Seeking Alpha

Basis Point's  Instablog

Basis Point
Send Message
Money Manager
My blog:
Trade Ideas
  • Time For Caution In Equities

    Equities both sides of the Atlantic have been rallying for the past 10 weeks with the European large cap stocks outperforming their US peers. Last 6 days have seen a higher close on the FTSE 100 with all intraday pullbacks being heavily bought into.

    Yesterday the investors piled in more money resulting in a big bull candle. This is trend acceleration which is an early sign of trend end. Also, the price is far from 20, 50 and 200 day moving averages. Risk to reward for new longs here is very poor. Rather it is time to be cautious and wait for a deep pullback to initiate new longs.

    static.cdn-seekingalpha.com/uploads/2013/1/24/1004836-13590822404641788-Basis-Point_origin.png

    I would close all long positions, move into cash and wait for a correction.

    Jan 24 9:52 PM | Link | Comment!
  • Long USDJPY

    Background - Last time I recommended this trade, it did not work out. This time we have a failed break of USDJPY under the May 2012 lows.

    Fundamental view - The US federal reserve has recently announced a fresh round of quantitative easing. As a result, risk assets have moved higher. Yen, a traditional safe haven is weak across the board.

    Technical View - USDJPY has failed to maintain the break below the May 2012 lows. This has been followed by a bullish reversal and the 50 day moving average has been taken out without any hesitation.

    static.cdn-seekingalpha.com/uploads/2012/9/18/1004836-13479444508411312-Basis-Point_origin.png

    As ever, the intraday chart is more revealing. The 15 min chart below shows a big spike down and complete reversal after the announcement of QE by the fed. Since then USDJPY is in a steady uptrend.

    static.cdn-seekingalpha.com/uploads/2012/9/18/1004836-13479446183729167-Basis-Point_origin.png

    This gives a low risk entry to get long USDJPY with an initial target of 80.6 yen.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: I am long USDJPY.

    Sep 18 1:11 AM | Link | Comment!
  • Long USDJPY

    Background - USDJPY had been trading in a very narrow range for about a month and has seen a breakout of the range in the last two days.

    Fundamentals - There is a consensus in the markets that more monetary easing from either or both sides of the Atlantic is on its way. With this in view the risk assets are higher and the yen, traditionally a safe haven, is being sold across the board.

    Technicals - USDJPY has broken out of very narrow range in the past two days. The 50 and 200 day moving averages have been broken without the slightest hesitation.

    static.cdn-seekingalpha.com/uploads/2012/8/16/1004836-1345137920166874-Basis-Point_origin.png
    USDJPY daily

    The intraday price action is even more revealing. Initially after breaking out of the consolidation range there was a big spike down when the US retail sales came out on Wednesday, 15th August 2012. This would have initiated fresh new shorts but since then the whole of the spike has been reversed and we have moved higher. This means that the market wants to go much further.

    static.cdn-seekingalpha.com/uploads/2012/8/16/1004836-13451383364917848-Basis-Point_origin.png
    USDJPY 15min

    This sets up a low risk long entry for USDJPY with targets of 80.6 and 81.75 Yen.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Aug 16 1:40 PM | Link | Comment!
Full index of posts »
Latest Followers
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.