Tradefair & Financials
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This week CPI numbers came out in OZ showing and annualized rate of 1.6%.The reserve banks "comfort" number is 3%. So the stage was set for an interest rate cut.The RB did not cut in feb as expected, keeping rates on hold @ 4.25%.
Commentators immediately called for a 50 bps cut.The AUD fell to a low of 102.47 from the mid 103's. 2 days later it is back to 103.65.The RB meets next tuesday to decide on rates. Pundits claim a cut is 100% certain and is "baked in "Yet the AUD rises.
The same commentators have been calling for a sub 130 eur for more than 2 months now.Yet the EUR is @ 132.25. Fundamentals suggest the EUR should be much lower.
WHy is it so? Its a short squeeze play.Everyone is told" its going down" so traders get short. No one is left to take the other side of the trade and hence the rise.
Heres the play- both move higher to an uncle point where upon the shorts capitulate and once out- whooska!!!! the downside occurs.
Big $$$$$$ to be made on this play.
Commentators immediately called for a 50 bps cut.The AUD fell to a low of 102.47 from the mid 103's. 2 days later it is back to 103.65.The RB meets next tuesday to decide on rates. Pundits claim a cut is 100% certain and is "baked in "Yet the AUD rises.
The same commentators have been calling for a sub 130 eur for more than 2 months now.Yet the EUR is @ 132.25. Fundamentals suggest the EUR should be much lower.
WHy is it so? Its a short squeeze play.Everyone is told" its going down" so traders get short. No one is left to take the other side of the trade and hence the rise.
Heres the play- both move higher to an uncle point where upon the shorts capitulate and once out- whooska!!!! the downside occurs.
Big $$$$$$ to be made on this play.
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If you're correct on all this, then it does make one wonder why all the " pro" traders in the bank FX dealing rooms are all apparently so " dumb" to be continually squeezed in this manner.
They can't all be lemmings surely ? |
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AUD 104.50, EUR 132.60 half an hour b4 the dow opens.
another great call by me.  May go higher but I'm exiting here,no need to hold over the weekend and locking in profits is nice. can always play again next week. |
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One has to admire your style, Mr Ben. You seem to have a knack of posting/ quoting the very top/ bottom of every move on whatever instrument you chose for trading. It's no wonder you make so much money.
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Thanks Muqbil.Like most here I post only the trades that I think have the very best chance of success.
I did miss the top of the AUD for the day as it closed at 104.70.Nevertheless its been an excellent week. Next tuesday- aussie time , the reserve bank will release the interest rate change. The volatlilty that day should be BIG. Good luck if your on. |
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So Mr Ben. Please tell us well in advance of next tuesday, which way we should be positioning ourselves for any RB announcement. Thank you in anticipation.
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The issue with this particular anouncement Froggy is that it is well flagged.Much more heavily flagged than normal.Pundits have priced a cut @ 100% chance.Unheard of .
25BPS is the norm with 100 BPS after the GFC being the only bigger change in recent times. Banks in Aust have not been passing on cuts in full.So theres a good chance in my view it will be 50 BPS. On this particular occasion I will be trading after the dust settles.Normally I get positioned about 10 minutes before the announcement.If in fact the AUD does plummet after the announcement I will be buying for the upside.If its 25 BPS the downside may not be so dramatic. Of course the RBA may blow it out of the park with no change or 75BPS. It will also depends on how hard the shorts get squeezed on monday.The squeeze this week has been earlier and more severe than most. I have found in trading to have ideas set in concrete leads to too many disasters. To be honest, having cleaned up on the squeeze this week I may well not trade this particular announcement. Apologies if thats avoiding the issue a bit. |
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Normally I get positioned about 10 minutes before the announcement
The fetal position? To be honest having cleaned up on the squeeze this week Stop it, I'm busting my ribs I may well not trade this particular announcement. Apologies if thats avoiding the issue a bit. In other words, "I don't have the faintest idea" but whichever way it goes I think I covered all bases to be able to post that I made "10 years wagers" profit What a clown |
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what a pity you had to appear melly.
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50 BPS cut
good results but not huge. Happy Days |
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In other words, "I don't have the faintest idea" but whichever way it goes I think I covered all bases to be able to post that I made "10 years wagers" profit
Don't say I didn't warn you |