Saturday 4 February 2012

FX Updates & Troll Attack.

Just a quick update on what is happening in FX land.
Call it manipulation or coincidence, AUD sold off after the NYSE closed on Friday. It made a triple top  in the daily chart;
It is expected that RBA will reduce the rates by at least 25 basis points next week, which may trigger a correction.
Euro failed to break 1.32 level and is entering a decisive phase of the Greek drama.
The situation is clearly a mess. While Greece may not ultimately leave EZ, the game of brinkmanship and who will blink first is going on. Market do not like uncertainty. 9th February is the ECB rate decision day and while a rate reduction can not be ruled out, the credit situation in Europe is alarming. Only thing saving the market so far is the LTRO program of ECB. But I do not think the risk rally has priced in the Greek default yet or we do not know what is happening behind the scene.

US Dollar is sitting at critical support level.  
There are many factors which go into the fair valuation of a currency. I think the recent down trend of US $ has something to do with the expectation of a QE. Now that hope has been dashed, we may see a reversal of fortune for the greenback. There is a -0.86 correlation between USD and equities. With indexes at a record high, the risk appetite is not an assured thing. It sure going to be interesting next week.

On a different not, we are having Troll attack on this blog. There is one guy who posts nasty remarks about the blog. The worst part is, this troll does not have the courage to give his ID and like a little spoilt girl, he hides behind his mother and makes faces. He has no logic or argument. Now his favourite point is my missed call for the January bottom which did not come. I am the first person to admit when my calls go wrong and I do not think there is any one individual who can make 100% correct calls all the time. If I could I would not be sitting here writing this. The interesting thing that I have found so far is that most of the Trolls are from my own community, which is South Asian. My call to all the low life Trolls, you do not have to read this blog if you do not like it. Move on and get a life.

Thanks for reading my thoughts. Have a wonderful weekend folks.


  1. Don't mind the troll... This is the internet, so all kinds of kooky characters. Those who follow you know you're legit.

  2. Hi

    Thanks for your contribution and handwork. I read your blog every day and use it as a guide for trading. Trolls are trolls. Ignore them. I wish to ask you a question about AUD. Does it's movement has a direct or inverse relationship with US equities? If there is sell off of AUD, should I expect a sell off in US equities next week?

  3. Thanks for your support Daryl. Yes, at this point AUD and SPX has over 90% positive correlation. That means any sale in AUD would reflect sale in SPX and vice-versa. At present AUD, Euro, Equities and precious metals ( All risk assets) are showing signs of sell off next week or two. But that will be only temporary I think.

  4. It's only a matter of time before you become a cold hearted bastard like me and disable all comments LOL. Keep up the good work!

  5. I just ignore the idiots who post on blogs. These are ignorant people with no actual life. Real traders take all blog posts for what they cost (free). I actually really like your commentary and it is one of only 3 or 4 blogs I read anymore.

    Hit the ignore button, everyone else is.

  6. I agree next week is going to be very interesting...and thank you for your all your efforts. I'm truly amazed at the variety of humanity on this planet, the kind strangers, regardless of country, or langauge, that make this life so interesting. The trolls exist so you can realize where the lower end of the scale is. Looking forward to your next post.

  7. You do nice write-ups but you're trying too hard.

    The central bankers are pushing this along until they aren't. The news is beginning to fill with stories about how the economy is booming and hiring is going on all around us while the stock market can only go up.

    Meanwhile, the SP500 is bouncing up the 10 day sma just like it did while Bernanke had the almost daily QE spigot running. I wish I had the depth of knowledge to understand which alphabet soup ECB/Fed programs were behind this but it's clear something un-natural is going on. At least when the QE faucet was running you had some idea when it would be shut off because they were fairly open about it.

    Trolls are a fact of life. It's part of the free range nature of the internet. Ignore them and they go away, eventually. Trolls are only looking for attention.

  8. Troll attacks are a sign you've hit the big time. Just look at what someone like TK pulls in every once in a while. Has "The Hun" been here yet? LOL.

  9. You have good insight and follow-up. I read you blog to get a perspective. Keep up the good work.