Knowledge. Experience. Alpha.
There was a technical difficulty. I had to restore back everything. Latest post that was posted recently about SNB was/is missing. Therefore, I have to re-write everything from the beginning. I will post it as soon I finish it. Thank you.
Yesterday, on January 14, 2014, the U.S Census Bureau released Retail Sales data for the month of December, 2014. It was disappointing and unexpected. Retail sales fell 0.9% (-0.9%) in December (+0.4% in previous month). “Core” retail sales (excludes the prices of autos and gas), fell 1.0% (-1.0%) in December (0.1% in previous month).
Plunging oil prices led to to a 6.5% drop in gasoline sales, the largest drop since 2008. In December, many people and media were saying that the holiday sales were going to be strong. Economic recovery and the falling gas prices would lead consumers to spend their hard earned money in other areas, such as department stores, etc. Yesterday’s release told us otherwise. Excluding auto and gas, retail sales fell 0.3%, (expected gain around 0.4%). Retailers that did well, are bars, restaurants and stores that sell home furnishings. December is one of the months that many people party. Therefore bars and restaurants did well. Many people might like to start their new year by clean and fresh furnishings in their home. That’s why home furnishings did well. I believe the drop in retail sales are only temporary, for now. We never know what future might hold.
I believe technology will be successful more than anything (except needs; foods and drinks). Late 1990s and early 2000s transformed, especially young people into whole new generation. 2015 will be the beginning stage of new era of technology (again). Drones and 3-D printing, google glass and “The Internet of Things” will start to go into mass-market. I think we are too early for drive-less cars to go into masses (maybe, in 2 years). People will be wanting to try the new technology. 3-D printing will lead to many inventions, making certain market more competitive. Drones and google glass will probably transfer people into being photographer or not. New things will be added into existing products, emotionally leading people to buy them.
One wrong move from the government or large companies (that have significant impact on the economy including jobs, etc) will either slow down and shut down “economic recovery”, leading to another crisis.
Shorted around 0.7820. As of right now, it’s still open.
Trade at your own risk. These are my own opinions and analysis.
Note: The screenshots were taken around the night of Jan 12, 2015.
1H Chart:
It’s false breakout because the candlesticks did not close above the line. It’s a weak hammer because it’s in the middle. Stronger hammers should appear on bottom in a clear trend.
OU – Opposite of U I made up OU because of my experience in chart analysis. I realized that formations like that have strong impact most of the time. It consists of 3 candlesticks. OU can appear anywhere. It signals bearish market. For it to signal bullish market, it has to be in a formation of U. It doesn’t matter what the color of middle candlestick. But it has to be a small body or a doji. First and last candlestick has to be about the same body size with each other.
Daily Chart:
I said “more like Double bottom” because it’s not in a “perfect condition” of how real double bottom should look like. It’s in a “good” or “75% out of 100% condition”
As you can see, doji was backed or supported by strong support line.
Bearish Engulfing Pattern was very strong because it was backed or supported by resistance and trend line. It was also supported by small body or doji. Forex market is open 24 hours. You may be asking “why is there gap between doji and first candlestick of engulfing pattern?” The answer is that the doji was closed on Friday 5 P.M and first candlestick of engulfing pattern opened on Sunday 5 P.M.
If you have any questions, feel free to contact me anytime.
On January 9, 2015 (Friday), jobs report came out and it was little stronger than expected. 252,000 jobs were added in December 2014. The unemployment rate or jobless rate fell to 5.6% from 5.7%, the lowest since June 2008. I believe jobs rate for January 2015 will fall under 210,000, since many people are or were employed for holiday season only.
The most disappointing news of Non-Farm Payrolls was its earnings report. In December, average hourly earnings for all employees on private non farm payrolls decreased by 5 cents to $24.57. I believe this is only temporary. If it continues to drop, consumers of the business will be making less purchases. Therefore, business’s earnings will be weak too. When non farm payrolls come out for January, the earnings will rise back.
If Europe goes into crisis or recession (higher chance because decreasing inflation > deflation), it will have impact on the US in a negative way.
Earlier today, German CPI (Consumer Price Index) was released. It was weaker than expected. It’s the lowest since October, 2009. CPI is important for inflation. If it drops more (more likely will), deflation will be here both in Germany and spread to other Euro countries.
Japan is already in recession. Europe most likely will be next. It will spread to UK (United Kingdom). Japan, Europe and United Kingdom all have major impact on the economy of the US (United States). Therefore, United States might join the recession list. It’s like a domino effect. Everything starts from somewhere and spreads.
Greek crisis is worrisome. Greek may default and exit from Euro. Elections will be held 3 days after ECB, on Sunday, January 25, 2015.
On Thursday, January 22, 2015, ECB (European Central Bank) will release interest rates and there will be press conference. It will be closely watched as always. But this time, many are wondering if they will release QE (Quantitative Easing).
I believe ECB will delay QE because Greek elections are yet to be held. After the Greek elections, ECB will act on its next meeting.