Well, still long. Had a nice frantic bounce last friday in Europe. It definitely was a different kind of bounce than prior ones. It was the kind where you could see a shitload of traders trying to get back in after a heavy volume down day and they just couldn't because there were no sellers. Shit for large traders (because they can't buy without moving the market a lot) but it's basically free money for the small fries. I even have some SocGen calls now (couldn't resist) which filled up nicely. Other recent upside action has been reasonably contained but unfortunately the US session showed none of the excitement. However it doesn't seem yet to me like we made a top in Europe yet (not enough volume, need to stick at this level for a bit to turn but it's more likely it will keep going...of course if it dosen't keep going up it's gonna go down as always ) so might be a gap up in the US indices monday. Only thing that has me worried still is the lethargic action in the US. Just no joy, no inspiration. Reminds me of that disgusting uptrend that the S&P500 had since September 2010 (it was a healthy bounce before that, it turned disgusting somewhere around the part where there was no vol and it just went in a straight line) only this time it's in the other direction. If this bounce doesn't stick that may become a likely scenario (prolonged oversoldness into a disgusting trend move). Of course Europe didn't really mimic that trend for the most part so I don't expect it to mimic this either as there aren't as many momo monkeys to shake out of the tree. Also Europe should outperform US for the remainder of 2011, there is really nobody paying attention to us even though growth forecasts for Europe are actually being revised upwards for some countries by the IMF.
superb analysis by Locutus (as always)! i am puzzled myself by the muted optimism in the market. i suppose nobody wanted to risk a huge adverse move over the weekend if the Greek deal were to go in flames.
eu/usd at 1.4225 area; has retreated 85pips (approximately -0.60%). Equities and eur/usd are positively correlated. Is EUR/USD at end area of this retreat, and would markets be in synch? It is now 12:48AM. 1:06AM: stronger hand buyers reached? I am running a count down. 1:09AM: Is this a successful launch? If someone is watching ES, could you share what is happening (if any) starting at 1:06AM? (see countdown clock above).
How can people even be treating oil falling as a bearish signal? Typical, really. They were ignoring it as a bearish signal when it was going up and now the economic data have all been messed up, most likely at least 50% if not 90% due to the rise in oil, and now it's going back down and it's bearish? Also like with most things, it's not the level which matters most (as oil had been slowly and gradually trending up without causing any problems earlier) but the rate of change. I'd be more worried if oil was gradually and steadily coming off if I was looking for deflation fears. Right now it's just the Middle East supply speculation trade unwinding. Anyone could've seen the soft economic data coming from 10 miles away and the improving data is also foreseeable from an equal distance as long as oil doesn't rebound. So imo treating falling oil as a bearish signal (which is what a lot of the media is doing) = oversoldness and treating rising oil as a non-signal or even bullish (inflation trade here we come!) = overbougtness.
1:12PM: are robots about to start buying to face the last 20 minutes retreat? I am watching eur/usd to try to read their "minds". e/u at 1.4298.
the words oversold and overbought no longer have meaning. They are ancient Technical Analysis tools and no longer work or OBSOLETE. If they do work, why more than 90% of small traders lose? They just lose!
In reality it's probably more like a zero sum of -1s and +4s (4 on average and that is just a guess, it could be anything >1)