Tag Archives: Futures

Market Sentiment Like We’ve “Never” Seen It

In 1985 I graduated High School, in what at the time, I considered the sticks. In truth suburban Cincinnati wasn’t so far from London, New York, or Paris. Ask Nolwenn Leroy, all types of interesting people pass through Cincinnati.

Me

I’ve found myself in the sticks again, I’ve left Paris for some fresh air and space. I’ve moved to a charming valley, called the Vallée de l’Eure. This change after living in Cincinnati, New York, London, and Paris is refreshing, and exciting. The trading strategies I employ have nothing to do with the stress and noise of Paris, I’m hoping to be more effective here. For those of you who have followed this blog, you’ve seen what’s probably a classic novice trader’s chemin. My interests over the last year have focused on index futures, and option hedges. This year I’ll continue with these products.

A lot has been happening since I last spent a few hours ranting here on Brandnet and I have so many ideas bouncing around in my head that this first post of March risks being incomprehensible, beware.

Here are some of the contradictions that get me thinking:

  • Europe, and it’s place in the world economy – for that matter in my economy…
    • Italy and it’s comedy, specifically
  • Youth, Unemployment, Ambition
    • Subway
  • The media’s handling of politics and the economy
  • Bitcoin, Wealth, distribution
  • Market tempered euphoria
  • Trading strategy

Admittedly the white smoke, the pope, and the historic deconstruction of how Francis will move on 4 wheels takes a certain effort to avoid, but this too will pass, as Vatican punditry fades.

2Paragraphs has a refreshing perspective.

Dow_EURUSDStarting with Europe’s Spring head fake, Europe still hasn’t paid the piper. My last post, Will Europe Find Center Stage (Again)? rings true, still. The economic numbers continue to disappoint and the European markets continue to levitate, following the US markets to recent highs. Ten straight now. The flagrant disconnect in the EURUSD defies logic. Manipulation? Obviously. This divergence is tradeable, but when? You would expect euphoria, and all you sense is apathy, as if the smart money is dumb, and the dumb money is in hibernation.

The founder of Subway, Fred Deluca claims regulation would prohibit the creation of Subway if he tried to start-up today. The spin around this story, puts me in papal avoidance mode, yet the premise strikes a chord. I’m reminded of a grandparent saying how hard they had life, wearing that struggle as a badge of honor. That tale is turned on its head today. In fact life was easy for our Grandparents, or so we’re told. Ambitious youth, educated and indebted face an increasingly difficult journey.

Yet if you compare American youth to their Italian, Spanish, Greek, French and Portuguese brethren who live with nearly insurmountable under employment (though less debt), I have to ask where and when the social impact of this horror will appear on the nightly news. What would our Grandparents say? Or what should we say to our Grandparents?

The EURUSD chart above reflects a manipulated market and a manipulated currency. The ECB and the Federal Reserve are responsable, politicians are complicit, and many argue fully justified. Yet, since we left the gold standard for a fiat currency, currency manipulation, QE or whatever lever central banks choose to employ, is fully accepted as prudent economic theory. The gold standard debate is a can of worms, lets avoid it. But PhD’s assert sans fin, the brilliance behind financial structure, and the strategies employed to manage employment and inflation. That alone raises questions. The simple idea that currency shouldn’t be manipulated by central banks is a powerful idea. Simple = Smart?

Bitcoin is constantly catching my attention, I’m trying to grasp the disruptive potential. I absolutely love the pitch, but struggle to grasp the reality. A recent ‘bug’ caused major stress in the bitcoin market. (here) On the other hand, Argentina’s capital controls are a boon to bitcoin… This  just gets more interesting. My personal experience so far is limited and a ‘wallet’ that just never seems to be synchronised. It’s going to take some work to understand the utility, but the fact that we can buy cupcakes, and trade bitcoin as a unmanipulated currency keeps my attention. (One of my recent posts on Bitcoin.)

Good Trading.

Michael Phelps - Olympics

Pre-Market Indicators August 1st, 2012

Good Morning NY.Michael Phelps - Olympics

  • EURUSD (1.2305) + 0.02%
  • Gold Futures (GC) still holding over 1600 ($1614.90) + 0.27% 
  • Oil Futures(CL) + 0.06%
  • S&P Futures (ES) + 0.25%
  • Europe: CAC40 + 0.25% FTSE + 0.28%
  • Asia: (NKD) + 0.58%
  • Corn Futures (ZC) – 0.53%
EURUSD Trade Idea

EURUSD Trade Idea

The disconnect this morning between the CAC40 and the EURUSD is worth keeping an eye on. A priori, the headline telephone conference is holding up the CAC40, why is the EURUSD falling? This looks like a divergence worth trading either from the long EURUSD or short CAC40 Futures (or both). The EURUSD is also nearing a resistance level at 1.239.

EURUSD Trade Idea

The CAC40 looks like this:

CAC40 and EURUSD Divergence

I’m not sure what’s going on here, but I’m still looking at the EURUSD trade I mentioned here, but now in the context of a CAC40 divergence. Interesting…

Good Trading.

 

Missed Trade

Suffering from a lack of inspiration and a little voice in my head which says: “Don’t trade today, don’t trade today, Monday’s aren’t good for you…”

So I’m analyzing the short $ES_F trade I didn’t make but thought about making. Here it is, I’ve circled it. My targets were well placed, and I still ignored it. “Don’t trade today, don’t trade today…”

S&P Futures

The headline effects were limited with nothing on the calendar in the US. Only fear and loathing here in Europe, so the set up was perfect.

Here’s a quote I like from ZH this afternoon. (You can find the full piece here.)

For the moment we appear to be in limbo, where stocks and other risk assets will rally no matter what?  The view seems to be that if European sovereign debt improves, then risk will do well.  There is little fear right now, as the assumption is that if sovereign debt does poorly, Germany will relent and the ECB will officially begin printing money (we say officially, because it is getting harder and harder to believe they are truly “sterilizing” their purchase in a true market neutral fashion). So that seems to be the idea out there, be long risk because if Europe improves, you will win, and if Europe gets worse, it will print, and you will win.  That just doesn’t make sense to us, as we think Germany is further from capitulating on printing than the market seems to have priced in.