Chinook's EUR/USD (E/$)Mumblings
- Thread starter chinook
- Start date
Quote from trade-ya1:
With all due respect, what evidence do you have to say that the big money funds have already established large dollar long positions? I'm very curious as maybe I really need to improve my network of contacts.
I'm probably wrong and big money funds are looking at this as a temporary drawdown to 1.1600, where they'll buy aggressively for the next big figure move to 1.3500 as you said, and their hedging is what is evident in the technicals.
Or, maybe your contacts are playing it closer to the vest than you think?
The Soros' and Tudor's of the world can stomach this drawdown if they still believe the Dollar story. Or they're already reversed and using their contacts in the press and all around to keep the smaller funds long EUR?
Regardless, I'm rooting for you! I do hope this is only a shakeout and the day ends unch. and then next week we see a big EUR rally in tandem with a big Crude rally. Although, don't you think bullish sentiment is rather high in Crude though while public fear is very high as well going into elections and Bush is the big "Oil Monger" in their eyes? And as a result, we may see a sudden release of the S.R. in conjunction with the Republican Convention to give Bush a sudden boost? Either way, if Bush wants this election, it won't happen with Crude at $50. Crude's done for now through the elections. And if Crude's done, there's a good chance that so is the EUR rally. And then, maybe all will be normal again and we'll see EUR rally to 1.3500 like you said.
I think supply/demand is more important than anything as it discounts all variables and tells the true story.
Pejman Hamidi
"The Rookie"
As you know, I speak to numerous big investors and hedge funds. Frankly, they don't have much reason to lie to me as I am not really in their league and cannot hurt them in any real way. Many of them I have had a relationship with for a decade or more. Also, I often speak only with the investors of those Funds who know the firm positions (such as Blackstone, UBP, FIX Investments, etc.) and they all confirm that the big money funds are very short dollars. Granted, if they change directions it could get ugly, however, in my experience, these guys don't get shaken out that easily. The extreme trade deficit coupled with the softening US economy (and less aggressive Fed hikes) provide the fundamental backdrop necessary for the continued weak $ story. However, just looking at the chart that you posted, I just dont see how anyone can be dollar bullish (yet, that is).
That's the beauty of the market!!
Looking at that same chart, it's as clear as day that a top has been completed and the uptrend is history.
Pejman Hamidi
"The Rookie"
Both the $ and crude are having a classic counter-trend move in an otherwise strong trend. The $ is getting near to levels where I might get concerned, however, I'm a buyer of crude as well as non-US currencies. My latest thought is that we are going to have a shake-out in the $/EUR below 1.1970 and probably close back above. I'm starting to become less optimistic about a move higher in EUR today, however, I am going to buy the first break of 1.1970 under the assumption that it will be a bit of a shake and bake. Best, Neal.
Isn't it possible to set up a dollar short position using swaps, offshore accounts, and multiple other instruments and strategies that would give the appearance to investors that these funds are short the dollar, and then all of a sudden, their performance is great and no one even cared?
I suppose that is possible but highly unlikely. Why go to all that trouble just to hide a long dollar position? There is no dirty little secret that the 'smart' guys are hiding that is causing them to make long $ positions but give the world the appearence that they are short the dollar. In an instrument like the $, the market is so huge and cannot be influenced significantly that there is no reason to hide your activity or disguise it in any way.
That's what I thought, until $44.50 was taken out like it was a feather. A major sell signal is being generated on traders desks all over the world in crude today, and $42 is going to get run over with "reckless abandon", unless of course there's a reversal. The closer we get to the Republican Convention, the lower Crude is going to go, and I would not be the least bit surprised if there was a release of the S.R. and we saw a Crash, which would present a too ideal buying oppty.
I like to go in and pick up money when it's laying around, and right now, I don't see anything with regards to the old stories of Dollar Bearish, Crude Bullish, Twin Deficits, Softening Economy.
But I'm rooting for you and I hope I'm wrong. I want to see you make money!!
Pejman Hamidi
"The Rookie"
In the long-run, yes, but in the short-run, there can be some deception, and especially at the beginning (or end) of a trend, when the large money needs to lay on massive lines in the opposite direction.
Hiding their positions would not be a "dirty little secret", but rather appropriate strategy of building their positions, and at their size, I would imagine a little deception and a pool of contacts goes a long way for just a little edge and a small window of time.
Pejman Hamidi
"The Rookie"