MMT, THE EURO & THE GREATEST PREDICTION OF THE LAST 20 YEARS?

I’m a big fan of MMT and Cullen Roche. I’ve had many arguments over MMT with many people and those that dismiss it as garbage. More often than not, those people tend to be the mass media fed kind that simply refuse to believe that they could possibly be wrong about anything.  If you’re not that type I invite you to open your mind and “think differently” as Jobs himself might say. See this post for some MMT info.

to read Cullen’s article click this link, MMT, THE EURO & THE GREATEST PREDICTION OF THE LAST 20 YEARS?

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Every time an EU leader makes a statement, the EU’s imminent disaster becomes clearer and clearer. From the ECB’s seemingly inability to do anything at all to the outright denial some of EU’s leaders. The ship remains on course with nobody at the wheel. If the ECB doesn’t do something drastic (I hardly call the recent rate cut drastic), the passengers will just continue to drink and dance the night away… Even as they sink.

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McKesson. A stock I hold near and dear because I work for MCK. However when it comes time to pull the plug on my MCK trades I will do so with a click of a button. My first buy was from the 60’s after a 5 point gap up. We recently just had another 5 point gap up (roughly) after 2012 targets were lifted. Before you go making the assumption I’m some insider, hardly. While I do work there, I have zero access to such information. I get it when everybody else does. How do I pick my entries and exits? The same way I always do. Supply & Demand analysis. It has served me well, as the $20k I set aside to trade MCK a year ago is now closing in on $35k. By hook or by crook I will boost that another $5k by year end.

JPM analyst, before the earnings news, set a $57 target on MCK after it had come down a bit from $87. My personal target was $66.25, which didn’t get hit. I was about 0.50 off of the recent bottom before the gap up. It dawned on my thet the JPM analyst, in their infinite wisdom simply picked the 365 EMA as the target price. I said to myself, “Wow, if it’s that easy I want to work for JPM as an analyst for $100k a year”. Needless to say JPM and a few others are now eating their estimates and have since changed those estimates back to their original $98-$108 targets.

MCK Weekly

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EURUSD showing not one, but two W shaped patterns, indicative of a bottom. It’s not often I’ve seen 2 of these, so i’m sitting just above our 2ed W for a breakout. Bad news is tomorrow is NFP and volatility may lead to this order not getting filled at all.

UPDATE: At 8:20 A.M.  I cancelled this order. Good thing I did.

 

 

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If you missed Part 1, don’t worry, Part 2 is way better.

The 4 Types of Supply & Demand Levels

1. Drop Base Rally.

Pretty self explanatory, sort of. Let’s have a look at a DBR.

The above chart is a 30 minute chart. If you’re a short term trader this is for you. Mid to long term traders, or those seeking higher probability trades should work off of weekly charts. The premise is exactly the same however. There is one key aspect to finding a quality level, how price moved away from the level. The stronger the surge, bull or bear, the better the level. The rule is, price should move away from a level at least 3 times the amount of the level itself.

In the next chart I use the fib tool as a lazy man’s way to judge a level. The fib levles are 0.0, 100.0, and 400.0. Have a look and then i’ll explain the meaning behind it.

With the Fib tool in place, drawn at the same places as the green lines, you can see that price has risen over 3 times the size of the level itself. Reaching and extending beyond our minimum 3x rule (400.0 fib level). You do not have or need to use the Fib tool to do this, but for a beginner it helps with the visualization. After you get the hang of it, you’ll eyeball it like I do.

In order to do all of this correctly, you need to draw the level correctly. In general, you want to look for price spikes like the examples above, the level itself is an area of consolidation. But, the key part here is candle bodies. Look for 2 or more matching candle bodies and draw your line on those candle bodies. Look again at the example above. The top line of the demand level is drawn right on 2 matching candle bodies. The bottom of the level is simply the lowest point of the swing. I should note that the 2 matching candle body rule is my own rule, adapted to fit the Spot FX market. Any other market and the rules change slightly, but that’s a topic for another time.

2. Rally Base Drop

A rally base drop is simply the opposite of a drop base rally. Have a look at the base of this rally base drop (circled in red).

Now let’s take a look at our RBD with the Fib tool implemented.

And finally, let’s look at the “traditional” entry point and the exit point. Personally, I have different criteria for entry and exit, but that will be discussed in a later post on the subject.

In part 3, we’ll go over the two remaining patterns…

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If they weren’t too busy turning Wall St. into a circus, they might actually accomplish something.  NOT that I agree with them, I do not. But there’s a right way and a wrong way to accomplish anything in general, united. Something this country hasn’t seen in a long time. Israel’s protest movement celebrates its first tangible success.

 

 

 

 

 

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We hit supply and turned down pretty hard. I was so busy being distracted by all this Greek bullshit to even notice. Even finessing a buy of EURUSD for a quick 25 pips. Admittedly AUDUSD still makes me nervous. The profit potential is, well, eh… Not the greatest. Really horrible at this point considering the downfall of the pair. Have a look at the previous AUDUSD chart, then take a look at it today.. It’s looking more like a fucking pinball game than something worth risking money on.

Today

 

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In order to exact revenge on Great Britain and their stupid Pound, I looked to Italy’s Ariete C1 as my weapon of choice. A single shot from the Ariete C1 allowed me to scoop up 25 pips, softening my GBPUSD 103 pip loss last week. The intelligence leading to the firing of this shot is as such…

USD Index. The oh so reliable Pinocchio Bar.

As we got a USD Index sell signal, we also got a buy signal on EURUSD. Another Pinocchio Bar.

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Easily the best free real time charts out there. NetDania has been around a while and many of you may already know about them. For anyone wanting to follow currencies without signing up for demo accounts and then attempting to keep your demo alive while you follow, NetDania is a good alternative. Not only can you follow currencies, you can follow just about anything traded on planet earth.

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