Forex Forum Archive for 05/03/2014

GVI Forex john 21:17 GMT May 3, 2014
Commitment of Traders Report

The USDJPY still looks overextended, but the chart indicates that there had already been some gradual liquidation of shorts through last Tuesday. This is due more due to a lack of price movement than an adverse price swing, which sucks!

GVI Forex john 21:09 GMT May 3, 2014
Commitment of Traders Report

Joe I look at the COT reports for indications of markets that are overextended. That means when the market starts to liquidate there will be a lot of POWER behind the stops when positions are being squared up. My point on the earlier post was that neither the S&P or the 10-yr Note looks to be heavily overextended. To me that suggests that there was another reason for the free-fall in the yield on the 10-yr on Friday other than stops.

Here is a current example of what I feel is a good example of an overextended market waiting for a catalyst.

Cambridge Joe 20:28 GMT May 3, 2014
Commitment of Traders Report

John adding the COT for the S&P I think will be of great interest going forward. However, if "stop-loss orders are the strongest force in trading", how do I see this information from the chart posted or am I being obtuse ?

GVI Forex john 15:23 GMT May 3, 2014
Commitment of Traders Report

Ive been trying not to overdo the COT charts, but I recently added S&P futures and then the 10-yr note today after hearing that the 10-yr note was heavily oversold coming into the end of last week. I wonder sometimes where these ideas come from. Note below that the market was short the 10-year as of the close on Tuesday but not overly so. It is not an explanation for the freefall in yields on Friday.

Note the two yield lines (actual and 20-day avgs) they are hard to reconcile with a Fed "taper", a recovering U.S. economy, and a net short position in 10-yr Note futures.

Why does this all matter?
1) all markets are correlated.
2) Stocks and bonds are the key elements of risk-on and Risk off.
3) COT data are representative of market sentiment and stop-loss orders are the strongest force in trading.

GVI Forex Blog 15:04 GMT May 3, 2014
All Eyes on U.S. Credit Markets. Monday Holiday in Tokyo and London
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HIGH IMPACT NEWS ITEMS: JP/GB- Holiday, HSBC PMI, US- Markit & ISM Service PMI's

The week ahead sees a couple of holidays on Monday, but U.S. Service PMIs are due. A key focus over the weekend has been the conflict in Ukraine. Apparently there had been talk at one point on Friday that Russian President Putin was going to use expected inaction at a UN Security Council meeting as pretext for moving into Ukraine to establish order. Fer of military action was the reason why yields on U.S. Treasuries went into a free fall on a flight-to- safety bid.

All Eyes on U.S. Credit Markets. Monday Holiday in Tokyo and London

HK [email protected] 10:05 GMT May 3, 2014
Kremlin says it is weighing response to ‘thousands’ of pleas for help from Ukraine
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MOSCOW — The Kremlin is receiving “thousands” of calls for assistance from Russian speakers in eastern Ukraine, and it has not yet decided what to do, a spokesman said Saturday, as Ukrainian authorities continued to move to push back separatists who have taken over key cities in the east after Ukraine suffered its bloodiest day in nearly three months.

The ominous Saturday announcement came after weeks of declarations from Russian officials that if Russian-speakers in restive eastern Ukraine came under threat, they would consider intervening in a conflict that has left several cities in the hands of pro-Russian separatists.

HK [email protected] 09:19 GMT May 3, 2014
Not for the faint-hearted.
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Odessa.

Images which can lead to escalation.

Not for the faint-hearted images from Odessa.

PAR 08:03 GMT May 3, 2014
Spain & Italy
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Eurozone government bond yields fell to record lows after Italy's 10-year government bond yield fell to 3.047% and Spain's 10-year bond yield dropped to 2.98%, both the lowest since data began in 1993.

Mtl JP 02:40 GMT May 3, 2014
OIL

Gold ... paper Gold more precisely - assume when volumes drop significantly in most financial asset - across the board - most people don't trust the pricing anymore. It makes no sense why someone would ever hammer with a 2000 size sell order in gold or silve thereby ensuring the worse possible price if you're a genuine seller. In other words, the market movements are BS.

But as long as they can keep supplying physical at the stupid prices... suggest to not complain much: just grab and go