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"These charts have the look of an accident waiting to happen," says Bianco Research, eying both...

"These charts have the look of an accident waiting to happen," says Bianco Research, eying both large and small speculators gathered on one side of the boat on the euro. Long dollar and short not just euros, but aussies and loonies too, may make great sense, but it's clearly a "crowded trade."
Comments (8)
  • With China dedicated to cutting rates after 4 years and 100 billion dollar fix for Spain and Euro Bonds backed by gold reported to be coming within 90 das in Der Spiegel and by Coxe of BMO Dollar Bulls bulls might get their faces ripped off next week.(UUP) hammering up against a double top already sell (UUP) buy (FXE)
    10 Jun 2012, 08:00 AM Reply Like
  • There should be a rout in the euro at the open today. It was indeed crowded. But it will be back after a while.

     

    I just hope AUD goes high enough for me to short it again.
    10 Jun 2012, 08:29 AM Reply Like
  • PS,
    Not sure why you think there should be a rout in the euro on Monday? What has fundamentally changed in the EU? Nothing that is of any longer term help in any of the weaker EU countries. Nothing that will reduce unemployment. Nothing that will improve competitiveness in the weaker countries. Nothing that will deal with the structural imbalances.

     

    Perhaps you are suggesting that a day trade in long euro and short dollar might be profitable, and it might be. But just don't see large investors changing their view that over time the euro has to weaken substantially. And if so, they likely will not change their short euro positions until something fundamentally changes.
    10 Jun 2012, 12:26 PM Reply Like
  • Untrusting, the rout will be at the open - we'll see the euro jump and the equity futures jump as well. I don't know what will happen afterwards, but some pain is clearly in the oven for shorts there.

     

    I can't suggest such a trade because I expect a lot of movement right at the open, a gap up.
    10 Jun 2012, 12:36 PM Reply Like
  • There, it produced a gap up in excess of 120 pips.
    10 Jun 2012, 03:46 PM Reply Like
  • The speculators will rock the boat in the near term, but the fundamentals will out in the longer term. I have a time machine, it is a wonderful item in my investment tool box. I can go forward or backward while all the rest of you have to try to remember what happened, to cause what, and to guess what will cause what to happen in the future.
    Not a crystal ball, an actual time machine. (there he goes again) [Ha ha, beat you to it again]
    I can tell you this, [write this down in your almanac]. Europe will continue to slide along on a downslope, as slow as the governments involved can allow it so it will not appear that the entire Ezone mess was a failure the day it started. The inevitable result will be no more Euro. This will take a long time. Even the big dogs have not figured out how to exit the mess they started. The big problem they have, as they thought they had the lion by the neck, but it was a slim neck [the tail], and now the lion is really p*&#ed off, and is turning on the tamer.
    The whole thing is debt. You an turn a deaf ear, or a blind eye to that word, but it is the problem. And I simply go back to economics 101, and tell you again, "Every loan ever made, has always been repaid, either by the borrower or the lender." And in this case, bud, it is clearly gonna be by the lender. No matter how you stir it, it is time for the lender to take a deep breath, swallow the meds, and move forward. The longer they allow this comedy to play out, no matter how many acts, the worse it will get and the end result will be the same. MAJOR LOSSES IF YOU ARE A LENDER TO PEOPLE WHO CANNOT PAY IT BACK. Is that clear enough?
    I, at one time, owed $94,000 on 67 credit cards. BUT at the time of the borrowing, I used the money to invest in gold and silver. When the zero interest days went away, I simply sold off some of my investment, paid off the loans, and now my credit card debt is ONLY what I use monthly and is paid off in 30 days, so I carry no debt save for my home mortgage which the interest rate is so small, I would be an idiot to pay it off. BUT [again] I have the cash to pay it if and when interest rates go back up. I also am getting envelopes in the mail from my credit cards at more offers for zero % deals, and I just took $9000.00 and bought a gold coin for $6200, which NGC says is worth $7600. I will go to a FUN meeting sometime in the future, reap my profits, and pay off the CC. I made $1400.00 minus the $3% fee. (grins to ya)
    NOW THAT IS HOW YOU USE CREDIT! As a tool not a burial implement.
    Was that hard to understand? Musta bin, cause no one seems to be doing it. (no one being TPTB) and NGM's)

     

    Happy paybacks
    Capt. Brian
    The Lost Navigator
    10 Jun 2012, 10:09 AM Reply Like
  • 67 credit cards? Man, did you contact the Guiness book of records already? There's surely a spot for that ... eheh
    10 Jun 2012, 10:14 AM Reply Like
  • All the hedge funds go "risk on" or "risk off" simultaneously, just like a school of fish which all turn in the same direction simultaneously.
    As Jim Grant suggested on CNBC the other day, maybe someone got the "risk on" and "risk off" labels switched around? Is the US dollar, which Prof. Bernanke can print in unlimited quantities, really "risk off", vs. real assets like natural resources, farmland, property, commodities, etc?
    10 Jun 2012, 10:41 AM Reply Like
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