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EurAnalysis Kindergarten 24 replies

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  • #63,401
  • Dec 14, 2012 10:32am Dec 14, 2012 10:32am
Quoting AaronWard
I get the words, but I am struggling with the reality. Why does a CB need somebody to buy and sell? Central banks can do this without the assistance of a third party. Also, the primary function of a CB is in fact to set monetary policy and to manage the money supply.
Perhaps as you said... for reasons of secrecy.

When the BIS participates in the market, nobody really knows on who's behalf they are acting.
If a CB executed their own transactions, the big boys (big banks etc) would know and that would give them more of an unfair advantage than they already have over the smaller big boys (small banks, insurance companies, hedge funds, etc).
Those who say it cannot be done should not interrupt those who are doing it
  • #63,402
  • Dec 14, 2012 10:33am Dec 14, 2012 10:33am
Quoting PipTrapper
Yes of course I forgot
on a serious note... if Sept 2012 QE highs break, I conclude that FX is now also completely rigged. that simply makes NO sense
Any prices quoted are futures
  • #63,403
  • Dec 14, 2012 10:36am Dec 14, 2012 10:36am
Quoting redteamgo
on a serious note... if Sept 2012 QE highs break, I conclude that FX is now also completely rigged. that simply makes NO sense
According to the birds, large amount is making it's way home end this year or early next year. Let's see if it was true.
  • #63,404
  • Dec 14, 2012 10:37am Dec 14, 2012 10:37am
Quoting Ken A
According to the birds, large amount is making it's way home end this year or early next year. Let's see if it was true.
are you talking about liquidity repatriation?
Any prices quoted are futures
  • #63,405
  • Dec 14, 2012 10:39am Dec 14, 2012 10:39am
Quoting redteamgo
on a serious note... if Sept 2012 QE highs break, I conclude that FX is now also completely rigged. that simply makes NO sense
I'm quite confident that it will not happen under current macro conditions, but things could change and if they changed for the better for Europe, or if there were some major repatriation flows or other such transactions, it could very well break QE3 highs. However, even in that situation, I still maintain that any rallies will be capped or faked out before we hit 1.32... at least on a daily close basis anyway.

Remember that the point just before a reversal almost always overshoots the high. Remember 3rd May 2011 and 4th Nov 2010?
Those who say it cannot be done should not interrupt those who are doing it
  • #63,406
  • Dec 14, 2012 10:40am Dec 14, 2012 10:40am
Quoting redteamgo
are you talking about liquidity repatriation?
I don't know the specifics but it's been on the air since last month.
  • #63,407
  • Dec 14, 2012 10:44am Dec 14, 2012 10:44am
Quoting PipTrapper
I'm quite confident that it will not happen under current macro conditions, but things could change and if they changed for the better for Europe, or if there were some major repatriation flows or other such transactions, it could very well break QE3 highs. However, even in that situation, I still maintain that any rallies will be capped or faked out before we hit 1.32... at least on a daily close basis anyway.

Remember that the point just before a reversal almost always overshoots the high. Remember 3rd May 2011?
no. unfortunately, i wasnt trading FX at that point.. still just spreading corn.

my fingers are crossed.
Any prices quoted are futures
  • #63,408
  • Dec 14, 2012 10:47am Dec 14, 2012 10:47am
Quoting AaronWard
I get the words, but I am struggling with the reality. Why does a CB need somebody to buy and sell? Central banks can do this without the assistance of a third party. Also, the primary function of a CB is in fact to set monetary policy and to manage the money supply.
Because they need to manage their reserves. Look let me give you a bastardized broad view on this. Think CB as any other bank, they hold "deposits" and they are sitting on piles of "cash" and "bonds" and "obligations". They need to manage their balances not only when they to adjust Monetary policy (via the Ms) but also to "invest" this funds to paid their obligations for example.

CBs reservescan be managed in complex portfolios or open-end fund structures. Moreover, the BIS gives CB credits and emergency funds for struggling CBs, etc etc meaning that BIS has to actively be involved in all the different instrument (including forex and gold) in order to hedge, invest, clear, etc their balances.

In simple words, yes one of the key mandates and objectives of a modern CB is manage the money supply, but the scoop of action is not limited to that via Reserves and managing collaterals, etc. On the second, a CB can only intervene in the market via bonds or re balancing their reserve structure but it cannot just go directly into the markets and acts as clearing house or an investment firm trading all the different derivates and markets. Just think the BIS as facilitator between the market and CB to manage their reserves ....

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #63,409
  • Dec 14, 2012 10:53am Dec 14, 2012 10:53am
Quoting redteamgo
no. unfortunately, i wasnt trading FX at that point.. still just spreading corn.

my fingers are crossed.
May 2011 (H4)
Attached Image (click to enlarge)
Click to Enlarge Name: 2011may.gif Size: 26 KB


Nov 2010 (Daily)
Attached Image (click to enlarge)
Click to Enlarge Name: 2010nov.gif Size: 27 KB
Those who say it cannot be done should not interrupt those who are doing it
  • #63,410
  • Dec 14, 2012 10:57am Dec 14, 2012 10:57am
Quoting PipTrapper
May 2011 (H4)
Attachment

Nov 2010 (Daily)
Attachment
well, i certainly like the appearance of both of those

i do recall the run up on Oct 31 2011 that took a little longer to fade but then faded pretty hard.
Any prices quoted are futures
  • #63,411
  • Dec 14, 2012 11:03am Dec 14, 2012 11:03am
Quoting redteamgo
well, i certainly like the appearance of both of those

i do recall the run up on Oct 31 2011 that took a little longer to fade but then faded pretty hard.
i'm out. done w euro for the year. g/l to all
Any prices quoted are futures
  • #63,412
  • Dec 14, 2012 11:06am Dec 14, 2012 11:06am
Quoting redteamgo
no. unfortunately, i wasnt trading FX at that point.. still just spreading corn.

my fingers are crossed.
Historically, 1.3150 (spot) was a strong resistance but looking at this 4H candle....... Not expecting long coverings this Friday seeing the movement.

Attached Image (click to enlarge)
Click to Enlarge Name: Capture.JPG Size: 88 KB

  • #63,413
  • Dec 14, 2012 11:08am Dec 14, 2012 11:08am
Quoting Ken A
Historically, 1.3150 (spot) was a strong resistance but looking at this 4H candle....... Not expecting long coverings this Friday seeing the movement.

Attachment

agreed, thats why i covered. day trading platform logic says that they WILL cover today precisely for the reasons you mentioned but given that EU has stopped their little meetings for the year, i think there is a low "bad news" event risk so why fight it. i'll let it find the top when it finds it and get back in later.
Any prices quoted are futures
  • #63,414
  • Dec 14, 2012 11:26am Dec 14, 2012 11:26am
I have a painted highest 1.3172 so far.
  • #63,415
  • Dec 14, 2012 11:38am Dec 14, 2012 11:38am
Quoting Ken A
I have a painted highest 1.3172 so far.
FXCM (via Sierra Chart) has the high @ 1.31734, i.e., about a pip higher than the September high.
Student of the Markets
  • #63,416
  • Dec 14, 2012 11:44am Dec 14, 2012 11:44am
This is the first day rally and I don't see it will reverse anytime soon after the Sept post QE3 highs was taken out.
  • #63,417
  • Dec 14, 2012 11:49am Dec 14, 2012 11:49am
Quoting dchristi
FXCM (via Sierra Chart) has the high @ 1.31734, i.e., about a pip higher than the September high.
Very well spotted. Most if not all retail will not have access to that intraday info and they will get stuck with the EOD data high. Yeap high was made on thin air the 16/09 in a few seconds. My intraday high was 1.3172....basically the current high can be the high of the week ...few minutes left on this hour and we'll have the answer

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #63,418
  • Dec 14, 2012 11:51am Dec 14, 2012 11:51am
Quoting Ken A
This is the first day rally and I don't see it will reverse anytime soon after the Sept post QE3 highs was taken out.
Bouncing off big resistance still...if it breaks, you'll be spot on!!!
  • #63,419
  • Dec 14, 2012 11:55am Dec 14, 2012 11:55am
think we are close enough to 1.3200 for a run towards it, but i think euro will pull back to restest previous support around there, it needs something like the fiscal cliff to bring back strength to usd for it to come down much further.

Quoting PipTrapper
I'm quite confident that it will not happen under current macro conditions, but things could change and if they changed for the better for Europe, or if there were some major repatriation flows or other such transactions, it could very well break QE3 highs. However, even in that situation, I still maintain that any rallies will be capped or faked out before we hit 1.32... at least on a daily close basis anyway.

Remember that the point just before a reversal almost always overshoots the high. Remember 3rd May 2011 and 4th Nov 2010?
  • #63,420
  • Dec 14, 2012 11:55am Dec 14, 2012 11:55am
Quoting chodd22
Bouncing off big resistance still...if it breaks, you'll be spot on!!!
It doesn't have to be today and further there're more buy stops above.
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