The London Open - page 183
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Watch GOLD for the 123...
Ok it's a historic day, I concede defeat the recession is over and thecarry trade is back, thank the almighty that after 20 years of spendingmoney we haven't got, it has all been solved/fixed in 6 months. I amalso delighted that my house is shooting back up in value and JOBS page is full of vacancies like 2 years ago. Ok I have a smallconfession I am being a little sarcastic. The market has lost theplot, you can use whatever example of a bubble you can find whether itbe the Nasdaq in 2000 or the credit bubble of 2006 either way itsgetting silly. Due diligence, credit analytics is being replaced bygood old fashioned get me some I need some yield. Normally I would saythis herd mentality is a sign of us topping out, I mean Chinese IPOS 400times over subscribed, is this really based on hopes of a recovery or usreturning to trend growth of the last ten years? As a trader callingthe top of the bubble is nigh on impossible, one thing is for sure weare not there yet. The Nasdaq rallied for over a year before everyonerealised it was a load of hot air, the credit bubbled rallied for 4years before it finally burst. If anyone wants a little snap shot ofthe real world, a world where there is too much debt not enough assetsand not enough tax revenue to go around, go and have a word with Arny inCalifornia and see how he's getting on. I have said it before and Iwill say it again, the numbers do not add up and the only way we get outof this mess is by saving more and spending less (Gordon Brown takenote!). Right in the mean time I am off to join the lemmings and closemy eyes and buy some risk, more of the same tomorrow.
Mr P.-.....
I get home and finally the DOW has behaved itself...That should drag USDJPY lower so overall i am happy.
Patience has paid off here.
D
Good morning all
I have chopped my DOW position as it broke back above the DP at 48 so only made 40 pips from yesterday’s trade. UJ was closed on the break of the 4hr 20ma at 93.90 for a loss of 35 pips… The DOW was all set to go but with all the good data out yesterday (except Morgan Stanley) it had no real drive behind it. Let’s be patient and trade with the trend where we c
CABLE
• ALL CCI´s are suggesting further strength in GBP
• However the 4hr chart is building into a Head and Shoulders pattern which would suggest a reversal
• The Right shoulder is always hard to trade for a long, as all MA´s suggest further strength but then weakens
• Strong resistance at 1.6559 which needs to be respected and it could be worth a small sell order just below with a tight stop above
• I am in mixed minds as short term charts suggest a buy up to 1.6559, where as my longer term chart suggests for us to look for a sell ahead 1.6559
• Temptation would say we could look for a break of 1.6503 (previous 1 hour reversal) up to old high at 1.6559.
• We could play this with a tight stop incase of pullback
Morning all
Made about 2 pips in CABLE today so happy days!!!
I agree Paul we are all loving those breakouts. Lots of pips on Monday, none Tuesday, lots of pips Wednesday, none today...Maybe that means lots of pips tomorrow.
You all know my levels on where to trade Wall ST Future & CABLE. They shoudl certainly bring us more safe pips.
See u later.
D
USDX
Another slightly lame day for the dollar yesterday but still unable to penetrate that 4hr 20 moving average, and still looking weak overall
4hr chart tells me that daily trend is still weak as is 4hr trend but daily still oversold somewhat and either more consolidation or a little pullback towards the 4hr 50 moving average.
78.54 is the level it needs to break through on the downside to see the slide continue, whilst on the upside would need to penetrate that ever elusive 79.05.
15m chart tells a slightly different story. My little diagonal support from yesterday’s low has been broken, so room to the bottom of the 79.05 78.54 channel.
The 15m 20/50 are close to a bearish crossing.
60m 20/50 are in close proximity adding extra resistance to the daily pivot point region of 78.80.
Just needs to break previous low at 78.66 to confirm this.
General consensus is to an overall weaker dollar but there is still big potential for a pullback with what looks like a hugely overbought Dow Jones, so would look to take small anti-dollar positions with a view to closing them out as soon as we see the Dow stop.
Afternoon all
Ok its carnage out there but i am hoping that a few of u caught that break in Wall Street.
We spoke endlessly not to trade anything until either the 8800 or 8900 level was broken in Wall St Future.
As u can see from the chart it smashed 8900 in a big way...Some nice pips in the tin.
See u all tomorrow.
D
Having sat on this desk for nearly 8 years I have seen some pretty maddays in my time. First Moodys upgrade in Russia, Tnk Bp merger and nowwe have the 2009 QE bubble. I traded more times in the first 3 hours oftoday's session than I have in the last week, follow on demand for thenew Gazprom deals was unprecedented. Relative value went out the windowpushing the bonds through all the secondary curves by a country mile andevery man and his dog, cat and gerbil looking to buy this steal of thecentury. If ever you wanted evidence of the euphoria and the stupiditythat has engulfed us, was seeing Evraz 09s trading at -ve yield in5million. The market is on fire like I have never ever seen it beforeand as I said yesterday, stand in the way of it at your peril. At themoment every single new issue is a no brainer win win for anyone who islucky enough to get bonds. That in itself is fuelling the madnessfurther. In my experience there is no such thing as a free lunch or ano brainer so I am off to buy some handkerchiefs because I guarantee itall ends in tears!
Well one of the craziest week in history comes to an end and I don'tknow about you but I am looking forward to a few zeds on the Chingfordexpress. The madness continued to a lesser degree with the new Gaz eurotightening another 30bp with retail continuing to hoover bonds. Fromthe flow I have seen over the past 24 hours this bond will continue tobe an expensive well placed bond, so short it at your peril. As I amwriting I am seeing the first glimpse of some profit taking, rude not towhen you consider some bonds are 100bp tighter this week. Going homelast night I was thinking that the market was due for a bout of profittaking. Having spoken to a few people in the market it appears this isa popular view coupled with the fact I have also heard there are stillsome stubborn, in pain shorts out there. With all that in mind maybethe sell off is not going to happen just yet. EM syndicate desks arefinally getting some glory as we are awaiting the tap of the Turkey 17deal to add to the Gaz deal from yesterday. I am hearing the book is inexcess of 8bn and if its anything like the Gazprom deal could tightenthe curve in further. I would assume there are plenty of conversationsgoing on behind the scenes between banks and quasi sovereign issuers inRussia so I fully expect to see more issuance in that space in thecoming weeks. Have a great weekend, enjoy the sun and expect some moreunseasonal volatility next week.
Good morning all
I trust you had an enjoyable weekend.
New Home Sales at 3.00pm in the States worth keeping an eye on. Wall St & Oil are making new highs by the day and that’s why we are going to stay with the trend as much as possible
USD weakness is set in again and we should be looking to sell USD until the trend changes.
We are predominantly looking for my little silver cross trade with the 4 hr trend.
CABLE
• Asia were lucky enough to buy CABLE off the 4hr support at 1.6365 region
• The Silver cross is looming and for safety we should wait for a break of the resistance around the 60min 50ma at 1.6475 and then look for the 123 on the 15min chart for a potential long trade
• That will confirm the silver cross and golden cross that we are looking for
• Any break below the 4hr trend line will be met with heavy sellers
GBPJPY
• Similar to CABLE and looks supported with the 4hr MA´s
• Safest trade here would be to wait for the break of the 60min 50ma at 156.15 and look for a 123 on the 15min chart
• That will confirm the Golden Cross of the 60min MA´s for an upward move
Verdict
• Lets keep things simple again this week
• Rule 1 - Trade with the trend and do not go against it
• Rule 2 - Look for retracements and then silver/golden crosses with the 4hr tren
• Lets enjoy the week and above all make safe pips
Dan