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Archive for June, 2011

Back to the old game

With the Greek Saga more or less priced in (or at least the markets think so – look at EURGBP) it’s time to contemplate and reposition. Although there is one last vote tomorrow, it’s never too early to re-strategize and have a few good entries put in. After all, there are always good potentials out there, and especially right now.

***If you’re still interested in riding the donkey into hell, the implementation and detail vote will be 0900GMT, 0500EST, 0200PST.

The EURUSD is at the top of my unscientific round numbers channel, 1.4500, with tonight’s upward momentum keeping it steady there for the time being. The buck is getting mauled left and right by risk appetite buying (and rising indices), rate expectations, and general unwinding now that the Greek story is swept under the carpet for at least 6 to 8 months. Yet, I would need good evidence to show that the risk button may once again be hit – and possibly in a grand way.

Here’s a technical chart of daily EURUSD, showing lower highs and today’s action hitting a channel. This seems very attractive to enter, but I am already in similar positions through EURJPY and USDSEK, hoping for amplification. Both price chart and the RSI exhibits this top hit, showing more reason that this aggressive bull run on the heels of even minor Greek developments may fall apart.

Here’s a chart, so you can form your own opinions. Definitely looking to what will happen today: bullish cross above the .146 will open the way back to near 1.47, perhaps then trending downwards after a double top. A hammer tonight (or by Friday more likely) will open the way back to the 1.4000s in around 4 weeks. The key is to look at whether or not it can break that key fib extension.

So what’s on the fundamentals calendar? Not much tomorrow save for Canadian GDP – which could go higher or lower for all I care. However, a higher output may push USDCAD down to .96 or even .95, which would provide an extremely attractive buying opportunity. I wouldn’t take the risk of entering now to bet on the GDP data.

However, Friday will seemingly start off with a bang, with Chinese manufacturing PMI at 0100GMT. Everyone and his dog knows it will be lower – but by how much? Analysts expect 51.5 in June compared to 52. With SHIBORs, O/N lending rates (which I forgot to download) going up, as well as the new 25bps increase in national bonds for consumers (something is lost in translation) money is still incredibly tight. I am expecting it to be lower, probably near 50.8, which would definitely lower the risk appetite tone going into Friday’s session.

But the other major data is ISM manufacturing at 1400GMT, expected 51.8 versus a previous 53.5. This is what killed the market’s forte last time, and another lower data point may once again do that. However, do keep in mind that because this is an US data, risk aversion flows caused from this could in fact go elsewhere, particularly the Swiss franc. The Euro and other yield currencies (the NZD especially at .83000) is near the top of their near-term limits with so many confidence bids, there is an increasingly high chance of downside movement.

If both these reports come out negative, then investors will realize the world economy is still pretty shite at the moment. Definitely not a good welcome party for Q2 2011.

But before that another catalyst – German unemployment in a few hours? Possibly, but also maybe not…

Already stretching… S&P500 closed above 1300 today, though just a bit. Equity futures are up around .200% the last time I checked.

Right-o, so until there’s confirmation, stay out of dollar or risk/yield pairs. Good things come to those who wait.

Best of luck, and welcome back to the old game. To the best of good buys.

 

 

 

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I don’t think any other phrase can be more fitting for the EURUSD and EU+ over the last few days of the Greek Saga. Keep in mind the BOYAH has another vote tomorrow – of how to implement the cuts (actually going down to the details) which will have a lot more headwinds than the previous confidence motion and 2nd budget vote.

And with the heavy EURUSD volatility (which was due to a PASOK PM voting against measure), expectations for a 25bps rate hike at the next ECB meeting have also summarily died off from 104.9% to 0.5%. The next ECB meeting will be on July 7th. The measure is based on differences in credit swaps over long term measures.

Meanwhile…. believe in your charts. And recovery.

To the best of good buys.

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Grab a nice cup of tea and watch the Greek vote/riots LIVE on the BBC. Let’s see how violent this baby can unfold… without any trades on, of course. Vote will be at 1100GMT, 0700EST, 0400PST.

http://www.bbc.co.uk/news/business-13954989

**Also live Parliament TV http://www.hellenicparliament.gr/vouliTVMP.html

If it fails, then goodbye markets. If it passes however, there may be a risk of Greece, Ireland and perhaps Spain asking for similar double bailouts, etc etc and perhaps bankrupting the EFSF and putting immense pressure on the German and French governments themselves (by their own citizens).

Don’t trade this unless you have conviction. There will be volatility, but no one really knows where the direction will head.

To the best of good buys.

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Three Men go to Venice 2

Part 1

MU

Griff and his loverly toilet

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No research while the market is way too cluttered with the Greeks. I think there’s a good chance that it’ll pass, but the markets will have little to no reaction if it does, since it’s been priced in quite a lot over the past days. Buy the rumor, sell the news.

So to pass the time and scalp scalp scalp a few sterling out, there are two pairs that are absolutely insane: EURJPY and GBPJPY. I’ll let the readers research why, but these two are beyond volatile, having a low daily range of only ~120, ~140 pips. In fact,

Remember, you need to have BALLS to play these two. And I do mean play in the sense of gambling, not investing or even trading.

I have one lot ($10K) outstanding in EURJPY. Here’s the 5 minute chart and corresponding P/L for just this range. This range is not moving at all, yet still giving and taking a good amount. Putting a stop so I can get at least $5 out, so if this baby explodes, I won’t get caught with the shrapnel.

Until Wednesday June 29th when the vote’s going to be, be careful and don’t lose your BALLS to the market.

Steady now… and to the best of good buys.

Endemic to all cross pairs...

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Here are the charts I’m currently watching. Have a limit at 81.200, which is the same fib on a longer term and shorter term 8 hr chart. Seeing if it can spike to this.

However if it has a daily close above 80.700/80.655 (which seems likely…), then it definitely confirms a channel break to the upside (have this chart at the office and I don’t want to replicate). I think at that point I’ll pile in a few more lots of USDJPY and wait for that train to take it to 82.

For the meantime, have a stop put in at 80.688 so I can make off with a good amount of P&L, and not to confuse this bit of luck with being a market genius. Entry order buy re-placed at 80.500 and 80.300.

Please, enjoy these very simple technical charts, and to the best of good buys.

Longer term 8 hr chart

Shorter term 8hr chart

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Now this makes more sense…

Massive currencies sell-off, including safeties CHF and JPY. Good.

And a new FRA-OIS, spread… and massively hemorrhaging markets and futures.

This may be the start of the new generation trading… as QE2 ends and Greek something is on the horizon. Good. Critical junction brings critical err… risk.

Putting a few stops in in case the markets decide to bounce.

To the best of good buys.

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