Tuesday, December 16, 2008

US$ on sale...

We anticipate the Euro rally, but again to be honest volatility always amazes us and we didn't quite expect the breakout to take EURUSD to1.37 so quickly. We are long so we're not going to complain, but those who are short vega may be adversely affected.

EURUSD should retrace now that the target has been hit. We'll however wait for some confirmation in the early hours of the European trading day. We are in the meantime tightening stops or even closing our position.

ER: range bound unless one moves to times frames of 30 mins or lower. Bias seems very mildly up for the time being.

ES: same story.

In a nutshell, it looks like our indices are looking at their key target, but are too shy to try them (is that the Madoff scandal?). More exogenous factors may be needed, but one can in any case expect surprises ahead of triple witching day ending a crazy quarter. Once positions are squared off, one can anticipate a better visibility for the next couple of weeks.

NB: There will be no update for tomorrow Wed 17th.

(posted 2:30AM Eastern)