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EurAnalysis Kindergarten 24 replies

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  • #71,001
  • Nov 28, 2013 3:14am Nov 28, 2013 3:14am
Quoting PipTrapper
{quote} Next week we have the ECB on Thursday and NFP on Friday. From those two events we will know if the time is sooner or later. As I said, it all depends on data and CB actions.
OK, nice one. Thanks
  • #71,002
  • Nov 28, 2013 3:17am Nov 28, 2013 3:17am
3607 is a tough one, if it hold can have at least a couple of days downwards
Wherever you go, there you are.
  • #71,003
  • Nov 28, 2013 3:21am Nov 28, 2013 3:21am
Quoting milam
3607 is a tough one, if it hold can have at least a couple of days downwards
Agreed.. IF it holds. Remember we are in thin liquidity today and tomorrow. Americans are eating turkey today and shopping tomorrow.
Those who say it cannot be done should not interrupt those who are doing it
  • #71,004
  • Nov 28, 2013 3:25am Nov 28, 2013 3:25am
Quoting PipTrapper
{quote} Agreed.. IF it holds. Remember we are in thin liquidity today and tomorrow. Americans are eating turkey today and shopping tomorrow.
Yes, makes them sleep, full of tryptophan…….


Also EA has reached over extended levels and the daily is talking….
Wherever you go, there you are.
  • #71,005
  • Nov 28, 2013 3:41am Nov 28, 2013 3:41am
Quoting milam
{quote} Yes, makes them sleep, full of tryptophan……. Also EA has reached over extended levels and the daily is talking….
E/A might be good for a pullback helped along by the H1 inverted H/S on AUD/USD and the target for A/U would be a kiss of the falling channel UTL resistance
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Those who say it cannot be done should not interrupt those who are doing it
  • #71,006
  • Nov 28, 2013 3:52am Nov 28, 2013 3:52am
Quoting PipTrapper
{quote} E/A might be good for a pullback helped along by the H1 inverted H/S on AUD/USD and the target for A/U would be a kiss of the falling channel UTL resistance {image}
Yes, AU also bounced from a key level (0.9070) and the daily is talking...
Wherever you go, there you are.
  • #71,007
  • Nov 28, 2013 5:46am Nov 28, 2013 5:46am
ALBERT EDWARDS: A Key Precursor For A Recession Has Now Fallen Into Place
http://www.businessinsider.com/alber...ession-2013-11

...the last three economic cycles have been unusually lengthy, averaging 95 months from trough to peak (see chart below). But these cycles were perversions of the economic cycle, as the Fed manipulated the private sector credit cycle to extend the cycle which became known as The Great Moderation. The longer the cycle lasts, the more investors convince themselves that it has been abolished and lower their guard in relation to overpaying for cyclical investments (aka risk)."
According to NBER data, the average cycle has lasted around 36 months...
Those who say it cannot be done should not interrupt those who are doing it
  • #71,008
  • Nov 28, 2013 11:17am Nov 28, 2013 11:17am
Current price action on eurjpy, the 138.75 area could provide a good opportunity to get back in long if the market drops from its current level, for atleast a 1:1 position.
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  • #71,009
  • Nov 28, 2013 2:21pm Nov 28, 2013 2:21pm
I'm not sure what to think of Cable. I still think we could see some upside, although I'm holding some shorts and would love to see some downward correction.

I think Eur/USD is coming down soon and hard. I don't believe we will see a taper until after the new year, but I see the ECB taking action soon and often. I wouldn't be surprised to see another rate cut, and the introduction of their own QE. There's still the possibility of negative deposit rates.

Interesting article here.

http://www.cnbc.com/id/101234268?__s...could+push+eur
  • #71,010
  • Nov 28, 2013 2:46pm Nov 28, 2013 2:46pm
Quoting britc17
I'm not sure what to think of Cable. I still think we could see some upside, although I'm holding some shorts and would love to see some downward correction. I think Eur/USD is coming down soon and hard. I don't believe we will see a taper until after the new year, but I see the ECB taking action soon and often. I wouldn't be surprised to see another rate cut, and the introduction of their own QE. There's still the possibility of negative deposit rates. Interesting article here. http://www.cnbc.com/id/101234268?__s...could+push+eur...
Hi Brit. My sentiment also. ECB meeting is next Thursday and I am sure they will either make an announcement of further measures, or they will be extremely dovish and strongly suggest that action is coming soon. That's the only way they stand any chance of lowering the Euro... assuming that's what they want of course... but why wouldn't they? It's pretty much the most effective way of helping the Eurozone to be more competitive in the export markets.

As for the taper, that is all data dependent. It could come next month or they could make a statement next month that it will come in March. No matter which they choose, it will set things in motion. Mind you, even if they don't mention anything, as long as the NFP is strong next week and the UE rate does not tick up, I think the market will take it upon itself to show the Fed what it's going to do with or without a policy change.

Technically, the Euro's top should come in around 1.3630 to 1.3660, so we're close. However, also from a technical perspective, that does not mean that it's a full on reversal as it may be heavily bid once it reaches 1.33x and then proceed for new highs. It's not just about the Euro here. There are two other factors. The Japanese search for foreign investment (European stocks and bonds) and the whole question of taper or no taper. This in time will reveal itself, but for now we are definitely due for a trip south.
Those who say it cannot be done should not interrupt those who are doing it
  • #71,011
  • Nov 28, 2013 3:15pm Nov 28, 2013 3:15pm
I have been running back through some analysis today and noted the following:

- After last months inflation print 2 year Spanish and Italian yields have dropped down to near 1.00%, this is the lowest level in years.

-This spread tightening in periphery debt (price appreciation) is helping out the local Spanish and Italian banks as they became the main buyers of government debt after the LTROs were initiated in 2011.

-This year, especially in the past 4-6 months there's been a flood of articles about global investors buying Spanish and Italian debt, and equities.
http://online.wsj.com/news/articles/...51380565267934
http://www.ft.com/intl/cms/s/0/47e44...teedition=intl

-The market wide thought is that Draghi's Whatever It Takes Speech is what sparked this move. This is probably true, but BOJ and QE were likely the greater culprits. The 2013 wall of liquidity has boosted global stocks, London Property prices and eurozone debt.

This European reflation trade has been a gift to the ECB. They have gotten all their problems solved while all the other central banks do all the work. The OMT remains untested, and in the wake of the Germans catching a fit over something as small as a 0.25bp cut in the cash rate, how the hell will Draghi ever actually activate OMT. The Eurozone and ECB are complacent about periphery bank risks... after all its those banks that will be exposed once tapering begins and everyone realizes its stupid to continue buying 2yr Spanish and Italian debt at 1.% yield when 2 year US yields will like be around 0.50bps or so. The trade doesn't make sense anymore on a risk adjusted basis. It was cool to buy 2 year periphery debt when it paid 4% yields, thats great... but now... The trade is about over and maybe this lower inflation print is what gave them the last gasp rally in bond prices and pushed yields all the way to 1%. The EURUSD is highly correlated to the Eurozone bank shares indexes, and once these periphery yields start to rise and the banks dont have access to LTRO funding anymore... they'll be screwed.


This payrolls number next Friday has huge implications. If taper timeline is advanced because of another 200k+ payrolls, the long periphery debt and equity trade could reverse. Periphery rates may rise and their banks will start to sweat, lower share prices and the deflation will get worse. The real EUR risk isnt even deflation, its return of tail risks in periphery bond markets that should have never rallied this much anyway without the Fed and BOJ liquidity. Looks like Draghi will have to deal with both.

I am hoping tonights CPI print will send EUR higher towards 1.3650, capitulate all the retail shorts then I plan to jump in and try shorts yet again.
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Twitter: @TrendersGame
  • #71,012
  • Nov 28, 2013 3:25pm Nov 28, 2013 3:25pm
Quoting Citiboy
I have been running back through some analysis today and noted the following: - After last months inflation print 2 year Spanish and Italian yields have dropped down to near 1.00%, this is the lowest level in years. -This spread tightening in periphery debt (price appreciation) is helping out the local Spanish and Italian banks as they became the main buyers of government debt after the LTROs were initiated in 2011. -This year, especially in the past 4-6 months there's been a flood of articles about global investors buying Spanish and Italian debt,...
Excellent analysis.

Thanks for your contribution City
Those who say it cannot be done should not interrupt those who are doing it
  • #71,013
  • Nov 28, 2013 4:22pm Nov 28, 2013 4:22pm
Great info Citiboy and PipTrapper. So nice to come here and find excellent commentary. Other threads it takes hours to search through all the meaningless quarrels to find some good information. Your contributions are much appreciated.
  • #71,014
  • Nov 29, 2013 2:49am Nov 29, 2013 2:49am
Good morning all. Another look at Cable. Seems to be playing out.

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Those who say it cannot be done should not interrupt those who are doing it
  • #71,015
  • Nov 29, 2013 2:50am Nov 29, 2013 2:50am
Quoting PipTrapper
Good morning all. Another look at Cable. Seems to be playing out. {image}
short @ 6328

Good day.
Wherever you go, there you are.
  • #71,016
  • Nov 29, 2013 2:55am Nov 29, 2013 2:55am
Quoting PipTrapper
Good morning all. Another look at Cable. Seems to be playing out. {image}
Nice chart, it is getting much clearer…I like that
Wherever you go, there you are.
  • #71,017
  • Nov 29, 2013 3:01am Nov 29, 2013 3:01am
Quoting milam
{quote} Nice chart, it is getting much clearer…I like that
Good morning Milam... or in your case, good afternoon
Those who say it cannot be done should not interrupt those who are doing it
  • #71,018
  • Nov 29, 2013 3:01am Nov 29, 2013 3:01am
Quoting Citiboy
I have been running back through some analysis today and noted the following: - After last months inflation print 2 year Spanish and Italian yields have dropped down to near 1.00%, this is the lowest level in years. -This spread tightening in periphery debt (price appreciation) is helping out the local Spanish and Italian banks as they became the main buyers of government debt after the LTROs were initiated in 2011. -This year, especially in the past 4-6 months there's been a flood of articles about global investors buying Spanish and Italian debt,...
The black friday plan of attack!
All posts are my personal opinion
  • #71,019
  • Nov 29, 2013 3:04am Nov 29, 2013 3:04am
All news are negative but euro still go up why no one knows why so wait for its badly fall down
  • #71,020
  • Nov 29, 2013 3:07am Nov 29, 2013 3:07am
Quoting usman ashraf
All news are negative but euro still go up why no one knows why so wait for its badly fall down
If you want to see why E/U is going up, you only have to see that USD is flat and the E/J is rallying. This is not only about economics. This is about central bank meddling... More specifically the BOJ and the Fed because the ECB is doing nothing.

Japanese banks are now buying Eurozone sovereign debt and other european assets instead of japanese gov bonds.
Those who say it cannot be done should not interrupt those who are doing it
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