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  • #2,381
  • Jul 8, 2011 2:56am Jul 8, 2011 2:56am
Quoting vicky_ag
How was the conference even remotely hawkish? Rating suspended for Portugal, no commitment on rate rise. It was all bearish. As Monroe put it, by the time everything happened no counterparty to take on the risk.

Seems 4300 has some fight left for now.
While it may have not been the most hawkish press conference I think it got the job done...

 

  1. Indication of upside risks to inflation which are being monitored very closely says to me there's another rate hike in Q4
  2. Ratings suspension regarding collateral of Portugal while not good in practice means, and I quote Jamie Coleman [quote]A ham sandwich is now suitable collateral if submitted by a Portuguese bank[/quote], which in the short term would allow the banks access to ECB funding even if there bonds go to junk status like Greece. Given the jitters about Portugal recently, I figured the market would take this well.
  3. Not part of the press conference, but two ratings agencies confirmed Ireland was in stable standing for now to assuage rumors that it was on shaky grounds and you have a nice risk-on move

Regards,
xXTrizzleXx

  • #2,382
  • Jul 8, 2011 4:07am Jul 8, 2011 4:07am
Quoting xXTrizzleXx
While it may have not been the most hawkish press conference I think it got the job done...
[list][*]Indication of upside risks to inflation which are being monitored very closely says to me there's another rate hike in Q4[*]Ratings suspension regarding collateral of Portugal while not good in practice means, and I quote Jamie Coleman , which in the short term would allow the banks access to ECB funding even if there bonds go to junk status like Greece. Given the jitters about Portugal recently, I figured the market would take this well.[*]Not...
Trizzle, agreed it looks bullish now. But as lumesh put it - the expectations now are so low that not so good/bad news is masquerading as good news.

1. Interest hike doesn't necessarily need to be due to growth. He even said ECB dint commit on interest rate hike.
2. Rating suspension by is ECB not private players. Private participants will still be wary due to the rating agencies.
3. Between the press conference there was a downgrade by rating agencies for Portugese issuers. Not really a good sign.

I personally have accumulated EU at the highs.
  • #2,383
  • Edited 5:31am Jul 8, 2011 5:14am | Edited 5:31am
Reading these last few posts just high-lights for me how frustratingly difficult it can be to get your head round all this 'balance of sentiment' stuff.

The whole thing seems to be subjective enough most of the time that the market can react in either direction and reasons can be attributed after the fact, whichever way it goes.

Then when everybody agrees and jumps one way, the market will often go the other. Presumably because if everybody is bullish and have already bought, then the buying pressure dissolves and the only way is down.

Would I be correct in thinking that there is a clue in trying to time that exhaustion factor when everybody's gone one-way and co-ordinating that with other factors?

EDIT - Considering the theme of this method is the search for liquidity, would it make sense to favour a generally contrarian attitude? If somebody has to get a big buy order into the market, it will always be better to buy on bad news and at a level where sell orders are most likely to accumulate?
  • #2,384
  • Jul 8, 2011 7:44am Jul 8, 2011 7:44am
damn, 18k... how awesome was that... the market is quite generous these past 2 days....
  • #2,385
  • Jul 8, 2011 7:45am Jul 8, 2011 7:45am
Quoting Monroe
damn, 18k... how awesome was that... the market is quite generous these past 2 days....
still in or bailed already?
  • #2,386
  • Jul 8, 2011 7:47am Jul 8, 2011 7:47am
Quoting vicky_ag
still in or bailed already?
oh i want more... im a greedy bastard
  • #2,387
  • Edited 8:01am Jul 8, 2011 7:50am | Edited 8:01am
Quoting Monroe
oh i want more... im a greedy bastard


I dint get my entry perfectly still...

Eff. Stopped out oh well
  • #2,388
  • Jul 8, 2011 8:07am Jul 8, 2011 8:07am
Quoting Monroe
damn, 18k... how awesome was that... the market is quite generous these past 2 days....
LOL I actually thought they missed a zero I checked in so many places! Was still able to get in nicely though. How you think that's going to bode with the Fed?

Regards,
xXTrizzleXx
  • #2,389
  • Jul 8, 2011 8:11am Jul 8, 2011 8:11am
Quoting xXTrizzleXx
LOL I actually thought they missed a zero I checked in so many places! Was still able to get in nicely though. How you think that's going to bode with the Fed?

Regards,
xXTrizzleXx
haha dude I did the same, I thought to myself, "they must have screwed that up no way 18k..."

I don't know what the FED will think about that one... I'm flabbergasted....
  • #2,390
  • Jul 8, 2011 8:34am Jul 8, 2011 8:34am
You think that initial down move was a nice f you to all of the bracket news traders :-) lol.

Wish I could of played this one but I'm in vacation had to watch it from my phone. Hope you guys made a killing.
  • #2,391
  • Jul 8, 2011 1:39pm Jul 8, 2011 1:39pm
Hey guys had a couple of thoughts to share/ask.

What are your explanations for the big fall in Audusd? Yeah it's not too much but looking at Nzdusd which made a new multidecade high, it does look enough to be thought about.

Same question about the sharp rise in cable. I have been hearing about safe heaven flow into Gilts. Anything else?
.
  • #2,392
  • Jul 8, 2011 2:16pm Jul 8, 2011 2:16pm
Quoting Monroe
No I was referring to EU, was just saying they popped the stops above in UJ on the ADP release .... sentiment was bearish but what does that mean? it was a little late to sell at that point... who are you selling to?
I had already shorted well before the ADP announcment (a few hours beforehand, due to bearish sentiment) and I had anticipated a better than expected report, so I held until after the announcement, and that gave it a nice, final pop downward before the conference began (figured I'd squeeze every last drop out of it ).

Anyways, I was a bit surprised that there wasn't much left for an upward movement in e/u at the beginning of the london session today, but I guess the prospects of good US job data plus overwhelming fear over sov debt crisis was too much....what a shocker than NFP turned out to be eh?
  • #2,393
  • Jul 8, 2011 2:32pm Jul 8, 2011 2:32pm
Quoting theColonel
I had already shorted well before the ADP announcment (a few hours beforehand, due to bearish sentiment) and I had anticipated a better than expected report, so I held until after the announcement, and that gave it a nice, final pop downward before the conference began (figured I'd squeeze every last drop out of it ).
good job in that case! I thought you just meant shorting after the ADP release...

Quote
Anyways, I was a bit surprised that there wasn't much left for an upward movement in e/u at the beginning of the london session today, but I guess the prospects of good US job data plus overwhelming fear over sov debt crisis was too much....what a shocker than NFP turned out to be eh?

indeed, a messy day, the charts are looking ugly... it really seems to want to break down, but the mighty panda seems to want to hold it up... don't forget about the DNT which expires around 2 weeks from now.
  • #2,394
  • Jul 8, 2011 3:08pm Jul 8, 2011 3:08pm
Quoting Vorbis
Reading these last few posts just high-lights for me how frustratingly difficult it can be to get your head round all this 'balance of sentiment' stuff.

The whole thing seems to be subjective enough most of the time that the market can react in either direction and reasons can be attributed after the fact, whichever way it goes...
Hey Vorbis,

Yea its pretty tough to get a handle on the whole sentiment issue. Everyone reacts differently to news so what may seem like a harmless news release to one person ends up being a sentiment shifter for someone else. The key is to know how the majority will react. The way to know that is through experience.

You're absolutely right about the whole thing being subjective. But I think with experience, we'll learn what can cause sentiment to shift and what doesn't, as well as what causes it to shift for just the day and what causes it to shift for a much longer period of time. The more examples we see of how the market reacts, the more we'll be prepared for when a similar situation arises in the future...

With regards to reasons being able to be attributed either way, it shows how important it is to understand the context of the market at the time of a sentiment shift, or, in other words, what things are in the back of the minds of participants that if aggravated, will cause them to buy or sell en masse.

A single piece of news can cause people to react in one way or another, cause them to buy or sell, depending on whats been going on the last few weeks.

For instance, it is not inconceivable that the news about Portugal being downgraded may not have caused the market to move downward IF we were in a totally different situation (i.e. no sovereign debt crisis, very strong ECB backing, any other reason that fundamentals are really strong and there's nothing to worry about).

If there was enough selling, it may have even afforded participants an opportunity to buy from the individuals who were selling (accumulate), and we may see a price rise afterward (for whatever reason). So you could have basically seen a price rise after just a short period of time from what you would think was a "bad" news release.

While my example is definitely unrealistic and I am not saying the market would react the way I said it would, I'm just trying to give an example of how a piece of "bad" news could be interpreted depending on the situation.

Now contrast this to the situation at the beginning of this week, where we know there are a bunch of euro countries in fragile situations, and we just had a good up move the previous week from positive developments in Greece, and all of the sudden you hear Portuguese bonds has been downgraded to junk status. Everyone already knew the situation was fragile, and the news release didn't announce a shift in fundamentals. But what it did was it brought the fear that was in the back of people's minds right out in the open and it served as a "reality check" that all is not well.

It all pretty much comes down to hope and fear, last week it was hope, this week it was fear, at least that's what I think.
  • #2,395
  • Jul 8, 2011 3:33pm Jul 8, 2011 3:33pm
Quoting Monroe
don't forget about the DNT which expires around 2 weeks from now.

Thanks man, great work on the NFP today too, saw you played that really well .
  • #2,396
  • Jul 8, 2011 4:00pm Jul 8, 2011 4:00pm
The thing is, even after the Greek situation was almost out of the clear, the votes were past and the news out that Greece would get it's tranche to pay it's bills... if you were paying attention, you would have caught the fact that Italy and Portugal were not looking good in the background even before that. I was talking about this during the time, I think with Trizzle maybe last week or so, because I was reading about it on IFR.

Longer term you can see we're in a big contracting pattern starting this past May, just look at the dailies. Fundamentals may be looking better for euro with future rate hikes while the dollar is far from it at this point, but who wants to hold euro's with contagion fears and people fearing that these rate hikes may cause more problems? You can tell they aren't fond of it when it pops up and the market sells off every time. Not only that, but with slowing global growth fears, bad US numbers can turn into a huge risk off situation very fast. I was talking with Carnegie today about this after the NFP number.

You have the fundamentals, technicals, market positioning, sentiment and expectations. From there I just try and think about where fear and greed will make the impact and position myself accordingly. I am always trying to be aware of the general conditions though because I wouldn't generally like to play against a strong trending market in most cases, I would just arb the sentiment going in the direction of the major trend. That is not the case on EU right now and to be honest i have no idea how this is going to play out so I have no long term views at this point, if anything it looks pretty bearish to me.
  • #2,397
  • Jul 8, 2011 6:54pm Jul 8, 2011 6:54pm
Quoting nasir.khan
Hey guys had a couple of thoughts to share/ask.

What are your explanations for the big fall in Audusd? Yeah it's not too much but looking at Nzdusd which made a new multidecade high, it does look enough to be thought about.

Same question about the sharp rise in cable. I have been hearing about safe heaven flow into Gilts. Anything else?
.
Heya nasir.khan,

From my sleepy perspective, I'd write the AUD/USD fall as being due to jitters of a global economic soft patch leading to risk aversion in the pairing initially. I guess investor demand shook this off as the day continued, resulting in it recovering its losses well..makes me quite interested in the pairing actually...Cable I'd say more-or-less the same thing that happened in EUR/USD, except sovereign jitters helped the latter give up most of its gains compared to Cable.

Quoting theColonel
The key is to know how the majority will react. The way to know that is through experience.
And this is the kicker...you have to be able to interpret the news from the eyes of those participants moving the market, no matter how much you may personally disagree with it, or find it irrational/illogical. At the end of the day, they are the ones that decide whether your position is in a profit or a loss.

Quote
With regards to reasons being able to be attributed either way, it shows how important it is to understand the context of the market at the time of a sentiment shift, or, in other words, what things are in the back of the minds of participants that if aggravated, will cause them to buy or sell en masse.
Very, very, very important.

Quote
It all pretty much comes down to hope and fear, last week it was hope, this week it was fear, at least that's what I think.
You know what they say..markets are driven by greed and fear.

Quoting Monroe
The thing is, even after the Greek situation was almost out of the clear, the votes were past and the news out that Greece would get it's tranche to pay it's bills... if you were paying attention, you would have caught the fact that Italy and Portugal were not looking good in the background even before that. I was talking about this during the time, I think with Trizzle maybe last week or so, because I was reading about it on IFR.

Longer term you can see we're in a big contracting pattern starting this past May, just look at the dailies. Fundamentals...
Indeed..the two conflicting scenarios make the pair a tricky one to trade if you don't devote the time to actively following the ADD-like shifts in sentiment. I almost had a mind to leave this pair alone until the Troika comes back to visit in September..but then again the ECB may decide to get all hawkish on us then and it will be a repeat of what's going on currently..only this time we'll get to evaluate Greece's progress. Bearishness is my view too, at least for the near-term..Italy entering the spotlight should make this thing pretty heavy!

Regards,
xXTrizzleXx
  • #2,398
  • Jul 9, 2011 1:31am Jul 9, 2011 1:31am
Quoting xXTrizzleXx
Indeed..the two conflicting scenarios make the pair a tricky one to trade if you don't devote the time to actively following the ADD-like shifts in sentiment. I almost had a mind to leave this pair alone until the Troika comes back to visit in September..but then again the ECB may decide to get all hawkish on us then and it will be a repeat of what's going on currently..only this time we'll get to evaluate Greece's progress. Bearishness is my view too, at least for the near-term..Italy entering the spotlight should make this thing pretty heavy!...
Same here, but on days like NFP, it's the pair I feel most comfortable on since I trade it the most, and it's an easy scenario to make pips both ways. You are right, once Italy or Spain enter the picture, it should be only one way. I don't really think Portugal downgrade came as a big surprise, but those ratings agencies can get things going.
  • #2,399
  • Jul 9, 2011 2:37am Jul 9, 2011 2:37am
Quoting Monroe
haha dude I did the same, I thought to myself, "they must have screwed that up no way 18k..."

I don't know what the FED will think about that one... I'm flabbergasted....
http://www.zerohedge.com/article/one...s-joe-lavorgna
  • #2,400
  • Jul 9, 2011 2:48am Jul 9, 2011 2:48am
Quoting Monroe
Same here, but on days like NFP, it's the pair I feel most comfortable on since I trade it the most, and it's an easy scenario to make pips both ways. You are right, once Italy or Spain enter the picture, it should be only one way. I don't really think Portugal downgrade came as a big surprise, but those ratings agencies can get things going.

Loosen up the risk reward and put on 1 single trade makes these news pretty easy to play, However... I am surprised that we are still above 1.4000 as all the mess in the Euro Zone isnt really something we can push under the carpet... If a spade was a spade we would have been way below 1.4000 ...... but then again

non-commercials:
Looking at the 3 month EuroDollar commitments, the same amount of non-commercials are present even (30% more longs) though we went up to 1.4600 and a drop to 1.4300 within that tuesday-tuesday 2nd recordings...

commercials:
6.69mill short vs 6.50 mill long on the commercials is telling me the commercials will play the shorting game next week,
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