Tag Archives: EUR/USD

Euro US Dollar 3 Year Chart

Pre-Market Spandicators

Euro US Dollar 3 Year ChartOnce again Spain and the Euro are dominating market sentiment, atleast that’s how the press is relating it and the French Press isn’t holding back; “L’ESPAGNE FAIT CHUTER LES BOURSES ET L’EURO” nor is Zerohedge; Spain On The Ugly Side of 7.5%. ZH gives a good perspective on IBIX which is down 5%. That would be the equivalent of the Dow Jones tumbling 600 points. It should be an interesting day.

The EURUSD at nearly 3 year lows has disturbed the Eurozone politicians vacation, who after a sunny weekend poolside/wineside/ouzoside/sangriaside, are now outfitting their seconds as keystone cops, for the start of the week.

Every effort will be made to stay pool/wine/ouzo/sangria side.

  • EURUSD – 0.26%
  • Gold Futures (GC) – 0.77%
  • S&P Futures (ES) – 1.03%
  • CAC40 – 1.94% FTSE – 1.74%
  • Nikkei – 1.62%
  • Grain Futures down across the board (a first for a while)
  • Oil Futures (CL) -2.89%

The CBOE Put/Call Ratios from Friday are updated (here).

I fixed the RSS and feedburner Email feeds for those of you not receiving updates, it should be OK now.

Grant Williams is out with another TTMYGH, this time sticking a fork in our political elites and their inept management of the economy. A must read, here’s the link for his free newsletter.

Good Trading

Pre-Market Indicators

This will be a crazy day, it already has been.

The first sign of wierdness are the CBOE Put/Call Ratios, here. The CBOE Index Put/Call Ratio has only been this low one other time since Jan 2011 and that happened on June 11th, 2012.

  • The EURUSD is now under 1.22 (-0.41%)
  • Asian markets are down with NKD 2.03% and HSI down -1.88%
  • Europe is down with the CAC40 -0.70% and FTSE down -.70% and the DAX -0.80%
  • Gold is off -0.80%
  • Oil is off -1.41%
  • S&P is off -0.75%
The only thing likely to change this trend will be very good initial and continuing claims numbers which come out at 8:30am EST. I can’t wait to see the VIX on open.
Good Trading
EUR USD Chart

Good Morning, After

EUR USD ChartGood Morning NY.

The indicators look ‘good’, the markets look ugly. After all the expectations, now it’s a sell the news day. Here’s the EURUSD chart… I’m expecting the broader markets to follow.

Here’s the rundown:

  • BOE, 50 billion in new money
  • ADP numbers beat 179k vs 105k
  • Initial Claims beat 374k vs 385k
  • Continuing Claims misses 3306k vs 3283k
  • ECB lowers rates to 0.75%
  • Gold Futures down -1.25%
  • Oil Futures down -0.56%
  • S&P Futures down -0.38%

Good Trading.

Pre-Market Syndications

Good Morning NY,

  • Europe is weak: DAX -1.4%, CAC40 -0.95%
  • The EURUSD pair is weak: -0.32%
  • Gold is Weak: -0.61%
  • S&P Futures are weak:-0.57%

All of this is before the release of the initial jobless claims at 8:30am EST. Curious to see if the tone changes.

Good Trading

Damien Cleusix Global Market Update

Watching paint dry, I stumbled on the reflections of Damien Cleusix today. Really good stuff and well worth reading.

Here’s the link from Zerohedge.

And this is just funny. Sarkozy is excitable and he wants the electorate to know. They released some news this morning that he was ready to go quickly to Frankfurt this afternoon.

Elvis has now left the building….

It started to rain and the markets finally started moving, with the $VIX pushing 35 and the $ES_F touching 1203, it’s time to start paying attention again. And this caught my attention…

From Bloomberg: America’s Bills About to Exceed it’s Paycheck.

The CHART OF THE DAY shows U.S. government debt divided among every man, woman and child will exceed per-capita gross domestic product this year for the first time in International Monetary Fund records dating back to 1980.

The amount owed will reach $46,771 per person, surpassing the $46,750 in output, according to Bloomberg calculations using the IMF’s deficit and growth projections from its September World Economic Outlook. Debt will exceed production by $8,000 per person by 2016, reversing GDP’s $18,400 advantage as recently as 2007, before the world’s largest economy fell into the recession and government spending surged.

U.S. Production vs. Government Debt

It’s hard to be bullish when you’re bombarded with little doses of reality.

I set up some $SPY Nov 121/111 bear spreads this morning and rest firmly bearish on “Europe” and the $EURUSD.

Monday JCP and ACN

Trying to get the month off to a good start today, and I’m mostly on ‘pause’.

We’re sitting at the bottom end of the range on the SPY, the biggest risk for my short positions would be a technical bounce here.

The other number which worries me today is 1.30 and the EURUSD 2% drop. It’s sitting 1.325 which feels very oversold. I was expecting 1.30 ish, but now that we’re here we should start to see a bounce. Will we?? The sentiment is still negative out of Europe and the reason this bothers me is that Europe is just a distraction! The strength in the dollar makes even less sense to me than gold at $1900. The markets have shifted from a flight to gold to a flight to the dollar. Frankly, I’d rather be in gold.

There are two unusual names which I’m starting to watch JC Penny, JCP,  and Accenture Ltd., ACN. JC Penny Company Inc. is holding up better than I would expect, and Accenture has earning scheduled for October 12th.

Accenture caught my attention because there’s huge open interest on the October 44 puts. Accenture is trading at 52.75. I can only imagine someone’s expecting a very weak earnings release next week. The put/call interest on ACN is 0.91 so the sentiment is fairly bearish. This is something to keep an eye on as we run into earnings next week. If earnings and their outlook are weak this would be another bad sign for the SPX.

Greek Bank Exposure THEN; Eurozone Crisis NOW

What’s going on with the Euro? Early this summer the question was: do banks have a dangerously large exposure to Greece? In June the numbers were very maneagable. Now “all of a sudden” they’re un-maneageable. What’s changed? If anything you would think, European banks have been managing their risk favorably since well before June. They were warned.

This June article from Reuters cites between 40 and 100 Billion but with little consensus.

  • “The main conclusion I draw from all this is that no one really knows what the effects of a Greek default would be — but that non-Greek banks are unlikely to be the main vector of any contagion. And while Kash is worried about US banks’ derivatives exposure, I’m pretty sanguine on that front, too.”
So I went back to Kash, who seems to follow this unravelling seriously. He’s asking what caused the crisis, and whether there is a local or systemic problem with the Eurozone, whether capital flows or budget deficits have played a role. We’ve moved on from the banks. But his conclusion is interesting.
  • “The eurozone debt crisis is big enough that there’s plenty of blame to go around, and some of it certainly should go to the crisis countries themselves. But it must also be recognized that as soon as those countries adopted the euro, powerful forces were set in motion that made a financial crisis likely, and very possibly unavoidable, no matter what the governments of the peripheral euro countries did. Irresponsible behavior by the periphery countries did not set the stage for the eurozone crisis; the common currency itself did.”
The common currency set the stage for the crisis. As a trader how should I consider this? Is the common currency starting to die a slow death? I find that hard to believe given the budget deficits of the US, and the rise in Gold as a popular safe haven. Alternatives make for good competition and taken together the Eurozone budget deficit looks small in comparison.

 

Atleast in the short term, shorting the Euro ($EURUSD) in favor of the dollar feels counter-intuitive after it’s recent decline, even in-light of the Eurozone problems.

 

American bloggers and the popular press like to scream that the Eurozone countries are unable to work together and as a result the common currency is destined to implode. At the same time, dear pundit, look at the pissing match in Washington…

 

I’m still not sure where the risk is higher.

 

ZeroHedge has a great article on current risk perceptions. My favorite quotes from this posting are on Margin Debt:
  • Although margin debt is coming down it is still historically high and at levels that preceded major selloffs such as September 2008. In fact margin debt is now higher than that of the dot com boom.
  • As long as stocks like AAPL continue to set all time highs I believe there is no real fear in the equity markets and thus no forced equity liquidations yet. AAPL may be the best company out there but there is little to no short interest to support selloffs and with everyone all in on the long side and leveraged once selling begins it will be fierce. Remember AAPL is the ATM and when people need to raise cash to meet margin calls they are forced to sell their most liquid position.
This is very true for $AAPL investors. Watch out.