25 února 2010

Ken Veksler's Market Commentary

Good morning,

Where there’s smoke there’s fire and where there’s fire there’s DAMAGE!
Every European newspaper has got their front page plastered with news of the Greek tragedy and quite frankly the Greek’s haven’t helped themselves one little bit with the Greek finance minister calling the Germans everything but “Nazi’s”, although I think he might well have muttered that under his breath also. Biting the hand that feeds you much?

Any way you look at it spells bad news for the Euro zone and clearly the currency as a result. Adding further woes was another article nominating Spain as the next battle ground for growing debt and potential bail out problems…. It just isn’t getting any better for them right now. What all this means of course is that the DXY is now approaching previous highs and doesn’t look anything like abating that growth in the near future. It’s practically a case of no matter what Bernanke and his mates have to say, this greenback is going higher. Save another disaster of 9/11 proportions chances are you need to be holding the big dollar right now. The only other currency that might hold a challenge to the USD as safe haven flow destination is the JPY, which in large part thanks to the EURJPY hitting significant new lows is looking remarkably strong at the moment. Cross JPY is the place to be right now and if you’re prepared to wear some volatility then EURJPY is definitely the place. I say buy some options… Go on put your hand in your pocket and buy an option…. See what it feels like to make some money for a change in an unforgiving market.

The Cable is also being punished at present trading (at print) to new 9 month lows having taken out the 1.5380 level and printing as low as 1.5310 this morning. Rallies need to be sold and sold heavily.
On the EURUSD I like a move to 1.3530/50 to begin selling on the day and continue in that vein all the way up to 1.3630/50 should you see it that high (good luck).

Elsewhere overnight data out of both Australia and New Zealand was seen to be positive for the respective currencies but in the end only adds further credence to my short AUDNZD position which at present is developing nicely. Having printed a high of 1.2923 overnight we’ve seen a good retracement lower and I am all but filled for the entire size of the position.

On the day we have data out in Euro zone in the form of Consumer and Business confidence and further out in the US we have Durable goods orders, Jobless claims numbers and the House price index all later this afternoon. I see this data as nothing other than USD supportive for now and choose to play accordingly.

For those that didn’t get my rather thinly veiled attempt at pushing options, here it is again in terms everyone should understand;

BUY OPTIONS!!!!!!!!!!!!!!!!!!!!!!!

Best regards,

Ken Veksler.

23 února 2010

Ken Veksler's Market Commentary

Good morning,

Little by way of earth shattering news overnight, other than some interesting comments regarding the AUD and the current rate cycle. BIS Shrapnel were out commenting that the RBA has at least another 2% left in this move…. Not really news to anyone I don’t think especially given the fact that this cycle could indeed last another 2 years or so. Nonetheless the AUDUSD was moved higher on the back of this but even so gains were a little more limited given rumors doing the rounds overnight regarding the potential for Yuan devaluation (gradual or otherwise). No one is disputing the mining boom that the Australians are currently experiencing but many I feel have forgotten and very quickly for that matter the fact that there was a new miners tax introduced only weeks ago…. I still hold the view that 0.9170 should cap this initial rally higher in the cross and then we settle down for some more sideways consolidation before we in all likelihood continue higher, this will take a while though. And in the interim I prefer to play this move on the cross via the AUDNZD as per yesterdays strategy.

Elsewhere SNB jawboning overnight saw the EURCHF move a little higher only to be back where it started…. They are starting to lose face in my eyes and becoming more like the BOJ with each passing day. While on the topic of the EUR I see a short squeeze here this morning having taken out stops ahead of 1.3650 and now making a firm push for the 1.3730 area ahead of the German IFO data this morning. I would think that we could see a knee jerk reaction on the back of the data and take out some weaker stops above 1.3730 taking us up to around the 1.3750/60 zone highs for the day. From there I once again look to sell keeping in mind the 1.3840 major pivot level highlighted yesterday. Also this morning hearing of short term stops gathering just below 1.3640 for those getting long the intraday rally.

Outside of the IFO data today we also have the US Consumer Confidence which might give the Greenback some added vigor in recent moves. Looking at the DXY I personally still see some more room for USD weakness/consolidation into 79.50/60 from where we most likely resume our bullish USD bias. On the USDJPY the retracement we had to have is still in play and I now look for 90.75 to hold on the day and am I buyer into that area, bearing in mind that I wouldn’t be against the idea of averaging into 90.50 and 90.30.

The Cable is still moving in tandem with the EURUSD and general USD sentiment and the levels highlighted yesterday still hold true for me. 1.5580 should be tested on the day and I sell all the way into 1.5650 should get the opportunity. All of this should be considered with a backdrop of the EURGBP which at this stage looks like its gearing up for an upside breakout.

Best regards,

Ken Veksler.

22 února 2010

Ken Veksler's Market Commentary

Good morning,

I’m back! And this time I’m feeling better than I have done in over a week (many thanks to illness and general bad luck).
I start off with fresh eyes today as I feel that I haven’t really seen the market in over a week and now will most likely need the better part of today to get reacquainted with it all.
No news to anyone that the EURUSD still sits languishing in its own Greek tragedy, nor is it in any way enlightening to learn that the Fed has moved the discount rate higher by 25bps late last week.
Interestingly though spec positions in the IMM stakes are now at record shorts for the EUR and of course record longs for the USD across the board. Where does that leave us? In simple terms we’re open to ugly squeezes and cleanouts in the coming days. In the absence of any hard data in the next day or two moves are likely to be pretty ugly if and when they finally start moving and as a result I look for relative value trades and firmly on the radar is the AUDNZD once more.

Further afield in the remaining majors the Greenback continues to rule the path of least resistance and as such we’re seeing the USDJPY pushing into first (and when there most likely overdone) resistance at 92.50/80, with intermediate support now resting at 91.30 and lower into 90.80. I buy tentatively into support as mentioned and look for a push into 92.00. Once we’re conclusively on the topside though I will be a strong seller in the next week or 10 days.

In the AUDUSD, surprisingly I am bullish in the very near term and still look for 0.9170 to be test in the coming days as the risk euphoria slowly returns to the market. From there however, like with the USDJPY above I will be a firm seller or better still look to express the view via the AUDNZD (which I’ll be sending an additional strategy piece in the next day or so).

The Cable is also now USD driven and I look for 1.5580/90 to hold the upside for the time being and provide small opportunities for being sold into.

I will keep you posted and myself desperately look forward to getting a better eye on this market.

Best regards,

Ken Veksler.