GU, GJ and EU Analysis Thread

Warm congratulations from this end! I really thought you're a grey 'old' man, with the amount of knowledge of FX you have; I'm obviousy wrong if you're just getting married.

I've been off celebrating becoming a first time 'Grandmother', and am looking to get back into trading following 6 weeks' "grandmaternity" leave.

Still looking to try and catch the swing high/low of a pair and take it all the way to the top/bottom so will remain on leave till next week. Now you're back, and 45C has resumed posting here, I'll be back with my 'questions' next week.

Congratulations again, and all the best for your new home. Forget the thrills of Forex a moment, nothing brings greater joy than to have someone to share one's successes, failures, and tests with. Here's to a peaceful marriage to both of you.

i

I was taking a look at the ONS website the other day – wish I hadn’t. Good grief does it make for enlightening reading of just how unenlightened things have become. Depressed, away from home, and trying desperately to find an open space where one could enjoy a glass of a smooth red in a quiet abode, I had to be content with a wine bar in central Manchester. Yep, back in what was once my home town, if only until tomorrow; I’m not saying it ain’t a great place, our kid, but bugger me love, it so busy I feel like a chip covered in gravy.

So, with a few colleagues, one had to feign contentment as the vinegar served from a bottle that purported to be a smooth Burgundy, barged past an oesophagus that was trying desperately to assist in keeping a reasonable ph level in my stomach. No, only kidding, it was okay, but way over priced for what it was, and, I suspect, bought from Tesco and not Tournus.

Anyway, the topic of conversation was the not too unsurprising revelation – if one can call it that – that inflation is now around the 5% level – pff, and some, but let’s not go there – and that real wages have not increased in quite some years. Really? Hey, Merv, we know you have to go with the flow set by the madmen in the asylum that has that big clock outside (Parliament), but come on, you feign surprise more than I feign enjoyment of a bad wine when served by friends. Actually, if I think it’s crap, I say so. Rather help them to avoid the same mistake the next time… although surprisingly, I don’t tend to receive any repeat invitations. They must be busy in these modern times.

And so we started to talk of the latest unemployment figures etcetera.

There are, apparently, approximately 500 000 vacancies in the UK, and 2.5 million unemployed. Uh-oh. I then read that from 2002 to 2007, approximately 22% of all jobs available have gone. When I look at unemployment figures for a comparable timeframe, the level was fairly consistent up until around 2008. To cut a long analysis short, fewer and fewer jobs are available to a growing of-working-age population, and trend and projection by many suggest that this will not be reversed anytime soon.

As the ONS state, there are 21 million people working full-time, 8 million working part-time and 8.7 million who do not work. Add to this some 6 million that are retired, and it starts to look dire in terms of costs to government coffers. Only 3 out of 10 people in the UK are employed in a role that produces growth! And this is predicted to get worse!!

Without dissecting the numbers too much, part-time income is not enough to live on - and I do not say this in criticism, just observation, as I know there are many reasons for having to work part-time - and this can indeed be proved to be the case if one delves into the state assistance that many part-time classed employed receive. A breakdown on the changing employment patterns, ages and gender behaviour, and sector changes is very interesting reading. For example, at the turn of the century, only 4% of the working population was employed by government, today it stands at some 40%. Why!?

I don’t really have a concluding summary to make, as I think this year is going to be particularly painful for many, and so will see where the UK stands come end of first quarter/collapse of the Spanish banking system.

On a final note, hey, Soros, keep your comments to yourself… nobody in the real world believes that you should be a free man, and if I had my way…{censored}

Looking for short on GU, TP at trendline.

... hope you have not succumb to anything in this little teaser of life down under.

Hey, Sarko, have you seen what has been done down the road from you?

http://www.spiegel.de/international/...742013,00.html

Yes mate, and guess what, you may be first to test the heat if you keep telling the world of how great the European project is progressing.

I’ll bet Mein Fräulein snapped a nail into the wood as you proclaimed: ‘The Euro is Europe. And Europe spells 60 years of peace. Therefore we will never let the Euro go or be destroyed… To those who bet against the Euro, watch out for your money because we are fully determined to defend the Euro.’

I could hear the corks popping in the offices of banks and hedge funds as you, effectively, invited them to take you, the EU and the Euro on. A bit of advice… they are far bigger than you. I’m not suggesting that you are another wannabe Napoleon – you know, of stature that induces an inferiority complex, and involved with a woman that some proclaim to be satisfied, but not entirely by you, but seriously, do you really think that you can scare big money away? They are who prop you up. A good read would be The Great Deception.

Oh, and don’t lose sight of the growing allegiance that Angie has been building with Russia. Not to delve into history too much – I’m not an historian, but France and Germany have many centuries of fighting between them, and a lot of national psyche on both sides can be attributed to this bloody history – but Russia was Napoleon’s downfall, and the Germans have never forgiven Napoleon for dragging them along for the ride. Hitler didn’t fair to well, either, with both eras costing Germany heavily, and forcing the country to bow to nations that many argue Germany still resents. I guess Angie will not risk allegiance with you too much… you creating a lot of heat in the kitchen, and all that. Moving quickly on…

Not content with fanning the flames that will invite the Angels of Death to descend upon you; you chuck from your trundling carriage of apparatchik ash the following corker: ‘To imagine that we might pull out shows a complete misunderstanding of the European psychology. It has to do with our identities as Europeans.’ Are you not the same President of France who but a week ago referred to Alsace as German, and not French? Hmm, no greater insult could anyone have given to this region of France - given its history of occupancy by Germany. I fear it was a parapraxis that shows where your loyalty really resides – where the money and power are – and your ever-pushing wish to create a super state and get rid of all these nasty little annoyances, such as national identity and sovereignty, democratically elected officials loyal to the local regions from whence they came, control over one’s own national finances, and, well, etcetera… the list is very long, and the antithesis of what Brussels and the European bureaucrats are striving for.

Meanwhile, we little people are still being used as fuel for you project. But that’s okay; I get the meaning of arbeit macht frei.


First four charts showing revised FE levels etcetera. Last chart showing alternative standard and fan Fibonacci study in order to show potential resistance being met. I'm still favouring further upside - perhaps the 1.40 levels, and am interested to see the reaction over the next week or so after the Davos drivel.

What say we all buy one for a 'mini' grand turismo of Europe for 2012?

http://www.telegraph.co.uk/motoring/...n=Motoring3001

Stocky: no-one would be impressed with you turning up in the DBS... only Bond should have one of those.

Hey mate, just quietly quietly round these parts. Since laying off the M15 bars in 2010 due to worries about the insanity of our financial system (who wants to be holding contracts at 50 or 20:1 when the market decides to go bidless?) things are a lot quieter for me and I am making my money off the broader market moves rather than individual swings.

My view is that all the parameters for the first half of 2011 were set in the market during the final quarter of 2010. So on the broad scale, there isn't much to add. Take positions, wait to be proven right or wrong while looking for fresh setups. Discussion with other traders to compare our "feel" on the markets is invaluable.

* US Treasuries remain bound by a range around longer term support. 10y. slightly more bullish price action than 30y.
* USDX continues to confound traders who aren't matching the micro with the macro. As per my last post on the DX, I decided 81.5 was my line of interest and we have yet to test this level.
* Proxies for the Chinese Yuan (as mentioned in earlier post) continue to make new highs even in 2011 against the USD. Take a look at the USDTWD and USDSGD rates despite the complete clusterfuck going on in Chinese liquidity right now. Somehow I still feel like these currencies will be taking their pain against the USD one day soon, but obviously the charts don't agree just yet.
* On technicals, buying the GBPUSD above it's Jan 2011 high seems like the obvious trade. However I doubt a breakout of the current high will be so easy.
* In gold, as usual a period of consolidation has washed out all the leveraged players chasing momentum and we are back around technical support levels from Sep/Oct '10. If you don't like paper money, you were buying at 1420 and the only difference is that now you're buying more for the same nominal value.
* High yield (i.e. junk) bonds shrugged off the muni and general note massacre that's been ongoing since Nov'10. Don't expect anything more than a bullish correction in equities without some damage in this space first.
* Indices like FTSE and STOX50 are not performing along the lines of their small-cap, financial and global counterparts. Expect relative weakness, especially in the FTSE on the back of an increasing GBPUSD.

Hi Sinner,

Yuan: yes, been reading quite a lot about a gradual appreciation and aspiration to become a reserve currency. Current projections by analysts maintain that this progression will take many years, but that domestic fiscal figures will have an ever-increasing influence on those currencies currently holding reserve currency status.

When it becomes possible to trade the yuan through mainstream brokers, well, that will be a roller coaster of whips and flips.

Regarding the unrest in Northern Africa, I found that pasted below an interesting read. Although written from an American perspective, it equally applies to most other 'big' dogs on the international stage. I have cut and pasted in entirety, but include the link.

http://market-ticker.org/akcs-www?post=178559


How To Destabilize A Region


First, you must sell allegedly "friendly" governments lots of weapons. You know, aircraft, missiles, guns, ammunition, that sort of stuff. It helps a lot if the governments have money, and it helps even more if you can convince them to peg their currencies in some way to yours, and they have something you want (think oil.)

Next, having accomplished the currency peg and sales of arms, you then allow your banks to engage in rampant speculation and fraud. You let them counterfeit your currency with impunity by issuing credit unbacked by anything (which spends exactly the same as does currency, and thus is an effective naked short upon it), so long as they bribe Congress sufficiently with "campaign contributions." This is all legal, of course, and where it isn't you change the law (such as through the CFMA) so it becomes legal.

Having done that, you let your Central Bank pontificate about how "rising stock prices" are good for the economy and "animal spirits." You intentionally fail to mention, however, that speculative price and value are not the same thing, and that said companies are drowning in debt to the point that you now need to pay $12 for $1 worth of actual underlying assets, after debt is subtracted. This, incidentally, is three times the level of speculative premium you had in 2007, just before the market blew up.

In order to support this speculative bubble (which your President is dumb enough to crow about in his "State of the Union" speech) you intentionally flood the market with "liquidity" (that's a fancy name for "cheap loans.") Speculators figure this game out immediately and start driving up the price of everything - not just stocks. Cotton quadruples in price. Wheat, corn, oats, copper, oil - all have a rocket strapped to their ass and lit.

Of course producers and processors of food and other items can only pass through those price increases or eat them. They can't eat them beyond their margin and remain in business, so this starts to leak into the real economy. The currency pegs mean that most of the inflationary pressure you're creating doesn't hit your nation, it's exported to others. That exactly how you like it, because you can claim "inflation expectations are well-anchored." Perhaps they are in your nation, but in other places they're extremely unanchored and are not only expectations, they're realized facts as the basic cost of life spirals up out of control.

This, in turn, provokes food riots in these less-well-endowed nations that you managed to dupe into participating in your outrageous scheme.

After all, there's only one thing worse than a hungry man.

That's a man who used to be well-fed and now he's both hungry and ****ed, along with being unemployed.

When his belly growls loudly enough, he riots.

And so do his similarly-situated neighbors.

That's when you find out what the balance of power really looks like between government and the people. Even in a monstrously-repressive regime such as Egypt, the fact remains that when the people have had enough, the government is fooked.

We should send our entire banking and scamming apparatus - every one of the people responsible for the bubbles and asset-stripping over the previous 20 years and all the policy wonks who have allowed and even encouraged the currency pegs and similar intentional distortions - over to Cairo on a nice Air Force airplane and turn them over to the people.

Let them hold the trial and determine what justice might dictate. Put it on pay-per-view and have the proceeds go to paying down the national debt.

We won't, of course. We'll claim we're not responsible in any way. The bankers will have none of this adhere to them, including Bernanke. Congress will, for its part, duck the responsibility that it has, in that it has continually allowed the bad debt to be hidden with outrageous actions like demanding that FASB change mark-to-market, bailing out insolvent banks, bailing out Fannie and Freddie and allowing Bernanke to claim that he "would not monetize the debt" - while he was doing so, and then allow him to do so - in the open, naked, without so much as a peep or legislation (or a contempt of Congress charge) to stop him.

This unrest is likely to spread, because unrest means disruption of supply lines, which in turn means prices go even higher. The same problems that caused this load of crap to happen are being made worse by it, and yet there's not one peep in the mainstream media nor among Congress as to what actually caused all of this to occur, or any calls for those responsible to be forced to stop it.

There's an implicit warning in what's going on over in Egypt today, as if this spreads through the Middle East, and it very well may, and radical elements get their hands on all the nice weapons we sold these nations under the premise of being a "friend" to America, you might want to think about what happens if the Middle East oil conduits get shut down, and whether that might create some "interesting" dynamics HERE in the United States.

Hi Sinner, regarding the FTSE. I've been watching in dismay the seemingly unstoppable rise in equities, and have not found a comparable drop on other indices to that seen on the FTSE on May 6th 2010. The precision onto the 23.6 yellow standard fib is unnerving, and I wonder if the wick is the clue to where it may return.

Hi 45c,

The decline in FTSE during that period was exacerbated several magnitude by BP share price shenanigans.

I remember posting gleefully about it here after two weeks of shorting the index non stop.

and here it is

http://www.forexfactory.com/showpost...&postcount=186

GBPUSD has broken the Jan high on the first day of Feb.

I rarely trade the cable anymore since mid 2010 but decided to put a small lot on this as a buy during Tokyo.

Posted this same chart a little while ago, talking of the internal wedge, and if price would push past in order to touch the descending magenta TL/green standard 61.8 fib/61.8 FE level. Seems a nice place to profit target in the 1.64 region.

As for EU, took a speculative short, and subsequently got a reply from EU that has been captured in the bottom picture.

http://www.telegraph.co.uk/finance/g...es-worsen.html

No s**t Sherlock. Dom, you dummy, we’re already there, pal. I’ve spat invective against you on more than one occasion, and so will restrain myself somewhat this evening. Of course, I will not pass up the opportunity to point out to you that the imbalance between the rich and poor has never been so disgusting as it is today, and has been propagated primarily by those that you prostitute yourself to. You know, those with the money to influence politics, profit and promotions. Pff, whilst we stay with p words, placement of more pennies into your putrid palms will ensure that no matter how rough they want to play, you will persevere with the pain, and allow them their pleasure.

I suppose you felt compelled to comment given the rising tension in the Middle East. Of course, the Euro will profit somewhat from this disturbance, and so the prigs that surround you will be able to enjoy that extra gratuity from the gravy train, whilst those protesting in the Middle East will still be wondering if they will be able afford that next packet of grain to feed their families. But that ain’t your worry, is it? Come on, is it? I know that you have to publically empathize, but I think you may have only one eye on events, with the other being on the potential threat to your pension… which is not so far away.

Hmm, actually, could you go one further in your press statements and tell us all here about the backdoor Russian support for this recent regional disturbance, and how it serves well Putin’s plan to raise the price of oil, and so enable Russia to make more of a profit on its dwindling reserves and therefore ease its current fiscal troubles before its oil runs out? Hey, Putin, I met you once – you won’t remember – and my opinion of you is still the same. You are a dangerous man, and I will never trust you. (45Condor prepares his bags to leave this hotel and therefore not be traced to this IP) Still, as a cold tactician, I doff my cap to you as you strike two birds with one stone, and see more customers come to your door in the hope of a more reliable supply than that which had previously been sought via the Middle East.

I’m not saying that Capitol Hill is also playing a hand here – well, I am, really – and also wonder why Mossad have been a little busy these past few weeks.

Dick, can I call you that Dominique? Dick, maybe I was a little harsh to brand you a dummy, as I’m sure nobody gets to your position without knowing the score – unlike the spineless political lightweights sharing a room back in the Downing Street dormitory – but seriously, Dick, stating the obvious for the masses on the ground to read is a little like telling a poor mother not to breastfeed her child, but buy baby milk formula – she is already past the point of listening to you, and knows what she has to do for her and her child to survive. Although I watched as you toasted, along with Peter Brabeck-Letmathe, chairman of Nestle - manufacturer of baby milk formulas, genetically modified agriculture, reasonable chocolate, mediocre coffee, and financial backers for many armament companies – and wondered if any of you really know what misery you serve around the world, whilst enjoying these shindigs up in the Alps?

I doubt it.

P.S. Anyone else think that Timothy Geithner sat uncomfortably during his session on stage? Constantly looking at his feet, rocking his knees, stumbling over platitudes and, generally, not looking too happy to be sat in such a reclined position in that chair whilst the back of his suit began to ride up over his shoulder line.

Sit up straight man!!!

I can't help myself laughing seeing this pix. I guess I will keep it for furture view when i get my backside properly dusted during trading.

Well, I've taken yet another speculative short based on the pop up to the descending magenta TL of the internal wedge/divergence that has built on the 1hr chart, and 4hr chart.

I am still mindful of my statements regarding the 1.64 level, and so am trying to trade what may be a retrace back to the 50 FE, maybe lower, prior to a push further north - which would be in keeping with the higher TF directions as defined by Guppy profiles.

Note, there is a nice pin forming on the daily candle.

50d: Yes, it's a funny picture, and allows us a light-hearted acceptance of our failures. There is no use in crying over loses, they happen.

Thanks for the clarification 45c, was wondering what your triggers were for standing in front of such a strong upmove.

For my salt, there were worse moves to pick than a small buy on this:


Taking majority profits here during Tokyo just below 1.62 and letting the rest run.

Interesting that many many markets made inside bar setups on their respective daily charts overnight. XAGUSD, EURUSD and ESH11 seem most interesting. I've left some small orders to sell the break of yesterdays USDJPY low and *EDIT* seems I looked at the NY hours only chart for EURUSD accidentally, EURUSD was *not* an inside day*...


I am still small here because of the Chinese lunar holiday, will probably return with size after that's over.

Don't want to be a silly foal, happy to just take small licks off the big block.
http://farm3.static.flickr.com/2364/...0d29038a8d.jpg

I spotted this finviz screengrab on zerohedge today (repaste from a ChrisMartensen article).

The visual representation of 1 year of futures performance, you can see exactly what's been going on here in Ben Bernankes "everyone must buy" market casino. Buy anything, guaranteed free Bernanke put with every single long!

http://finviz.com/futures_performance.ashx?v=16

http://www.chrismartenson.com/files/...ear_2-1-11.jpg

But sinner, the entire complex is up you say! How is it that NG is 20% down on the year?

Maybe this has something to do with it?
http://www.reuters.com/article/2011/...54609820110202
U.S. probes BP for gas market manipulation

For the record and unrelated to the current manipulation case, if you want to manipulate the crude market, NYMEX charges brokerage of 2.5 mio per manipulation and it comes with complimentary slap on the wrist. For potential to net billions from manipulation, the brokerage is quite cheap if you ask me

Hi Sinner,

As usual, interesting submission of information. The finviz almost takes the breath away.

Strong up move - yes. My short, well, it is contrary to my usual style of buying all dips onto an ascending Guppy profile... would never normally contemplate it, but was interested to play divergence for a change; something I do not normally do.

Salt block - agree, in these markets, just take small licks each day to keep the intake steady.

Forgot to add, not sure where you are stuck with the Chinese New Year, but I've been spending the week in Dublin. Leave today, but bejesus, the Irish are funny in the face of all that is happening with them this week - elections etcetera. Still, there is definitely an underlying sense of anger, and I would not want to be a politician caught alone on a street.

P.S. Short just taken out. Ah well, at least the rugby starts from tomorrow night, so it is back to France, the wife, German beer and, hopefully, some UV... don't think I've seen the sun since arriving here.

re the divergences thing, don't abandon it just yet, it's the perfect strategy to run against your guppy trend following, returns on the two concepts should be quite negatively correlated (and therefore smooth out your equity curve) if you can pick the occasional top and bottom and trail them with wide stops (maybe the red guppy or that light blue MA on the end there?).

You could try trading the div concept at 1/4 or 1/6th your normal lotsize and if they payoff they would be the base position on which to pyramid further normal trend following positions.

Just friendly ponderings, don't take me too serious