Hang Seng rises for 11th consecutive day

Lots of money still flowing into HK it would seem, with the local sharemarket posting it’s longest run of consecutive gains since 2005, at 11 days, and the HKMA disclosing yesterday that they bought almost $2 billion worth of USD/HKD in order to protect their peg.

  1. Regarding EURUSD, here is my analysis this morning:

    Recommendation: short the EURUSD on rallies between 1.3015 (100H MA) and 1.3030 (50% fibonacci retrace) with SL above 1.3035, and targets below 1.2950.
    Analysis: Yesterday saw a sell off in EURUSD followed by a rebound. Traders are mixed between a desire to rally on new hopes (chinese PMI, housing, etc) and a desire to sell off (terrible german PMI and sentiment, no spanish bailout). The later will progressively start to dominate. Monday formed a bearish engulfing candle which was followed by some downside yesterday. The sentiment this morning is bullish based on some rumors (hot air) and the reversal will be sharp once it starts. We favor the short side and we think that the return towards the 100-hour MA will offer a good short opportunity. Further resitance in between 1.3015 and 1.3035 is represented by the 50% retracement and trend line resistance.


    Good luck!

  2. Sean,
    Another remark: today, AUDJPY seems to signal a soon to come short (or rather scalp) opportunity. Both AUDUSD is getting close to a horizontal resistance around 1.04 and the USDJPY a major trend line resistance around 80.4. Given the bullishness in USDJPY we would not look for a reversal but for a saturation (side way movement after peak) in AUDJPY short term. I think I will be looking to short AUDJPY today based on price action, probably starting from approx 83.50.


    I still have to give more details about these numbers…

  3. That’s sometimes where a little bit of luck can be very helpful; sometimes we just get set or miss our stop by 2 pips but it seems like most times its the opposite 🙁

  4. Sean, it’s Thursday (not Friday, not Monday), and there is absolutely no volume in this market (at least it’s my feeling).

    “Volatility is a river, traders are fish…”

    I feel like a fish trying to cross a drying river…what a feast for those eagles (brokers)

  5. Sean,

    Do you know if there is a way to access live volume information on EBS or Reuters (for example number of tics per second)? Or somebody that would provide this kind information?

    Here is something about FXCM, one of the big brokers out there:

    “Institutional customer trading volume(1) of $46 billion in September 2012, 8% lower than August 2012 and 64% lower than September 2011.” (!)


  6. I imagine Citi, UBS, Barclays and DB talking to each other now:
    DB: Let’s bring up, I have some good stops above 1.303!
    UBS: Come on, there are plenty more below 1.2950. Don’t be selfish, let’s go down it’s funnier.
    Citi: I have a big Binary touch at 1.3050 and 1.2950, so you guys stay quiet or I won’t help you next time!
    Barclays: waf waf (that’s their ads)

    Sorry to write so much, but that’s what happens when there is no action…

  7. Iridium, the euro is having a golden cross soon, 50 ma moving above the 200 ma. Aren’t you afraid that it will bring more buyers (just because they trade on this)?
    A question to all: American gdp is coming out on Friday – finally it may make this market move
    Opinion on eur/usd direction after that? Thanks!

    1. Golden crosses give also fake signals, and even if the signal is correct, you can easily get a major move of several days or weeks against the trend that the golden cross indicates. Just look back at the past. So don’t get hypnotized by it.

      We are certainly close to some key levels and the golden cross fits well into the story. I think that the EURUSD can get easily to 1.335-1.348, possibly we could go much higher, but before we start this new ramp up, the EU needs to prove it can stabilize the situation. For the moment it’s been a lot of talk. We need Spain to request a bailout, and OMT to become active. Only then, 1.348 will become the next target. In the meantime, history has shown that european leaders tend to act only when they are pressured. This is why I am bearish on the short term, and expect Rajoy not to request a bailout until bond yields spike again. I might be proven wrong of course…

  8. Iridium, congratulations, you were right on the money! Euro peaked around 3015 and is still dropping…After the worse than expected amazon and apple earnings, I doubt tomorrow will be a risk-on day.
    Thank you for the clarification and the teaching, I really appreciate your sharing your thoughts and reasoning. About the Spanish bailout request: no one can predict its timing, but you are probably right, euro cant rally until then. But then again, how low can it go? 1.28 has been a hard nut to crack, at least until now. What do you expect in the downside?
    And, again, congratulations, your selling action of today should be in the textbooks! 🙂 Cheers to all!

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