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mortdiggiddy
Jun 20, 2018 6:58 PM

Ultimate Bear to Begin Short

New Zealand Dollar/U.S. DollarFXCM

Description

Looks pretty ugly. AUDUSD EURUSD DXY TLT GLD GDX

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Seasonality shows AU and NU following gold to a bottom each year around mid December.

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Shorted this CAM Daily R3 test on the way down. Notice the bounce off the 50 % pitchfork line from the main chart window.

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The descending green line is from the main pitchfork.

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Pathetic rise so far. Notice the 200 BBs on the above 1 HR chart picture (the faded blue bands) and how they are just opening up for MORE and MORE downside. NU is trending hard downward.

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Adding short here on some important backtests

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Nice retracement to near the lows. Converted position to EURNZD long and closing my eyes.

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EURNZD was the right call, trade wars continue and commodities suffer.

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Another hit on that same 50% line of the main pitchfork here. I suspect we just go lower still to the Year CAM S4 near 0.6670 shown on the main chart playback window

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green pitchfork line

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Next target seems pretty clear, the 2017 low of 6780, about 20 pips away from the lows today.

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Worst case scenario is everyone is looking at that same 2017 low about 20 pips from here.... and they pull it up before smashing it down again.

Took about 1/3 of my position off the table.

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2017 Low marked. It should experience a bounce there when it reaches it.

Trade closed manually

Closed 1/3 of short here on 2017 low test. Could jump up on it with buyers ready.

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If this chooses to spike down on RBNZ rate decision I will dump the entire thing on the added liquidity and wait for another move to short again.

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2017 low was backtested. Support now = resistance. Target remains the Year CAM S4 shown here.

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Close up

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Some bounce here off month CAM S3, added in last short to the Year CAM S4 target.

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Since NU usually has some kind of top in July and this year is such a bad year, I expect only a mild pullback in the next few weeks (if anything), then more rapid downside until october with AU and gold.

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NU weakness persists... still the weakest USD based currency this week down 0.5% for the week even with this pullback.

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This trade is still very much in play. I am revisiting today. Looks good. I wouldn't be surprised to see 2015 lows again sometime in the next 6 months.
Comments
DreamsDefined
Really impressed at how this trade has played out, and your actions/thought processes throughout.

It's clear to see that you have a method, and you stick to it. Nice work :)
EilderJorgeGarcia
Though everyone else disagree with this trade I DO agree, this is a huge sell down by many indicators except yesterday and today, I think the pair got enough breather in these two days and now we're going down for sure...
Jamal92
AU and NZ do not correlate solely with gold. The DXY is currently around its ceiling and its impending reversal is there. AU and NZ is a bull soon ;).
mortdiggiddy
@Jamal92, NU AU XAU all have relatively the same seasonality profile and have a big bottom in July and December.
mortdiggiddy
@Jamal92, Sorry TOP in July and bottom in December. AU highest correlation in existence is with copper.
mortdiggiddy
@Jamal92, Seasonality links in comment section above.
petaj
@Jamal92,
Looking at it now it seems you are right.
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