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Quite clearly, the markets need another 300 billion euros to be satisfied. They already have 440 billion euros to solve the debt problem. The total size of the problem is 795 Billion euros.
Follow us on Twitter @ Capital3x
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If interested, you can also check out the Capital3x portfolio for August and July.
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1
Category : Featured, Think Tank
Follow us on Twitter @ Capital3x
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If interested, you can also check out the Capital3x portfolio for August and July.
Performance Page
Subscribe to premium section for indepth analysis, charts. We trade medium term and short term.
No matter how bad the situation in EU zone is, the current price action is speaking a different language. Euro is not a good short at these levels. On the contrary, EUR/USD and EUR/GBP are building up a tremendous consolidation last seen probably in 2007. We know what happened then as it broke away to hit all time highs at 1.62. We are not saying it will do so now but the case to do so exists.
Please note that this is a medium term analysis 3-6 month view. This is not a day trading analysis. We post our day trading in our premium section at our site http://capital3x.com
After being dot on trades on MS and APPLE, we put out the latest analysis on the EURO. No better time than when the analyst community is split midway on which is worse: Dollar or EURO?
We use advanced indicators and internal indicators to judge on the EURO. These are the same parameters that allowed our premium subscribers to short MS on 1st Aug 2011 to make a 27% return. Summing all of August, the Capital3x portfolio is now up +1100 pips in profit after July when the total Net pips were +1021 pips.
The following is euro chart as it stands on 26 Aug 2011:
The daily charts on EUR/USD is making a very strong case for a major upswing in the euro esp against the dollar:
- The daily stochastic are building into a strong 81 levels. Our readers will know that stochastic are the best tools available to measure the strength of any build up of moves on either side. They measure the index of the days on which the euro has closed at the upper end of its day range. A level of 81 is indicating developing strength.
- Direction indicators are still lagging and are not pointing to directional movements.
- Vortex Indicators are pointing to sustained up move. The +vortex has broken over the -vortex but since then has fallen away a bit even while maintaining its gain over the -vortex.
The key levels to watch on the upside is 1.4550-.46. A break even on intra day will see some major moves being suggested by the stochastic. Until then we believe EUR/USD is a prime candidate for 70-150 pips move daily and to the delight of day traders.
Even more critical are the charts of EUR/GBP and EUR/JPY both of which are affirming the strength of EURO. Therefore we do not think the eur/usd strength is mere case of dollar weakness.
EUR/GBP Daily charts:
Stochastic have crossed 80, sign of ensuing strength. Vortex has been whipsawing but the possitive Vortex has been greater than the negative vortex by a marginal number.The level to watch for 0.8940-.90. Any move above these level will then confirm the sustained strength in euro against sterling.
EUR/JPY daily charts
The EUR/JPY charts are incredibly important to understand the strength in euro. The stochastic are indicating 80 levels, a sign of strength in euro.
Given both EUR/JPY and EUR/GBP charts confirming the strength in euro, we will come out with new trades for next week. Our currency trades are normally short trades and will take advantage of day trading setups rather than long term indicators and patterns.
An important note to our day trader subscribers: The charts above are indicating a general trend in the medium term. These should not used for short term trades. We post short term trades on a daily basis.
On the fundamentals, euro is being whipsawed by news flow from Germany and the rest of Europe. Purely based on the health of EU nations debt position, euro should have been closer to parity, if at all it made a case to be existing in the form today.
- EUROBONDS without Germany can be a reality
- Premium of 89 bps over German bunds indicate that EUROBONDS may not be easy
- Greece wants to give private collateral to some nations: Germany says NO!
- And to all Europeans and US: The Sumerian Amargi
The latest news is sure to add to the optimism around euro, no matter how wrong they may be in the long run. Monday’s merger of Eurobank EFG and Alpha Bank sent shares in every Greek bank up about 30 percent. The EFG/Alpha solution creates a huge buffer by raising 3.9 billion euros of new capital by selling assets and selling new stock, among other means. If successful, the new entity will have a 14 percent core Tier 1 capital ratio, giving it more than enough of a cushion to absorb the 21 percent haircut on Greek debt envisaged by the July deal.
But even this deal will not take away the fact that Greece is wafer thin from declaring bankruptcy and it is only innovatice schemes that keep it going. As traders, though we dont care what is the news item. We trade the price action.
Given the fundamentals weighing on EURO, it is a remarkable reality that EUR/USD still holds on and to the irony and mystery, euro is building some steam indicated on the stochastic daily charts.
On the weekly charts, EUR/USD charts look less bullish with all parameters still building steam. They have not moved into a zone where as a trader one can risk large amounts. The stochastic are at a respectable 63 level. But we also note that on weekly charts, stochastic only reach a point of *buy* only after the daily charts have moved into strong buy zone.
EUR/USD weekly charts
As noted by the falling Average true range (ATR), euro volatility has been steadily falling even with the increasingly fragile state of EU zone member states economic state.
We believe that either a major reform is in the making in the EU zone (either in form of eurobonds or consolidation) which has not yet come out or the Chinese are buying EURO at breakneck speed. We do not know. But the charts and price action is pointing to some level of stability in EURO index in the next few weeks.
But having said that, charts and trends can change and therefore we will keep our premium subscribers posted.
Any change to charts will be posted.
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Kate
Capital3x.com
Subscribe to premium section for indepth analysis, charts. We trade medium term and short term.
1
Category : Featured, Think Tank
August 2011 will be a painful reminder of Oct 2008, as Hedge fund industry is counting its losses, a loss of 6.9% for equity fund managers. Paulson leads the pack with his Advantage fund down 40% for the year. Not for the first time, the hedge fund industry has failed to live up to its name. Part of the problem, having managed funds at PIMCO, is that fund managers are under tremendous pressure to deploy capital and therefore at times, even the smartest out there will not listen to their own minds and go ahead and invest.
FT reports:
Behind the rout, many managers point to a sudden collapse in confidence in the US economy. “Most people were preoccupied with events in Europe, but confidence in the US was the big elephant in the room for the first half of the year,” says the chief investment officer of another multibillion-dollar fund manager.
Unexpectedly weak US growth data at the end of July were credited with helping trigger the August rout, while the political impasse over the debt ceiling did far more damage to perceptions of the US than many realised, he adds.
What I do not understand, is how smart people with lesser capital turn dumb with larger capital at their disposable. John Paulson being the prime example. We could see August coming and our subscribers made anywhere between 25% -50% return.
And yet Paulson could not redeploy his Advantage fund to reflect August reality.
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AG
Capital3x.com
The apple trade was issued on August 25 to all our premium susbscribers with detailed analysis. Steve Jobs had just stepped aside but that did not deter us from issuing the trade on Aug 25 backed by strong parameters and price action.
The stock is at 391 already in the money by 8%.
Read about the exact trade here: Aug 25: The APPLE trade
For free subscribers or those who are thinking of what they will get if they subscribe, here is a peek: Apple Charts
This is the second trade in August which was identified on the internal radar. The first was Aug 1 when Morgan Stanley was shorted 22 for a clean 27% return in Aug 2011. S
- 21 killed by hurricane in U.S. and 370,000 New Yorkers ordered to leave their homes
- 11-year-old boy among dead as tree split in half and fell on roof of his house
- Sea surge of 8ft had been expected in New York… but just 1ft of water lapped over the banks
- British tourists face days of airport delays as airlines try and clear a backlog caused by flooding
- Winds of 90mph and up to 12INCHES of rain in some parts of U.S.
- Road in North Carolina broken in five places as floodwater spreads
Some Videos:
Widespread: Flooding was under way or forecast along rivers throughout New England. Purple squares show major flooding, red moderate flooding and orange minor flooding
Waiting for your trades to fill in, can be frustrating at times.
Logged onto Daily mail and for the nth time am bombarded with Kim Kardashian wedding story. Daily mail has got be kidding me if they cant focus on something better than one pornstar, Kim Kardashian and another equally dumb headless chicken troll of a basketball player, who cant seem to get over their pathetic life and want everyone to see. They are desperate to make money and that is the bottom line. Some people work hard. But others like Kim Kardashian and Kris, seem to portray various part of their body in various forms and at various times of the day, to make a few dollars (read millions). They have not just made fun of an insitution like marriage but also made fun of the people who watch and read about their life. Kim Kardashian showed every bit of her body as she made her nude ray ray sex tape. The whole world has seen her. Everyone knows that she is pornstar. The question is how shameless are these people? I mean you married and even if it is on the silver screen, please give us a break. Take some time off. Frankly I am unsure about how many people are really interested in watching her flaunt her butt and breasts every single day. And Kris? Just cause you are 7.5 ft tall does not mean you put your face in the media.
And I just read that Kris finds out that Kim was married before he married her. He finds this out at a family dinner. And Kris was upset about it that another man was *inside* her. Unbelievable!
Dailymail, request you to please screen these pornstars out of your editorial please please. Even pornstar are little more decent about their life unlike Kim Kardashian. 2 weeks back she went to xray shop to get butt xray and prove to her little sister that they were not fake! Unbelievable is the word.
Subscribe to *premium section* for more premium analysis and charts. Premium members can access our daily trade ideas. Please verify our performance before you subscribe. July has returned us +1021 pips in net profit while August has returned us +1051 pips in profit. Check the *performance page*. This even while Paulson fund is down 30% for the year.
Gold touched intra day 1913 before correcting back to 1700. The level of the pullback and the speed with which it pulled back may have surprised many. But this was expected given the parabolic trend (Weeklycharts) into which Gold has now entered.
We have superimposed powerful indicators on daily and weekly charts for Gold to understand price action in future. So often proved by us, that yesterday price action can predict tomorrow price action with a high degree of certainity!
We have worked at firms like PIMCO where this has been done on a regular basis which is why hedge funds make money. Now for the first time, we are bringing these tools onto the retail space.
Gold Daily charts: A pause ?
The daily charts are suggesting a ………….rest of analysis in Premium section
Gold Weekly charts: Hyper Bullish ?
The weekly charts are suggesting further…… premium section
Our analysis on price action on the weekly charts indicate renewed bullish strength for Gold. Nothing has changed for Gold over the last 10 days even though it has come off by 10%. But the short term traders playing on small margins with limited capital must be careful trading the weekly charts for Gold. Gold on a intra week basis can swing as much as 20% and wipe off most traders. Therefore, short term traders beware of Gold charts on weekly basis. Short term traders must concentrate on daily charts which call for caution.
Kate
Capital3x.com
Subscribe to premium section for more premium analysis and charts. Premium members can access our daily trade updates. Please verify our performance before you subscribe. July has returned us +1021 pips in net profit while August has returned us +1051 pips in profit. This even while Paulson fund is down 30% for the year.
Subscribe to *premium section* for more premium analysis and charts. Premium members can access our daily trade ideas. Please verify our performance before you subscribe. July has returned us +1021 pips in net profit while August has returned us +1051 pips in profit. Check the *performance page*. This even while Paulson fund is down 30% for the year.
Gold touched intra day 1913 before correcting back to 1700. The level of the pullback and the speed with which it pulled back may have surprised many. But this was expected given the parabolic trend (Weekly charts) into which Gold has now entered.
We have superimposed powerful indicators on daily and weekly charts for Gold to understand price action in future. So often proved by us, that yesterday price action can predict tomorrow price action with a high degree of certainty!
We have worked at firms like PIMCO where this has been done on a regular basis which is why hedge funds make money. Now for the first time, we are bringing these tools onto the retail space.
Gold Daily charts: A pause ?
The daily charts are suggesting a break in strength. While the trend was just nearly maintained last week but just about.
- Price Stochastic are at 48 levels while volumes stochastic are also below 50. The daily trend strength has now weakened. We look forward to a zone of strong consolidation with prices to fluctuate below 1850-1875. The downtrend can extend upto 1600 on a conservative basis and 1400 on an aggressive basis.
- Directional Indicators(Vortex Indicators) are showing a pause in the trend.The +VI has now almost converged to -VI at 0.91. The +VI is for the record above the -VI. But these things can change in one hour of trading and hence we do not read too much into the levels when they are that close.
- ADX is at a pathetic 22 levels. ADX is indicating that Gold is going into period of consolidation with lots of sideways movement. The new step level is between 1600 and 1850.
We are extremely bullish Gold but as a smart trader one needs to put the money where the big moves are happening. Gold will be a intra day traders delight and we will be putting Gold trade for our day traders. But for the long term term trader with wide margins, we look at the weekly charts below.
Gold Weekly charts: Hyper Bullish ?
The weekly charts are suggesting further upside. If this is a parabolic breakout, which we do believe it is, there is far more upside left in this move.
- Price Stochastic are at 87 levels while volumes stochastic are also well above 50. The weekly strength in Gold continues to be strong.
- Directional Indicators(Vortex Indicators) are showing further gains with the +VI diverging away from -VI on the upside, vetting the upmove.
- ADX is at 74 levels. Any level above 40 is bullish. But we also understand that ADX indicators are lagging indicator and only flashes its signals once a move is well underway. We love to catch a move right in the first 5% of its move.
- Weekly RSI are at 71 but we have never paid attention to RSI as they lag the price movement. There is no point looking back at a move and saying we could have done this based on RSI.
Our analysis on price action on the weekly charts indicate renewed bullish strength for Gold. Nothing has changed for Gold over the last 10 days even though it has come off by 10%. But the short term traders playing on small margins with limited capital must be careful trading the weekly charts for Gold. Gold on a intra week basis can swing as much as 20% and wipe off most traders. Therefore, short term traders beware of Gold charts on weekly basis. Short term traders must concentrate on daily charts which call for caution.
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Kate
Capital3x.com
Subscribe to premium section for more premium analysis and charts. Premium members can access our daily trade updates. Please verify our performance before you subscribe. July has returned us +1021 pips in net profit while August has returned us +1051 pips in profit. This even while Paulson fund is down 30% for the year.
