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22-ICT Mentorship Core Content - Month 3 - Macro Economic To Micro Technical

Last modified by Drunk Monkey on 2022-09-09 12:49
1 00:00:28,530 --> 00:00:38,580 ICT: Welcome back, folks, this is the sixth of eight teachings and the November 2016 curriculum of the ICT mentorship. Okay, we're gonna be teaching macro
2 00:00:38,580 --> 00:00:50,430 economic to micro technical. Okay, and I'm showing you here, one of the secrets to how I'm able to call markets as I do. And it's a macro perspective. So
3 00:00:50,430 --> 00:01:00,030 onwards, it's not a day trading perspective, it's not something that's going to be forcing, you look at 15 minute charts, not even an hourly chart, not even a
4 00:01:00,030 --> 00:01:11,760 four hour chart. Okay, we're gonna be looking at daily charts only. And you probably are wondering, why is there a top secret image here at the bottom?
5 00:01:12,030 --> 00:01:25,500 Well, below this cover, is going to be one of the closest guarded secrets of my repertoire. And when I look at the marketplace, I use this as a barometer to
6 00:01:25,500 --> 00:01:35,310 help me determine where the long term trend of the marketplace is going. Now, there's a lot of folks that will scour bank reports, and my opinion of bank bank
7 00:01:35,310 --> 00:01:43,980 reports are this. Why would a bank tell you what their intentions are? It doesn't make any sense. It's like having a football team tell you what their
8 00:01:43,980 --> 00:01:54,690 plays are going to be for the Superbowl, it just doesn't happen. So when I look at the marketplace, and I'm looking for a long term macro view, I'm looking for
9 00:01:54,720 --> 00:02:07,080 an insight that would give me a three to six month outlook on where currencies may be heading, in what direction. And one of the things I use for that is
10 00:02:07,230 --> 00:02:17,220 interest rates and the way we find interest rates. And the way I do it, is I'm looking at the bond market, the 30 year Treasury market will give me the
11 00:02:17,220 --> 00:02:27,420 insights I need for interest rates on a intermediate to long term basis. Long term to me is three to six months, it may not be long term for you, but it is
12 00:02:27,420 --> 00:02:39,750 for me. So what I look for is every three, every three to four months, there is a quarterly shift that takes place. And what I mean by that is whatever trend or
13 00:02:39,750 --> 00:02:52,020 whatever market condition is prevalent for right now. In three to four months, time, there's usually a shift, okay, there's either a reversal, or it's an
14 00:02:52,020 --> 00:03:04,410 extended period of consolidation. And then future resumption of the trend or again, you know, a reversal. But every three or four months, I'm looking for a
15 00:03:04,440 --> 00:03:10,860 change in direction, because I believe there is a correlate shift that takes place in the marketplace. And you'll learn a lot about that later on in this
16 00:03:10,860 --> 00:03:23,340 mentorship. But for now, I want to teach you how I use the bond market, and how I use the interest rate as a precursor for where the markets may go. I don't
17 00:03:23,790 --> 00:03:32,490 require a whole lot of fundamental data to sift through, I don't believe I have enough time in the day to go through all that. I know, there's a lot of folks
18 00:03:32,490 --> 00:03:40,470 that would probably hear me say that and scoff at the notion that fundamentals are you know, that's the, that's the backbone to to the marketplace, you need to
19 00:03:40,470 --> 00:03:49,170 know those things. And my submission to that is, you know, who can keep up with that, you know, I don't have time to keep up with it, you know, I'm busy running
20 00:03:49,170 --> 00:03:56,910 your life. I don't have I don't have the time to be sifting through all the information. And quite frankly, I'm not that astute to be able to discern what
21 00:03:56,910 --> 00:04:08,820 that data is. So what I require is a visual interpretation of that data. And what I subscribe to is, the bond market will tell me that if I can read price
22 00:04:08,820 --> 00:04:16,770 action in the bond market, and not just the bond market, but we're gonna look at the 10 year notes as well. If we can get a feel for what the markets wanting to
23 00:04:16,770 --> 00:04:26,820 do, whether it be trade higher or lower, then we can have a pretty good basis on what the interest rate markets going to do. Okay, so, we're looking at is about
24 00:04:26,820 --> 00:04:37,320 June July, August time period, okay, June July, August time period, the top chart here is obviously the dollar index daily chart and the lower chart is the
25 00:04:37,380 --> 00:04:46,830 treasury bond market is the December contract, okay. So, December contract for the dollar index above us in the futures market and the December contract for
26 00:04:46,830 --> 00:04:51,060 the bond market on the lower end, okay. So the lower chart is the bond market.
27 00:04:52,560 --> 00:05:04,050 Between July and August, there was a high that formed in the bond market and for those that follow along on the On Twitter, and on my YouTube channel. This
28 00:05:04,050 --> 00:05:15,930 summer, I mentioned that the debt market was going to have a major decline. And I said that that was going to happen. I also said it was going to happen in the
29 00:05:15,930 --> 00:05:24,990 bond, I said it would happen across all the debt instruments. So basically, what I was implying was the interest rates were going to go higher. If interest rates
30 00:05:24,990 --> 00:05:33,810 are gonna go higher, that's going to allow the dollar index to go higher. Okay, but when interest rates are going higher, that means that the bond market is
31 00:05:33,810 --> 00:05:44,130 going to drop. As the bond market rallies, that's a lowering of interest rates. And when it drops down in the futures market for the bond market, that is an
32 00:05:44,130 --> 00:05:57,360 increase in interest rates. Okay, now, the 30 Treasury bond is the benchmark for what we have in us as our mortgage rate, we put a house on the market for
33 00:05:57,750 --> 00:06:08,970 purchase, someone wants the ball and chain debt program to pay off a house for 30 years, the interest rate that's arrived at this market pretty much is the
34 00:06:08,970 --> 00:06:18,240 benchmark for it. There is another interest rate asset market that I look at, which is the tenure. Look at that we'll look at that later on in this teaching
35 00:06:18,240 --> 00:06:32,790 here. But what I want you to look at is when the bond market is creating a high here, okay, at the same time that the dollar index is making a low, can I want
36 00:06:32,790 --> 00:06:44,580 you to take a look at what's going on here. In the last week of June, we have the dollar index making a low and the market failed to make a lower low, at the
37 00:06:44,580 --> 00:06:57,780 same time that the bond market was making a higher high. Now in lesson five of this month's teaching, I taught you the SMT divergence relative to the dollar
38 00:06:57,780 --> 00:07:06,660 index and foreign currencies. That same idea is applied here. But for an interest rate divergence and now it's we're looking at how the bond market
39 00:07:06,750 --> 00:07:20,010 interacts with the dollar index. So around every three to four months, there's going to be this shift that takes place. This underlying change in trend is seen
40 00:07:20,010 --> 00:07:31,110 in the dollar index with the failure to make a lower low. At the same time, the bond market made a higher high market traded softer. At the same time, all into
41 00:07:31,110 --> 00:07:43,170 the last week midway point of August, we saw consolidation in the bond market as well. Then we saw what the Movement higher on the dollar index. At the same
42 00:07:43,170 --> 00:07:51,300 time, we were seeing weakness in the bond market, which means interest rates are increasing, which means now we have the dollar index pulling back into a down
43 00:07:51,300 --> 00:08:01,920 candle, which is a bullish order block. So we can expect to see prices may move higher on the dollar, which will do what send the bond market lower. So when we
44 00:08:01,920 --> 00:08:13,170 see this rally up, it's returning back to an up candle, which is a bearish order block, and it sells off again, this sell off, okay accelerates the buying in the
45 00:08:13,170 --> 00:08:23,550 dollar. So if the dollar is going to accelerate going higher, let's go back to this time period here and can reflect on the analysis I was given in the
46 00:08:23,550 --> 00:08:30,300 mentorship y'all knew that I was looking at this particular time period right here on $1. And I said they were gonna start going higher and we're gonna be
47 00:08:30,300 --> 00:08:40,470 looking for that $1 mark, dependency one or two mark. And the reason why I suspected that was gonna happen. Number one, I was looking at the dollar pairs
48 00:08:40,860 --> 00:08:51,390 that are started with the USD as in their name, that was like dollar CAD, dollar Swissy DOLLAR YEN. I was looking at the dollar CAD and it does support the idea
49 00:08:51,390 --> 00:09:00,210 that we were going to go long here are starting to go higher. At the same time, the bond market was rallying up returning back to a bearish order block. So I
50 00:09:00,210 --> 00:09:09,930 knew what to expect was the see if we we turned the tide here and started going lower on bonds that dropped down in bonds as an increase in interest rates. An
51 00:09:09,930 --> 00:09:20,760 increase in interest rates is going to see a aggressive pouring in of funds to buy up the dollar. So that's what we're seeing here that that aggressive rally
52 00:09:20,760 --> 00:09:21,060 up.
53 00:09:22,350 --> 00:09:30,540 The markets showed a willingness to drop even lower here on the bond market. At the same time, there was a small little decline at the same time when the bond
54 00:09:30,540 --> 00:09:39,030 market was dropping, small little deviation from what would be considered a normal that was all attributed to what the US elections. Nobody knew what to
55 00:09:39,030 --> 00:09:51,690 expect with the elections, except for ICT said Trump's gonna win. So, obviously Trump won overnight, the futures market were tanking and the dollar index sank
56 00:09:51,720 --> 00:09:59,970 and the Dow Jones futures were down like 750 points at one time overnight. And then all of a sudden the very next morning everything was peaches and cream and
57 00:10:00,000 --> 00:10:09,180 He's been rocketing up since in 10 days in a row, the markets been rallying up for the dollar index. At the same time, we've seen an accelerated so all in the
58 00:10:09,180 --> 00:10:18,930 bond market, which means is an increase in interest rates. So when we look at the marketplace like this, utilizing the bond market to help us, we can use that
59 00:10:18,930 --> 00:10:30,390 same idea as it relates to looking at divergence between the bond market and the dollar index. So with that said, I'm not going to go into great detail because
60 00:10:30,390 --> 00:10:40,920 obviously, you know what I mean by that, but by using what was taught to you in the fifth teaching of this month's content. Okay, folks, we have the 10 year
61 00:10:40,920 --> 00:10:51,780 note to the left and a 30 year bond to the right. Okay, I want you to take a look at the s&p divergence that we have in these two charts. Okay, and we'll
62 00:10:51,780 --> 00:11:04,770 take a look at the currency markets and see how that assisted us in analysis. Again, this is a long term to intermediate term concept. So it's aimed at giving
63 00:11:04,770 --> 00:11:17,730 you the next three to six months outlook on what currency should be going. Okay. So take a look at the 10 year note here, making a higher high here. The same
64 00:11:17,730 --> 00:11:27,960 time 30 year made a lower bond market took off lower. So the second week of September, we saw interest rates increasing by the effects of the bond market
65 00:11:27,960 --> 00:11:42,030 and 10 year note declining. Then we saw the last week of September going into October, we saw this higher high form and tenure. While we saw a lower high or
66 00:11:42,060 --> 00:11:53,970 s&p divergence in 30, year, and then immediately, we saw another decline in both 10 year and 30 year, which is an increase in interest rates. So right away, we
67 00:11:53,970 --> 00:12:05,760 know that there should be a an accelerated buy for a rally in the second week of September, and the last week of September for the dollar. So let's take a look
68 00:12:05,760 --> 00:12:19,080 at that. Okay, we can see here, the dollar index, first week of September, here's that low, we would expect because we saw an increase in interest rates as
69 00:12:19,080 --> 00:12:28,050 a result of the sell off with the divergence in the 10 year and a 30 year bond market. And in the last week of September, we saw the market maker rally away
70 00:12:28,050 --> 00:12:39,270 from that point as well. So we have a rally here in a rally here and begins that big movement higher. Now, if we see that in the dollar index, we should be
71 00:12:39,270 --> 00:12:53,640 seeing rallies in dollar Swiss. Here's your September this month, your first week of September are rallies last week of September it rallies. So we see that
72 00:12:53,640 --> 00:13:07,170 same effect appearing as well in dollar pair. Let's take a look at the dollar CAD here's September the first week of September, it rallies in a sale last week
73 00:13:07,170 --> 00:13:18,930 to this month of September. It rallies again as well. Let's take a look at the Euro this is going to be the opposite we're gonna see a high form. The first
74 00:13:18,930 --> 00:13:27,510 thing is September, here we are and then itself up again in the last week of September. And there you go, well pulls over the pound, we should be seeing a
75 00:13:37,770 --> 00:13:48,270 that pound, we should be seeing the high form in the second week of September, and a sell off the last week of September. So high here and a high here and
76 00:13:48,270 --> 00:13:55,590 accelerated sell off. Okay. And that was the reason why I also told you we were going to be looking for these lows to be violated. That was all behind the
77 00:13:55,590 --> 00:14:06,990 scenes why I was calling that that move here. Okay. And what's also led to our target my target that I shared on Twitter, and on YouTube, it's still my youtube
78 00:14:06,990 --> 00:14:26,550 channel videos calling for the 120 level for British Pound before the Brexit so and we'll add one more, let's take a look at the dollar yen. Okay. And we have a
79 00:14:27,240 --> 00:14:38,790 low that formed in the first week of September. In the last September there's a pie and it takes off and it's taken off extremely high. So again, it's a macro
80 00:14:38,880 --> 00:14:49,110 perspective, using macro economic principles, interest rates, okay, and then utilizing that down to a micro technical so we can take all this information,
81 00:14:49,500 --> 00:14:58,260 okay. And from the month of September, start looking for reason to be a buyer for all the dollar based currencies that start with the dollar first underneath.
82 00:14:58,710 --> 00:15:10,380 We'll be going along those pairs New Zealand Dollar, we should be seeing a sell off around the first second week of the month. We see it here last week of the
83 00:15:10,380 --> 00:15:24,780 month see it here. And Ozzy you should be seeing a sell off the first week of the month here. And last week of the month here, you see that as well. Okay. So
84 00:15:25,680 --> 00:15:33,840 again, it helps you it builds an idea about where the market should go because of the underlying fundamentals, which I don't have to go through fundamental
85 00:15:33,840 --> 00:15:41,550 reports to do all that. I can rely on the interest rate markets that I know, which is the bond market and 10 year note, couple that with the dollar index,
86 00:15:41,910 --> 00:15:51,300 it's like the pins in the lock term for you, and no one can take it from you. So let's go back to the 10 year and the 30 year note. Okay, now we're going to take
87 00:15:51,300 --> 00:16:03,510 a look at the rally higher here on the 10 year. That was not seen here on the third year. So we know that there's going to be an accelerated rally on the
88 00:16:03,510 --> 00:16:16,230 dollar index, the first week of November, obviously, post US elections. So let's go back to our dollar index chart that we see November, when we get lower low.
89 00:16:16,560 --> 00:16:27,900 It's that whole overnight fiasco with the sell off on the dollar. And the Dow Jones was all fluff. It was all manipulation, because we see that lower low here
90 00:16:28,200 --> 00:16:38,250 in dollar, but we did not see it in higher highs seen in a 10 year and 30 year futures on the debt instruments. So interest rates, we're calling the shots
91 00:16:38,250 --> 00:16:49,050 still, even though short term heart attack on the charts. In this down move here on the dollar and Dow Jones overnight, the daily election, everything was put
92 00:16:49,050 --> 00:17:03,510 back in gear longer term, with the acceleration on the move on the dollar rally chasing higher yields. And you can see that also in the form of dollar Swiss.
93 00:17:06,030 --> 00:17:19,710 Dollar CAD weakness, even though it looks like its strength above an old high, remember that's that false movement we look for SMT is telling you looks bullish
94 00:17:19,800 --> 00:17:27,420 with the underlying tone in the marketplace, there's no way the dollar is going to allow Aussie dollar to rally. And that's why you're seeing a give up the
95 00:17:27,420 --> 00:17:42,480 ghost. Same thing with the New Zealand dollar, it looks bullish starting off running, just taking out an old high, then running down lower the dollar CAD
96 00:17:44,640 --> 00:17:46,770 accelerated to the upside.
97 00:17:51,840 --> 00:18:03,990 euro as well, that initial run up clearing an area of five stops. We talked about it on this mentorship here. It 113 big figure. And it's been slamming
98 00:18:03,990 --> 00:18:12,420 lower since. So I hope you take this information, keep it close to your vest. In other words, don't share it with the general public. Most people will never
99 00:18:12,420 --> 00:18:22,950 learn this. This tactic, I don't have a source to be able to say I learned it from this one or that one. It was just me understanding the bond market as a
100 00:18:22,950 --> 00:18:30,840 futures trader and understanding that the interest rate markets just basically control everything around the world. Okay, it makes everything go in in the
101 00:18:30,840 --> 00:18:39,870 financial industry. Without interest rates, nothing moves. So if I'm going to understand the industry market, it just stands to reason if as long as I know,
102 00:18:40,110 --> 00:18:46,980 the bond market and the 10 year note, I'll know everything I need to know and take a look at the bond, the German bond and you'll see that it's been going
103 00:18:46,980 --> 00:18:55,920 down also. And that's the reason why I said it was going to go down everything that's been shown here today in this teaching. Again, please please don't make
104 00:18:55,920 --> 00:18:59,700 it common knowledge. Until next time, I wish you good luck and good trading