21 ledna 2010

Ken Veksler's Market Commentary

Good morning,

Things are going well and the market looks good to me in the sense that I am picking trades and direction, one problem however and that is that this morning I am terribly hung-over!
So apologies if this seems a bit sketchy but Danish slow poured beer is definitely the culprit here.

On to markets and developments of note overnight… China! Having reported their CPI, Retail sales and GDP figures I am left scratching my head and thinking how essentially planned economies can pretty much report anything they like and defy the rest of the world to prove them wrong. You might have guessed that I don’t necessarily believe these awfully industrious chaps from China, but if they sell the idea and the rest of the market buys (albeit skeptically) then who am I to argue. Point is the data did give a small boost to recently waning risk appetite in that it perpetuates the notion of the global growth and recovery story and adds credence to those pitching that this is not a commodity “bubble” but genuinely demand driven…. Whatever….

Elsewhere the DXY and the greenback continue to march on ever higher and stronger with the EURUSD giving in further ground testing overnight lows of 1.4065/70 and wearing even more pain this morning with reported stops sitting below 1.4050/60. I feel that they will get taken out today and we end up seeing a print below 1.4000 and well enough to my intermediate target of 1.3900. Rallies in this cross need to be sold and I advise looking for the invariable short squeezes as opportunities to do so into 1.4150/70.

The Cable has followed suit and this morning finally taken out the 1.6250 level and the sops that have been building up below it, my target on this move is 1.6180 and depending on how the UK data reads later this morning we may well be through there also. However I do initially expect some good two way business to be seen around those levels. In order to express my view on further Cable weakness and avoid the inevitable volatility associated with the EURGBP, I am now strategically short the GBPCHF at 1.7020 looking for corrections to 1.6750 and 1.6600.

I have taken profit on my short AUDUSD from 0.9290 of last week around an average of 0.9090 and feel that from here while there is likely to be more downside it will be relatively limited until we see the outcome of the Feb 2nd. RBA meeting.

Data today brings us;

Euro zone PMI
UK Public Finance data
US Initial/continuing claims

On the employment data from the US I would be erring on the side of caution and suggest we could well see a worse number printed.

Best regards,

Ken Veksler.

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