Forex Market Commentary
When everyone is heading in one single direction generally the crowd becomes a ponderous bulk and loses all sense of purpose and reasoning and usually becomes stuck with an overwhelming conviction that a trade must be right and not correct. there is a difference between the zealous right and correct in that the zealous right becomes a blind faith mantra of follow the herds! The 'Boy Plunger' from New England knew this very well as a chalk boy at Paine Webber he instinctively learned to tune into his senses to distinguish between the right and the correct observation. Notoriously accurate for shorting the market Jesse Livermore in the 1920's became famous for his contrarian approach to trading; by moving against the overwhelming crowd.
Today with the EUR/ USD a massive 60% of the market is short the EUR/USD in favor of Dollar strength and the net short in the market grew by 11% from today since last week. That is an increasingly strong short position that very few longs could stand against. in short we are looking at a scenario no weaker than attempting to throw a baked bean at a charging Rhinoceros. Try to point out any positive data on the EUR on the short term and get slap back in the face with greater proportioned ill news on the overall state of the European economy bar Germany. But do markets fall forever? Do we ever see net shorts approach 70 and 80% of the total market? No. why? Because, for example with futures and options, for every short in the market there has to be a long to cancel the bet. The ETFs being the largest traders are already net short like the bigger specs. but it is the stragglers who step in now who may end up with their trousers down because they are the ones paying the higher premium in the market to short the EUR. markets do die but the tend tend to come back in time. So short traders beware. fundamentals are heavily skewed in favor of the USD given global quality bond differentials. But markets zig and zag and its always the retail shorts in the market last in and first to perish. Dollar longs be careful climbing all the way to the top as the last steps become more and more treacherous and EUR plungers what goes down goes back up like a rubber band.
Crude has been performing well the last 2 weeks but that spurt is about to come to an end and the prices sure to fall as we slip to the bottom of the sideways trading channel again.
See on Reuters the following report of pressure on crude -
http://www.reuters.com/article/2015/04/17/us-markets-oil-idUSKBN0N802J20150417?feedType=RSS&feedName=businessNews
Once again see the interview with legendary hedge fund manager Stan Druckenmiller. The billionaire investor makes 3 strong predictions for this year and next in an exclusive interview with Bloomberg. Firstly, that interest rates should rise, secondly that China should start growing rapidly again and thirdly that crude oil prices should start climbing through 2016.
See full interview on Bloomberg here -
http://www.bloomberg.com/news/articles/2015-04-15/druckenmiller-bets-on-market-surprise-with-china-boom-oil-rise
With Dollar strength currency and commodity market volatility is sure to rise through 2015. Crude oil 45 -60, USDX 90-105.
Today with the EUR/ USD a massive 60% of the market is short the EUR/USD in favor of Dollar strength and the net short in the market grew by 11% from today since last week. That is an increasingly strong short position that very few longs could stand against. in short we are looking at a scenario no weaker than attempting to throw a baked bean at a charging Rhinoceros. Try to point out any positive data on the EUR on the short term and get slap back in the face with greater proportioned ill news on the overall state of the European economy bar Germany. But do markets fall forever? Do we ever see net shorts approach 70 and 80% of the total market? No. why? Because, for example with futures and options, for every short in the market there has to be a long to cancel the bet. The ETFs being the largest traders are already net short like the bigger specs. but it is the stragglers who step in now who may end up with their trousers down because they are the ones paying the higher premium in the market to short the EUR. markets do die but the tend tend to come back in time. So short traders beware. fundamentals are heavily skewed in favor of the USD given global quality bond differentials. But markets zig and zag and its always the retail shorts in the market last in and first to perish. Dollar longs be careful climbing all the way to the top as the last steps become more and more treacherous and EUR plungers what goes down goes back up like a rubber band.
Crude has been performing well the last 2 weeks but that spurt is about to come to an end and the prices sure to fall as we slip to the bottom of the sideways trading channel again.
See on Reuters the following report of pressure on crude -
http://www.reuters.com/article/2015/04/17/us-markets-oil-idUSKBN0N802J20150417?feedType=RSS&feedName=businessNews
Once again see the interview with legendary hedge fund manager Stan Druckenmiller. The billionaire investor makes 3 strong predictions for this year and next in an exclusive interview with Bloomberg. Firstly, that interest rates should rise, secondly that China should start growing rapidly again and thirdly that crude oil prices should start climbing through 2016.
See full interview on Bloomberg here -
http://www.bloomberg.com/news/articles/2015-04-15/druckenmiller-bets-on-market-surprise-with-china-boom-oil-rise
With Dollar strength currency and commodity market volatility is sure to rise through 2015. Crude oil 45 -60, USDX 90-105.
Always look to support and resistance band lines as the key to understanding in the long and short term where prices are converging. Professional technical traders use 50 day and 200 day medium and slow moving averages as fundamental cornerstones for interpreting the direction of price action.
USDX
97.446 -0.247 -0.32%
Support 96.776 Resistance 98.496
EUR
1.080600 +0.004435 +0.41%
Support 1.06847 Resistance 1.09147
Crude Oil
57.66 -0.45 -0.78%
Support 56.01 Resistance 58.99
Gold
1204.500 +6.310 +0.53%
Support 1,191.8 Resistance 1,213.4
Pieter Bergli - DeLoren Trust Holdings
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