Verb's Macro Economic Sentiment Journal

Likewise your rumination upon the Yen pairs...

I have caught up on reading and I'm just so pleased to have the great minds in this thread. It renews my hope in FF when I see traders taking the underlying economics seriously rather than just waiting for a buy/sell pattern/signal.

I will continue posting...short-term analysis coming up later today.

Market Analysis: Euro
Future Indices:
Mixed picture with bullish and bearish movements in the euro futures however with the positive unemployment report from the US, this is bullish to me as optimism will have a chance to spill over into the London session.
http://i1058.photobucket.com/albums/...01-Indexes.jpg

Commodities (Gold, Oil):
Gold and Oil are consolidating after this recent run-up signaling a possible pullback.
http://i1058.photobucket.com/albums/...omm-Metals.jpg

News:
Earnings season in China will certainly drive risk appetite on positive reports and should have spillover onto the euro. G20 Summit over the weekend saw some new commentary on strengthening Germany's economy as the financial backstop for the EZ in exchange IMF to bolster the relief fund. The focus off of Greece is the real interesting part about this. Otherwise the news agenda today looks fairly light until US pending home sales. The news agenda for the week however is packed so expect nice volatility.
http://i1058.photobucket.com/albums/...12-01-News.jpg

What Could Happen?
With Gold and Oil consolidating, positive US data and a mixed picture on the futures front, I'm anticipating a bullish movement at equities open and stocks play catchup off the good US data and then consolidation until US data. If the data is good, we should see more unwarranted optimism and risk rally. If the data is worse, then we should see consolidation and a bearish decline.

What Could We Do?
Generally speaking, I'm starting to see some complacency in the market about the Euro being ok for now. While this may be good enough to fuel a short term rally, is it really the fundamental truth as it relates to the Euro? I think not, thus a contrarian position makes the most sense to me since complacency can turn to panic quicker than continued optimism. As I mentioned before, I'm continuing to build a contrarian position short to the market, if price disrupts well below 1.3443, we should see stops hit on longs and bearish decline. I'll probably look to get short on rallies if this happens.

I'm posting this a little early as I'm busy later. Normally I would like to see what China does and then update approximately 30-40m before the London bank open during Frankfurt.

It did not occur to me to have a look at a Fibonacci extension based on the most recent swing these last few weeks, and having closed all positions on EU last week once my TP was hit - fear of volatility due to the G20 meeting - I placed a fresh study on the chart - the yellow plot.

This shows that price was clearly heading for a halt at the 1.3664 mark/kiss of the red MAs of the Guppy profile. For those that read my muses, I often talk of 1, 2, 3 plays based on retraces that return to the red MAs. The price halt at this fib corresponds nicely to the price halt on the UC trade that I took and which again hit the expected fib extension.

I am therefore side-lined here, and from what I read so far this morning concerning the lack of significant progress in Mexico - not surprised, as some will know that I think Greece is being placed into a position whereby it has no choice but to default - I anticipate oscillation around these levels, with some potential surges one way or the other, but ultimately, noting that would currently constitute a trend in my opinion.

With the cesspit of deceit that is Brussels, busying itself into a position best suited to blossom into a false rose over the next two weeks, whilst the people of Greece rummage through the detritus on the ground in order to survive another day, I am loath to take any major positions until either the bond payments due March 10th are paid, or the holders think stuff this, we will get a better return if we trigger the insurance... I'm guessing that backroom deals are being done between governments and the managers of the big hedge funds - the latter of which seem to have been very tight-lipped the last few months.

...for the record, the TP mentioned in last the post was actually posted elsewhere on FF... on what is currently my regular thread after Stocky's lost momentum.

It seems quite clear that the IMF do not have the money to boost any European firewall, and the Americans do not want to pour more good money after bad into the IMF until the Germans get on board. Well, given the comments from the Germans this weekend, and the American frustrations, I see the situation as that until one side gives in and pays up, the other will not.

A stand-off, if you like.

And so I think we have more can kicking, with all sides wanting to hold out for the bond payments on March 10th - or insurance calls - and then the unfurling of what I think is the final plan... which is to let Greece default. Whether this is soft or not, I am not sure, but one thing is for certain, it will not be soft for the Greeks.

PS. I would not want to be one of those 160 German tax collectors that are being sent to Greece to help the Greek authorities collect tax from individuals - if caught alone on a street, they will likely be lynched.

PPS. It would be interesting to see how many Germans in Greece are already trying to speak English with an English accent, to avoid detection.

Will be interesting to watch.

"Japan has the worst balance sheet in the world" Kyle Bass



Good to see you back Verb

Outcome:
We did not see a bullish rally continuation as I expected however my long-term bias being bearish was supported by a decline. London equities open was mixed to consolidation based on the futures and without strong conviction led to a bearish decline until NY open. Positive US news contributed to a modest rally however the S&P credit cut on Greece kept optimism at bay.

http://i1058.photobucket.com/albums/...01-Outcome.jpg

Market Analysis: Euro
Future Indices: Futures mostly up and dollar index down.
http://i1058.photobucket.com/albums/...-Indexes-1.jpg

Commodities (Gold, Oil): Gold and Oil are up.
http://i1058.photobucket.com/albums/...m-Metals-1.jpg

http://i1058.photobucket.com/albums/...Comm-Oil-1.jpg

News: LTRO on the docket today and a ton of USD news.
http://i1058.photobucket.com/albums/...-01-News-1.jpg

What Could Happen?
Currently there is a risk-on sentiment and I anticipate this to continue as all major markets are up (not to mention a DOW above 13k) and dollar index down. Figure a bullish London session consolidating until the news announcements in the US. Good news will drive even more risk-on sentiment and push the Euro higher above some major supply around the 1.3500 levels.

What Could We Do?
Get long on dips in the London session and try to hold it through the NY session on good news but of course anything can happen on the LTRO news.

hello all...

Congrat bro ! Keep it up

Just been reading this:

http://www.spiegel.de/international/...818586,00.html

…and it got me a thinking – again I hear people groan.

Well yes, because it’s all a game of deferment whilst Merk the Berk positions herself on that side which will court favour with re-election – and if this means jumping into bed with the blunt teeth of Wolfgang Schauble, then so be it, I think. Word on the street is that they cannot stand each other, but will share a leaking Frankfurter if both are satisfied – erm, excuse me for that innuendo… I may very well barf in a moment.

Anyway, moving quickly on. Merk has been frigidly opposed – oops, there I go again – to any increase in the Euro firewall, that is until I read the article aforementioned in the link. Now, this fund may rise from 500B Euro to 750B Euro. Yeah, I know, where in the world is this going to come from? What, what’s that you say? China and Japan… hmm, maybe, and I’ll bet they’ll be falling over themselves to contribute, but only if certain conditions are met. Why she has buckled so far off from the Greek repayment date of March 20th is something of a mystery for me, but I guess she knew that the International Swaps and Derivatives Association would not trigger a CDS insurance rush today… and hey, with those with a voting right in this hotbed of putrid pirates being comprised of the very banks that caused our current global situation, is it any wonder?

So, Merk has most likely rattled a few composures in the German banking community, and, well, further vexed a lot more German taxpayers today. So why start to hint that you may expand the firewall, which not only perturbs the folks back home, but unsettles a market that seemingly needs a greater and greater dose of valium in order not to lose it completely?

As I have mentioned previously, apparent rumour on the floors of the trading houses is that Greece will not meet the repayment levels on March 20th, and that plans are afoot to declare a default on Greece on Friday evening of the 23rd of March. I don’t think anyone will be surprised with the expectation of default, but the declaration date, I wager, is pencilled in on every central banker’s calendar, and also Christine-I double speak corporate parlance nonsense because in truth I haven’t got a clue what is going on, but got my new job at the IMF because I was the right kind of candidate-Largarde’s. So, the question for me is how will Asia decide to contribute? My opinion – and that is all it is as I am not privy to inside information – is that the increase in the firewall is in preparation for a default, and better to get it into the public domain now, and then implemented as quick as possible in order to be ready for the latter part of March.

This extra dosh settles the nerves of the bankers, makes Merk the berk appear wise to the public, and allows Obama-banana and Timmy-tantrum to get rid of baggage they no longer want pulling on the loan line from the FED. And this brings me to the bondholders: if they know extra money is there, they will most likely go with the politicians as this would probably ensure better – or at least a known as opposed to unknown in the event of a chaotic default – return on their holdings.

Penultimately: why would Merk suddenly volt face? Hmm, perhaps because if she truly believed that a bailout for Greece would be successful, she wouldn’t add an extra 250B Euro to a fund that she thought would not be needed. If she had asked anyone here, we could have told her long ago that the true numbers for tax collection, manufacturing and so on and son in Greece is far worse than ‘officially’ expected. Sadly, Greece has just been thrown back 50 years in time.

Finally: Nice going idiots in positions of power around Europe and farther afield. You’ve just blown a trillion in Euros, achieved little of what you aimed for, undermined democracy directly in two European sovereign states, made the rest even more corrupt than they already were, and sent inflation for the rest of us plebeians to such a level that I’m beginning to see an awful lot more beggars in the cities around Europe.

I should also mention that I am beginning to suspect that in some convoluted relationship of inverted proportionality, a default of Greece would be good for the Euro – even if only for a short period of time before the rest of the PIIGS trot along to insolvency - as money that is currently waiting to get in, will be encouraged to do so, and a default will, if faith is restored in the Euro, assist the US in keeping the dollar weak in order to help out there. Of course, inflation would cut that deficit down, but those dudes, and dudesses (is that a word) that pay their taxes also carry guns, and won’t be impressed if the price of gas becomes much higher.

Us chaps in Europe have wine bottles and beer glasses, and whilst able to inflict serious injury if broken to create a weapon, are still ineffective against a state-sanction projectile screaming towards one at almost 700mph.

Verb, may I ask where can I see those ticker tables that you've posted?

Appreciated.

Bloomberg's got everything you need on their site

Analysis coming up later.

I know, but I think those tables are not from there. I feel like numbers look prettier for me here (I know right)

That's fine, not a big deal

Outcome: LTRO and Bernanke killed the bull run, I'm still overall sentiment short.

http://i1058.photobucket.com/albums/...01-Outcome.jpg

03-05-2012 – EURUSD London to NY Session - #07

Market Analysis: Euro
Future Indices:
While the indices are pointing to a mixed picture, the market favors bearish sentiment. Equity levels are very high right now with the S&P and Dow at equally high levels will make it difficult to push higher. Dollar strength is up as well which I anticipate will continue this week but wont last as the presidential election looms and a strong dollar does not support high equity levels.

http://i1058.photobucket.com/albums/...01-Indexes.jpg

Commodities (Gold, Oil): Gold up slightly however Dollar strength due to Bernanke's comments on no QE3. Oil bumped up on explosion rumors and strengthening Israeli resolve, this will have a negative effect on equity prices. High oil prices make it difficult to sustain high equity levels.

http://i1058.photobucket.com/albums/...1-Comm-Oil.jpg

http://i1058.photobucket.com/albums/...omm-Metals.jpg

News:
Last week, the markets showed it's sensitivity to medium impact news on the Euro so we will regard this week as high impact. Additionally, LTRO easing and the Bernanke comments caused prevailing bearish sentiment. The combination of good news from the Euro and USD ISM should cause a slight rally in the NY session.

http://i1058.photobucket.com/albums/...12-01-News.jpg

What Could Happen?
Unless we get incredibly optimistic news, I am expecting further ranging movement through London and then a bearish sentiment move as profits are taken off the table and Oil levels take their toll on equities.

What Could We Do?
Good news will cause rallies which I will be looking to add to my shorts.

Cerber, I added hyperlinks to the charts. Apparently Bloomberg has changed their format on futures indices a little which I anticipate will cascade to their commodity futures. Sad, I like the old format.

Thanks for mentioning about tickers. Also, nice insight. Do you just do Euro? I'd like to hear some thoughts on yen at the moment..

cheers