Friday, May 25, 2012

Anticipation of a Euro reversal?

So lets just recap a couple of things, Goldman puts out a "FREE" report saying they are bearish on the market, the last time they did this, they were bullish on the market in March, we know how that turned out, it was the same analyst in fact who wrote both reports. Hours later GS alumni and former Greek PM, Papademo says "Greece is considering back up plans for a Euro exit", this was non-news and just commons sense, but it moved the Euro (by way of correlation) the market lower. When was the last time Papademos spoke publicly? I can't remember and he certainly isn't part of the government or in a decision making role.

From the charts showing positive divergences in the last week or two, lets assume GS was already accumulating , from the recent 15 min charts which are much stronger, lets assume they used their propaganda unit to make one last push, lets also assume they're about ready now and well positioned.

Mario Monti comes out today (also Goldman Alumni) talking Greece up, that they'll stay in the Euro , although no one knows this, it depends on the elections in mid-June, even if he was on the phone with Greek leaders every minute, no one knows which one will win in June and the polls are useless, so Monti is out there talking up the Euro in a scenario in which he has absolutely no control. Do we hear the actual would be leaders of Greece that aren't Goldman Alumni saying anything market moving? No.

Now lets take a look at the Euro...

 Here's the larger trend, you can see it was moved over night on Monti's comments

 We have a consolidation pattern which suggests something is up right below an important resistance zone.

 2 min chart has gone leading positive

 same for the 3 min

Same for the 5 min, Even the spotty trade looks near term bullish.

The same Institutional stock trading desks have FX trading desks, they know what's going on with order flow in the currency. I guess we'll just have to wait and see.

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