The London Open - page 178
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Just as it felt like we going to fall off a cliff the buyers return. PBbuyers leading the way looking to pick up decent corp and quasi paper inreasonable size, spreads 10-20bp tighter. The big wide world is still amixed bag. People unfortunately continue to lose their jobs in the US(continuing and initial claims higher than expected) although the greenshooters choose to ignore this data as a laggard (ie the markets rally 6months ahead of the trough). I still haven't got a clue, as I amwriting my little market feels ok having felt offered at the start ofthe week. I still don't see a huge amount of value for the risks atcurrent levels however further spread compression cannot be ruled out.I remain extremely bearish long term ie I think at some stage in thenext 2 years we will blow up in style and trade lower than the Marchlows. The bull argument however is there for everyone to see. Take theliquidity the ECB pumped in yesterday, 425bn euros at 1% well you don'thave to be Bill Gross to make a decent return on money at that rate, andas much as I hate the snails at the ECB I think this is better than theQE adopted by the Fed and BOE. What I am trying to say is that we areweighing up the huge liquidity that is out there at the moment vs thereality that the consumer is still indebted and losing their job. All Ido know is that if liquidity does win the day, we are creating an evenlarger bubble than we burst last year and that will not be fun when itbursts. Friday tomorrow, I'd be lying if I said I wasn't lookingforward to the weekend.
Mr P.....
Good morning
It’s Friday with little news out this morning. Core CPI, Personal Spending and Consumer Sentiment in the States at 1.30pm will be worth keeping an eye on.
CABLE
Range bound between 1.6200 and 1.6600.
Temptation on the 60min chart suggests a buy off the 4hr 20ma at 1.6400 with a stop below DP at 70.
As I write a lower low has formed so I will be patient and wait for a higher high and higher low and a cross back above the 15min 20ma.
If however GBP continues to fall lets wait for a break through the 60min 20ma and 123 south play before we enter. The level would be around the 1.6370 with a stop back above the figure.
Patience before we jump in here.
USDCHF
Heavily boxed between the 4hr 20ma and 60min 20ma.
Looks weak initially but I would need to see a confirmed break of the 4hr 20ma at 1.0875 for this to really suggest weak USD across the board this morning.
Look for a 123 below the 4hr 20ma and a silver cross for any south play.
Likewise if the USD wants to strengthen this am then the only long play would be a break back above the 60min 20ma.
We would need to see 1.0950 level tested and broken for a long.
USDJPY
Looks reasonably weak with the 4hr 20ma and 60min 20ma behind it.
I would like to use the next 15min short trigger to suggest further weakness in USDJPY with a stop above the 96.00.
GBPJPY
With CABLE dithering around the 1.6400 level and USDJPY hesitating for a short, GBPJPY could be a play if these 2 go.
Lets again be patient and wait for a 123 through the DP and use the 15min trigger to our advantage.
D
I am currently sitting here waving my white flag (not a white glove Imight add!). I went home feeling a little bullish last night due tothe huge amount of liquidity that is prevalent in the market placecurrently however I cannot convince myself to get bullish when themarket has rallied 40% and companies continue to lay people off and theconsumer continues to save more and spend less. My little market infairness still feels ok with retail continuing to look for bondsalthough real money is taking some P. As you can tell from my last 2days commentary I have no conviction on the market near term and remaina bear long term. With that in mind makes sense to stay close toChingford. Enjoy the weekend, enjoy Wimbledon and don't turn on theradio unless you want to here Michael Jackson's back catalogue.
Mr P.....
Good morning
I hope you all had an enjoyable weekend.
USDCHF
The hourly trend is positive suggesting strength in the USD this morning.
A break above 1.0877 will see USD strength coming into the market and we can use the 60min 20ma as support.
As it stands we are boxed between the 60min 20ma and 50ma with a positive silver cross of the 15min 20ma crossing the 60min 20ma.
The WP will be key here and any break below 1.0826 will see weaker USD today.
EURUSD
The hourly trend is negative suggesting weakness in the EUR this morning.
Heavy resistance at 1.4077 & 1.4107.
A break below 1.3997 would see a break of the WP and previous low for a move towards DS2 at 1.3954 and potentially DS3 at 1.3903
Wont be looking for any long play in EUR unless the 60min 20ma is broken on the upside and tests the DP at 1.4065
CABLE
The hourly trend is negative suggesting weakness in GBP this morning.
The old high at 1.6511 & 1.6557 will be key resistance levels.
GBP is boxed between the 4hr 20ma and 60min 20ma making a very small gap of opportunity.
With the 84CCI in red we should be looking to sell but it is hard to sell with the 4hr 20ma so close. Would need to see a break below 1.6421 to really suggest GBP weakness today.
If the 4hr 20ma holds and support comes into the GBP market the only long play we would look for would be a break of the 60min 20ma, a pullback onto support and then a push through the resistance at 1.6511.
EURGBP
The hourly trend is negative suggesting weakness in EUR this morning.
WP at 0.8500 & previous low at 0.8475 are key support levels.
Looking for a break south here.
* The hourly trend is the 84 CCI on the 15min chart
Dan
I am not sure if it's the weather or the fact that no one has a cluewhat to do either way the market is quiet but feels in good shape.Weirdly govies trade extremely well and yet so do stocks and creditmarkets. The market to me is very reminiscent of 2006 early 2007,fundamentals kind of irrelevant, liquidity over-riding everything else.The one difference between now and back then are spreads. Levelshistorically still look cheap so if the central banks keep throwingmoney at the banks, levels can still tighten in further from currentprices. This week spells the end of June, the quarter and half year andwe also have a Non Farm Thursday. Lots to look forward to and at themoment it appears the liquidity out there is creating another bubblehence prices rally further. Of course the problem with a bubble is thatno one has a clue how far it will inflate. Who would have thought thatthe Nasdaq traded at 5000, Kaz banks at 200 over or Nestle at 2bp? Mostpeople out there know it will all end in tears what we don't know is thetiming. As one of the bears I am going to temporarily abstain andwatch, the further we rally the more I fear the cost to the nextgeneration. Enjoy Wimbledon and the sun and if you are a bull therally!
Mr P.......
Still holding EURGBP since this mornings email alert...
Its dead out there so enjoy the sun.
Any good tips on teaching kids how to swim?
D
Good morning
CABLE
The 60min trend is up so technically we should be looking for continued strength in GBP this am.
The 84 CCI is a little over bought for my liking.
Looking for a pullback and for GBP to find support off the old resistance around the 1.6592 level.
At that stage the 60min 20ma will be following as support.
Use the 7 CCI trigger for confirmation.
USDCHF
The 60min trend is down and looking for USD to weaken further over the next few days.
Support at 1.0794 and looking for a break here for a move towards the DS2 and DS3.
An ascending triangle has formed and resistance is sitting at 1.0850 which is close to the 60min 50ma.
Lets use the trigger and resistance at 1.0850 for a short play (with trend) and then add on break of the 1.0794 level.
USDJPY
With Indices having a surprisingly good day yesterday USDJPY found support.
The 60min trend is flat at this moment but if we get the 60min golden cross of MAs then a break through the MP at 96.35 will be key.
Boxed between the WP and MP and waiting for break.
The descending triangle is still in place from yesterday and a break of 95.00 will certainly see USDJPY lower.
EURGBP
The 60min trend is down and GBP seems to be holding stronger for now.
0.8475 is still the key level to break however with EUR across the board looking strong EURGBP isn’t exactly lighting my fire
Still waiting for this break lower.
EURJPY
USDJPY 60min trend is flat but with USD showing signs of weakness EUR across the board looks supported.
EURJPY 60 min trend is still up and resting on DP.
Let’s look for a double bottom and break back above the 15min 20ma for any long play
There is a resistance line heading down from midnight. Look for the break here which would coincide with the 15min 20ma.
Conclude
Hard to trade GBP ahead of Halifax HPI at 7.00am
EURJPY looks appealing on the break.
Lets wait for levels to break in USDCHF & EURGBP
Thanks
Dan
Much like the last 6 months its been a game of 2 halves today.Obviously the first part of this year was D&G and part 2 was reflate thebubble everything is fine lets strap it back on like the old days.Today was in reverse with everyone strapping it on in the morning andselling it in the afternoon as stocks sold off. I apologise for myfrustration but essentially FX, Commodity, Credit and Equity traders areall trading the same markets ie the S&P. The one market that has buckedthe trend that has a sense of independence is the govy market. Althoughoff it highs it trades extremely well despite the fact all the expertsare calling for inflation to get out of control. Have a guess whichmarket is the most reliable at forecasting recessions, and bouts ofmarket volatility, you guessed it the govy market, so watch this space! The past 6 months has been a proper rollercoaster and its interestingthat in just 3 months we have gone from one extreme to the other. Backin March everyone was calling the end of the world and now in June allthe D&G economists are calling the worst has past. Well as always Idon't buy it, we have rallied on liquidity and not fundamentals and Idon't care about numbers being fudged in China, or copper prices orKorean exports, I want to see house prices bottoming and jobs (not madeup Gordon Brown jobs) being created in the private sector, then and onlythen will I concede we are past the worst. Talking of which did anyonesee the UK data today? Awful data (current account data and GDP) andbrings back my very simple statement, the numbers just don't add up!Income is less than expenditure and remind me didn't that get us intotrouble in the first place? Anyway tomorrow brings us a new month, a new quarter and a new secondhalf I have a sneaky feeling this rollercoaster ride isn't over justyet.
Mr P......
Good morning
So confidence is low and Indices get a hammering. Is this the start of another big push lower!!!
The WS Future sees its WP now below the MP for the 1st time since March…8330 & 8316 are two supports the WS Future needs to drive through before attacking the big support level at 8,200. A break through here and we could see a substantial move lower.
With that on the back of our mind, the USD should remain a little supported but again lets trade what we see and stay with the trend for that currency.
CABLE
The 60min trend and 4hr trend is now down with only the Daily still positive.
There is support at 1.6411 and technically we should be looking for a south play (with the trend) on the break to retest the MP around the 1.6339 level.
EURUSD
The 60min and 4hr trend is now down with only the daily trend still positive.
We are boxed between the 4hr 20ma and 4hr 50ma with solid support around the 1.4000.
Technically we should be looking for a break through the 1.4000 down to WS1 at 1.3887.
If the USD does weaken this am, then a 123 through the 1.4061 resistance would be a key level to work off.
USDCHF
The 4hr MA´s are flat as a pancake which makes it very hard to trade from here.
Might need to be patient across the board if the USD is going be hard to trade this am.
Technically the 60min trend is positive and a break back above the 15min 20ma would see USD strength this am. We could wait for a 123 on the 5min chart for an entry with a tight stop.
EURGBP
Looks supported this am off the MP.
The 60min trend is positive so we should be looking for long plays.
For me the Silver cross of the 4hr 20ma and Daily 20ma will be key. It seems to building towards this and that will confirm strength in the EUR.
Watch the break of 0.8550 for a move higher.
Hi Dan, hi all
Great morning in the room, pips in the tin, Dan left and now we're partying!
This little economic joke is courtesy of Boord, James Boord.
It's the month of August on the shores of the Black Sea. It's raining and the little town looks totally deserted. It's tough times, everybody is in debt and everybody lives on credit.
Suddenly a rich tourist comes to town. He enters the only hotel, lays a 100 Euro note on the reception counter and goes to inspect the rooms upstairs in order to pick one. The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher. The butcher takes the 100 Euro note and runs to pay his debt to the pig grower. The pig grower takes the 100 Euro note and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the 100 Euro note to the town's prostitute that in these hard times gave her "services" on credit. The hooker runs to the hotel and pays off her debt with the 100 Euro note to the hotel proprietor for the rooms that she rented when she brought her Clients there.
The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything. At that moment the rich tourist comes down after inspecting the rooms and takes his 100 Euro note after saying he did not like any of the rooms, and leaves town. No one earned anything however the whole town is now without debt and looks to the future with a lot of optimism.
And that ladies and gentlemen is how the United States Government is doing business.
Back to the party.
RS