Monday June 5, 2006 - 10:26:03 GMT
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Black Swan Capital - www.blackswantrading.com
Escape from the range?
â€śThe unique character of each investorâ€™s mindâ€”in infinite variations of reason and emotion, fear and greedâ€”finds its expression in the cascade of market prices.â€ť
EURUSD testing 13000 this morningâ€¦will we once and for all break out of this excruciating range?
Fed Pause Themesâ€¦
1) US economic momentum is slowing faster than expected
2) US housing is deteriorating faster than expected
3) Inflation expectations are rising, but itâ€™s unclear if the Fed thinks its behind the curve giving the weaknesses already showing (and given the monetary lag thing)
â€¦while the ECB is expected to hike and sound hawkish on Thursday.
One minor problem: Everyone knows these themes! And plenty are riding the euro accordingly, as seen in the open interest levelâ€¦
Euro Jun â€™06 futures daily:
Is there a blow-off rally in the making that will drive the dollar into the tank; thus pulling the host of structural concerns to the fore? Or is there yet another surprise lingering out there for those who think we have finally escaped the range?
Mr. Hindsight has all the answers. But unfortunately he is on hiatus until at least Friday, maybe longer.
Jack Crooks, Black Swan Capital
Black Swan Subscription-based Service
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