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Dr. Duru  

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  • The Forlorn British Pound: The 'Schedule' For Rate Hikes Pushes Out To 2016 [View article]
    It's amazing what a little bit of fortitude can do, eh? Good job sticking with that short position. I had to have similar fortitude when the pound finally bottomed at 1.48 in 2013... Good luck to you as well!
    Jan 31, 2015. 03:32 PM | Likes Like |Link to Comment
  • The Forlorn British Pound: The 'Schedule' For Rate Hikes Pushes Out To 2016 [View article]
    Things are dynamic day-to-day. For example I closed up GBP/USD on the last bounce, played 1.50 support again, and decided to get out on the next bounce. However, my position on long GBP/JPY is not working out as I would have liked with GBP/JPY cracking its 200DMA. A stop out is likely coming at recent lows. I opened a fresh position short versus euro (using U.S. dollar), so at any time I might decide to open GBP/USD again as a small hedge as I wait out any relief bounce on EUR/USD.

    In other words, I don't trust the pound long or short except for very specific, short-term trades. At our around 1.48 I would definitely try a more aggressive trade long and see whether I can catch a bounce back to 1.50 or so.

    If 1.48 definitively fails, then I would have to be a full bear on the pound going into the May elections.

    What would make me much more constructive on the pound is a GBP/USD above the 50DMA, currently around 1.535 or so. This resistance has held since it first failed in July, 2014. An amazingly persistent and consistent downtrend that I was too slow in accepting (as you know!).

    (And you can see why I am not overly concerned right now with longer-term issues like budget deficits...)

    I hope that clarifies things a little bit.
    Jan 30, 2015. 01:25 PM | Likes Like |Link to Comment
  • The Forlorn British Pound: The 'Schedule' For Rate Hikes Pushes Out To 2016 [View article]
    By bullish I think you mean my read on the economy? I learned my lesson a while back not to be bullish on the currency. I have traded in and out from both sides of the fence over the past 2 months or so.

    The budget deficit and current account deficit did not prevent the pound from rallying for a year, so I am not as concerned about those numbers as you are from a trading perspective. I am sure they add to the bearish case when the pound is indeed falling, like now. I also recognized in this piece that the bias for the pound is for weakness until at least the elections.
    Jan 30, 2015. 09:11 AM | 1 Like Like |Link to Comment
  • FXCM Spin Game Doesn't Change Its Misleading Marketing And Disclosures [View article]
    Nice way to put it. That's exactly what is happening. FXCM's complete set of disclosures indicate that it will forgive negative balances at its discretion. It is confusing, and I wish they would clear it up.
    Jan 29, 2015. 08:01 PM | Likes Like |Link to Comment
  • A Dramatic Australian Rate Cut Flip Flop [View article]
    Readers, please note that I posted a chart of FXA as of the close January 28th. FXA closed on January 29th at $77.79. At the time of writing, FXA had already gapped to that level to reflect the overnight selling in the Australian dollar.
    Jan 29, 2015. 07:50 PM | 2 Likes Like |Link to Comment
  • A Good Time To Stop Shorting The Euro [View article]
    I have an article coming soon addressing that. Look for it under GLD Friday morning. Basically, I think the Fed in general was surprisingly "hawkish" relative to all the soft pedaling being done by its contemporaries in the face of plunging oil and other disinflationary pressures.
    Jan 29, 2015. 06:29 PM | Likes Like |Link to Comment
  • The Mixed Bag For The U.S. Housing Market: 2014's Performance In Perspective [View article]
    I couldn't have said it better myself. Thanks for the comment. I am constantly surprised at how the on-going deflationist psychology overlooks the great potential for housing to serve as a store of value over the long-run which should feature a resurgence of inflation....
    Jan 27, 2015. 08:47 PM | Likes Like |Link to Comment
  • A Good Time To Stop Shorting The Euro [View article]
    I forgot to mention that you should stay on your toes going into Wednesday's Federal Reserve meeting. Given the talk of the day is disinflation and deflation, it is very likely that the Fed could signal an end to potential rate hikes this year. That could send the euro soaring on account of the dollar sinking. It will probably be a good time to fade the euro, but it still represents the next significant upside risk for the euro (vs the US dollar).
    Jan 27, 2015. 03:18 AM | Likes Like |Link to Comment
  • A Good Time To Stop Shorting The Euro [View article]
    So far, so good on staying short the euro. I have heard forecasts as low as parity with the USD. At least there is a very clear and relatively tight stop loss above 1.16 to 1.17 or so where the euro was before the ECB.
    Jan 27, 2015. 02:49 AM | Likes Like |Link to Comment
  • FXCM Tries To Slip Bad News Past Investors [View article]
    The interesting thing to consider is just how many clients suffered negative balances? $225M is a huge sum but it is entirely possible this represents the loss of a few overly leveraged traders and institutions. Too bad we can't get THAT disclosure - but LUK likely knows. I am inclined to think that a company that is (was?) owned 44% by its founders and management still has enough incentive to make the best deal possible under the circumstances. At a bare minimum, it is not likely LUK went into this deal thinking bankruptcy is the most likely outcome.

    It is too bad daytraders and momentum players are creating a lot of noise for the stock but that is the nature of repricing events in the market...
    Jan 24, 2015. 01:46 PM | 2 Likes Like |Link to Comment
  • FXCM Tries To Slip Bad News Past Investors [View article]
    Great point. I am starting to wonder whether LUK is the better risk/reward way to play the FXCM deal.
    Jan 24, 2015. 01:42 PM | 1 Like Like |Link to Comment
  • A Good Time To Stop Shorting The Euro [View article]
    Not sure whether you read my entire piece based on your comment. I have been shorting the euro the entire way down- that includes periods where a lot of folks wanted to play contrarian and doubted the ability of the ECB to help drive the currency lower. My main point here is that I could make a case for the euro going up almost no matter what the ECB did. I saw no point in making a bet on the outcome under such conditions. Note that it so happened that there was PLENTY of time and opportunity to short the euro after the ECB announcement - the ECB actually managed to surprise the market enough to cause a further fall.

    Once the Greek election is behind us, I will feel more comfortable making the next assessment of my next trading plan. If the euro continues to slide, I think there is a LOT more room to the downside, perhaps parity against the US dollar. And clearly there is plenty of upside potential if the euro launches another relief rally. In either case, the stop loss points are also clear (around the levels of the past events).

    So, all things considered, I saw no need to take on these particular event risks.
    Jan 24, 2015. 01:38 PM | Likes Like |Link to Comment
  • A Good Time To Stop Shorting The Euro [View article]
    The Bank of Canada prepared the path for the Reserve Bank of Australia to cut rates. The RBA keeps complaining about how overvalued its currency is. The high rate relative to major currencies is a direct culprit. With easing going on, the RBA may actually have to cut more than once or twice...

    I examined the Bank of Canada monetary policy report here and also made the case for RBA rate cuts: http://seekingalpha.co...
    Jan 24, 2015. 01:28 PM | Likes Like |Link to Comment
  • A Good Time To Stop Shorting The Euro [View article]
    Long the USD against the Australian dollar and Japanese yen. I am contemplating getting bearish on the Canadian dollar again based on what I read in the Bank of Canada's latest monetary policy report.

    Given the euro's reaction today, I could be back to shorting the euro again next week after the Greek election is out of the way.
    Jan 22, 2015. 01:31 PM | Likes Like |Link to Comment
  • Leucadia's Rescue Of FXCM Is Effectively A Transfer Of Ownership That Compels Debt Collection On Negative Accounts [View article]
    Fascinating! Thanks for this find. I will investigate further if I can. I tried to press customer support on this issue before I wrote my piece and the agent was only willing to take the conversation just so far.

    At the time of writing, FXCM surged at one point 50% higher so I think my thesis of a good short-term trade is proving very true...so far.

    I also forgot to note that IBKR was also a great trade. It fell in sympathy last week and I bought it right away (couldn't buy FXCM that day). I failed to lock in profits before earnings but the stock eventually soared off its lows and closed strong. I closed out my position at that point. IBKR could be one to buy on the dips as I am guessing the market remains jittery about brokers.
    Jan 21, 2015. 08:12 PM | Likes Like |Link to Comment
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