The London Open - page 165
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See u all tom.
Ok just talked u through my ideas in USDJPY, EURUSD, GBPJPY and CABLE
Key supports levels are 97.50, 1.3150, 143.50 & 1.4700
Looking forward to next 24 hours.
D
So the Fed are mildly optimistic, we have seen the worst etc. Chryslerto file for chapter 11 and everything is fine apparently. The bulls areback in the ascendency and the worst is behind us according to many.What is interesting about this rally is that it has not really beenbased on a turnaround in data but expectation and maybe anecdotalevidence that we have bottomed and there is once again signs of life.So my question is simple, has this rally been on expectation of theturnaround? If the answer is partially then it probably means the rallyhas further to go as the data starts to come in better than expected andunderweight fund managers are forced to buy. If the answer is 100% yesit could mean sell in May and go away still makes sense. Personally Ihaven't got a clue however I am not joining the "we have seen thebottom" club yet. Until I see evidence of consumers paying down debt,savings rates decreasing, companies recruiting, etc etc I cannot sharethe euphoria that is in the market.Despite my scepticism towards the rally I still think there is somedecent value to be had in my world currently. Yes I know therelationship between CDS and cash has broken down these past 12 months,but they should not be forgotten. Essentially what I am saying is thatthe cash looks extremely cheap to CDS and if you are confident that therally continues then its only a matter of time before the cash playscatch up to the CDS (CDS spreads can't go past zero!). Until this isthe case I would still say new issuance for anything but a sovereign inthe CIS region is unlikely at current levels. May starts tomorrow soshould be a quiet couple of sessions, if previous May's are anything togo by may be a choppy one.
Mr P.....
Bank holiday weekend!!!
Have fun...Looking forward to making pips on tuesday.
See u then.
D
Good morning
Well tough day for me... I lost on CABLE (50%)and GBPJPY (25%) and made on EURUSD (50%).
Hindsight is a wonderful thing but i was 'expecting' cable to drop 50 pips through the 80 level before a big long play. I prempted the break and got stopped out. Pre empt trades can be great because u get in at great levels but when u get hit like today it is very easy to say why not just wait for break. Thats trading and i have to take it on the chin (a big chin at that).
Yes the 60min 20ma is support and yes u would usually look to buy off it..However u need to see where true support is and that is the 4hr 20ma which was 100 pips lower.
I am all flat now after last weeks longs in CABLE and USDJPY. I am waiting for my next attack in CABLE off support.
The vvvvvvv strong PMI data didnt help and i misread that figure totally. I was expecting this to come in around flat.
Nevermind...I will nail pips back later today...
Cheers
D
Well i am blown away by the strength of GBP...I was not expecting that kind of move today...
The ball park is changing and we are now boxed between the weekly 20ma and weekly 50ma. Should be an interesting few weeks ahead.
Speak to u later
D
Green shoots have gone and we now have a fully fledged bean stalk, Jackis in his element! Believe it or not I am not a total doom monger andI am actually enjoying this rally particularly as some of the commentaryand rhetoric is funnier than any sitcom they put on terrestrial TV thesedays. Bears are almost extinct and more and more people are humming theMonkee's most famous hit record. My personal favourite from today wastalk of a double dip! Since when did we get out of the first dip, letalone start another one?? All this said there are reasons to thinkthat this run continues. Money market funds are seeing redemptions asthe self fulfilling prophecy adds more fuel to the fire that is the bullmarket, as investors pile back into risky assets with the mentality thatthis is your last chance to buy cheap assets. As I mentioned last weekmy key question is, how much of this rally has priced in the data thatis inevitably going to improve over the coming months. China is goingto be a key part of the recovery process if and when it comes howeverare we really that surprised that data is improving there following a$600 bn stimulus package? Everyone is agreed that inflating debt awayis the only way out of this however are the Chinese or the Middle Eastgoing to be that chuffed if the US print money to such an extent thatBarack will start handing out 50 dollar bills on a street corner? Mybig question is simple who possesses enough pricing power to ramp pricesand get inflation into the system again. The way I look at it, is thatthis whole crisis was triggered by housing coming off in the US as theconsumers followed by the banks and hfs' were over leveraged. Clearlyprices have come off as has leverage but in order for prices to go backup again we either need to see real wage inflation or an increase inleverage. Banks are clearly not going to lend to the extent they were afew years ago therefore we are looking at wage inflation. I don't knowabout you, but unless you work for Gordon Brown, the chance of getting apay rise in this environment is pretty unlikely therefore unless I ambeing dumb I don't see how house prices can rally any time soonespecially in my lovely country.In my world despite my scepticism of this rally, the worst is pastmentality there is plenty of reason to be optimistic about some of thecorporates in my world especially when you look at how quickly CDSspreads have gapped in. I know I am sounding like a broken record butits inevitable that if this rally continues cash has to play catch up tothe CDS therefore I continue to like Russia quasis plus, TNK and Vip.Going on today's business (lots of buying!) and bearing in mind it's aNFP week could be a lively one short week.
Mr P......
Good morning
CABLE
• Big retracement overnight and back down at support
• Boxed between 4hr 20ma and 60min 20ma (also below DP) so will be patient today and wait for break before I trade
• Technically for a long play I would need a break back above 1.5050 with support on a 123 trade before I enter
• Only looking for short trades if we break below the 4hr 20ma at 1.4965 with a 123 south using the 4hr 20ma as resistance
EURUSD
• Boxed between the Daily 20ma and 4hr 20ma
• I still like EUR and GBP higher but need DOW to perform
• Will only look for a long play back above 1.3350 with a 123 off the 60min 20ma
• If EUR breaks support at 1.3200 then the ball game has changed and we should look to sell around the 85 level (123) with a stop above 1.3220
Verdict
• Patience today…Patterns are boxed and lets wait for brea
Hi
Had to be patient today...
Well done to those that took that cheeky CABLE long from 65 to 90.
Indices are key and think they will turn soon. The Indices room have been shorting them recently and this will move EUR and GBP.
Speak later
D
Best to watch the footy, play golf or have a bbq. The currency market today has offered very few safe trades.
Tomorrow is another day...Won't make targets this week unless i have a good day tom or friday. Saying that i wont pressure myself. If the setups arent there i simply wont trade...
Still can't get over that CABLE trade today. No shoes for the misses!!
See u tom.
D