31 March 2014 ~ Free Money From Yellen?

By my estimations there was some free money to be had today. But you had to be quick, and you’d have to have deep enough pockets to really hit the market hard and make the most of the move…

14:52 UK time The Fed’s Yellen spoke with a slightly more Dovish tone than the market has gotten used to. The S&P 500 caught a bid and gradually started to move North – to claim a quick one or two points wouldn’t have been overly difficult, although the lack of follow-through certainly capped any potential profits.

14:45 UK time saw the scheduled release of US Chicago PMI figures: 55.9 as against 59.2 Expected. This is clearly Tier-2 data, for my money. The market didn’t move much despite the number coming in a good way off target.

10:00 UK time. To kick off the session Eurozone CPI came in slightly below expectation, at 0.5%. Marginally more scope for the ECB to take action? The Euro apparently thought so as it took an immediate dive, although classic market action: it bounced right back up. The only opportunity, in my opinion, was to fade the move and bank on it reverting. Not a good spot by any stretch of the imagination, though.

27 March 2014 ~ UK Retail Sales ~ Otherwise A Very Quiet Day

It was not an exciting day for the markets.

* 09:30 UK time saw UK Retail Sales hitting 1.8% as against expectations of only 0.3%. No surprise to see GBP spiking to the upside – but too fast for any human to safely profit from, surely?

* The markets were left with little else to do through to 12:30 UK time whereupon US GDP (Final estimate for Q4’13) came in marginally below expectation; 2.6% annualized. Stale news, though.
Simultaneously US initial jobless claims came in broadly as expected at 311k (Exp 323k). The S&P 500 barely gave a shrug of the shoulders, and I’ll not bother with a video for that reason.

* Later on, US Pending Home Sales fell, -0.8% m/m and disappointing against expectations for 0.1% gain. Poor weather was suggested as a contributing factor, but in any event, the S&P 500 once again couldn’t seem to care less. No justification for a video.

All in all, a forgettable day, so let’s move on to the next.


25 March 2014 ~ Draghi Provides Opportunity

For the quick-firing trader there was money to be made today, on the back of ECB banker comments.

In the early afternoon (12:50 UK Time), ECB’s Makuch claimed members of the ECB board are prepared to take decisive steps if needed and one of the possibilities is adding liquidity.
6E behaved nervously and this was a sign of things to come… Harry Hindsight News Impact: 4/10

The Big Dog Draghi was scheduled to speak at the Sciences Po Conference in Paris, and at 16:15 UK Time he re-iterated that the ECB stands ready to take additional monetary measures.
Nothing new right? Well 6E took a considerable dive and it didn’t require a high speed supercomputer to get in on the action either.
On a Harry Hindsight Impact Scale, I’d call this a 6!


Data Released

And finally a bit of house-keeping to the 3 most noteworthy scheduled data releases of the session:

09:00 AM London Time saw the release of German IFO Business Climate – 110.7 vs Expectations of 110.9
To my surprise, the EUR moved a fair bit, albeit so quickly perhaps the best trade there was to fade it? Harry Hindsight News Impact: 3/10

09:30 AM London Time came and with it the release of UK CPI at 1.7% vs Expectations of 1.7%
Despite coming in bang in-line, 6B similarly put in a notable move, although no easy money in my opinion to be had. Harry Hindsight News Impact: 2/10

14:00 London Time saw US Consumer Confidence hitting 82.3, a good bit above the Expected figure of 78.5
The market (ES) response was muted, and the failure to rally was perhaps a reliable signal that the next move was to the downside. Several points were lost over the next half-hour. Harry Hindsight News Impact: 1.5/10

24 March 2014 ~ French & German Manufacturing PMI

To kick off the day there was a trio of scheduled data releases out of Europe.

1) French Manufacturing PMI came in a marginal beat over expectations and caused an immediate spike in the EUR. There was no trade here, as the move was so short-lived. (Apologies for the messy video… I was running late for work).

2) German Manufacturing PMI came in marginally lower than expected, and naturally, EUR gave up any earlier gains with a rapid spike lower. If there was an obvious trade to make here – I certainly didn’t see it, as there was no sustained move after the initial jerk.

3) Latterly, Eurozone Manufacturing PMI came in bang on expectations of 53.0. I won’t dignify it with any video footage.

The session was otherwise uninspiring. There was clear selling across equities for much of the day but perhaps on this occasion it was more Technically driven than Fundamental, given the lack of big news.


22 MARCH 2014 ~ Retail Positioning in Forex

As part of an ongoing series, I’m keeping one eye on the relative Long and Short positions of retail Forex traders. Does this information provide any trading clues? Let’s try and find out.

Here are my latest observations:

A generally rising market, in which the retail crowd are generally… short (?) !
The recent and sudden initiation of long positions and subsequent reversal to net short (the green/red cross-over) may signal a good buying opportunity below 1.38000.

Something interesting?

Something interesting?

Did the Thursday/Friday green/red cross-over provide a reliable buy signal?

Possible signal?

Possible signal?

Despite the recent rally, I’m still calling this a down-trend. Are we about to witness a red/green cross-over and potentially a reliable sell signal?

A clue from the retail crowd?

A clue from the retail crowd?

20 March 2014 ~ US Claims ~ US Phili Fed

Thursday suffered some considerable selling across the board in a continued reaction to the more Hawkish stance from Yellen the night before.

Of note:
12:30 noon London Time: US Claims released without any surprises, and negligible market impact.

14:00 London Time: US Philadelphia Fed hits 9.0 as against expectation of 3.0
Markets jerk a little but still register as a 1/10 on the Harry Hindsight Impact Meter.
* Several minutes later US equities had risen several points but I question whether this was a direct result of the Phili Fed number. More likely general sentiment.

19 March 2014 ~ FOMC Statement ~ Yellen is Hawkish

Sadly I lost audio feed ahead of the Fed Statement at 6pm London Time.
Nevertheless, I provide the video footage for several minutes, during which the market’s did move considerably.
5/10 on the Harry Hindsight Impact Meter.
* Fed sees first rate rise in 2015, drops 6.5% jobless threshold.
* Fed cuts monthly Treasury purchases by $5bn, and MBS by $5bn; generally expected.
The water turns pretty much red for a good hour thereafter.

…And an hour later, 7pm London Time, the Fed’s Yellen is answering questions and comes across as more Hawkish than the market bargained for. Further selling ensues…