Friday, February 18, 2011
Selling GBP and EUR...
put your money where your mouth is...
this is just my view and not necessarily view of my company. Although I do not trade FX, but follow it closely, the developments over the last weeks in Europe, such as increasing talk of interest rates hikes, continuing political uncertainty on how the future would look like should expose the dark side of the "recovery". Simply betting that any further IR hike speculations for the economies that just plugged the wholes in their sinking ships and not solved them (keyword debt) would scare markets going further and $ will benefit from this (despite I don't like Ben's policies either). Out of two evil you choose the smallest one. Technically I like short GBP more then Euro, but European periphery will be devastated by IR shock...
I will be working on hypothetical portfolio, rationale and charts, but for the time being:
short EURUSD @ 1.3630 stop 1.3760 target under 1.30
short GBPUSD @ 1.6230 stop 1.6330 target under 1.58
time to be contrarian... looking for a good entry in the equity indices and commodities....
this is just my view and not necessarily view of my company. Although I do not trade FX, but follow it closely, the developments over the last weeks in Europe, such as increasing talk of interest rates hikes, continuing political uncertainty on how the future would look like should expose the dark side of the "recovery". Simply betting that any further IR hike speculations for the economies that just plugged the wholes in their sinking ships and not solved them (keyword debt) would scare markets going further and $ will benefit from this (despite I don't like Ben's policies either). Out of two evil you choose the smallest one. Technically I like short GBP more then Euro, but European periphery will be devastated by IR shock...
I will be working on hypothetical portfolio, rationale and charts, but for the time being:
short EURUSD @ 1.3630 stop 1.3760 target under 1.30
short GBPUSD @ 1.6230 stop 1.6330 target under 1.58
time to be contrarian... looking for a good entry in the equity indices and commodities....
Wednesday, February 16, 2011
is the UK falling into stgfltn
Over a month, correction, over three months, I didn't want to write anything I did not believe in.
the above line was in drafts of this blog waiting to be published since end of November. If I kept everything I wrote which then was deleted it would make for a good sized book.
I have been reading a lot other people's thoughts though and it appears to be I belong to a small group of people called "permabears". And while we continue talking how bearish we are, making money if you were a permabear would have been difficult in this environment. Yet there were ideas during last year that that fit both bear and bull camps, e.g. rising bond yields - some said it was a sign of economic recovery, others meant inflation and in case of some countries increased risk of default or outright punishment for irresponsible spending. A reminder for myself - know your "enemy".
I think it would make sense to brand the ideas that fits all camps as "one size fits all"...
since I am just warming up for the year, I will talk about some very country specific observations rather then macro view..
The striking evidence of things getting out of control is not in Egypt or other Middle East countries, but rather in the UK. Is it obvious, that negative growth with high inflation means "...." - the word we have not heard for a while. well, not so negative growth and not so high inflation, but it feels like the trend is there. watch employment numbers today...
Once this "word we do not pronounce" gets into mainstream media, like morning newspaper, expect things to uncover quickly... will George Soros be on the short pound trade again?
Historically, interest rate differential between the UK and other countries had been very high. Sentiment is this is to stay. sorry, but I am not buying it.
Patience is a virtue
the above line was in drafts of this blog waiting to be published since end of November. If I kept everything I wrote which then was deleted it would make for a good sized book.
I have been reading a lot other people's thoughts though and it appears to be I belong to a small group of people called "permabears". And while we continue talking how bearish we are, making money if you were a permabear would have been difficult in this environment. Yet there were ideas during last year that that fit both bear and bull camps, e.g. rising bond yields - some said it was a sign of economic recovery, others meant inflation and in case of some countries increased risk of default or outright punishment for irresponsible spending. A reminder for myself - know your "enemy".
I think it would make sense to brand the ideas that fits all camps as "one size fits all"...
since I am just warming up for the year, I will talk about some very country specific observations rather then macro view..
The striking evidence of things getting out of control is not in Egypt or other Middle East countries, but rather in the UK. Is it obvious, that negative growth with high inflation means "...." - the word we have not heard for a while. well, not so negative growth and not so high inflation, but it feels like the trend is there. watch employment numbers today...
Once this "word we do not pronounce" gets into mainstream media, like morning newspaper, expect things to uncover quickly... will George Soros be on the short pound trade again?
Historically, interest rate differential between the UK and other countries had been very high. Sentiment is this is to stay. sorry, but I am not buying it.
Patience is a virtue
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