we see a casual break of 84.7. They didnt have the guts. Therefore we zoned in on the trade with a stop just above. What a clean trade as it trades nearly 120 pips below our entry. Ok sorry for the pat on my shoulder but I cant forgive you for not listening to me.
EUR/JPY
The setup on EURJPY was not easy as AUD/JPY. EUR/JPY had a real potential to run up to 108.28/.30. But we waited to see if it could take out 108 levels. We waited for hours. And finally on friday we took the trade to short it at 107.8 with clear instructions on the reasons. The whole rally of EUR/JPY to 108 was bear flag rally as SCHATZ was breaking its 2 month range at 110.50. You never question a trade when it is in the same direction as the bond markets. The bond yields were falling in Germany and US. And to make things more interesting it was the short end that was deflating. A clear sign that yen was about to strengthen as early as monday. Well now that we are in this trade, we will wait to see the action around 106.8 if it does retrace else we are headed much lower (sub 105). You can check the the Live Trade Sheet at Capital3x to see the exact stops and targets.
USD/CAD
USD/CAD threatened 0.99 on friday NY once again but very quickly came back up to .9930 and closed to make higher low. The case for CAD has weakened significantly after the release of Central bank minutes and inflation data all of which makes the Carney look and absolute duffer when he reiterated his hawkish position. Either he is dumb or he is an insider to some funds who are paying him to make hawkish statements to manage their own entries. The latest USD/CAD trade can be seen in the live trade sheet.
You need to be a premium member to see the rest of the post and the above charts
- The April Live Trade Sheet
- The April Live Trade Room
- C3X Performance FX portfolio
- Key economic data and speaker list for this week can be found here:Economic calendar
- The Bond auction schedule can be found here: Bond schedule
