My long position [email protected]
- #68,722
- Oct 30, 2013 5:37am Oct 30, 2013 5:37am
{quote} First off I need to declare that as of yesterday I closed out my A/U positions in profit and I am now flat and sidelined this pair. With that out of the way, and it being know that I have no stake in whichever way this currency runs, I am in a position to be as objective as possible.So here goes... I have a couple of questions which I hope you can answer. 1. If indeed this pair does head for the hills (parity or above), what do you figure would be the catalyst and the cause... driving force if you like? 2. From my perspective, China...
{quote} First off I need to declare that as of yesterday I closed out my A/U positions in profit and I am now flat and sidelined this pair. With that out of the way, and it being know that I have no stake in whichever way this currency runs, I am in a position to be as objective as possible.
I'll just keep it brief and simple as I have stated my perspective before.
1. Catalyst is and has been that:
* China manufacturing collapse - Not happening.
* End of Resources boom - Not Happening.
* Commodity Price collapse scenario - Not happening actually in a new bull market.
* Further Rate cuts - highly unlikely and even then priced in
* US needs a lower dollar than Australia in their recovery
* Fresh investment and removal of over taxation due to new government will lead to a stimulated domestic economy, higher company profits, increased jobs etc etc
* Tapering will have limited impact as everyone already was and is long USD only to see AUD climb
Finally, on the RBA. I have no idea how they will react to a higher AUD and nor do I care. What I have realised is that it will be temporary as most have realised what an out of touch, slow responsive department they are.
I try to simplify my fundamental outlook and make a call. Couldn't and still don't understand the drop in AUD down to 88 as it never belonged there but hey, it gave me the perfect buying opps.
- #68,724
- Oct 30, 2013 6:04am Oct 30, 2013 6:04am
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
{quote} Hey Piptrapper. I knew you would have been one of few to bank your pips. Good one. I'll just keep it brief and simple as I have stated my perspective before. 1. Catalyst is and has been that: * China manufacturing collapse - Not happening. * End of Resources boom - Not Happening. * Commodity Price collapse scenario - Not happening actually in a new bull market. * Further Rate cuts - highly unlikely and even then priced in * US needs a lower dollar than Australia in their recovery * Fresh investment and removal of over taxation due to new...
Regardless of what either of us think, the market will make up its own mind anyway.
Cheers and good luck
Those who say it cannot be done should not interrupt those who are doing it
{quote} Okay I think we'll have to leave it there and agree to disagree on this one. Regardless of what either of us think, the market will make up its own mind anyway. Cheers and good luck
- #68,726
- Oct 30, 2013 6:12am Oct 30, 2013 6:12am
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
{quote} GL to you too buddy
For example, do you have political allegiances with the current ruling party?
Do you have a stake in the Australian mining industry?
Did RBA Governor Stevens have an affair with your wife?
etc etc.
Those who say it cannot be done should not interrupt those who are doing it
- #68,728
- Oct 30, 2013 6:16am Oct 30, 2013 6:16am
- | Commercial User | Joined Sep 2013 | 2,500 Posts
Money Makes Money
- #68,729
- Oct 30, 2013 6:24am Oct 30, 2013 6:24am
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
Those who say it cannot be done should not interrupt those who are doing it
- #68,730
- Oct 30, 2013 7:55am Oct 30, 2013 7:55am
- | Commercial User | Joined Mar 2012 | 1,978 Posts
Can't believe NZD rebounded from the moody's article 
Just took a small short in NZD, I will cut it before fomc. And PIP I still hold my audnzd longs, This time we should have the power to bust thru 1.16 
Just took a small short in NZD, I will cut it before fomc. And PIP I still hold my audnzd longs, This time we should have the power to bust thru 1.16 Want the lifestyle of the top traders in the world? TAKE RISK.
- #68,731
- Oct 30, 2013 8:12am Oct 30, 2013 8:12am
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
Can't believe NZD rebounded from the moody's article
Those who say it cannot be done should not interrupt those who are doing it
- #68,732
- Oct 30, 2013 8:21am Oct 30, 2013 8:21am
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
Those who say it cannot be done should not interrupt those who are doing it
- #68,733
- Oct 30, 2013 8:41am Oct 30, 2013 8:41am
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
Those who say it cannot be done should not interrupt those who are doing it
- #68,735
- Oct 30, 2013 12:24pm Oct 30, 2013 12:24pm
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
I'm all set for FOMC to go either way.
I have covered all my "in the money" E/U & G/U positions as well as a couple of U/W ones which still avg me out in the green.
I have set my numerous AUD/NZD longs at BE+50 except for the one at 1.1515 which is set to SL at 1.1385
My EUR/AUD short from 1.4489 has an SL at 1.4535
The only ones floating without SL are my SPX500 shorts which are 1766.6, 1692.4, 1660.0 & 1642.9 with an avg at 1690.3
Now if the market goes all apeshit on risk appetite and send the Dollar to hell, I'll suffer some losses but come out unscathed.
If on the other hand the market does not think that the Fed is any more dovish than last time, or if they are less dovish, then all my existing positions move clearly into profit and I laugh all the way to the bank.
Some may call this a gamble, but I assure you it is not.
Why?
Because all risk currencies and equity indices are overbought and the dollar is oversold. So, unless the FOMC makes it very clear that they will keep their pedal to the metal for a specified period of time past March 2014, upside in risk will be very limited if there is any upside at all.
The alternative possibilities (out of the most probable) are as follows...
1. Fed announces that any future taper will be tied to data on a month by month basis. In that case there is still a chance for taper to start in December. (USD Bullish)
2. Fed announces that they will make an economic assessment regarding tapering when they release new projections in December (USD neutral to slightly bullish)
3. Fed announces that they may start tapering anywhere between January and March 2014 (USD neutral)
4. Fed announces that tapering will not even be considered until the fiscal issues in DC are fully resolved. (USD Bearish)
5. Fed makes absolutely no mention of taper and basically issue the same standard statement that they will increase/decrease asset purchases as required (USD neutral to bearish)
6. If the Fed changes the goal posts, as in that they introduce new or modified data targets, then that could throw a wrench in the works as the market digests the consequences of such change. At that point it's anybody's guess.
The above is based on the following assumptions.
1. The market has already mostly priced in the expectation that the Fed will not start tapering until April 2014.
2. The market has already priced in the current underperformance of EZ and UK econ data.
3. The Fed statement does not make any extremely dovish or hawkish statements regarding the US economy as compared to previous statements.
In case the above assumptions are off, then the projected outcomes of each scenario I mentioned above has to be adjusted up or down accordingly.
I don't have a crystal ball, so anything can happen. However, this is how I see it. This analysis is not meant as a signal on how to trade the FOMC release. It is only my opinion and I am sharing it as an opinion only.
Keep in mind also that tomorrow is month end, and the way the USD has been bashed in the last 40 days may actually produce month end flows back into USD. However, come Friday, month end won't play into the equation any more and it's back to business as usual with flows according to the outcome/contents of the FOMC statement. It could also be argued that month end flows too place yesterday and today in order to get them all squared off before the FOMC statement.
So buckle up your seatbelts. This could be a rough ride, but then again it could turn out to be a non-event. Only Benny and the boys know for sure at this time.
Best of luck.
I have covered all my "in the money" E/U & G/U positions as well as a couple of U/W ones which still avg me out in the green.
I have set my numerous AUD/NZD longs at BE+50 except for the one at 1.1515 which is set to SL at 1.1385
My EUR/AUD short from 1.4489 has an SL at 1.4535
The only ones floating without SL are my SPX500 shorts which are 1766.6, 1692.4, 1660.0 & 1642.9 with an avg at 1690.3
Now if the market goes all apeshit on risk appetite and send the Dollar to hell, I'll suffer some losses but come out unscathed.
If on the other hand the market does not think that the Fed is any more dovish than last time, or if they are less dovish, then all my existing positions move clearly into profit and I laugh all the way to the bank.
Some may call this a gamble, but I assure you it is not.
Why?
Because all risk currencies and equity indices are overbought and the dollar is oversold. So, unless the FOMC makes it very clear that they will keep their pedal to the metal for a specified period of time past March 2014, upside in risk will be very limited if there is any upside at all.
The alternative possibilities (out of the most probable) are as follows...
1. Fed announces that any future taper will be tied to data on a month by month basis. In that case there is still a chance for taper to start in December. (USD Bullish)
2. Fed announces that they will make an economic assessment regarding tapering when they release new projections in December (USD neutral to slightly bullish)
3. Fed announces that they may start tapering anywhere between January and March 2014 (USD neutral)
4. Fed announces that tapering will not even be considered until the fiscal issues in DC are fully resolved. (USD Bearish)
5. Fed makes absolutely no mention of taper and basically issue the same standard statement that they will increase/decrease asset purchases as required (USD neutral to bearish)
6. If the Fed changes the goal posts, as in that they introduce new or modified data targets, then that could throw a wrench in the works as the market digests the consequences of such change. At that point it's anybody's guess.
The above is based on the following assumptions.
1. The market has already mostly priced in the expectation that the Fed will not start tapering until April 2014.
2. The market has already priced in the current underperformance of EZ and UK econ data.
3. The Fed statement does not make any extremely dovish or hawkish statements regarding the US economy as compared to previous statements.
In case the above assumptions are off, then the projected outcomes of each scenario I mentioned above has to be adjusted up or down accordingly.
I don't have a crystal ball, so anything can happen. However, this is how I see it. This analysis is not meant as a signal on how to trade the FOMC release. It is only my opinion and I am sharing it as an opinion only.
Keep in mind also that tomorrow is month end, and the way the USD has been bashed in the last 40 days may actually produce month end flows back into USD. However, come Friday, month end won't play into the equation any more and it's back to business as usual with flows according to the outcome/contents of the FOMC statement. It could also be argued that month end flows too place yesterday and today in order to get them all squared off before the FOMC statement.
So buckle up your seatbelts. This could be a rough ride, but then again it could turn out to be a non-event. Only Benny and the boys know for sure at this time.
Best of luck.
Those who say it cannot be done should not interrupt those who are doing it
- #68,736
- Oct 30, 2013 1:07pm Oct 30, 2013 1:07pm
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
Fed announces that any future taper will be tied to data on a month by month basis. In that case there is still a chance for taper to start in December. (USD Bullish)
The market has already mostly priced in the expectation that the Fed will not start tapering until April 2014.
Those who say it cannot be done should not interrupt those who are doing it
- #68,737
- Oct 30, 2013 1:26pm Oct 30, 2013 1:26pm
- Joined Jan 2010 | Status: Trader | 10,268 Posts
{quote}
Say good bye to this commodity currency.Did anyone realize in that FOMC statement that the Tapering's Original Timeline for Q1 2014 remains unchanged? so tapering is still on the table... expect Dollar strength to pick up soon.
and Tapering is going to shadow any good news the Australian economy has to offer (if they still have any more good news juice left...) lol
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return:
0.7%
- #68,738
- Oct 30, 2013 1:36pm Oct 30, 2013 1:36pm
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
{quote}
Those who say it cannot be done should not interrupt those who are doing it
- #68,739
- Oct 30, 2013 1:37pm Oct 30, 2013 1:37pm
- Joined Jan 2010 | Status: Trader | 10,268 Posts
We live in a finite world with infinite possibilities.
FxTyrant M-Series (Live - Darwinex) All Time Return:
0.7%
- #68,740
- Oct 30, 2013 1:40pm Oct 30, 2013 1:40pm
- Joined Aug 2008 | Status: Persist Until Something Happens | 17,898 Posts
Those who say it cannot be done should not interrupt those who are doing it