The Club!

Infinitus have you considered maybe brokers knew there is chance for this event to happen, becouse message was in de-leveraging of most brokers on CHF pairs weeks ahead of SNB de-peging. I am starting to think they considered it a very high likely scenario to happen thus decreasing leverage. My broker went trough well, maybe becouse of cutting leverage helped a lot.

I do not know. Maybe there were some warnings on the wall already. You know what most of the time happens, when a bet gets to one sided.

Duka gave warnings very early.

Some EW sources like EWI gave warnings, too:

http://www.elliottwave.com/club/anal...%20SNB%20Shock


It states:

“Likewise, a significant move may be fast approaching in the Swiss franc (CHF) relative to the euro…. The precarious position of stocks calls for the euro crisis to worsen dramatically. As it does, mood will deteriorate, traders will sell euros and other weak currencies, and the SNB will abandon its peg in an effort to protect whatever valuable assets it has left.” -- Brian Whitmer, December 2014


I have not traded UC or EC for a long time. But as a German proverb states: the fortune is with the dumbest


I am trading with Duka via a segregated account, which is denominated since a longer time in sFr.

Now the question for me is: what now? Shall I take the profit I made now and transfer it back into EUR, USD or whatever? Or to completely switch the denomination? Or to leave all in sFr?

The big question for me is: is the SNB this time right?

CB's have a history of being wrong/doing the wrong at the worst of times.........

Any opinion is welcome

Interesting thats some bald correct statement from that EW site.

If your acc is in CHF thats great, CHF should appretiate further which will grow your account, and maybe at end of 2015 or 2016 you can convert into EUR, as EUR looses further against CHF by end of year. I wouldnt switch nomination. SNB will add negative rates but i dont think they can counterpart negative rates against non peged CHF considering safe haven flows from EZ, unles they really go heavy on negative rates, or they actually protect some level on EURCHF and keep buying EURs but at slower peace, for both of those scenarios we cant know until next few months and things are clear.

http://www.zerohedge.com/sites/defau.../picture-5.jpg
What Really Happened At The SNB Yesterday: One Person's Take


interesting

Hi man,

Think ECB got them cornered. Have just posted SNB balance sheet on EU thread, they got like 175Bn Eur. In case ECB announced neg rates, SNB couldnt take it anymore. So they realized they gotta abandon peg sooner and cut those rates to neg first, so impacts wont be that huge after ECB cut.

But now imo SNB didnt expect such a strong impact. So it is not certain. Could be quite possible that EUR got so weak the r gonna deliver just some betaversion - will be only blathering about QE but do some minor changes. Result could be as well correction on EU and CHF. So am pretty unsure what to expect of ECB. if they wont deliver, bonds could spike, so it has to look like they got market what was needed. Could be anything but I suspect quite good numbers coming out of EU next week.

We gotta be closely watching. You still got time to move funds till 22th .

T

Maybe you are right. Maybe best to keep all the CHF. I can not lose until around 1.25 literally

maybe I should buy a EC call for the 22nd?

Are you talking about those Oil options? I really dont know how Oil works.

no, I meant buying an EURCHF call

Well options are generally best hedge. They have been made for that. I got most assets in czk, unfortunately illiquid, loosing already for some time now and dont have access to hedge czk. Still havent opened those accounts. Maybe it would be the best to hedge the move. But imo better to trade it. Who else can make cash out of such move than trader? All others will loose or gain some and perhaps notice half a year ago.

last analysis:
http://singulorum001.blogspot.de/201...rm-update.html

Well, the drop did not come unexpected.
pink 5 of blue 5 may have ended as ending diagonal. Price ran into major support, which can be seen on monthly chart.
I have here mainly four issues I am thinking about:
a) since the drop in EU was literally staged over the thin traded holidays in December, question is, if all the "smart money" was on board. If not, we may bounce now or soon.
b) the steep and fast drop in USDCHF and EURCHF has caught almost all the "smart money" on the wrong food. Even Goldman lost, and that might be telling. What will they do the next days, to recover at least a bit of their losses?
c) from an EW perspective, I do not like how the main base channel was broken and the momentum speeded up over the course of the last days. Right now my count shows, that we are in a wave 5 of an impulse down. Maybe we have to relable that in the future, because the actual 5 may develop as an unfolding wave 3 in reality!?
d) From an socio-economic point of view, central banks are only part of the herd, and history shows over and over, that central banks do the wrong at the worst time. They suck big in timing. So in light of this, was the decision of the SNB yesterday the panic reaction at the end of a wave 5? Got they involved in a sucker-rally? Inquiring minds want to know, but I fear we will only see in hindsight :-(

I see three options right now:
a) as shown in the following chart, we do acknowledge the spike down yesterday as the end of a wave 3 ABC-move (of an ending diagonal)
or
b) same count as above, but the actual subwave 5 of pink 5 is extending more to the downside: Maybe we are in wave B (up) of an ABC subwave 5 of pink 5 now.
or
c) ignore the spike (reasoning: leveraged market, algo-induced, panic etc.), then we may be actually in subwave 4 (up) of wave pink 5. So this would give us room for one more drop. Movement above 1727 would invalidate this view, because we would run into the territory of subwave 1.

http://www.zerohedge.com/sites/defau.../picture-5.jpg
Knight 2.0: Jefferies Rescues FXCM With $300 Million Bailout, CNBC Reports


snipset:

So - in summary - a central bank blew up an FX broker and a mid-market junk-bond underwriter bailed them out... must be good for a green close for the week in stocks!

Very reasonable guy, I mostly agree.

Schiff is guy you want to be careful with if you are listening him for investment. He is aprox 70% right and 30% wrong, those 30% wrong is however very large portion of what makes investing worth. Quite sad how he opens show with : regular financial comentators are acting like cheerleders. Funny thing is thats exactly how he is operating. Then usually he also embarks that if there is good economic data, comentators drag it trough news all day and if its bad data, they rational it and try to nit-pick it. Its true, but again, thats exactly what he does, just in oposite order hehe. If data is bad he is going to jump on first ball not questioning a bit and go along with bear story. When data is good, he will nitpick all numbers of who got employment, why CPI is down. Basically its principle of rationalization of counter argument to look it like it is being negated, no conclusion point is given but if you rationalize it enough it seems like its working.
Heck in episode i think 38 or 39, he totaly contradicts himself and his speeches for past few years. He kept stating how droping oil price is great for economy and consumers, and then once Oil droped big he completly changed his view, started noting oil price drop is bad for economy, it might be good short term for consumers but economy cant take such low oil price. Hehe so basically completly switched his view once he saw that his first view was way too simplified. If deflation picks up with lowering prices, he will nitpick holes and bear it on currencies or CBs as long as he can find gold bull view on it. If prices go up, its his regular story...inflation is bad. So basically he has no proper view at all, he is cheerleader afterall. I like listening to his shows let me be clear, he does states many facts, but dont listen to his whole picture becouse its sooo skewed.


In this last video he is noting that FED announcing QE would crash markets which is obviously not true at all. Market has taken countless QEs, its not retailers and gold bugs who determine market reaction on QE announcement, its Wall Street party that does. So if and when next QE will be announced he will be wrong, just like on previous few.

52 minutes ago | January 16th, 2015 20:14:02 GMT.
SNB’s Jordan: Market reaction has gone too far
http://1.gravatar.com/avatar/b38e4b7...4&d=retro&r=PGby Adam Button
Comments from SNB President Thomas Jordan in an interview with Le Temps newspaper:

1. Market reaction has gone too far, finding equilibrium will take time
2. It was impossible to change the bank’s communication before changing the policy
3. It was necessary to surprise the market
4. SNB was aware the move could have a major market impact
5. Gradual exit of cap would have been impossible

#16'927

http://www.cmegroup.com/trading/fx/g10/euro-fx.html

...outperformed!
FXcube

In nomine Patris et Filii et Spiritus Sancti!

An der Börse gehts zu wie im Dschungel -- nur die Beute zählt!

[quote=infinitus;8001510]last analysis: http://singulorum001.blogspot.de/2015/01/01122015-eurusd-short-term-update.

I start thinking that the smart money was on the movement at 17th December. Maybe that explains the hard movements during holidays.
Of course they haven't been during these last two days, so an upward movement, or an spike it's possible to 1.18 area.

Luckily I don't trade CHF

My broker survived, wonder what will happened with FXCM & their negative balance clients..


ADDED
umm.. didn't read this before posting:

http://blogs.wsj.com/moneybeat/2015/...dangerous-mix/

2:25 pm ET
Jan 16, 2015

A Lesson From the Swiss: Leverage and Online FX Are Dangerous Mix

1. By
2. Michael J. Casey

http://si.wsj.net/public/resources/i...0116135645.jpg
Bloomberg News

From the days when online sites first brought foreign currency trading to retail customers in the 1990s, seasoned currency traders at big banks and institutions warned that it was not a game for the little guys.

With the big client losses at prominent retail platform FXCM after the Swiss National Bank SNBN.EB -0.94% unexpectedly removed the cap on the Swiss franc, the reason for that warning has been made painfully clear: The leverage needed to make money in FX is dangerous.
Through leverage, an investor buys a security or a currency with only a small amount down, with the broker or dealer covering the remainder until a sale is made. In equity trading, there is some opportunity to do that via margin trading, where brokerages lend money for stock purchases, but in retail currency trading the degree of leverage is significantly higher. In fact, it’s a necessary feature to make money in a market that never rises, in percentage terms, anywhere near the same extent as equities do. Some online trading firms allow up to 100 times leverage, meaning the amount initially tapped from the client’s account is only 1% of the value of the overall bet.
This model means that the upside gains are potentially much larger. Say an investor puts $1,000 into a bet that the dollar will rise against the Canadian dollar and it goes from C$1.00 to C$1.02. Without leverage, the two-cent gain would translate into a profit of $20. At 100 times leverage, the gain would be $2,000, based on nominal original investment of $100,000.

The problem is that the opposite happens on the way down. In that case, a decline of the same magnitude would see the position lose $2,000 and the client would be on the hook for the additional $1,000. A smart trader will use so-called stop-loss triggers to protect themselves from losing too much if the price falls too far. But many don’t use them, becoming wedded to the belief that their position will recover.
What typically happens is that the loss is deducted from the client’s overall account. Perhaps the client has $50,000, which then absorbs the $2,000 loss. And if the capital base continues to decline, the brokerage typically makes margin calls, requiring the client to put up more cash.
On Thursday, however, losses in the euro against the franc were simply too big and too fast after the SNB said it was abandoning its policy of imposing a floor for the euro at 1.20 francs. With the euro dropping by as much as 25% in the first hour or so, entire accounts were wiped out immediately.
In theory, the client is liable for the full amount beyond the depleted account, but the brokerage’s battle to claim those funds, perhaps with lawsuits down the road, will take months, if not years, and may never be won. In the meantime, brokerages that didn’t have strict enough margin rules in place have instead taken the hit to their own capital base. In the cases of FXCM, whose stock was halted Friday on news of its clients’ losses, U.K. broker Alpari, which was thrown into insolvency, and Global Brokers in New Zealand, which stopped operating altogether, the Swiss franc blow appears to have been big enough to challenge their viability.

“The moral of the story is that brokers can’t offer that kind of margin to clients,” said Larry Tabb, founder and CEO of the TABB Group. “At the end of the day, it is the broker that will pay.”