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Observations Heading Into The Close
Some interesting tactical observations heading into the close via Goldman. Probably the most relevant is the divergence between the USDJPY and the 2 Year: whereas the two have traded on top for the past two years, in the past month we have seen a very notable divergence. Goldman's advice: short the USDJPY big at any level above 92, as the fair value based on the 2 Year is 88. On the other hand a 4 point drop in the USDJPY would cause a wipe out in stocks, due to its impact on the EURJPY, so in essence this is like saying short the market and go sell an overpriced 2 Year. Nonetheless, for recoupling chasers, this should be a pretty sold and profitable convergence trade. Another observation from GS: a close below 1,091 will lead to a retest of 1,036.6. This is now pretty much a given.
From Goldman Tactical on things to watch for the NY close:
USDJPY – Will post a bearish key day with a close below 92.04. The market still looks very over-valued relative to 2-year U.S. yields. Something nearer 88 looks to be “fair value” for USDJPY at this point.
S&P Future – Will post a bearish key day from the 200-dma with a close below 1,091 today. This should argue for a retest of the 25th May low at 1,036.60. It was also highlighted to us today that you can count a particularly negative Elliott structure from the April highs which would imply we’re about to begin another notable down move, something worth keeping in mind.
A few other quick points…
EURUSD- Has broken to new lows for the cycle, below 1.20. Various targets and supports now come in from 1.19 to 1.18. Our aim is to stick with our Favourite Tactical Theme for 1.18. But would emphasise that for various reasons outlined in The Charts That Matter Next Week we’re not targeting significantly beyond that level at this stage. When/if the market trades 1.18 we’d consider the position closed regardless of what’s happening.
G10 commodity currencies- Appear the place to focus attention from here. Copper has now sold off aggressively from the 200-dma, in a similar fashion to Q3’08. This sets a negative backdrop for AUD and other related currencies, and as such makes us think sticking with short-AUDUSD for the 0.7759 double top target is still the right idea.
EM- Two notable triangle continuation patterns have completed today on EURHUF and USDTRY targeting 296 and 1.6670 respectively. EURPLN also still has a very bullish look to it on the weekly charts.
U.S. and UK 10-year/2-year yield curves– Starting to bullishly flatten again. The weekly structure on both of these curves/spreads argues there is scope for significant further flattening and the cross asset market backdrop which now appears to be developing should help those trends.
EURSEK– Is this finally going to bounce? The market has now double bottomed against the prior low from 13th May at 9.5230. With the CEE currencies beginning to weaken sharply SEK could start to weaken “in sympathy” as it did during late-‘08/early-’09.
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What version of Dow 10000 hats are we on now?
We need the hard-hat version. This monument is coming down on top of their heads.
The battle to defend DOW 10K is moving from block-to-block fighting to house-to-house. Almost two hours spent fighting over a strip of DOW only 2/10ths a percent wide.
Anybody notice Gold got a woody about 11:30 this morning?
Nice description.
DOW 10K=Volga?
When is Dow 10k going to crack already? I'm not holding my breath though.
It cracked right when I posted.
better late than never
Most ridiculous comment I read on the BLS report:
-Williams (investment manger) said the labor market situation is actually improving, despite today’s weaker-than-expected data.
“The problem with the unemployment data is that there are people who don’t want to go back to work, are at the age where they can semi-retire and they’re happy collecting their unemployment checks,” Williams said.
Obviously the moron has never had to live off an unemployment check - His let them eat cake attitude pisses me off. He could probably afford to semi retire now if he were laid off as well as his friends at the country club .Fucking rich people in their microcosms have no clue .
The fact that "rich" people hold sway politically is a vicious cycle; one that is almost broken now, and hopefully soon will be.
I heard that live on CNBC and unfortunately I was eating something, which promptly went down the wrong pipe. When Mr. Williams was challenged, he said "Well that's what I believe" like a petulant 4 year old.
"You can't make me, you can't make me believe anything I don't want to believe."
"liar, liar, portfolio on fire" - LOL
LOL that was good.
That's just the reflex explanation some robot always coughs out. Unemployment could be 30% and they'd just say it was people not wanting to work.
The weird thing is that the U.S. already has the most pollyannish unrealistic method for reporting unemployment for the G8.
Maybe it's a truth in many cases, and it's good, let those who really need jobs to have them! But there are no jobs and explaining everything with "people are happy with unemployment checks" is totally wacky. Many posters on ZH imply that people don't want to work and that's the whole problem, I would like to see one of them picking tomatoes or strawberries for few days.
No the problem is nobody wants to go back to work building a fuck up. Why keep trying if you keep getting the rug pulled out from under you or the other shoe keeps dropping.
Actually I also think that now the Euro has broken the 1.2 mark, we'll start seeing a major crash in commodities in the comming weeks. Oil will be the first to go and retest 63$.
How come the Yuan / Euro isnt traded on the FX? That would be the ultimate manipulation for china to mess with...
+1
Ladies and gentlemen, we are at another breaking point. Yes, ANOTHER breaking point.
And I'm loving every minute of it. Red is such a beautiful color.
big breakdown into the close?
Not sure... Just getting and closing under 2220 on Naz will make me happy. (for today)
Take it down hard boys. ES just hit 1063. Big volume. What a fucking day. Beautiful.
See this is what happens when someone orders to many Dow 10k hats, you can't let it fall below until all the inventory is sold off.
Does the President's Working group have a Zazzle page or what? lol!
Dear (or Deer?) clients:
Thank you very much for helping us build our short positions this week. We welcome your continued assistance as we now look to cash these positions out, so kindly commence stopping your current portfolios and building new long positions. Your offers are very much appreciated!
Kindest regards,
Drakul Mon Calamari
GS giving good advice? 1st the Euro short to 1.18. Should we believe this? It seems logical, which scares me.
GS vs China...
Should be an interesting fight.
"This is now pretty much a given."
I don't know. Notice the fierce, monetary bazooka resistance at 10000?
You KNOW they (the politicians) aren't going to let the stock market crash. It's all that they have left.
Also, in regard to jobs, I have noticed more and better quality jobs over the last couple of months compared to the beginning of the year. The pay is much more substantial for the same work...
Oh Johnny boy, the pipes the pipes are calling!
I decided to take a break from my job as an agent working for the Guatemalan central bank, where I get paid millions of dollars to manipulate the gold price by posting on the internet and post about something else for a change.
Hey, yous cool mayne, you got your wedges and stuff, but, uh, whatcha wedge gonna do when after 40 long years gold is once again considered "MONEY"?
I thought it was already considered money. That's what the goldbugs always tell me. "Fiat dollars are worthless. Only gold is real money."
The wedge will do what wedges always do. Break down.
You know what just occured to me though? Maybe gold is making an H&S pattern as well.
LS - 1220, H- 1250, RS- 1220.
Of course, that's a longshot.
The wedge is clear as day for all to see.
Considered seems to be subjective for you and yours.
POG dollar 1219
POG euro 1018
1219/1018= 1.1974
Euro/USD =1.1997
Gold is money. And nothing else.
Isn't it time for another Dow 10,000 v.? hat????
We need LCD Dow caps (flashing red / green for up or down)... over to you Howard!
Dow 9k hat on!
Guys, the VIX is only 33, considering the bad news out there, it ought to be higher. don't you all think? what's that mean? we may get to go hell of lower.
I was thinking the same thing.
+1
I will add, I think that the 14% gain today was pretty tough for the market to swallow, so maybe the VIX is where it should be. I am looking for all hell to break loose next week however; disclaimer: up and down may not matter anymore. What happens next could look like nothing ever seen before.
PUTS, BITCHES!
#edit:#
Agree, should be 40+. How about these for DAX and SX5E:
VDAX 29.3 (V1X on bloomberg)
VSTOXX 37.7 (V2X on bloomberg)
I've never seen the spread so large, I think. (VDAX is traditionally higher). Given that these indices overlap, and given that I think the next song and dance is Eastern Europe, where Germany has massive exposure, I think DAX puts are tasty and cheap.
Any reason not to simply be in the ETF SH or other inverse ETF? SH tracked the S&P 500 index nicely (i.e. inversely) since I bought it, but I've never seen anyone mention it here.
VIX is just a lagging indicator, I thought? After all, the market has been pretty much sideways lately.
Don't mind me, I'm just screaming at my computer over BIDU not falling at least below 70 right now. Apparently none of the US Skynet computers realize China is already in bear status.
I bought BIDU at 120, and sold it later. I'm killing myself for not holding onto it longer...
I've been puzzled by the anemic action on the VIX all day.
At first I thought it was because the PBoC was defending 1.2000 EUR
1.2000 EUR seems to be holding. VIX futures June thru August are hovering around 32-33, which seems very laid back.
Puzzling.
I think we could see 40 handles down on the ES in the last 30 minutes....
I won't rest easy till we crack and CLOSE under the May 6th barrier.
unbelievable that a market maker who front runs everyone is legally allowed to solicit bets based on turning their "book" profitable.
Looks like "hold it above 10,000 at all costs" (what again?)
Step along folks, you have seen this all before..........
PMs taking off again!
The PPT will have their hands full today. Look for more selling into the close.
Who would want to hold over the weekend?
**************** crickets chirping *****************
Uh....**cricket, cricket**...maybe bulls will buy the "lows"?/"dips"?/(catchphrase)? **cricket, cricket**
10,000 BROKEN
Personally, looking for PPT stick save after 3 pm to end above 10K come hell or high water. Bad NFP and below 10K close on same day not allowed, especially on Friday.
+1.
I dont know how many times I've watched my gains in short positions get vaporized after 2:30.
Funny thing is that there is a lot of money piling into the short end of the curve, the Yen and gold.
Gee, I wonder if that rumour about SG is true now. And when do we here about how bad the Austrian banks will get zapped by Hungary threatening to go Tango Uniform.....
+1
Personally, looking for PPT stick save after 3 pm to end above 10K come hell or high water. Bad NFP and below 10K close on same day not allowed, especially on Friday.
I like 9991.11 personally. Fitting for them Bildebergers sipping martinis in Barthalona.
hey TD, Can we have a glimps at the accumulated ES volume on the day?
9990, 9989, 9988, 9987, 9986...
9986 beer cans on the wall, 9986 cans on the wall.
Take one down, pass it around, 9985 beer cans on the wall.
9985 beer cans...........
http://www.slyfoxbeer.com/index.php/front/beer_113
The new PM of Japan wants a weak yen so USDJPY is prob going to 100
Can anyone on the MFP measure of the BLS reports assist me in finding information on agricultural non-profit measure.
What are the different applications of the MFP measure. For example, does it apply to the not-for-profit agricultural business? I have been scouring the website for an hour.
14:00 EST. Wait for it...here comes the save...
Leo, come out to play-i-ay
lol
FYI. On an earlier GS/NFP thread Leo said he was "pissed" and was going to look into the data and come back later to "man up". I have had major differences with Leo, but when he surfaces, let's stick to the facts (not trying to be a big brother and not directing that at anyone, thats as much directed at myself as anyone).
I know I gave him credit for that post. He said he was going to take a good look at the report and get back to us. However it is pretty funny that he is M.I.A. It shouldn't take him all day to read the jobs report. he is probably hoping for a late day ralley so he doesn't have to eat crow.
MyFriend, you have a point.
Aussie down more than a pinch, I would say.
Crawling it sideways and letting Seller's exhaustion set in before hitting the jets?
Gold futures up, but Silver and Platinum down.
Is this due to industrial use of silver and platinum (economic slowdown priced in)?
Asian central banks may be buying gold:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayfUw66KFH4w&pos=6
Yes.
Alright men! Mount an all-out defense of hilltop 'DOW 10,000' to the death! Thats all that matters now! Any volunteers?
Looks at the bears.
I think I hear my mom calling.
10000.66 at 2:24 p.m. It's difficult not to laugh.
Black Monday, anyone?
Futures open on Sunday night should be interesting
Rumor has it, all the trading managers at GS have been fired, because at the end of this morning's conference call with Blankfein, they thought he said "Tell everyone 'bye' ", instead of "Tell everyone 'buy' ".
"Something happening here... what it is ain't exactly clear"
Since we all know "they" get the job numbers ahead of time, how could the administration (and the usual "insider" suspects) be so wrong, after coming out so strong on the "blowout number" story?"
Could it be fear of a bond failure for Mondays $62B in T-Bill auctions... hmmm!
Maybe some internal politics are going on...dissention in the ranks.
A little Pharcyde anyone? "OOOOOH SHIT!!!"
1066, that's a good number. Let's hold it there for a while.
S&P 1066.
Only 400 left before it gets interesting.
What was that...it's like the PPT didn't even try. C'mon guys.
what's the gap between S&P Futures and EURJPY today?
From my daily email from Chas Schwab:
"The global equity markets posted steep losses to finish out a holiday-shortened week, as Hungary emerged as new European debt crisis casualty candidate to get the selling ball rolling, picked up by a disappointing US labor report, which showed private sector payrolls rose by a much smaller amount than forecasted. The euro traded at a fresh four-year low versus the dollar, helping the Dollar Index moved to a new yearly high. Treasuries received a boost after a spokesperson for the new Hungarian Prime Minister that it too distorted its economic statistics and may need assistance to avoid a default."