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Our micro composite is really balanced. So as balance begets imbalance we could have a big move brewing. We had tried to push higher before and were solidly rejected at the composite LVN, and that put us back into the range. We are outside the value area of the larger composite. But the larger composites POC only shifted about 100 ticks. even though we made a 500 tick move. So we really are just in a huge value area. as its the high value node of the large composite.
A couple of ideas. If we break out of this micro composite and find initiative buyers then we can likely see the other side of the LV area on the composite and go to like 1.3400. If we find responsive sellers like last time we can have more of this large ranged high volatility chop we are in for the last few weeks. Though a test and rejection sending us back down could test the bottom of the larger composite value area around 1.2780s. Which would be interesting, as it would give us more range but we still would not be that imbalanced in the larger picture of things, still trapped in a value area.
There should be some fireworks later today. Right now I see we turned @3250 which was the 50% retrace level. I think we need to stay above 3140 to continue this move up. Bottom TL is pretty well defined, still looking for confirmation on the proper upper TL to see if we can get into one of those lovely channels the 6E likes to surf in.
Data: DTN IQ FEED 6E from 12/3/2012 - 5/7/2013 - 5 minute bars
Its calculated by the net c-delta change for each bar, in this case 5 bars. So i created a histogram of that change.
A few things I noticed, is that its really symmetrical but highly leptokurtic. Which is basically what you find in most market based time series. Although we are basically centered at 0 which is cool, skewed only -1.17. The 1st standard deviation around the mode is, -110 to 110 and 2 std devs around the mode is -460 and 460.
I also calculate the cumulative delta momentum which just sums the individual bars that move in the same direction.
same thing highly leptokurtic but symmetric basically about the 0 line.
very interesting VP. composite shows 'b' shape while micros are just building value overlapping. huge confluence of VPOCs. Don't really know how to take advantage but I presume we are going to get out of balance sometime.
For both entertainment and educational purposes, looking to discuss EURUSD.
So the rate cut on Nov 7 had zero long term effect on the currency. Inflation numbers earlier today lower than expected--at this point, it's all on the table before the ECB meeting Thursday. The currency is a little weaker today, but the CPI number caused barely a sneeze.
So, the question is whether a rate cut has been priced in today (in effect, hardly priced in at all). Another way of saying it: would a rate cut Thursday really be a surprise, causing a drop as it did on Nov 7? Or is it expected enough that a cut will cause a little panic selling, and then a rebound as before? And if no changes are made Thursday, will this be opportunity for another rally?
I considered getting short Euro after the run up to 1.39, but it seems quite resilient. Even with the easing, and potential for more, supported by the numbers, it seems reluctant to fall. Would love to hear thoughts from those who regularly trade this.
