This page has been archived and commenting is disabled.

EUR Soars Most Since October 2011 Greek "Bailout" Announcement: Here Is What Happened Next

Tyler Durden's picture


Today's 4-sigma short-squeeze ramp in EURUSD (up over 220pips from pre-Summit-statement) is very reminiscent of the 10/26/11 reaction to the Greek debt deal. EURUSD rallied magnificently, squeezing a dominating short-crowd over 400 pips higher that time. But it is the impulse reaction that we note - within two days, the entire rally had faded and indeed went on to sell off for a few more months as reality struck. One month after that previous last 4-sigma jump in EURUSD (late November 2011) we saw the global co-ordinated central bank liftathon that started the five-month epic idiocy of the equity exuberance that was the decoupling self-sustaining short-squeezing 'cleanest dirty shirt' first quarter of 2012. Trade accordingly.

EURUSD testing up to its 50DMA here as the 4-sigma move brings back hopeful memories from last October and November (and fearful squeeze nightmares)...

and here is how the EUR reacted to the Greek debt deal (a 400 pip rally) and then the hangover fade as all those shorts were burnt and the fundamental reality kicked back in...


and today's exuberance as shorts scramble...


Charts: Bloomberg


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 06/29/2012 - 10:55 | Link to Comment DavidJ
DavidJ's picture

My EURO shorts hurt.

Fri, 06/29/2012 - 10:57 | Link to Comment slaughterer
slaughterer's picture

I am waiting for the Merkel "NEIN" still.

Fri, 06/29/2012 - 10:59 | Link to Comment Xibalba
Xibalba's picture

after qtr end...duh. 

Fri, 06/29/2012 - 11:46 | Link to Comment NotApplicable
NotApplicable's picture

I think the chart should be labeled "Black Swan Dive."

Fri, 06/29/2012 - 11:20 | Link to Comment EL INDIO
EL INDIO's picture

God damn, she could come out and say:


Fri, 06/29/2012 - 11:35 | Link to Comment sockratte
sockratte's picture

indeed, nein can still come. the german parliament won't vote today on the changes (bank recapitalisation via esm) discussed on the eu summit. furthermore, the constitutional court has still to decide, whether esm and fiscal pact are consistent with the german constitution.

Fri, 06/29/2012 - 11:00 | Link to Comment sockratte
sockratte's picture

yes. damn politicians...

at least, switched at a 1000 pips loss and regained some 800

Fri, 06/29/2012 - 14:45 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture



It's obvious now, these fits of hopium from summit after summit are thinly disguised EURUSD pump-&-dumps, which only benefit insiders of course.

Sorry I didn't recognize the pattern before now, but it's clear now. 

Expect more of the same.  When bankers can't make money from interest in a ZIRP environment, they resort to pumping & dumping markets to make money, what we can clearly see now.

Fri, 06/29/2012 - 11:12 | Link to Comment AccreditedEYE
AccreditedEYE's picture

Hedge with some bank shorts. Big financials are getting taken out to the wood shed...

Fri, 06/29/2012 - 11:29 | Link to Comment LongSoupLine
LongSoupLine's picture

Thank God they listened to Soros huh?!


Fri, 06/29/2012 - 10:55 | Link to Comment SheepDog-One
SheepDog-One's picture

King Eurollar!!

Fri, 06/29/2012 - 11:07 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

The Muppets are, if nothing else, predictable. I am (of course) speaking of the professional Muppets, those who run OPM (Other People's Money). Makes yesterday's late day market ramp even more interesting when viewed from today.....doesn't it?

The markets do not move. The markets are MOVED.

Fri, 06/29/2012 - 11:26 | Link to Comment LongSoupLine
LongSoupLine's picture



Bingo CD...

Hmmmm, I just don't understand why we continue to bleed retail investors from this "market".

Fri, 06/29/2012 - 11:50 | Link to Comment Ragnar24
Ragnar24's picture

And as Tyler pointed out, it was a $3.3B position -- not even disguised.

Fri, 06/29/2012 - 10:56 | Link to Comment Popo
Popo's picture

'Guess it's a good day to get out of all those Euro accounts before this crap unwinds...

Fri, 06/29/2012 - 10:56 | Link to Comment midgetrannyporn
midgetrannyporn's picture

These kinds of rallies ARE NOT bullish imo.

Fri, 06/29/2012 - 11:19 | Link to Comment Marginal Call
Marginal Call's picture

A chain reaction of stops getting hit and pushing the market higher, and in the over night on squat for volume so their lucky to get filled even in the neighborhood where they're placed.  Yeah, hot air rally.


the 60 min profile for the ES tells the story. 

Fri, 06/29/2012 - 10:57 | Link to Comment slaughterer
slaughterer's picture

Re-short EUR/USD @1.2750.

Fri, 06/29/2012 - 11:15 | Link to Comment EL INDIO
EL INDIO's picture

I guess when if you’re sure you’re right , you must persevere !

Fri, 06/29/2012 - 11:15 | Link to Comment DeadFred
DeadFred's picture

You're pretty gutsy. I see nothing to stop this medium term before it hits the high end of 1.29 to low 1.30s. Strong resistance is at 1.34. Short term is beyond me so enjoy.

Fri, 06/29/2012 - 11:22 | Link to Comment hnaparst
hnaparst's picture

May be.   But you can sell a little bit all the way up.  Each batch should be so small that you feel it isn't even worth doing it.

Fri, 06/29/2012 - 20:47 | Link to Comment fswalker
fswalker's picture

Your measly 100k positons aint shit to the market so why bother with small batches all the way up? Why not just rather wait till the rally is properly exhausted & put in a decent sized position with a good risk/reward ratio?

Fri, 06/29/2012 - 10:57 | Link to Comment falak pema
falak pema's picture

the roller coaster always goes up and down wildly. So who cares, until it derails. 

Fri, 06/29/2012 - 10:58 | Link to Comment mark7
mark7's picture

The lower eur-usd goes, the more it takes away from argument that PIGS should issue their own currencies and devalue.

Fri, 06/29/2012 - 11:02 | Link to Comment Nachdenken
Nachdenken's picture

As foreseen yesterday lots of traders with wet trousers or shoes (depending on whether they trade sitting or standing). They can chase the trend now.

This is not a bounce, the turn will be encouraged by National Debt Management traders to maintain the illusion of unity and certainty and support within the Eurozone. 

Friday after the 4th of July celebrations could see a further push into higher ranges.  Thats MM market manipulation for as long as it lasts


Fri, 06/29/2012 - 11:04 | Link to Comment The Duck Stops Here
The Duck Stops Here's picture

Makes sense now that EU is united in their insolvency

Fri, 06/29/2012 - 11:15 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Yet somehow we still trail the US in the race. We can never win.

Fri, 06/29/2012 - 11:24 | Link to Comment The Duck Stops Here
The Duck Stops Here's picture

But they are trying their darndest to give the US a run for their money, Obama gets obamacare and they had to up the ante to try and keep in the race

Fri, 06/29/2012 - 11:06 | Link to Comment eclectic syncretist
eclectic syncretist's picture

Individual company earnings and forecasts will put a sobering damper on these festivities soon enough.  This is just the denial stage.

Fri, 06/29/2012 - 11:07 | Link to Comment Sockeye
Sockeye's picture

European Debt Union

Fri, 06/29/2012 - 11:11 | Link to Comment francis_sawyer
francis_sawyer's picture

That chart would qualify as a Friday foto caption contest...

Fri, 06/29/2012 - 11:11 | Link to Comment SpeakerFTD
SpeakerFTD's picture

Any news on the SNB's efforts to hold the currency line?   I guess today helps them out, but that kind of inflexible intervention seems like an obvious place to look for an eventual breakdown.

Fri, 06/29/2012 - 12:30 | Link to Comment NooooB
NooooB's picture

Look at the charts man! last night SNB bought a shitload of euros. That is what this is all about...

Fri, 06/29/2012 - 11:13 | Link to Comment Itch
Itch's picture

Every risk event has been sold for a long time now, looking around the markets today i have to admit i have my doubts about selling this one. There is also the fatigue element with the euro kicking in now, there will be many people wanting to take a good step back. Its happened many times before; things weren’t completely fixed but it rallied for months. Im long until the price tells me otherwise.

Fri, 06/29/2012 - 11:13 | Link to Comment bullmarket
bullmarket's picture

Only one slight differnce bewteen Oct 28, 20011 and today. The US market had a tremendous run up strarting October 5. Today it's been basically down. Some context is always appreciated but rarely delivered.

Fri, 06/29/2012 - 11:13 | Link to Comment EL INDIO
EL INDIO's picture


Thanks man.

Fri, 06/29/2012 - 11:14 | Link to Comment GlomarHabu
GlomarHabu's picture

Each day for the past several years we've been treated to the MOTU manipulation of FOREX,DOW,S&P, and a host of variables in the big equation making up "the world economy" .

Each day we find, again and again, the constant in the equation is DEBT. Huge unmanageable DEBT with no end in sight. These daily manipulations will not save us from continuing down The Road to Serfdom.

Fri, 06/29/2012 - 11:15 | Link to Comment knukles
knukles's picture

Fucking thing's still broken.
Nothing's been solved.
If "they", the Imperious Grand Technocrats were going to fix the Problem, they'd be addressing the Problem, not the symptoms.

"That weeping open shanker on your lips needs a new band-aid, honey.  That one's all soaked."
" Oh thank you kind sir, now we can kiss again"

Fri, 06/29/2012 - 11:23 | Link to Comment DeadFred
DeadFred's picture

I salute your imagery. LOL

Fri, 06/29/2012 - 11:25 | Link to Comment geewhiz190
geewhiz190's picture

lipper fund flows continue to show equity funds flows out. how anyone can hope to call this thing one way or the other is a waste of time IMHO. if you're in it, you've got to hedge it. if your out,relax a little and have a nice weekend.

Fri, 06/29/2012 - 11:26 | Link to Comment Jack Sheet
Jack Sheet's picture

EUR rallies these days seem to be as transient as Warron Buphitt's erections.

Fri, 06/29/2012 - 11:27 | Link to Comment jannewmx
jannewmx's picture

So, when will the broken clock get it right? I'm not even asking for a broken clock getting it right twice a day. Bears have been calling for a crash for so long it's about time they get it right at least once. Face the truth. The financial system might be a mess but it has miles to go before it crashes. The can is lighter than you think. It can be kicked down the road far farther down the road than any one of us can predict. It will not occur in this decade or the next. Relax and enjoy. All that stress will kill you.

Fri, 06/29/2012 - 11:36 | Link to Comment Itch
Itch's picture

One thing of note is that EUR/CHF is not playing along in the slightest, thats strange, thats very strange.

Fri, 06/29/2012 - 11:44 | Link to Comment Snakeeyes
Snakeeyes's picture

It did taper off. Markets realized that Spanish banks will simply "Die another day." That was all that was accomplished.

Fri, 06/29/2012 - 11:47 | Link to Comment Splootch
Splootch's picture

what you were expecting...eur goes to 0 and made bunch of littles of you the next george soros?...dont worry eur will go back down but first it must allow me to close my long at 1.2800

Fri, 06/29/2012 - 11:53 | Link to Comment Peter K
Peter K's picture

What's funny about the Euro rally is that the only way to save (and I use that term loosely) the Euro is by expanding the monetary base, i.e. QE. And the unsterilized kind. Sell Mortimer, Sell :)

Fri, 06/29/2012 - 11:55 | Link to Comment Paul Atreides
Paul Atreides's picture

Funny thing is you could almost predict this was going to happen today by the comments yesterday evening, one troll started commenting that he shorted the EUR 100k and had all ready made 13k from it and everyone should do it. I knew instantly that the shorts were going to get murdered this morning, glad I am out of the paper ponzi casino completely but its interesting that you can gather that insight from analyzing the comments.

Fri, 06/29/2012 - 12:36 | Link to Comment Itch
Itch's picture

100k is only $10 a pip, so he would have needed a 1300 pip move to get his supposed 13k. And, if he had of been 100k on margin at say even 50:1, he would have been snuffed out the minute he put the trade on, whatever the market conditions, thats like $500 a pip.  Either way, hes a terminal bullshitter. The only thing you learned from his comment was that people who talk about their trade sizes are 99% of time bullshitting, horribly. Same thing goes for people who try and advise you on how you should trade. Always, always, always ask to see their bottom line...its only then the real bullshitting starts.

Fri, 06/29/2012 - 12:05 | Link to Comment Village Smithy
Village Smithy's picture

Short positions are as important to a healthy market "ecosystem" as long positions. Bernanke and the other arrogant CBers who don't really understand free markets have started a war on shorts but they will regret it someday.

No follow through yet today, that may be a sign that returns are diminishing rapidly.

Do NOT follow this link or you will be banned from the site!