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Bearish Euro Exposure Continues To Drop
As Friday was Veteran's Day, the most recent CFTC's COT report (for the week ended November 8) was released at 3:30 pm today. While hardly containing anything earthshattering, the most important speculative exposure, that of the zEURo.PK continues trend and has seen the net bearish sentiment decline for the 4th consecutive week, dropping to -54,257 from -60,060. This is well over a 30% decline from the peak bearish sentiment in the EUR hit on October 4, when -82,697 net speculative contracts were outstanding, and which subsequent squeeze in both FX and stocks, resulted in the massive October move higher. We have now reverted to the EUR sentiment last seen in the second week of September. More importantly, it means that with each subsequent week of declining bearish interest, the capacity to force a squeeze using rapid, momentum driven episodes of "banging the close" is diminishing with each week. This matches what we observed last week on the NYSE where short interest across NYSE stocks plunged in the last week of October. Simply said: it will take much more effort to create a short squeeze going forward.
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I would not underestimate people laying on late EUR/USD shorts at 1.37 with the Citi/Englander target of 1.30 by year end 2011 in their brains.
Elliott Wave sees a "kiss goodbye" moment for the Euro and it plunging downward moving forward.
I also love hearing from Jim Rickards, whose new book Currency Wars, is amazing.
Another good interview here from Rickards:
http://www.ftense.com/2011/11/jim-rickards-discusses-currency-wars.html
I hope shorts of all stripes are saying to hell with it, and just buying up commodities.
^just junk the troll^
Hey congrats on the 8 weeks 1 day!
As a present I got you this nice case of "STFU Noob".
if you did a greatest hits uToob, it would be all ad-links, fuu!
hmmm
Meanwhile 3pm ramp was reliable as usual.
Little does the world know how bad of shape the USD is in.
In any case, big gap up overnight.
I love how everyone focuses on the 'value' of the Euro, completely ignoring the charred ash remains of the US Dollar.
I guess thats just whats in style this Q.
The Euro is the entire global market these days. There is no way to get around it. All correlations are built on the most risky currency in the world.
Well, that's obviously because it can't hyper-inflate against gold.
/sarc
At some point this euro=everything correlation breaks.
We saw a brief (10minutes max) glimpse last week when the ECB cut rates: the Euro spiked sharply lower and european stocks sharply higher. Then back to business as usual - everything up in lockstep.
So if the ECB dont print - strong(ish) Euro - eventualy weaker stocks/more zombified banks/more austerity/less consumer income/less employment and deflation. That would seem to break the correlation.
On the other hand - The ECB prints. Euro down, inflation up, financial stocks too the moon, broad market up also, commodities up, etc etc, which would also seem to beak the correlation.
Or I am wrong and the black hole of debt is just so big that printing will not send the Euro lower, but we rally beacause financials are saved again. Thats the only scenario where the correlation stays intact, so perhaps it is what Mr Market expects in his wisdom. Personaly I do not buy that goldilocks scenario.
Or is it simply that the spotty kids who give the bots their instructions make the dangerous assumption that `it worked today, it will work tomorrow`?
in the last 6 weeks the ES has been down 2 or more days in a row only one time. meaning the probability is very high tomorrow is an up day and will easily reverse this lame down day. get your long on and take the shot.
Ah yes, so youre a gambling man. Well so is everyone else in this rigged casino, except for the casino owners of course, good luck beating them youll need it.
it's surely not much of a gamble. indices in intermediate bull trend since october 1. forming bullish wedge. trend still intact as far as i can see. indices easily held support today and coudln't even muster up enough momentum to take a shot at filling the gap from last friday. breadth was down but not dreadfully so. throw in my prior observation about mkt up vs. down as well as how many daily bullish cup & handle or flag patterns on leading stocks, the probability is high. plus ben's & his minions are actively pursuiing dollar decimation. all that leads me to believe we're setup for another gap higher tomorrow. ho hum, same old same old.
Personally, I'll ignore your advice and go long on FAZ as I know bulls' blind luck when I see it. Besides - since when is looking in the rear-view mirror any way to predict the future?
still it's better to wait to short the euro until specs have gone net long.
http://www.renegadeeconomist.com/news/four-horsemen-film-official-trailer.html
This is good news. It moves us closer to facing our reality. Still, I think it will be some time before the bears have any strength. We have been beaten almost (but not quite) to death with ZIRP, QE and Euro BS. Bears perform an important role in the trading ecosystem and they have IMHO been systematically destroyed by the TPTB. They still believe that it wasn't greed and stupidity that brought down the system but those rumour mongering short sellers. Do I sound bitter and resentful, oh I'm sorry.
this was done intentionally to have everyone long, throw the switch overnight, a drop so quick, it'll run thru all stops! of course the stops won't trigger, leaving longs buying whatever dip there is, alas, to no avail!
sorry bears, we will gap up overnight. That you can be 10000000% sure of.
this market is over-bought and overdone, narrow volume-less rallies, huge USD buying Asian session, BoJ trying to game hedge funds (instead they got gamed). it's too optimistic on interventions to drive rallies. And metals are sliding again, gold got slammed few hrs ago. bad news from Singapore (retail down) to Indonesia (bond spreads). Europe? Get ready for Italian yields too go back to 7% and Spain about to blowup.
Major selling ahead