EURUSD - The ratio of long to short positions in the EURUSD stands at -1.40 ... signals more EURUSD gains.
USDCHF - The ratio of long to short positions in the USDCHF stands at -1.13 ... signals more USDCHF gains.
...
OK, I am just getting more and more baffled. The market is betting that the euro and Swiss franc will move in opposite directions? diverge away from the 1.20 peg? Right after the Swiss National Bank pledged (Michael Corleone voice) "don't you know that I would exert all my powers to prevent that from happening"?
highlight of today will be ireland versus spain ( but painful for me)
The Germans will tell Ireland they need to lay off some of those players, and tell Spain that their stars aren't worth the salaries they've been getting.
But the tulip-mania behavior has continued for 6 years now. Other moneys trade at prices that have some relation to what you can buy with the money, wobbling up and down by a few percent or being manipulated outside such a range for reasons we can understand. Analogy: I don't know if big stores outside the US do this kind of thing also, but here you can get "gift cards" (so-called because usually you get one when you are giving someone a present but want to let them pick out the specific thing themselves) for Barnes & Noble Bookstore or the Bed Bath & Beyond household goods chain or big general stores like Walmart or K-Mart. Now the thing is, a hundred-dollar gift card usually sells for pretty close to $100, but sometimes it will be discounted considerably if that chain is hoping to draw in new customers, just like you find some currencies that are intentionally depreciated, and the economic rationale is evident. But hundred-dollar gift cards to the Euro Store are the only ones in the world that sell for $120 apiece, and this is a general store that sells nothing that we couldn't buy other places, and avoid the special markup; now, a lot of people have little choice but to shop at the Euro Store, because there aren't any other stores except far away from where they live-- but of course, ever since the Euro Store gift cards started trading at these prices, the stores have been pretty empty of customers, while still remaining fully staffed and stuck with the same overhead costs. We keep hearing unsurprising news that this branch or the other can't meet payroll or pay the utility bills, but exuberance over news that a new loan has staved off bankruptcy seems a little misplaced when the CEO keeps announcing "We have no intention of returning to profitability-- ever." (I'm writing as Nowotny of the ECB just Bernanked the market, saying the ECB has no mission except inflation-fighting and they'll keep the euro high even though they know perfectly well that this will keep the whole EU bleeding in a years-long recession-- he didn't put it quite that bluntly but pretty close.)
I myself still have a $20 gift card to Borders Bookstore; when they shut down the majority of their branches, I intended to make a trip to one of the surviving stores before the whole chain folded, but I didn't get around to it. People who held long EUR/USD over the weekend of the gap-up made a good profit, but I would be horribly nervous holding long-euro over a weekend: one of these weekends inevitably they are going to have to spring a nasty surprise, maybe "If you are from Greece/Spain or you're not a citizen of any EU country, your euro holdings are being involuntarily converted to drachmas/pesetas".
I did not understand it all but with the first sentence you show an example of the what I am trying to say - the tulip-mania which lasted for about 1 year was pure speculative - and could probably been traded with technical analysis and fundamentals. The reason why people demanded tulips I don't know but there was a demand (fundamentals) - but at one point however people started to speculate on tulips not because they appreciated the flowers but just because traders expected price to trade higher. There was no true need just a game where you can buy and expect others to buy from you at a higher price - this as well as the first part can be explained by technicals but at the end price will trade so high that it will be absurd -price will be too high that even people that don't have any clue will understand that price is wrong - in this case you will be using fundamentals - but you need to wait until the technicals give you a sell signal our you will be crushed
The IT bubble is another example - going short silly companies which where losing money is on papper a good idea but many people lost when trading as these companies soared - as the did not learn about technicals (human behavior on the financial markets)
Its the same thing today - price is bullish - why? we don't really know - some say that its hedge funds taking profits - some one might be speculating on a good out come in the Greek election - we don't really know - but the technicals say that we should be bullish so I prefer being bullish.
Tulip mania or tulipomania (Dutch names include: tulpenmanie, tulpomanie, tulpenwoede, tulpengekte and bollengekte) was a period in the Dutch Golden Age during which contract prices for bulbs of the recently introduced tulip reached extraordinarily high levels and then suddenly collapsed.[2] At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble (or economic bubble),[3] although some researchers have noted that the Kipper- und Wipperzeit episode in 1619–22, a Europe-wide chain of debasement of the metal content of coins to fund warfare, featured mania-like similarities to a bubble.[4] The term "tulip mania" is now often used metaphorically to refer to any large economic bubble (when asset prices deviate from intrinsic values).[5]
same thing happened in spanish property market - prices driven higher by speculators - more developments because of false demand created by speculators - demand had already been supplied -there were no real buyers left - when they worked this out it was too late
Alej - thank you very much for your explanation. I am learning. This is really a battlefield between all forces!
If you know your enemy and you know yourself you need not fear the results of a hundred battles. If you know yourself but not the enemy for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself you will succumb in every battle.
I'm rolling over my recommendation from last weekend - short Euro over the weekend.
This, almost ridiculous run in the common currency this week, has shuffled out a handful of shorters (which is good) and most importantly, priced in at-least 50% of a new-dem win over the weekend. If Syriza does win (tonight I find out from our man on the ground in Greece, who, when I last spoke to him actually said Syriza held a 3% lead as of Tuesday evening), Euro is likely headed to 1.228.
Our broker is actually not accepting any orders from 6am EST to 3pm EST this Sunday owing to, what their internal analysts believe, will be unprecedented levels of volatility.
For any of you who are worried, scared, confused about your shorts - don't be. The bulls have had their bit, soon the drop is going to come with full vengeance.
Happy to get into detailed fundamentals, but am holding off for now - our previous arguments stand.
BoJ rate decision tonight may spur some risk off unless they do QE
Hiya Mystic, Be weary of the HnS formation, it has no downward sloping neckline and the right shoulder isnt having a volume spike. Just a couple of things to be weary of as the HnS is so common. I would assume that it isnt real
I'm rolling over my recommendation from last weekend - short Euro over the weekend.
This, almost ridiculous run in the common currency this week, has shuffled out a handful of shorters (which is good) and most importantly, priced in at-least 50% of a new-dem win over the weekend. If Syriza does win (tonight I find out from our man on the ground in Greece, who, when I last spoke to him actually said Syriza held a 3% lead as of Tuesday evening), Euro is likely headed to 1.228.
Our broker is actually not accepting any orders from 6am EST to 3pm EST this Sunday owing to, what their internal analysts believe, will be unprecedented levels of volatility.
For any of you who are worried, scared, confused about your shorts - don't be. The bulls have had their bit, soon the drop is going to come with full vengeance.
Happy to get into detailed fundamentals, but am holding off for now - our previous arguments stand.
Short into strength,
Midas
Dear Midas - reading your writeup here is most comforting and assuring of my short positions which I have been holding for weeks!!
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Originally Posted by Gregory McLeod
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