Friday, August 3, 2012

Euro Clip


We saw the Eurostoxx index move above 2350 in anticipation of the Draghi bonanza, as we see by the long wick in the above chart.
Instead we saw abrupt moves following no rate cuts, no bond buys, no new measures to help the euro and thus global risk reaction was quite large - the market was expecting some greater move by Draghi than the multiple shades of 'we are ready to act'.  Draghi did mention the directives over the next few weeks were 'designing the appropriate modalities for policy measures' - which is hinting at more expansionary mandates for the ECB.

Gold fell below the 1600, as I had expected - I wasn't even this trade as the current margin and leverage for Gold cfds are too large for my portfolio.  I either need to put more funds into my cfd account or trade it in my interactive accounts.

I managed to get positioned in the KBH two nights ago, as part of the US housing recovery that buffett also mentioned again (his positioning through Wells Fargo) but we can see the equity and credit markets also betting on the housing recovery. http://soberlook.com/2012/08/markets-are-betting-on-us-housing.html

For those who are in the agriculture positions due to my call, it looks to be a good time to be booking some profits on the next spike higher if it comes.

We are seeing a good rebound to end the session last night, and if we end strong tonight in the US session, this would most definitely be bullish for equities.