World markets are coming down w/ a serious several-years drastic change to volatility levels & downside risk factors since December, very, VERY big things are brewing now, China's problems along w/ the US FED + UK BOE signalling that after all, potentially, they may NOT continue to hike their national currencies' interest rates in 2016-2018, and instead, actually slash rates downward towards 0% and possibly even in negative territory - this is monumental because the main reason by far that the US Dollar had always been in bulltard mode for the past couple years was because the US FED was chanting they would hike rates UP as the "US Economy is recovering so well.." which pushed the dollar UP & kept pressure on EUR, GBP, etc.
The minute it is no longer an inarguable fact that US economic data has been so good, that US recovery is so real, and that US FED will absolutely raise or at least keep rates steady ; the minute institutional investors start expecting real risk that the FED might instead actually *lower* rates - that's when the USD / DXY really dumps down from its bulltard advance the past 2-3 years, and in the past several days that's what we've been seeing on the markets - EUR GBP JPY *UP*, USD *DOWN*.
Now that the world's macroeconomic factors are almost universally pointing to a short- & mid-term bear market in equities (stocks) and commodities , it's no wonder gold has been pumping upward so much, w/ barely any dips in price - it had been pressured down for so long, after all - Though this capital & risk flight barely helps BTCUSD because the affluent chinese' capital controls evasion goals are met w/ resistance to using BTC to achieve it, since the recent blocksize debate contention have spooked many into just relying on good-old gold as a hedge vs. unstable / scary world markets collapse risks & economic slowdowns / currency devaluations.
So TLDR this global climate of risk aversion means USD down, EUR up (mostly because US down), GBP up (a bit less, though, for this reason, chiefly), JPY up (risk-off safe haven), CHF up (risk-off safe haven) Wheat neutral, Oil up & down (for many reasons), CAD therefore also up & down (tied to oil), AUD & NZD down (commodities-tied currencies), Gold up (risk-off store of value), Stocks down (risk-off), Bonds up (risk-off - but eventually down too, when/if things get really ugly). So, extremely simple then? Not so fast - If things are that clear/easy to see, w/ even the world's biggest investment banks' analysts currently saying 'yes it's a bear market, things will be bad, sell your stocks, etc' then inevitably that shows a CROWDED trade environment in which there are too many bets stacked on one side, and thus, at the slightest hitch of 'dead cat bounce' rallies/etc, it only takes one viral news headline - and suddenly there is a 'rush for the exits' - in this case, a rush BACK into risk-on assets, which causes violent moves in both directions, in order. So no, it's not as simple as 'naked short-sell everything zomg, and baI gUoLD!21!11!'
Important to consult ZH & also balance that equities-perma-bear gold-bulltard view w/ some MW + FF <- Click those links & bookmark - you cannot survive as trader w/o these cardinally indispensable resources, both fundamental / macro-economics & technical / chart indicators feedback.
Some critically informative recent posts I've curated from around the finance world :
[>] http://www.tradeciety.com/the-5-stages-every-trader-goes-through-before-becoming-profitable
[>] http://thereformedbroker.com/2015/09/22/fundamentals-are-only-half-the-story
[>] http://www.forexfactory.com/showthread.php?p=7007834#post7007834
[>] http://www.forexfactory.com/showthread.php?p=8662251#post8662251
[>] http://www.zerohedge.com/news/2016-02-04/opaque-process-collapse
[>] http://www.valuewalk.com/2016/01/the-big-short-accuracy
Some quotes for the ages :
"The problems of our current monetary system are the result of the actions of the USA (Bretton Woods with the approval of most of the victors of WW2) and Richard Nixon. After that Congress took full advantage of the reserve currency status (egged on by the public who enjoyed more benefits with lower taxes.) Now that the chickens are coming home to roost we are loking for someone to blame.
This mess is not the fault of the central banks...they serve at the pleasure of the government. To believe otherwise is just simplistic thinking. At ZH there are a few favorite scapegoats like Boomers, jews, politicians, political parties and the FSA. In truth we Americans have lived higher on the hog than any other nation. In a big way this was do to our ability to print dollars and spend them into the economy without 'the pain of work'. The recycling of the dollars we spent by the world's central banks , as they sent our dollars back to us to buy treasuries, insured that the government could continue to spend yet not raise taxes. This worked for half a century but is now breaking down.
Not to understand what is actually happening, blaming the wrong groups and believing in incorrect models will only lead to personal bankruptcy and punishment of innocent people. Behaving with clear thinking is hard when the whole world is suffering but we will get a much better outcome if we do."
~ ZH'er
"This is when trading becomes boring – and trading should be boring! At this stage, the trader has spent years of looking at screens and taking the same setups hundreds or even thousands of times. He knows exactly how his preferred setup looks like and trading becomes a waiting game.
At this stage, the trader has fully internalized that he can’t win every trade and, more importantly, he does not really care about losses as long as he has followed his rules. Trading is now an activity of pattern recognition, risk management and constant self-improvement."
~ Rolf @ TradeCiety
"The middle class is shrinking and they claim the 1% are making too much. Is that really the problem? No. The problem is the 40% (government) is broke and consuming a steady increase in the proportion of everyone’s income. Government produces nothing. It lives off of what everyone else produces. The more it grows, the lower the real economic growth."
~ Economics Blogger
"One day I had lunch with a provincial Chinese govt. official. He told me he had made two trips to the US and had hosted many trade delegations from the US in China. He smiled and said, the United States is socialist. We (China) are capitalist. I shook his hand and told him that he understands what millions of Americans don't."
~ ZH'er
"As long as I can find a winning strategy, however tenuous, *I don’t give up.* *In danger lies opportunity.* It’s always darkest before dawn. [Focus on mastering process - Not on the results. They will come in due time.]"
~ George Soros
