Stubborn as a mule…this kind of mindset can really get you in trouble.
If it wasn’t for the reasonable understanding of the “big picture” it would be very easy to just jump on the ‘long train” and passively assume the The U.S Dollar will continue to rise.
What’s also interesting to note is that no matter how much media hype, or how many days where risk is still “seemingly in the green” – world markets are still in the process of putting in a “lower high”.
After an entire month trading sideways The SP 500 as well DOW are still unable to make new highs, and are now “juuuuuuust on the edge” of tipping back to the dark side.
I hear rumors that Luke Skywalker slips over to the dark side in the new Star Wars film.
Sign of the times maybe. The timing looks right to me.
Nice to hear from you again Kong.
Are you expecting ECB to really disappoint this coming Thursday? Short EUR and DAX long trades seem to be the over crowded trades based upon ECB expectations this Thursday. Just look how much each has moved since the leak of more QE came out in October. If they do disappoint, could see an almighty rally in EUR. Am positioned short Dax so we shall see.
It’s incredible how every single bad news is now met by, “moar QE coming”. Should FED disaapoint next week with no rate rise or if they do raise rates but then state, “no more rises for 6 months or data dependent”, we could see risk spike a little but all in all, I think risk off is seriously coming soon (hopefully).
I expect the FED to stay put ( or perhaps .25 ) and risk to come off / dollar fall regardless.
I believe the real impact will come from any statement following the FED meeting. If they hike but say they will then be on hold or that further hikes will be data dependent, we could still see risk taking off.
If no hike, then again we could see a short term pop in risk-on (partly due to santa rally). We’ll then only see a sustained risk-off when FED does not announce further QE and so markets will try and force the FED to do something more.
We have NFP this Friday too.
By the looks of the markets last night, looks like they are intent on seeing new ATH’s in DOW and S&P. I said (on this very forum in March I believe) that we would not see August 2014 lows being passed down and although we came close, they managed to ramp everything back up. Unless we get a major risk off between now and end of year, Aug 2014 lows will hold until some point in 2016.
The ECB doesn’t give a damn crap what the Germans are saying. They never did or can you mention one time they did?
Politics!
How many German bankers and finance ministers have come out and said that QE and purchase of debt isn’t healthy in the long-term and will not be tolerated. How many times have decisions by the ECB gone to the German courts.
Lets see what happens when the ECB starts buying deeply negative yielding bonds and the Germans start to realize the ECB is one small black swan event from sitting on billions of euro worth of losses. Germans know they will have to carry most of this burden.
The ECB knows it has a political game to play and without the Germans, the ECB is doomed. The Germans know they are the ones who will have to pay if/when the ECB will blow up.
Let’s see how it plays out.
Why should the ECB disappoint?
Hi michaelpenthous,
Disappoint as in not deliver as much as the markets are expecting. Eur$ has dumped 4%+ since Oct on expectations of QE and rate cuts, Dax has rallied over 2k pips since Oct. Since last week alone Dax is up 5%.
Remember ECB also has to contend with the Germans who were already against QE last time round so it may be interesting to see what (if any) comments thy may come out with after any QE/tax cuts are announced.
michaelpenthouse:
You may want to check out comments by Bundesbank president Weidmann’s as well as the comments of the German Finance minister Wolfgang Schäuble.
Just a few I came across:
http://www.bloomberg.com/news/articles/2015-11-10/ecb-faces-three-suits-over-quantitative-easing-in-german-court
http://www.bloomberg.com/news/articles/2015-01-22/german-ecb-officials-said-to-have-showed-most-opposition-to-qe-i58efgzt
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11073816/Mario-Draghi-cannot-launch-QE-without-German-political-assent.html
Only so far ECB can go. They are not omnipotent.
Should ECB implement all that they said in October 2015, it will be interesting to see how the markets react in terms what powder the markets consider the ECB has left afterwards. If they think this is all they have, then any bad data onward will be a sign for risk off until there is more QE from perhaps the USA.
michaelpenthous:
I rest my case. Just look at Eur and Dax after ECB meeting.
The ECB vastly under-delivered and bang bang, all those who were relying upon the ECB to deliver got shot down and crushed. As I mentioned above, Dax long and Eur$ were the over crowded trades and when the ECB failed to deliver, just look at the speed of the un-wind in these trades.
The markets had run up way too much on expectations of what the ECB was going to do and what they could do. ECB knew that with bond rates that were negative, they only had so much dry powder left and it made no sense to increase bond buying limits as if they held on to these bonds until maturity, they would have to take a capital loss.
Should Euro zone bond rates rise much further, this may encourage the ECB as they’d be able able to buy bonds above negative yield. Then we may get another increase in the ECB QE. Until then, no more QE from Europe.
Boom…..
Too micro for me Madness as…..great insight on the specifics there in EU but for me it was as simple as seeing/knowing risk craps out here…a confirmed lower high in global markets and down hill from here.
Great work man.
Entry short USD Tues will register as my largest trade of the year.
Wow….what a whopper!
“I expect the FED to stay put ( or perhaps .25 ) and risk to come off / dollar fall regardless.”
Gotta’ agree with that. It seems so priced in right now due to the months and months of rate-hike anticipation. Buy the rumour, sell the fact. That’s what’s probably going to happen.
What a putz, Kong never changes…after 1,500 pips he says to the effect, the dollar will fall. No shit sherlock, eventually it will.
Sounds like you’ve got this figured out too jack ass…
1500 up…yup….great place to start looking short.
Very simple. Very straight forward – you nailed it.
Awesome!
No shit clown.
We don’t f#*k around here – obviously.
Get friendly…..contribute….be cool.
Make money.
I would like to apologize for the name calling…you infuriated me a long time ago with your USA bashing, and as a fierce patriot (Retired USAF), I have a hard time sitting idle while the USA is being ridiculed, unjustifiably at times. When the truth is spoken, no problem, but that has not always been the case. If you could tone that down a bit, and it seems you have, then getting friendly, contributing, and being cool are in order. Thank you again for the recent insight, I have made money. Peace.
Fantastic “Someone” – this is just fantastic.
Please understand……I have lived in 8 different countries over the past 16 years ( The U.S included…both Miami and Las Vegas ) and have come to be an incredibly accepting and open minded individual with respect to the people I’ve found as friends, as well Government policy / economic factors across a very wide range of cultures/countries.
Patriotism really has no place in trading…and I can speak frankly in saying that I “don’t agree what so ever” with what is happening in the U.S – None the less……the people I’ve met in the United States have been great.
Opinions will be exactly that….and we’ve all got them. I try to trade “objectively” but on occasion “do go off the rails”.
I’ve softened. Thank you for getting back in here. I do appreciate it.
Let’s make some money!!
Thank you for the comments. ex-anonymous