Tuesday, May 18, 2010

Tuesday 18 May

I have taken profits and closed my EURUSD and CRUDE shorts for the following reasons.


Crude has fallen over 20% without a bounce and tomorrow is the release of the UN draft sanctions on Iran. Iran has said it is prepared to block oil and "wreck Western economies" if sanctions are imposed.


EURUSD has fallen hard today and bearish sentiment is really extreme.  The all-time low is at 0.8228 in October 2000 and the all time high at 1.6040 in July 2008 so that means the 50fib is at 1.2140 … and the 1.618 fib extension of the last swing is around 1.2165.
In fibonacci terms this is a good place for a bounce.

S+P futures have stopped tonight at the 50% retracement of the bounce off the flash crash lows.  It makes me think that the indices could rally from here.

Remember .. I am often wrong :)

22 comments:

  1. these are no longer charts. they are sharts

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  2. Haha
    Look forward to being back with you next week.
    Remember when all the bulls throw in the towel its time to buy.

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  3. Hey nic, any thoughts on the German shorting ban that broke around the UK session close?

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  4. Fantastic holds Nic, great exits. Enjoy your break.

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  5. This comment has been removed by the author.

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  6. You mean you closed it because you thought it's gone a long way and you started looking for a reason to take profit...I hope you don't think a few fibonacci levels are going to stop this train wreck.

    I don't think one can say bearish sentiment is at an extreme. Has sentiment ever been measured during a sovereign debt crisis?

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  7. Sorry I missed the open this morning.
    Tom - I am still bearish EURUSD and I am sure it is going to parity, just not in a straight line and I used the fibonacci levels as a tool for exits. Sentiment has been bearish extreme since early April based on CoT and 2% DSI (2% are bullish.
    I think that EUR GBP and CHF will outperform the commodity currencies (AUD CAD NZD) hence I am long EURAUD, the least popular vs the previously most popular.

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  8. Hey Maverick
    I am still trying to figure out how this ban is going to work. I think the reason the market doesn't like it is uncertainty too, not necessarily because its ne. Obviously there is a big bid under bonds but that has been for a while already.
    I think it is likely other EU countries will follow and I think the ECB might cut rates as the next step at least to 2% and its going to stay there for a long time (years).

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  9. And Italy suspends mark to market accounting for Eurozone bonds this morning.
    This bailout, the German ban, the Italy trick. It is all about protecting EU banks which must be in really horrible shape.
    This is going to be the part 2 ...
    The trend has definately turned for risk currencies AUD NZD and SEK

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  10. German BaFin:
    Bund Future Exempt From Short-Selling Ban

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  11. wheres your source on the bund ftr not being included? still a grey area i think nic..

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  12. and the SNB bought 15 yards of EURCHF

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  13. Maverick that is what they are saying in the STIRS trading room at propboards.com

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  14. Medley report out says chances of ECB intervening to buy EUR is high

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  15. snb goin nuts
    this is madness

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  16. Round 2 - SNB buys another 12 yards EURCHF

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  17. suits me still long 1/2 from 14010

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  18. what a week u picked to take off.....

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  19. http://news.bbc.co.uk/1/hi/business/10134766.stm

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  20. I'm getting withdrawals... please come back soon.

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  21. I am not around at all tomorrow but I am back in the seat on Thursday and looking forward to it.
    Hope everyone's trading going OK

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