Equities Get Short Squeeze March 31, 2015
USD Rally Sends Stocks On An End Of Month Short Squeeze
Yesterdays US equity short squeeze was just enough to get them in the green on the year, which is likely to continue into April. As I was reading up on some news this morning I saw a few long term charts of the US stocks showing technicals that they are well over bought and the indicators they were using showed all three rolling over. Now members will know I have never been a fan of such indis but thats not to say that several of the big boys arent watching them wondering just how they will prevent them from becoming true. This is why I would say the move is a short squeeze based on the fact that should the S&P and Dow both drop below March lows it has potential to create the flight from equities that they will be looking to prevent at just about any cost I would imagine. Considering the banks are being flooded with free cash and have been for several years now, they do have the means at their disposal.
I also have a pod cast that was very interesting and reminded me of a question members asked in the live session a couple weeks ago. They asked if I believed that the pending correction/crash was something they have planned all along? My answer was “no I do however think that they are just that stupid”. In the podcast below is an interview Chris Martensen had with Steve Keen where Steve explains a lot of economic jargon that was difficult even for me to soak in at times so don’t feel bad if you seem a little lost sometimes while listening. However the good part comes when he talks about Central Bankers he knows and talks to on somewhat of a regular basis. Showing he is on my side of the fence regarding their deliberate stupidity and only concern is for them self and political elite. Good stuff.
EUR/USD Potential False Push UP
The move on the EUR/USD yesterday does smell of a false push to the upside Friday last week but we will need to see the conviction below Fridays lows today to confirm and get a bias for direction. Since its looking like they will attempt the move during Asia this morning I will want to see London agree before looking for the backside entry. Otherwise they have potential to either be running stops below for a retest of the Asian highs or higher. If they do manage to hold it up the 1.0841 close to the Asian highs is a higher risk short and I will be open for the long from 1.0801 only if it holds and pulls back before a test during the London session.
GBP/USD Has First Push Down
The only thing that concerns me a bit with the first push down on the GBP/USD is the potential bottoming they will have to push through to get the second today. Conviction below the 1.4774 level will add probability to a test of the lows or down to the next level at 1.4726. the best short level I see is up at 1.4818 but I am currently having doubts they will push that highs unless we get the pullback starting soon. If we do get a good hold above the Asian lows I will be open for the long there but will need enough to change the short bias for today.
EUR/JPY Held Up By UJ
Of course just as I say that the correlation is likely to continue, they break it down regarding the EUR/JPY. Typical. I wont be having a clear bias for this pair today. The safer short will be from up at 130.15. I will consider a long from 129.45 but the level is weaker than the one lower at 129.06 so I will be cautious. If we do see conviction below the Asian lows during London I will consider a backside entry as long as it dont test 129.49 first.
Forex News Today
The calendar today has German Retail Sales expecting a sharp drop so a better figure should get some Euro positive sentiment. There is also French Consumer Spending expected to up tic a bit so may also be Euro positive as long as it gets help from the German figures. Later is German Unemployment data we will be watching for a big miss. Otherwise Euro Zone CPI will be the big one to watch. Expected to be negative but improving so a disappointment should cause a bigger move while a miss above the zero mark should be positive.
The UK has their GDP release expected flat so I will be watching for a clear set up going into the release to trade the GU.
The US has a Fed member speech along with Chicago PMI and CB Consumer Confidence. The PMI data expected to jump above 50 will be big if it misses slightly positive while the CB data is expected to drop a little so has potential to be off setting depending on how big they deviate.