Tuesday 28 May 2013

Free lunch for everyone!!!

American Equity Indices are breaking again record highs. European indices are also reaching new tops every day, and are targeting 2008 records. Japanese stock markets are up an awesome 70% since last summer. In the same time, base metals are reaching new... lows!
Surprising? Not that much I would say. Ben Bernanke and its dear fellow from the ECB and BOJ have been printing contiuously money which in turn flows into financial markets. The economy is not going much better than just 6 months ago. But we know that if anything goes bad, central banks will print money. If the economy recovers, they will print money as well. So why should we worry? You should be completely crazy to sell the market and play against all those piles of cash!

Actually, there are no less than 15 Central banks that cut their rest only in the month of May 2013. Yes, you read it properly. 15!!! And here is the list:

Central Banks rate cuts in May 2013

Now the question is how long will those injections of fresh cash last? Borrowing rates of "risk-free" countries are already shooting up!

From an article of Zero Hedge - Is This Why Europe Is Rallying So Hard?

Update: Strategy of the Week - Long Brent

Wow! It did not even take 24 hours for my target on Brent to be reached! I personnaly would advise to close the position here, as the breakout of the $105 resistance seems really uncertain. Indeed, the 2 following news should weight on the prices in the medium term:

  • The OPEC is divided concerning a cut in the production to sustain prices. Thus the flow of shale crude oil should prevent prices from rising any further: U.S. Oil Boom Divides OPEC
  • Net long positions on Brent are reaching new highs, which is usually a sign of trend reversal. Indeed, if the price of crude oil do not rise as expected, the unwind of speculative positions will drive prices sharply lower: ICE: Brent Crude Net Longs Up 5.8% in Week to March 19

Monday 27 May 2013

Strategy of the Week - Long Brent

Brent Crude oil
The first post of this week will concern a short term strategy on Brent. Brent crude oil has been tading sideways since reached a bottom mid-april. Prices have been building a bullish triangle, floored by a strong support line. The current situation in Daily data is the following:

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Economic calendar 27 of May to the 2nd of June 2013

canary Wharf


Please find below the economic calendar for the coming week :

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Saturday 25 May 2013

Wrap-up of the week - 25/05/2013


Rapid wrap-up of the main event of this week:

  • Equity Markets: The correction has finally begun after this long bull run! It looks like everybody was waiting for a low entry level at $1,590 on the S&P 500 but jumped into the adventure when the $1,600 were breached. However the upward move has been regular and systematic, with exhaustion gap that would weight on the price. Lots of resistance has been seen around $1,675, and given current valuations, rumours of the end of the QE this summer and the possible second downgrade in the US, equity indices should halt least halt for a few weeks before breaking for new record highs. European indices should follow the same trend.
    The Nikkei has also encountered "some" resistance. The 1-day correction of -7.5% is huge, but little compared to the 70% bull run since last summer. This should keep being hot stuff for quite a few weeks, depending on the results of Japanese (exporting) companies, inflation data and every statement from the BOJ. I would personnaly not touch it anymore as hedge fund have been closing most of their positions this week and retail investors have been buying Japanese equities of late (which is usually a very good contrary indicator!!!).

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