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ICT Mentorship Core Content - Month 03 - Macro Economic To Micro Technical
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ICT Mentorship Core Content - Month 03 - Macro Economic To Micro Technical

New Section

In this section, the speaker introduces the sixth teaching in the November 2016 curriculum of the ICT mentorship. They discuss their approach to calling the markets and emphasize a macro perspective using daily charts and interest rates as indicators.

Macro Perspective for Market Analysis

  • The speaker shares that their market analysis is based on a macro perspective rather than day trading.
  • They explain that they focus on daily charts instead of shorter timeframes like 15-minute or hourly charts.
  • The speaker mentions a top-secret image at the bottom, which represents one of their closely guarded secrets related to determining long-term market trends.

Using Interest Rates as Indicators

  • The speaker expresses skepticism towards relying solely on bank reports for market insights.
  • They highlight interest rates as an important factor in determining long-term market trends.
  • The bond market, specifically the 30-year treasury market, provides insights into interest rates on an intermediate to long-term basis.
  • Every three to four months, there is usually a quarterly shift in trend or market conditions.
  • The speaker looks for changes in direction during these shifts, which they believe indicate a larger trend change.

Importance of Visual Interpretation

  • The speaker acknowledges that analyzing fundamental data can be time-consuming and challenging to interpret accurately.
  • They prefer visual interpretation and rely on price action in the bond market and 10-year notes to gauge future interest rate movements.
  • By understanding whether the bond market is likely to trade higher or lower, they can make informed predictions about interest rate trends.

Analyzing Dollar Index and Bond Market Charts

  • The speaker presents charts showing the dollar index (daily chart) and treasury bond market (December contract) between June and August.
  • They mention predicting a major decline in the debt market during this period, leading to higher interest rates.
  • A high formed in the bond market while simultaneously the dollar index reached a low point.
  • The speaker suggests observing the relationship between bond market highs and lows in conjunction with the dollar index to gain insights into interest rate movements.

New Section

In this section, the speaker continues discussing their approach to using interest rates as indicators for market analysis. They emphasize the importance of understanding the bond market's impact on mortgage rates and highlight the correlation between bond market highs and lows with interest rate changes.

Bond Market and Mortgage Rates

  • The 30-year treasury bond serves as a benchmark for mortgage rates in the US.
  • The interest rate determined by this market is considered a standard for long-term mortgage programs.
  • The speaker mentions another interest rate asset they analyze, which is the 10-year note (to be discussed later).

Correlation Between Bond Market Highs/Lows and Interest Rates

  • When the bond market forms a high, it indicates lower interest rates, while a drop in the bond market signifies higher interest rates.
  • Understanding this relationship helps predict future movements in both the bond market and interest rates.
  • By analyzing price action in these markets, one can gain insights into potential changes in interest rates.

Timestamps are approximate and may not align perfectly with specific sections of the transcript.

Bond Market and Dollar Index Interaction

This section discusses the interaction between the bond market and the dollar index, specifically focusing on interest rate divergence.

Interest Rate Divergence

  • The bond market and the dollar index show a shift every three to four months.
  • A change in trend is seen in the dollar index when it fails to make a lower low at the same time as the bond market makes a higher high.
  • When there is weakness in the bond market, it indicates increasing interest rates.
  • A rally in the dollar index leads to a decrease in bond prices.

Analysis of Dollar Index Movement

This section analyzes the movement of the dollar index and its relationship with other factors such as interest rates and elections.

Predicting Dollar Index Movement

  • Analyzing currency pairs starting with "USD" (e.g., USD/CAD, USD/CHF, USD/JPY) supported the prediction of an upward movement in the dollar index.
  • The rally in the bond market confirmed expectations of a higher dollar index.
  • The drop in bonds led to an increase in interest rates, resulting in aggressive buying of dollars.
  • The US elections caused some deviation from normal market behavior but did not significantly impact predictions.

Impact of US Elections on Market

This section discusses how the US elections affected markets, particularly regarding futures trading and changes in the dollar index.

Impact of Trump's Win

  • After Trump won, futures markets initially tanked, causing a decline in both the dollar index and Dow Jones futures.
  • However, overnight everything changed, and markets started rallying. The dollar index has been rising for ten consecutive days.
  • There was a small deviation during this period due to uncertainty surrounding the elections.

Utilizing Bond Market for Analysis

This section explains how to use the bond market to analyze divergence between the bond market and the dollar index.

Analyzing Divergence

  • By observing divergence between the bond market and the dollar index, we can gain insights into future currency movements.
  • The analysis focuses on long-term and intermediate-term concepts, providing a three to six-month outlook on currency direction.
  • Examples of divergence are shown between 10-year notes and 30-year bonds.

Dollar Index and Currency Pair Analysis

This section examines the relationship between the dollar index and specific currency pairs, using examples such as USD/CHF and USD/CAD.

Analyzing Dollar Pairs

  • The movement of the dollar index is reflected in other currency pairs such as USD/CHF and USD/CAD.
  • Rallies in these pairs correspond with rallies in the dollar index, confirming predictions based on interest rate divergence.

The transcript provided does not contain enough information for further sections.

New Section

This section discusses the movement of various currencies and their highs and lows in different weeks of September. The speaker also mentions their target for the British pound before Brexit.

Euro Movement

  • The euro is expected to have a high in the first week of September, followed by a sell-off at the end of the month.
  • This pattern indicates a rollover in the euro's value.

Pound Movement

  • The pound is predicted to reach a high in the second week of September, followed by a sell-off towards the end of the month.
  • These highs and lows suggest an accelerated sell-off in the pound's value.
  • The speaker had previously mentioned that these lows would be violated, leading to their prediction.

Dollar Yen Movement

  • In early September, there was a low in dollar yen, followed by a buy signal at the end of the month.
  • This resulted in an extremely high rally for dollar yen.
  • The speaker emphasizes using macroeconomic principles and interest rates to analyze currency movements.

Dollar-based Currencies

  • Based on observations from September, there is an indication to be a buyer for all dollar-based currencies.
  • This applies to currencies that start with "dollar" as part of their name.

New Zealand Dollar and Aussie Dollar Movement

  • The New Zealand dollar is expected to experience a sell-off in the first and last weeks of each month.
  • Similarly, the Aussie dollar should see a sell-off during those same time periods.

Fundamental Factors and Interest Rates

  • Understanding underlying fundamentals such as interest rates helps predict market movements without relying on fundamental reports.
  • By analyzing interest rate markets like bonds and 10-year notes, one can gain insights into overall market trends.

New Section

This section focuses on how interest rates influence currency movements and how the dollar index is affected by macroeconomic factors.

Dollar Index and Interest Rates

  • The speaker mentions a rally in the 10-year note, which was not seen in the 30-year note.
  • This indicates an accelerated rally for the dollar index after the US elections in November.
  • Despite a temporary down move on election day, interest rates continue to play a significant role in currency movements.

Dollar Swiss and Dollar CAD

  • The speaker notes that higher yields are driving the up move on the dollar rally.
  • This can be observed in currencies like dollar Swiss and dollar CAD, which show strength or weakness accordingly.

Underlying Tone of the Marketplace

  • The speaker highlights that even if a currency appears bullish based on technical analysis, it's essential to consider underlying market conditions.
  • The dollar will not allow certain currencies like Aussie dollar and New Zealand dollar to rally due to its overall strength.

New Section

In this section, the speaker emphasizes keeping their information close and not sharing it with the general public. They explain their understanding of bond markets and interest rates as key drivers of global financial industry.

Understanding Bond Markets

  • The speaker shares their tactic of understanding bond markets as a futures trader.
  • They believe that interest rate markets control everything in the financial industry.
  • By focusing on bond markets, particularly 10-year notes, one can gain comprehensive knowledge about market trends.

German Bond Market

  • The German bond market has also been experiencing a downward trend similar to other bonds mentioned earlier.
Playlists: 2016 ICT Private Mentorship Core Content Month 03
Video description

2016 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in November 2016. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN Trading performance displayed herein is hypothetical. Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. Trade at your own risk. The information provided here is of the nature of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person’s investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. You should seek appropriate advice from your broker, or licensed investment advisor, before taking any action. Past performance does not guarantee future results. Simulated performance results contain inherent limitations. Unlike actual performance records the results may under or over compensate for such factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profits or losses to those shown. The risk of loss in trading can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. If you purchase or sell Equities, Futures, Currencies or Options you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you may be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a “limit move.” The placement of contingent orders by you, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.