25 – 29 May 2020 Trading week preparation

Every week I share a bunch of stuff.
– Daily signals for MA Crosses and MA breakouts
– Market Reports
– Consolidated market data
https://eod-notes.com/shared-content/
From last week:
I just had an horrible trading week,I have been having a lot of trouble keeping focused and being patient.
That made me mismanage all my trades, bad stop placement, bad risk management, bad entries. You name the error, I made it.
My AUDJPY short got stopped with a loss, the gold long scalp got stopped for a small profit.
Tried to revenge trade a short scalp STOXX50 with a very poor entry which I magically found a way to mismanage too.
I have been super stressed all week and obsessed with trading.
To salt my wound even more I found a major bug on one of my algos.

I am still a little bit frustrated with my mistakes, simply because I know better.

My macro opinions for long term:

  1. We are heading lower, much lower on stocks.
    Looks like SP500 doesn’t want to go down. The Powell printing press is life supporting it.
  2. US bond yields are going to zero.
    It´s happening, not much to say
  3. Gold and silver will go a little bit lower before acting as safe heavens.
    I though I was wrong on this. But maybe, just maybe, I am right. Will explain more below.
  4. Commodities will behave like gold, specially grains.
    Mainly grains, are having a bad time. Still a wait and see game.

Next Week:
A lot of work to do this week, mainly focused on getting back on track.
Will stop day trading. It´s not my trading style, I need to get back to my roots.

Will have to sort out how to fix the bug, that still is an issue. The algo is stopped at the moment.

Need to start exercising again, the brain and the body go hand in hand.

Will take my time and align myself with what works for me.

That being said, markets never stop and I am keeping an eye on a watch list.
Things are getting interesting in some sectors, and the alligator mode is ON.

CRUDE

It´s still a no mans land. No one have a clue on whats next. It´s true crude has been rallying but the demand is still very weak. Technically It´s on a big cross roads. For me is a wait and see game. Let´s see how the triangle breaks. Inventories started to drawdown which may help the bull case.

Oanda WTI CFD Daily / Weekly
TANOS Market Gauge Crude Dashboard

GOLD
The yellow metal It´s on a crossroads too.
Market conditions made a lot of people seek refuge in gold but as long as market keeps going up people are feeling FOMO and started to sell gold to risk on again. Technically the path of least resistance for gold looks to be down.
The weekly candle shows that there area lot of indecision in the market.
If the technical setup activates, I will buy at the orange box ~$1580.
One curiosity, gold is trading away far from it´s mean reversion. Often, assets tend to return to their mean reversions lines.
I am very bullish gold long term, of course It must have is up and downs during the time.

Oanda Gold CFD Daily / Weekly
TANOS Market Gauge Gold Chart
TANOS Market Gauge Gold Dashboard

SP500
It´s fighting for It´s life. No one knows what the hell is going on, the fed crushed the bond market ETF last week with a major inflow.

https://www.trackinsight.com

It´s seems almost impossible to slay the SP500 dragon but the dragon is starting to show some cracks. On the 4h chart and on the daily chart, the SP500 is forming and Head and Shoulders pattern. If the 4h pattern triggers, it may complete the daily one, causing a massive sell off.

Oanda SP500 CFD Daily / Weekly

Same as gold, the SP500 is trading far above It´s mean reversion lines.

TANOS Market Gauge SP500 Chart

+50% of the index components and still below their bull/bear line.

TANOS Market Gauge SP500 Dashboard

Airlines
They have been slaughtered by this crisis. They are very big businesses some even too big to fail and will receive massive bailouts. As an alligator I must make sure I am looking to grab my bite.
I am focusing in two stocks , both European. Lufthansa and Air France.
Both companies are pending bailouts decisions by the German and French government. The stocks will probably pop when it is reveled.
This will be a very long flight until things are back in “normal mode”. I will enter small positions at first and averaging up and down as long as the stock moves. Airlines are a very volatile business. A stop loss is a must on this one.
The upside seem really juicy.

AF & LHA Daily Chart

Shipping
It´s interesting again. Shipping companies are having huge profits, companies such us $TNK Just beat earnings, and have an iron clad book.
I am looking into two stocks $TNK and $STNG. Both seem good to start buying.
Same as airlines, Shipping is a risky business so my guard is up and stop losses are down.

TNK $ STNG Daily Chart

CAD & AUD
Still very bearish both, despite my AUDJPY got stopped, both are still on my radar. I am waiting for a better sell setup. AUDJPY needs to break the rising wedge and CADJPY probably will retest the upper band of the channel.
JPY is also looking to break out.

AUDJPY & CADJPY Daily Charts
JPY Futures daily

VIX
I don’t believe one can TA(technical analysis) the VIX, although a lot of signals can be extracted from the VIX.
VIX curve structure is not pricing in future risks, risk mode is off.

http://vixcentral.com/

VIX short term spreads are bullish

VIX Short term spreads

VIX long term spreads are dropping really fast. The signals for a SP500 sell off are between -2.5 & -3

VIX long term spreads

Another Notes
Safe havens are zig zaging

TANOS Market Gauge Safe havens dashboard

Sentiment is a bag of mixed feelings:
AAII & NAAIM

TANOS Market Gauge Sentiment Dashboard

Fear Greed Index:

CBNC Fear &Greed Index

Insiders transactions, more selling

http://www.openinsider.com/

For last, total tape market volume is declining, a lot

TANOS Market Gauge Market volume dashboard

Articles:
https://www.zerohedge.com/markets/central-banks-are-buying-24-billion-assets-every-hour-their-balance-sheet-eclipse-20

https://www.bloomberg.com/graphics/where-hedge-funds-invest-13F/2020-q1.html

https://www.zerohedge.com/markets/retailers-reel-commercial-landlords-issue-thousands-default-notices

https://perchperspectives.com/reports/geopolitical-forces-shaping-the-2020s/

Events:
Monday
EUR – German GDP / German ifo Business Climate
GBP – Bank Holiday
USD – Bank Holiday

Tuesday
JPY – All Industries Activity
EUR – German Gfk Climate
USD – Consumer Confidence

Wednesday
EUR – ECB Lagarde speaks
CHF – Credit Suisse Economic expectations
USD – Richmond Man. Index

Thursday
USD – Prelim GDP / Core Goods / Unemployment Claims

Friday
JPY – Tokyo CPI/ Unemployment rate / Consumer confidence
EUR – CPI flash estimate / Core CPI flash estimate
CAD – GDP
USD – Core PCE / Personal Spending / Chicago PMI / UoM consumer sentiment / Fed Powell speaks

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