Scan Of The Markets

The news about the off-the-cuff decision by US President Trump to cancel further fiscal stimulus talks until after the election has been felt and is still reverberating around all corners of the financial markets with equities and the Aussie taking a severe hit.

On the other side of the equation, as one would anticipate, the fortitude in the likes of the US Dollar and the Japanese Yen is what transpired after what can be considered as a sudden and unexpected decision by the US President. After Trump’s hospital release following his COVID-19 diagnose, the market had built up expectations that renewed fiscal stimulus efforts would ramp up.

The reaction in financial markets clearly communicates that while Trump’s health does matter, it’s a fiscal stimulus agreement or lack thereof that the market is especially sensitive to. During Tuesday, this was clearly portrayed by the wild movements in all asset classes. So, be aware that we’ve suddenly transitioned from what looked like a constructive ‘risk-on’ environment to true ‘risk-off’ flows.

What’s interesting about this sell-off in risk is that some of most sensitive markets to the pendulum of risk being ‘on’ or ‘off’ were already telegraphing via order flow a potential rotations in fortunes for the interest of US Dollar bulls as clearly depicted by the AUD/USD. In today’s video, I will walk you through a short trade opportunity that emerged out of the interpretation of fractals-based order flow.

Hot Trade Of The Day

To see an expanded version, right-click and select ‘open link in new tab‘. In this section, I pick a market or several ones that presented an opportunity to buy on weakness or sell on strength based on the higher timeframes outlook.

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Insights – Hot Trade Of The Day

Video Length: 00:01:33

In this video analysis, I dissect the information above. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter and manage a position, hence the video is intended as educational in nature and not financial advice. 

Recent Economic Indicators & Events Ahead

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Source: Forexfactory

Important Footnotes

MARKET STRUCTURES

Markets evolve in cycles followed by a period of distribution and/or accumulation. To understand the principles applied in the assessment of market structures, refer to this video. Fractal breakouts is at the epicenter to assist us in the analysis of chart structures.

MARKET MOMENTUM 

In order to assess the market momentum of a particular asset, I’ve promoted for years the idea of using what I call the smart money tracker. The settings and the indicator can be obtained via our Discord room, where traders from all walks of life interact frequently. In this video, I lay out the elements I look into to call trend directions.

PROJECTION TARGETS

The usefulness of the 100% projection resides in the symmetry and harmonic relationships of market cycles. By drawing a 100% projection, you can anticipate the area in the chart where some type of pause and potential reversals in price is likely to occur, due to 1. The side in control of the cycle takes profits 2. Counter-trend positions are added by contrarian players 3. These are price points where limit orders are set by market-makers. You can find out more by reading the tutorial on The Magical 100% Fibonacci Projection.