now is the time. Market does not expect anything and is looking past pretty much any risks economically or geopolitically. Volumes are low, data is tracking well, and they look disconnected if they talk about the need for crisis level stimulus when the market is ripping.
I got that feeling too...but I got that feeling before as well and it didn't play out. The big economic data is not until the week of the 23rd. GDP read, etc... until then it feels like everybody is trying to hand on until quarter end to the big gains. Some concerning headlines out of the middle east again that could bring in some sellers and volume. Certainly doesn't feel like the market will top 196 in June
you have to remember, they have 3x the population vs. the US, so growing at 7.3 is really like 2.4%
they were cheap protection. I have a feeling if volatility pops it going to pop big and very fast. the boat is very full with longs pushing things up into quarter end.
for every .10 cent move down in the Euro is a reduction in $1 in S&P earnings. Global companies have Fx impact on their earnings. That is why the S&P has been melting up....Weaker Euro
and billions will be lost or made. FYI...the US dollar depreciated going into QE and when they announced QE the dollar went up. I have a feeling all those short the Euro will be scrambling to cover
off the 181.31 low. 181.31 is almost exactly the 50% retracement from the January low of 172ish to the high of 189 and change. A 50% retracement off the 193.3 level will put us at 187.3 sometime in June. Run the fib extensions and you will see....it's amazing - the algos are running the show folks. I bet we don't clip 193.3 before retracing 50% unless the ECB pulls a rabbit out of their hat.
I suspect tomorrow will be another very very quiet day with a bias to the downside. Very small POMO day and longs who are not stupid enough to ride the gains into a clear risk event. Everything is priced in for perfection and there is no way the ECB comes through at that level. I am going to the sidelines tomorrow.
that would be too easy.
You would think there would be a pullback going in the ECB meeting. Judging by the volume, it seems folks are sitting on their hands with their portfolios and we are about to go green again on the day.
We all know the ECB is going to lower rates and something else. It seems the risk is to the downside given the pumping going into it....
For the first time the market will react to their actions, not words. And for the first time in several weeks we will see more volume. Lots of pockets below to test if the market does not like the policy or it is sell the news.