Breakfast Blog: Morning Update

This week to date we have seen a continuation of the upward momentum across the board, on the economic front markets have received support from Spanish bailout rumours and stronger then expected data out of the US. All eyes today will be on the EU summit, we are not expecting anything major to be released but any further mention of Spanish bailout or an update from Greece could steer the market higher. Overnight we have seen data from China showing the economy slowed for a seventh straight quarter in July-September, missing the government's target for the first time since the depths of the global financial crisis. The Chinese have supported the data stating that 'This is within expectations, the economy is showing signs of stabilizing, that is good news', traders will look to the market reaction for a more clear view on the stability of the chinese economy.
In terms of levels we need to be aware of today, SPX levels on the upside (Yst Highs 1463, Sept Highs 1474), DowJ ( Yst Highs 13,563, Sept Highs 13,662 and downside support at 13,492).
Although market sentiment has remained bullish throughout the course of the week, we need to keep in mind that a correction could take place before the christmas rally begins.

Happy Trading

Good Morning Markets,
Yesterday saw the Euro climb out of the 1.28-1.30 range it had been trapped in for the last few weeks, with traders getting out of there Euro short positions it has caused a squeeze and the price action currently sits above the 1.31 mark. You can wait weeks for a move like this and before you know it and 110 pips later its happened and you haven't even blinked yet! A typical buy the rumour move ocured yesterday with a rumoured credit line to Spain this was later said to be "over-interupted" by a Senior German Lawmaker. Then Talks between Greece and The Troika broke down, but you can't keep a bad Euro down and with a brief correction to 1.302 the 23.6% Fibo Retracement of the Euro rally this week, it went higher and pushed thru the 1.31 level during the Asian session.
The Equity markets joined in with the Risk Sentiment, The S&P 500 finished up, closing above the important  1455 level. This is a far cry from last Friday when the 1425 level was tested. Dow Jones finished at the 13,550 Level, But sold off right after the close and sits at 13,525 as I type.
A quiet day regarding news today so all eyes will be on any more developments from Europe and especially Spain.

Breakfast Blog

Asian equities followed the European and American sentiment of Monday and edged higher on speculation over a Spanish aid request, a Greek extension to its bailout terms, and better activity data and earnings in the US.
Tuesday promises to be a busy day with respect to data releases we are expected to see Economic sentiment from Germany and inflation from the U.K.
In the currency markets all eyes will be on the EUR/USD as we have seen the pair hold on to Mondays gains and the pair at the time of writing currently trades at 1.29912 testing the psychological barrier of 1.30. There are bound to be plenty of sell orders clustered around the 1.29900-1.3000 level so traders will be looking to any middle eastern buying in the morning session to push us over this next level which could lead to a break in the pairs range.


Happy Trading

Breakfast Blog

Top of the Risk Management morning to all, Yesterdays Euro rally started at the 200 Day MA average and did 200 pips before fizzling out at 1.2951...a very important fibonacci retracement. This was the 50% retracement of the 1.2824-1.3072 rally. I can guarantee there will be a lot of orders around here with stops just above. The Euro rally yesterday broke through the 1.2910 barrier with apparent Macro Fund stops being tripped just past this level allowing further upside. The Euro has since consolidated and now sits at 1.2935 as I type. The American equity markets opened in positive territory yesterday trying to stop the rot after 3 sessions in the negative. Wall street reached the heights of 13,435 before selling off nearly 100 points. This has been typical of the American sessions this week. The Initial Jobless claims were the lowest since February 2008 but there was errors cited in the results as one large state was omitted from the calculations. A quiet Asian Session saw the Euro once again go for the 1.2951 Barrier but this was stopped once the Europeans entered the frame at 7 O'clock London time.
On the order board note we see big bids for the EUR/USD pair at 1.2900/10 and big offers from 1.2960 upwards. It looks like another day in the range but markets do seem more positive so the upside would be favoured. Happy Trading

Intervention vs Correlation

So as I write we have seen the Eur/Usd trend positively from the morning lows of 1.28470, on the back of what positive news we ask ourselves?. Last night SnP rating agency downgraded Spains credit rating, this would usually cause a drastic selll off in European and Eur related markets but instead we have seen a slight rally. The only logic behind this rally can be down to the fact that a downgrade has already been priced into both foreign exchange and equity markets. As a trader, the psychology of the markets has changed over the past few months we have started to see a negative correlation between bad news/data and market reaction. Usually bad news causes the markets to trend in a downward direction and positive news causes the markets to trend upwards in a positove direction, but this has however not been true. In my opionion this can be directly attributed to the level of intervention that we have witnesses by the BIG3 (ECB,FED,BOJ). The markets have become a battle between the central banks, Who can print?How much can be printed? When do we need to start printing?

The result of the above has left the market ranging in no definate direction, we have seen the diminishing effects of QE3 a rally that lasted no longer the 5trading days and there is already talk of QE4. I think that we could see an unusual swing in the final quarter of this year, we have earnings season which will undoubtely be highlighted by poor earnings from US corporates, a heated US election battle, slowing growth in China, a crippled Eurozone and yet the markets continue to make gains? Something is not adding up, the correlation is no longer.

Happy Trading

11th October

Risk off, Europe, Fiscal cliff, China? The markets have been dominated by these headlines for the first 3 days this week, a long hangover from Fridays Non-farms and Low unemployment rate. Yesterdays American session saw a 100 point sell off on Wall Street, relentless selling dominated the Asian Session aswell after S&P downgraded Spain, the Dow Jones touched off 13300 briefly before recovering to 13330 where we trade as I type now. With Analysts starting to mention the word correction there will be a negative bias to todays european session, but with low interest rates, free liquidity and not much news a relieve rally will occur on any good news. The Euro is still stuck in its 1.2822-1.3050 range, the 200 day MA was tested last night but it bounced straight off and went higher, there was obviously a lot orders located in that region. We trade at 1.28492 at present. As of yesterday the pair will see orders in the 1.291 area and bids in the 1.283 region. A break below the 200 Day MA would turn the Euro bearish and a deeper correction target of 1.2750-1-26 could be seen.  Not much news to note today except some initial jobless claims at 13 30 in The States.
Happy Trading

Breakfast Blog

European equity markets slipped overnight as the Eurozone debt crisis remained in focus after finance ministers meeting in Luxembourg yesterday which added Cyprus to the list of countries that requires a bailout.

 

Mario Daghi is currently addressing the conference, and we have seen the Eur/Usd and equity markets slip back from earlier highs. Coupled with this the outlook for the global economy is likely to remain in the spotlight after the International Monetary Fund on Tuesday cut its 2012 global growth forecast to 3.3 percent from a July estimate of 3.5 percent.

 

As the Eurozone comes back into the spotlight traders will be looking for entry levels around the 1.2900 -1.29100 levels, if previous weeks are to go by we have seen support from middle eastern buyers at these levels, so keep an eye on the bounce.

 

Happy Trading

Breakfast Brief

All eyes turn to the Luxembourg, where Eurozone finance ministers are due to commence a two-day meeting to discuss debt management efforts. Traders will be interested in any moves to mend disagreements between the Greek government and troika monitors that open the door for disbursement of the latest batch of bailout funding. We will also be looking for any clues about the timing of a Spanish request for a full-on rescue package are also sought, particularly after borrowing costs rose at a bond auction last week. Any such bailout information should be seen as a bullish sign for the Eur.

Happy Trading

Trading the News

With an important day ahead in respect of market news we are expecting an extermely volatile day. Here are a few fundamentals to be aware of when trading on a day like today;

1. Do not make 50/50 bets prior to releases, if you are in profit be sure to lock in profit and re-enter after news releases. After all betting on these releases is 'GAMBLING'
2. If trading F/X focus on strong currency pairs which tend to be less volatile and more liquid. These pairs tend to hold solid direction and can be easier to trade especially on days like today.
3. If you are not in the zone and remain un-sure about expectations and probability of outcomes, remain on the sidelines. The markets usually return to normal volume and volatility after these releases which tend to be easier to trade. It is also very important to have all resistance and support levels mapped out on the graphs you are trading helps the trader find high probability entry/exit levels.
4. Do not trade if you are un-sure. There is always an opportunity to trade you do not have to always be in the market. If you want to be in the market always look at the option of reducing stake size reducing that 'FEAR' feeling.
5. Avoid getting carried away on the releases and be aware that there are many variables that can be priced in to the market already, so if numbers beat expectations do not always be expecting drastic increase in price levels.

In conclusion it is a dangerous time to trade, but attempt to maintain a level of control over your trading, and ride the wave.

Happy Trading

Brunch Brief

We have seen stocks and equities advance during the morning session this was primarily on the back on the likelyhood of Spain requesting a bailout in the coming days/weeks. Some analyst's seem to think that this might not take place until after the US elections. On the flipside of the coin Moody's published a report which stated that the Spanish banks may need a larger capital injection then previously expected, the results of last week stress tests may be to some digree distorted.

We are expecting to see DowJ open up slightly higher having tested 13,572 in early morning trading. Futures are pointing to sligh gains across the board, it wouldn't be unusual to see the DowJ trade down to last night close 13,510 and then make a move towards the upside and challanging the morning highs.

Happy Trading

European markets opened lower on Tuesday as Spain is reported to be ready to request a bailout but Germany is hesitating, as they favour giving more time before an official request is submitted. Poor Spanish Jobless claims released this morning rose 79,645 in September, or 1.7%, to over 4.7 million, according to government statistics. This will be play on the markets this morning as uncertainty creeps back in and the Eurozone once again steps into the spotlight.

Important levels to take note of include;

 

EUR/USD: The pair traded lower overnight as Spanish worries remained prevelant, the morning low was at 1.28775 and the morning high traded around 1.29194. We expect to see a bit of a recovery into the afternoon testing higher levels.

 

DowJ: The index traded in a very tight range overnight during the Asian session the lows reached were down at 13,490 and the top of the range was 15,530. With no economic data out today we expect to see stocks climb higher, off the back of Bernankes speech yesterday. Will the market have faith in QE3 we soon will see.

 

Happy Trading

European Breakfast Brief

European shares and indexs opened lower this morning despite talk of leveraging the permanent bailout fund, the European Stability Mechanism (ESM), to give it more capacity to help struggling euro zone economies. All eyes will be on the German IFO Survey of business confidence due out at 9am. Expectations call for a slight pick-up on the headline Business Climate gauge, snapping four consecutive months of losses. Needless to say, a soft reading may conversely amplify risk aversion further.

European stocks look set to open firmer, after BOJ initiated another round of Quantitive Easing, this was 40% to 50% priced into the market as analysts believed it would be implemented this month or in October. The terms of the easing were 80 Trillion Yen, the 10 trillion extra increase will be split between asset purchases and Japanese Government bonds. The Nikkei was up 0.5% to 9171.
At present Wall street sits at 1617, a lot of resistance is seen at 1630, with the market not being able to breach that level from numerous attempts during the Asian session.
Resistance on the EUR/USD looks strong at 1.303 and the topside is being contained around 1.3075.
Happy Trading!

Brunch Brief

The US Stock Futures opened lower this afternoon, after the major indexes (SnP500, DowJ, NASDAQ)  retreated back from their previous four-day winning streaks. This coupled with a poor outlook for the Eurozone played down by a troubled Spanish economy and a potential Spanish bailout can only presume that the morning mood will prevail this afternoon.

The EUR/USD has retreated from morning highs and traders should look to remain bearish this afternoon, as the outlook remains negative and it will be hard to see the EUR getting back to 1.3100 levels.

DowJ has been trading towards the downside this morning but we have seen the 13,500 resistance level holding firm, on the upside the Dow is pressing against the 13,538 (200day SMA) resistance, but traders should be aware that rallies will more than likely be short lived.

Happy Trading

European Breakfast Bulletin

Europe:
European shares are expected  to open lower this morning as investors wait for Spain to decide whether to ask for help from the European Central Bank’s bond-buying schedule.
Spanish Prime Minister Mariano remains uncertain about tapping the ECB’s bond-buying program, which would mean signing up to a permanent bailout fund.
The EUR/USD traded higher overnight reaching a high of 1.31141 but was subsequently brought down to a session low of 1.30906.
Uncertainty remains prevalent throughout the Eurozone and all eyes will be focused on German ZEW Business Confidence data to be released at 10.00am.