This EurChf is going well so far now at 1.2112 and chances are it could become a core position.
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Neither Tech nor Macro
- Thread starter fxintruder
- Start date
This EurChf is going well so far now at 1.2112 and chances are it could become a core position.
QE3 that is, priced in already tho but #spx is happy. Surprising how that #jpy is reacting; BOJ big d..k or USD becoming a risky asset. anyway my USDJPY long is slightly in the money now; more on this later.
More important is the coming Bernie speech and the time needed by the Market to digest all this before positioning.
More important is the coming Bernie speech and the time needed by the Market to digest all this before positioning.
At 1.0614 that is. This one is scheduled after after Bernie talks, I donât want to be filled before, in some liquidity distortions (knee jerk). I give to this trade the status of a core position tentative.
Why:
1: The price is that high because market is pricing QE3 for a while now. And Specs can push that to become a âbuy the rumor sell the fact â scenario.
2:AUD is more linked to Chinese economy than the US one. China numbers were ugly lately, even if we had some slight improvement in the past month.
3: A RBA rate cut of 0.25bp is likely in the coming 2 months, and AUD high levels are by a large part helped bu carry trade (yields spread).
4: I consider that QE3 push is the good opportunity to reach a level high enough to become out of macro perspectives very quickly(timing). Pushing macro traders to short it.
5: That level is nice enough to attract techs in numbers.
Risks:
On the downside, structural shorts covering at that liquidity level and pushing the price higher.
The global macro analysis that US QE3 is going to relaunch Chinese exports which in turn will need Australian Iron ore. That Idea attracting real money in the game becoming structural longs.
Bernie speech can push the price way higher if he appears too dovish
Why:
1: The price is that high because market is pricing QE3 for a while now. And Specs can push that to become a âbuy the rumor sell the fact â scenario.
2:AUD is more linked to Chinese economy than the US one. China numbers were ugly lately, even if we had some slight improvement in the past month.
3: A RBA rate cut of 0.25bp is likely in the coming 2 months, and AUD high levels are by a large part helped bu carry trade (yields spread).
4: I consider that QE3 push is the good opportunity to reach a level high enough to become out of macro perspectives very quickly(timing). Pushing macro traders to short it.
5: That level is nice enough to attract techs in numbers.
Risks:
On the downside, structural shorts covering at that liquidity level and pushing the price higher.
The global macro analysis that US QE3 is going to relaunch Chinese exports which in turn will need Australian Iron ore. That Idea attracting real money in the game becoming structural longs.
Bernie speech can push the price way higher if he appears too dovish
Question: Why don't do that with #eurusd in place of #aususd???
Cos it's massively oversold and OMT plus QE3 can trigger a big short covering upmove. Oversold doesn't mean undervalued tho.
Cos it's massively oversold and OMT plus QE3 can trigger a big short covering upmove. Oversold doesn't mean undervalued tho.
Quote from fxintruder:
I don't have any core position running cos was off the 2 previous months and have closed everything before that break.
I am slowly digesting what's going on and will have a clear idea about it by the end of this week. Plus the FOMC meeting and the German court decision are too important to enter the market ahead of them.
But I do open a long position on #EurChf after Draghi's OMT for 3 reasons:
1: OMT is going to eliminate the tail risk, namely EZ collapse, then likely reducing risk premium paid for safe havens built on the debt crisis.
2: #eurchf was the symbol of that feared collapse. Real money flowing massively into Switzerland, and SNB buying all Euros it can to maintain a floor at 1.20 and taxing transactions.
3: IT's a n easy trade at no risk since my stop below 1.20 is protected by the SNB.
I don't know yet if this is going to become a core position, I doubt that #euro is going to reach previous highs, but I think that slowly but surely the pressure on "eurchf is easing.
#eurchf :
long @ 1.2035
stop: provided by SNB floor
target: none.
on the downside:a systemic event permitting an attack on the floor triggering the stops gathering below and creating a huge liquidity distortion and pushing the price in the far south, tho unlikely.
on the upside: Real money unwinding massive short positions since they were opened on run to safety purpose only.
Ok Let's summarize the trades of this week and outline the key factors driving the opened/closed/pending positions:
1: #eurchf :
long @ 1.2035
stop: provided by SNB floor
target: none.
This one is on his way as planned now 130pips above the entry price. I'am seeing it as a forming Core position to which I will probably add if I come across some catalysts in the coming days or weeks.
Key drivers: Pressure released on the "EZ tail risk" after the Daghi put (OMT's) on a pair symbolizing it. SNB floor.
2: #usdjpy
long @ 77.65
stop: not needed cos of the BOJ jawboning.
Target: not defined yet can be tech level based.
The entry level was not good, price on pre-FOMC statement went way below the first liquidity zone where I was pending. It's now going as planned and I think it's going to really unfold in the next weeks, tho how far north is not clear yet. The stealth intervention is still questioned seeing how the Yen reacts to QE3 announcement vs AUD and EUR. The rumors of upcoming new easing measures from BOJ are now spreading out among the traders.
Key drivers: BOJ easing looming augmented by US QE3, usually followed by a new leg upward.
3: #ES_F pending long @ 1421.50
This one is a miss (not filled) cos was built on no QE3 outcome, this is what I've posted about it:
"Why no QE? : Not easy for the fed to be seen as helping Obama openly during a presidential campaign. But who knows."
I will probably reposition it around 1440; since the core Idea is that I'am bullish on stocks and this with or without QE (see the post about this trade above).
Did I miss this opportunity? Not really but it's an other story out of the scope of this thread but the drivers are the same, holding now these 2 options on SPX way in the money.
SPX Oct18'12 1430 Call
SPX Oct12' 1425 Call (SPXW)
Remember what've said about getting rid of local volatility with the use of options. Will close 1430 strike before this PM gmt US data:
#AUDUSD pending short @ 1.0614.
Still waiting to be filled, this can occur during the London luch break or around the US CPI release this PM gmt. See the post above for the factors driving this trade.
That's it
Let's see on monday for week #38
Have a good weekend.
Hereâs is an opportunity to talk about the way I manage my running trades, those classified as core positions.
Letâs take as example that # USDJPY filled last week:
Since I am considering this one as a core position, I will not look at it below a daily Time frame. On that TF i see that 79.00 price level may have consistent liquidity around 79.040. The positioning here can be formed by pending techs wanting to fade from there, helped by some specs (hedge funds, banksâ¦) who want to buy the pair or add at a lower level (more on this later), you can have also there big sized orders from other specs wanting to buy or add thinking they will find there enough liquidity to bid without pushing the price too high against them. Some others can wait for this level to be btoken to be assured that the pair is making a new North leg. Any way I am going to monitor this area, and if the price doesnât go south below 78.500, I will lock it at BE+ 1/3 daily ATR (30 days).From that moment I will add to the pair as the specs do, with the helps of tech positioning and market dynamics (catalysts), applying a management on Intraday H1 chart.
Letâs take as example that # USDJPY filled last week:
Since I am considering this one as a core position, I will not look at it below a daily Time frame. On that TF i see that 79.00 price level may have consistent liquidity around 79.040. The positioning here can be formed by pending techs wanting to fade from there, helped by some specs (hedge funds, banksâ¦) who want to buy the pair or add at a lower level (more on this later), you can have also there big sized orders from other specs wanting to buy or add thinking they will find there enough liquidity to bid without pushing the price too high against them. Some others can wait for this level to be btoken to be assured that the pair is making a new North leg. Any way I am going to monitor this area, and if the price doesnât go south below 78.500, I will lock it at BE+ 1/3 daily ATR (30 days).From that moment I will add to the pair as the specs do, with the helps of tech positioning and market dynamics (catalysts), applying a management on Intraday H1 chart.
Attachments
Quote from fxintruder:
At 1.0614 that is. This one is scheduled after after Bernie talks, I donât want to be filled before, in some liquidity distortions (knee jerk). I give to this trade the status of a core position tentative.
Why:
1: The price is that high because market is pricing QE3 for a while now. And Specs can push that to become a âbuy the rumor sell the fact â scenario.
2:AUD is more linked to Chinese economy than the US one. China numbers were ugly lately, even if we had some slight improvement in the past month.
3: A RBA rate cut of 0.25bp is likely in the coming 2 months, and AUD high levels are by a large part helped bu carry trade (yields spread).
4: I consider that QE3 push is the good opportunity to reach a level high enough to become out of macro perspectives very quickly(timing). Pushing macro traders to short it.
5: That level is nice enough to attract techs in numbers.
Risks:
On the downside, structural shorts covering at that liquidity level and pushing the price higher.
The global macro analysis that US QE3 is going to relaunch Chinese exports which in turn will need Australian Iron ore. That Idea attracting real money in the game becoming structural longs.
Bernie speech can push the price way higher if he appears too dovish
That AUDUSD has been filled @1.061, going well but it's still building its core position status. I am monitoring it very closely on H1 (not core yet) cos of many risks and news that can modify my views on it.
Attachments
Quote from fxintruder:
I don't have any core position running cos was off the 2 previous months and have closed everything before that break.
I am slowly digesting what's going on and will have a clear idea about it by the end of this week. Plus the FOMC meeting and the German court decision are too important to enter the market ahead of them.
But I do open a long position on #EurChf after Draghi's OMT for 3 reasons:
1: OMT is going to eliminate the tail risk, namely EZ collapse, then likely reducing risk premium paid for safe havens built on the debt crisis.
2: #eurchf was the symbol of that feared collapse. Real money flowing massively into Switzerland, and SNB buying all Euros it can to maintain a floor at 1.20 and taxing transactions.
3: IT's a n easy trade at no risk since my stop below 1.20 is protected by the SNB.
I don't know yet if this is going to become a core position, I doubt that #euro is going to reach previous highs, but I think that slowly but surely the pressure on "eurchf is easing.
#eurchf :
long @ 1.2035
stop: provided by SNB floor
target: none.
on the downside:a systemic event permitting an attack on the floor triggering the stops gathering below and creating a huge liquidity distortion and pushing the price in the far south, tho unlikely.
on the upside: Real money unwinding massive short positions since they were opened on run to safety purpose only.
This one is now core (+170p or so) and my views since the Draghi put are not likely to change. I see it more like something grinding higher at a slow pace tho with a possible huge boost if SNB announces that its raising the floor. One other effect that can make the price popping up are options barriers levels in this uncharted territories. The only way to join a barrier attack is to hear about it (more on this later).
Surprising is that chart with no volatility till the OMT program.
Attachments
Quote from fxintruder:
3: #ES_F pending long @ 1421.50
This one is a miss (not filled) cos was built on no QE3 outcome, this is what I've posted about it:
"Why no QE? : Not easy for the fed to be seen as helping Obama openly during a presidential campaign. But who knows."
I will probably reposition it around 1440; since the core Idea is that I'am bullish on stocks and this with or without QE (see the post about this trade above).
Did I miss this opportunity? Not really but it's an other story out of the scope of this thread but the drivers are the same, holding now these 2 options on SPX way in the money.
SPX Oct18'12 1430 Call
SPX Oct12' 1425 Call (SPXW)
Remember what've said about getting rid of local volatility with the use of options. Will close 1430 strike before this PM gmt US data:
The last position of week#37 not filled yet, and I really don't see it returning that low hence I have pulled it down near 1460.5. Still holding the 1425 call, the other was closed far in the money.