Thursday, September 22, 2011

Quick Update Post Fed Action Sept 22, 2011

Panic seems to be the theme. No pause in bearish trend.

  • US treasury futures behaving exactly as the twist was defined. 10Y price breakouts to the upside. 30Y steady but yet to break out. 2Y and 7Y tanked.
  • DX 78 was key, and break out led to full out USDCHF breakout (broken confidence in Eurozeone). Next test 80 in sight. Fail at 80 = possible risk on correction. Perhaps try to fade 00's
  • USDCAD extending bullish breakout to top fibs. USDNOK Extending bullish break out to top fibs. Yen tried to unwind but went all wild; USDYEN rallied 700+ pips and has pared back all those gains since then.
  • EURUSD 1.38 --> 1.35 300 pips post fed. Pound no pause continues downward fall to 1.54
  • NZDUSD below previous historical breakout resistance level. AUDUSD below parity.
  • Currencies erased all gains for 2011 pretty much.
  • Interesting gold is very quiet; this seems to be more FED related than panic possibly or gold has been priced in or is correcting from it overvalued highs. If risk aversion is really hear 2000 target is in sights.
  • ES technically can be still considered bull trend.Prints that stick below 1140 can reverse this.
  • NG making new all time lows ahead of supply numbers
  • Shorting crude at 85 was correct (short 84.9 ---> 83). Seems trend can extend. Look to re-enter on bounces.

It seems that 2011 will be a slightly bearish year if we can get the risk rally/risk correction before the year ends. If not this year will be bearish overall. Its possible that all this bearish sentiment can create a self fulfilling prophecy that will lead the world back in to recession. At this point both scenarios seem very possible.

Analyze Capital LLC

Tuesday, September 13, 2011

Market Update September 2011

It took almost 2 and half years before European Equities started to reflect some true fundamental value in share prices. The DAX has almost erased all of its gains from mid 2009. And almost 30% down from its yearly highs seen at the end of June 2011. Also, Italian equities are not too far behind German equities close to 30% down from the end of June. This is reflecting a collapse in confidence in the sustainability of the Eurozone (Spanish and French equities almost 23% - 24% down from July highs). This is compared to UK and and US equities which have dropped only about 11% to 12% of prices. 

The question for US and UK equities is if these indices will continue diverge and bottom or continue to drop in the face of continued  uncertainty. My thesis for the end of 2011 is way off at this point though my time frames may have been off. 

If the SPX can consolidate at 1150 its a possibility for a strong price recovery into 2012 to 1300. Its possible the equities will continue to rally up until the November elections. However, if prices fail at 1150 below 1000 is possible if no certainty is returned. It is more than likely though some pyseudo QE3 would come into play helping a rally thesis. 

Analyze Capital LLC

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