MenthorQ Forex Levels

Summary

The webinar covered institutional approaches to foreign exchange (FX), macroeconomic context, liquidity, and using MenthorQ’s “Blind Spot” levels alongside an existing trading strategy.

Jay Medrow’s FIST framework

Medrow described his process as FIST:

• Fundamentals: Track economic conditions, central-bank policy, and whether data is better or worse than expected.
• Intermarket analysis: Monitor relationships among volatility, equities, currencies, bonds, and commodities.
• Sentiment: Assess risk-on/risk-off conditions, market positioning, and the prevailing narrative.
• Technical analysis: Use price structure and tools such as MenthorQ’s gamma-related levels.

He said he reviews the Commitment of Traders (COT) report on weekends and uses positioning data to help identify potential FX opportunities.

Morning routine and markets monitored

Medrow suggested the following routine:

1. Check the news and identify the market narrative.
2. Compare economic releases with expectations and, where available, expected ranges.
3. Check the VIX, which he considers a key volatility signal and a leading indicator for the S&P 500 E-mini (ES).
4. Review the US dollar, interest rates, and the yield curve.
5. Check commodities, especially gold, oil/crude, and Bitcoin.
6. Review bonds and other major asset classes before choosing a trade.

He emphasized that economic releases and other genuinely new information can drive significant moves. He also noted that month-end, quarter-end, half-year-end, and year-end flows can affect markets.

Macro views and figures cited

• Medrow described the prevailing US environment at the time of the session as a reflation phase, with GDP growth and inflation rising. In his framework, this generally favors stocks over bonds. In a deflationary contraction, he said investors may favor bonds over stocks.
• He said concerns about government spending were putting pressure on long-term sovereign yields and steepening yield curves.
• He cited a 60-basis-point move in the 10-year yield within a month as a pace that could hurt the Nasdaq/“Q’s”. He gave moves from 4.0% to 4.6%, or from 4.0% to 3.4%, as examples, while stressing that this was a current-market rule of thumb, not a fixed law.
• He referred to the US borrowing rate as about 4.25% and said monetary-policy changes can take up to 18 months to feed through to the real economy.
• On the session’s PCE release, he said the data would have supported Fed easing absent the tariff-related narrative. In that scenario, he said he would expect support for long bonds and a weaker dollar.
• He described European defense spending as a stimulus for the euro area and used differing GDP growth rates to illustrate the “base effect”: growth from 1% to 2% is a 100% increase, compared with 10% to 11%, a 10% increase.
• He said markets trade expectations about the future, citing the 2020 pandemic period as an example of markets recovering before uncertainty had fully passed. He also asserted that the average pandemic lasts about three years.
• For crude, he described the front-month market as range-bound and said rumors of OPEC+ adding 411,000 barrels per day were negative for oil. In that setup, he suggested looking to buy the lower edge of the range, subject to confirmation from the levels and market conditions.

FX approach, risk, and execution

• Medrow said FX is an over-the-counter (OTC)/interbank market, not a centralized exchange. Liquidity and displayed orders may disappear, particularly around events, so traders should not assume orders will always execute at a displayed price.
• He follows eight economies and their currencies: the US dollar, euro, British pound, Australian dollar, New Zealand dollar, Swiss franc, Canadian dollar, and Japanese yen. He argued against limiting analysis to one pair, since currency values reflect relative economic conditions and policy.
• He emphasized risk management over headline returns. In his account of institutional practice, investors focus heavily on average and worst drawdowns. He also described banks’ value-at-risk (VaR) models as estimating potential losses at a two-standard-deviation level.
• Medrow said his own process has an 87.7% hit ratio, while stressing that it is not 100% and does not guarantee an outcome. This was a claim made by the speaker and was not independently verified during the session.
• He said institutional portfolios are generally assessed by expected losses and drawdowns, rather than only by returns. He also argued that large institutional investors often use execution algorithms rather than chart-based trading.
• He warned that retail traders can be whipsawed by noise and advised against acting emotionally or assuming a trade must reach a particular target.

MenthorQ levels and trade-planning framework

Fabio explained that the FX Blind Spot levels combine futures-options data, such as 6E and 6A options, with cross-asset correlations and other model inputs because spot-FX options data is limited. He said the levels are not conventional support and resistance derived from past swing highs and lows.

The speakers described the levels as a secondary confirmation tool, not a standalone trading system. Their suggested approach was to:

• Begin with a trading edge the trader already understands.
• Check whether the timing, setup, and location support the trade.
• Use nearby levels to consider potential entries, profit targets, and stop placement.
• Allow for “pin risk” and noise around levels; a level may briefly break and then reverse.
• Treat a sticky level as one where gamma-related hedging may resist or slow price movement. A slippy level may see hedging flows reinforce a move through it.
• Consider options’ implied volatility and skew alongside the levels. Medrow said higher implied volatility may support considering wider targets, while lower implied volatility may favor closer targets.
• Incorporate the macro narrative and event risk. He used a hypothetical tariff shock as an example of a situation where a trader might hold a position toward a farther level, but this was illustrative rather than a specific trade recommendation.

Medrow also described a low-volume test near a level as a possible long setup and noted that execution algorithms can create activity around the hour and half-hour.

Long-term investing comments

Medrow recommended that people first understand their income and expenses, and the difference between assets and liabilities. He then expressed the opinion that people should save and invest regularly in a broad equity-index ETF before trying to trade. He cited SPY and the MSCI World as examples and suggested allocating 10% of monthly income to an ETF. This was his personal recommendation, not individualized advice.

Instruments, assets, and organizations mentioned

• FX: US dollar, euro, British pound, Australian dollar, New Zealand dollar, Swiss franc, Canadian dollar, and Japanese yen. EUR/USD, USD/JPY, AUD/NZD, and USD/CAD were discussed or referenced.
• Equities and ETFs: SPY, the MSCI World, Nasdaq/“Q’s,” Tesla, Nvidia, GameStop, and Bank of America.
• Futures, options, and market indicators: ES, VIX, 6E, 6A, CTA positioning, implied volatility, gamma exposure, and VaR.
• Other assets: Government and corporate bonds, gold, oil/crude, and Bitcoin.
• Institutions and events: Federal Reserve, Bank of Japan, Reserve Bank of New Zealand, OPEC+, and the tariff narrative. Bloomberg and Reuters were mentioned as news sources.

Cautions and disclosures

The speakers emphasized that trading is difficult, painful, and uncertain. Levels do not guarantee a price target, and the Blind Spot tool should not replace a trader’s own edge and risk controls. They also warned about OTC liquidity risk, market noise, drawdowns, and emotional decision-making.

No formal “not financial advice” statement was heard in the subtitles.

Presenters and sources

Presenters: Fabio, Patrick, and guest Jay Medrow (his name is rendered inconsistently in the subtitles).

Sources and data references mentioned: MenthorQ levels and CTA positioning, the Commitment of Traders report, economic releases including PCE and nonfarm payrolls, central-bank projections and policy, and news coverage from Bloomberg and Reuters.