10.6 EDSEL

[nanningbob]

From John Maudin's newsletter. He is quoting someone else who runs a large hedge-fund but if this drags on this is what this manager is expecting to happen.

The first is a note that I got from the head of emerging-market trading at one of the world’s largest hedge funds. This is what he sent out last week, ahead of any real action:

My view, Putin is stuck now, cannot easily de-escalate. Further escalation is a possibility, with Ukraine cracking along the obvious ethnic fault lines and the West reacting with measures such as sanctions and visa restrictions. Tit-for-tat follows; gas supplies to the EU are disrupted. Russian capital outflows accelerate and the RUB [ruble] quickly gets to 40/$, fueling inflation and unnerving the Russian banking system, and also infecting the European banking system, in the manner that Chris Watling has envisaged. Meanwhile, the Chinese liabilities residing inside the European banking system are also in trouble, of course, and will continue to deteriorate. The CBR [Central Bank of Russia] hikes repeatedly with very little effect on slowing the RUB slide, further hurting GDP growth and economically sensitive segments of the market. The Russian RTX index revisits the GFC lows of 2008, Gazprom ADR's are already within shouting distance of their 2008 lows today. In such a scenario, there is an obvious risk of market contagion spreading throughout Eastern and Western Europe, and in fact the rest of the world. It is likely to resemble something on the order of the 1998 LTCM + RUB collapse + Asian financial crisis magnitude. In fact, a number of hedge funds will fail precisely because they have loaded up so heavily with European debt instruments which will unravel.

I would hope cooler heads will prevail but this is a long term outcome if this continues for quite a period of time.

[nanningbob]

Another viewpoint:

Putin’s decision to back himself into this corner has been derided by the Western media as a strategic blunder but it is actually a textbook example of realpolitik. Putin has created a situation where the West’s only alternative to acquiescing in the Russian takeover of Crimea is all-out war.

And since a NATO military attack on Russian forces is even more inconceivable than Putin’s withdrawal, it seems that Russia has won this round of the confrontation. The only question now is whether the new Ukrainian government will accept the loss of Crimea quietly or try to retaliate against Russian speakers in Ukraine—offering Putin a pretext for invasion, and thereby precipitating an all-out civil war.

[art]

morning, all currencies on the 4 hour css, turning in towards the middle, i assume that means nervousness, maybe bob will comment

[art]

another question,on the 4 hour css the NZDis turning down under the EUR, but the eurnzd pair is heading down when i thought it would be heading up,i've noticed that a few times

[nanningbob]

another question,on the 4 hour css the NZDis turning down under the EUR, but the eurnzd pair is heading down when i thought it would be heading up,i've noticed that a few times

The eur line represents the average of all eur pairs and the nzd represents all nzd pairs. So the euro across the board strengthened while the nzd across the board weakened. That does mean individual currencies may not follow the overall trend but eventually they will if they are strong enough. The problem is now no currency is really trending strongly so it is easy for an individual pair to buck the trend. That is why we use the CSS to go look and the individual charts to enter the trade.

[nanningbob]

For a moment there the CHF broke out and looked like it may run but they all ran back to the 60MA line so we are still trending. Its like watching a bunch of chicken in a chicken yard waiting for one to break from the pack and head for freedom. They sneak out and then run back to the crowd.

[Pipstubborn]

another question,on the 4 hour css the NZDis turning down under the EUR, but the eurnzd pair is heading down when i thought it would be heading up,i've noticed that a few times

That's also because the NZD right now is making a pullback on H4 CSS relative to D1 CSS. You can see that the overall trend for EUR/NZD on the D1 CSS is a DT because the NZD is been above the EU but more precisely the pair is in a Range Mode right now.

My point of view is that the combo reads of the CSS is that accurately predicts the future anywhere from 4 to 16 hours ahead of time.... it's amazing!!!!

Would like to hear Bob's thoughts.... and MULTI thanks again Bob

[art]

thanks for the replys guys, much appreciated, all i know at the moment this market is very difficult

[boldtrader]

For a moment there the CHF broke out and looked like it may run but they all ran back to the 60MA line so we are still trending. Its like watching a bunch of chicken in a chicken yard waiting for one to break from the pack and head for freedom. They sneak out and then run back to the crowd.

I like those false breakouts (fading the move). They can play chicken all they want. CSS gave me heads up on some EUR, AUD and GBP action for +124 pips since Sunday open. Hit and run mentality is fun. A constant recheck of previous break-point levels in a ranging market or over extended market works for me.

Pips to all..

Cheers.

[nanningbob]

For a moment there the CHF broke out and looked like it may run but they all ran back to the 60MA line so we are still trending. Its like watching a bunch of chicken in a chicken yard waiting for one to break from the pack and head for freedom. They sneak out and then run back to the crowd.

I like those false breakouts (fading the move). They can play chicken all they want. CSS gave me heads up on some EUR, AUD and GBP action for +124 pips since Sunday open. Hit and run mentality is fun. A constant recheck of previous break-point levels in a ranging market or over extended market works for me.

Pips to all..

Cheers.

Fading, counter trading, your a man after my own heart. learning that art is what makes a good trader. Most of my trades the last several weeks have been range trades but that is hard to teach and harder to master.