Euro 7-7-10

Yesterday's >20K volume spike in 10y treasury bond was the topping signal for ES_F:

Happened today too, so expected topping to happen soon in Euro:

Another day another stop loss gunned down for me... I was so close to nailing this one but not close enough.

Massive Euro/Gold Liquidations 7-1-10

Haven't touched this market till yesterday since my last post. Got stopped out on a badly executed fill after having price go in the direction I expected prior to this trade, which gave me the confidence to make the trade.

Saw big buying cluster (now green, used to be red), then expected price to stay above VWAP but it didn't, got stopped out with -5 tick damage.

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Gold vs. Euro correlation: What correlation?!

Gold's long term uptrend hit the breaks on this liquidation day... tanked over 3%

While euro had a no dip Thursday... up over 2.4%

Also notable on the tape today were big orders at capitulative volume spikes (over 90), either long or short

Euro bumped into 50DMA resistance...

...and made its first significant dip of the day before ramping into 1.25s

Also notice the big sell print in spot Euro on the retest of that 50DMA, these kind of prints happened last week too, so far the most consistent swing buy signal in Euro since I started tracking it:

Euro 6-21-10 New Structure

Overnight Review

UPDATE:

Took another loss today. -9 ticks damage. I was expecting some kind of 30-40 tick bounce as it did before this major structural change. Well the bounce was very muted and didn't even reach the morning low, which was my target. I heavily relied on the tape since it was so useful to me in the past quarter. I saw some supposedly capitulative volume on 1min chart, a reversal signal and several retests of low but it kept bumping into the same lower high under morning low and eventually returned back to low so I had to cut my loss. Then it broke to a new low and made another leg down with another muted bounce afterwards.

My rationale for buying was because there were several nice bounces overnight and that the theme is still one of squeezing the shorts, hence all bounces should be shallow. *buzz!* WRONG! mean reversion was muted and Euro kept sliding down.

I was expecting confirming indicator in the tape in the form of gradually increasing sell orders to follow the rise in price. (this has happened last week in a very trendy up move on the way up to upper 1.23s). Didn't happen. After the big clusters of long stops getting hit, instead of typical massive buy orders to gradually work into the tape, there were just less frequent long stops getting hit instead.