BGIP-Blog

In For A Penny, In For A Pound

noreply@blogger.com (Brentwood Global Investment Partners) — Tue, 29 Jan 2013 13:01:00 +0000

GBPUSD:

After briefly touching $1.64 to start out the year, the Pound's come under pressure the past few weeks as a batch of poor economic data has sparked rumors of continued and perhaps increased easing:

This sharp sell off has brought back into play support at the bottom of the 4 year triangle we've often spoken about:

This pair is getting close to the apex of the triangle now and we'd have preferred to see a breakout at one of the prior contact points. Triangles should resolve before this and not press so close to the apex. That said, we started a small long position yesterday to see if the support holds again and will watch closely for now...

EURGBP

As with the weakness against the US Dollar, the Pound has also given ground to the Euro and that pair has risen right back to the top of a multi year channel and near resistance:

We've also started a [small] short position in $EURGBP to see if the overhead resistance holds.

At this point, both trades are purely technical and speculative; we'll sit tight for a while, watching them and trying not to over think the trade...

Disclosures:
long GBPUSD, short EURGBP

____________________________
The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

Sterling's Gold

noreply@blogger.com (Brentwood Global Investment Partners) — Thu, 16 Aug 2012 17:47:00 +0000

GBPUSD daily:

Over the past few weeks $1.58 has been formidable resistance for GBPUSD, but with each retest the odds of a breakout increase:

Should the pair break above 1.58, we'd expect mid 1.60s in short order, which would bring into question the multi-year triangle we've spoken about often:

GBPUSD weekly:

If we were forced to guess, our bias would be that we eventually retest the top of the multi-year range (about $1.65ish). What will be more interesting is what shall happen when either $1.65ish to the upside or $1.54ish to the downside is broken, completing the almost 4 year triangle. We'll not wager that far out for now, but to quote Sterling:

"I know cooler heads should prevail, but am I the only one who wants to see this?"

In the short run we are playing the pair via a long position against the Aussie dollar.

GBPAUD daily:

We traded this pair from the short side and caught about 1/2 of the large move down from May, but took our profits too soon.

We're now playing from the long side and will just trail a stop (currently at break-even at 1.4785) should the pair start to run as it did from March to May of this year. While we never expect to catch 100% of a big move, we left way too much on the table with our short side trade this summer and don't intend to let that happen again should we be fortunate enough to be at the start of a large move...

Disclosures:
long GBPAUD

____________________________
The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

$EURUSD views

noreply@blogger.com (Brentwood Global Investment Partners) — Thu, 02 Aug 2012 11:22:00 +0000

Three quick views of the Euro/Dollar pair on different timelines...

EUR.USD daily:

On the daily chart the pair might be putting in a small inverse head and shoulders, with a neckline above 1.23ish:

While we have less confidence in this little H&S than we did a few months ago with the always scary Thriller Head & Shoulders in this pair (original post here), should this be broken we could see the pair trading back up to a 1.27-1.28 range. It almost feels like we need a sharp rally to shake loose the weak bears and get the uber-bulls all excited again before a larger move down can occur.

EUR.USD weekly:

On the weekly chart the channel is pretty clear and the pair has bounced around as we've gone from bad sPain headlines to random EU comments that they'll "do whatever to save the common currency:"

We would probably look to sell a rally back to the 1.27-1.28 area, keeping in mind the bigger picture...

EUR.USD monthly:

On the monthly chart the picture has been clear for over two years now as the large channel has held:

Our bias from the start was that this current leg in the Eurozone debt crisis would take the pair down to the 1.10 to 1.15 range. Fundamentally, in the US QE is temporarily off the table - which will help the US$ while Draghi will be forced to crank up the printed presses if he wants to keep Spanish yields below 7%.

As such, after closing out our long held short position a couple of weeks ago we're looking for any temporary relief rally back to the 1.27-1.28 area to establish a new short position for the next leg down.

Disclosures:
no position in EURUSD at the time of writing

____________________________
The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

Copper Trap

noreply@blogger.com (Brentwood Global Investment Partners) — Fri, 20 Jul 2012 11:17:00 +0000

After consolidating for the past couple of weeks, did Copper just set another bull trap on the daily chart with a failed breakout and lower high?

In early April copper futures briefly appeared to be breaking out higher before reversing and plunging through support while clearing stops along the way. The move lower led the general market turmoil as the EU crisis and slowing global economic growth returned to the front page.

After spending the past few months in a range of about 3.30 to 3.50, it appears that copper may have failed again to crack and hold the 3.50 level and could next retest 3.30. Yesterday's mini-breakout might have fooled some, but appears to be a another trap:

Our bias is still that we see $3 copper before the downtrend ends as there is no question that global growth is slowing. We've been trading in and out of copper futures on some of these bounces, but still hold a core $JJC short as a hedge against some longer term equity longs. Now looking for another opportunity to play the futures from the short side.

Disclosures:
Short $JJC

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

You.Are.Here

noreply@blogger.com (Brentwood Global Investment Partners) — Thu, 14 Jun 2012 12:01:00 +0000

Basically....

S&P500: 2011 (Daily):

Let's not get too carried away. Sure.. markets are taking the Spanish "fail-out" and new spike in yields in Spain/Italy pretty well - impressively well actually. But even a good boxer can take a lot of hits before getting knocked down.

Still feel like we need one more rally to shake the weak bears loose and get the perma-bulls and Dow 36k crowd all excited.

Still very slightly net short and sitting tight. This feels just like last year; you are here; curves ahead.

Dial 0 for more information or operator assistance.

Disclosures:
Under caffeinated and bored with the current market churn; but no positions noted above that need disclosing. nothing.to.see.here.

Hold the line!

noreply@blogger.com (Brentwood Global Investment Partners) — Thu, 14 Jun 2012 11:28:00 +0000

Short post; few words needed.

Pound/Dollar is in quite a fight right now, holding right against multi-year support:

In prior posts we'd been closely watching the 2011 rising trend line (dotted line above) for clarify but chose to avoid the trade in Pound/Dollar, choosing instead to short Euro/Pound and others.

However, as the 2011 trend broke a few weeks ago we waited patiently and decided to take a small shot at a long position last week at 1.534ish and are now sitting tight. Our main concern is that the next "risk-off" move (that we still expect) will send the dollar higher and put this support to the test, however as capital flees Greece, Spain, et al we could also envision a scenario in which the UK serves as another safe harbor. These are indeed crazy times.

That said... we're not focusing on guessing the fundamentals at this point and prefer to bet on this multi-year support line. Until it breaks, the trend is still up and Sterling has stayed tough so far.

Hold.The.Line

Disclosures:
Long GBPUSD

The Dollar Knight

noreply@blogger.com (Brentwood Global Investment Partners) — Fri, 25 May 2012 11:06:00 +0000

So. The Dollar Index has had quite a little run and appears to be in the process of forming a unique chart setup, the Batman Double Top. Right up there with other powerful trends we've previously noted (i.e. the Anthony Davis and the "Thriller" Head and Shoulders), The Batman Double Top must be respected:

Dollar Index Futures, weekly nearest contract:

Even with some sideways to lower consolidation, given the escalation of the European debt crisis we are expecting an eventual retest of the $88 top from May '10 highs.

That much strength in the dollar via a "flight to safety" would likely be combined with enough trouble in the broader equity markets for the Fed to fire up Bernanke's signal:

We're still expecting an extension of Operation Twist and/or a new round of asset purchases later this year. That, combined with the media circus that will display for the rest of the world how dysfunctional our Congress can be while they fight over how best to kick the debt can down the road, would probably be enough to halt the dollar's rise.

We're sticking to our "risk off" positions for now to ride out the storm. Should the dollar push higher and bring the index back to the 87-88ish level... that's likely where we'll be looking to flip to the other side and to start betting on a weaker dollar.

Because Bernanke might not be the hero Gotham City deserves... but he's what we're stuck with.

Trade then accordingly; forewarned is forearmed.

Disclosures:
Short EURUSD, EURGBP

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

Deja EU

noreply@blogger.com (Brentwood Global Investment Partners) — Thu, 24 May 2012 11:38:00 +0000

So we're in the crazy time of the year now where depending on your time frame bulls and bears can both be right. We've had a nasty little sell-off, but if the past two years have taught us anything it's that during the easy money rally period... things just slowly and peacefully go up.

But in the sell-offs, the move down from peak to trough is never straight down:

S&P500 - 2011 daily:

Last year we started off with a continuation of the QE2 rally. When that rally stalled, in March and in June we hit mini-bottoms when it was clear that Greece was in trouble (still), AMC's Mad Men's future was uncertain, and that Michael Bay would unfortunately keep making movies.

But in between those two temporary lows we had two sharp rallies as Europe held a summit every six minutes and all it took for a 10 point spike in S&P futures was the cousin of a housekeeper of some Greek MP to say that a new bailout deal was in the works. On each of those dips, the bears were screaming to short more. On each spike the bulls were yelling that you missed the dip.

And... then it got really ugly in the fall. Despite that sell-off, we obviously gained all of that back as well in the slow Op Twist and Deux LTRO rally from October until April. We expected the 2011 "drachma-drama" to repeat again and begin to take shelter this spring.

In our April 1 newsletter "Clear and Present Danger" we stated the following:

"In Conclusion, until we have more clarity on the future of continued and/or new quantitative easing in the US and Europe, we're slowly making our way to the financial sidelines until we know the storm will miss us (or at least until it passes). After riding the market higher this year, over the past two weeks we've begun to take profits in many of our long positions and we are sitting at about 50% cash right now with that number likely to increase on any new push higher...

...If we were forced to guess, we'd say that it will be a return of the Eurozone crisis to the front page that will spark the next downturn - likely from uncertainly over Greek elections or the crisis bypassing Portugal (which we believe is past the point of no return) and moving on to Spain. We're closely tracking Spanish yields to see if they begin to breach the 6% level that caused so much panic during the last two sell-offs. Unfortunately in today's easy money market one isn't given much time to adjust and so we must be prepared to act quickly in the event that the easy money prepares to run. Forewarned, then, is forearmed."

We've been net short since very early May, but despite expecting another spring/summer sell-off we've still be surprised by the failure of any rally to hold. But here's the catch:

S&P500 daily (1/1/12 to 5/23/12):

This looks eerily similar to last year. We've lightened up on the shorts, added a few longs in the past two weeks, and imagine we'll be back to neutral soon. If we get a rally back into the high 1300s, our initial view would be that it's a short covering rally on hope, just like last year.

It will take a catalyst that is action, not talk, to put in the new bottom. Talk of plans to bailout, pledges of support and unity, etc mean nothing. Until the Fed and/or ECB are committing real cash to extend the cheap money bubble we'll be sellers.

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

Cinco de My Mistake

noreply@blogger.com (Brentwood Global Investment Partners) — Wed, 09 May 2012 11:24:00 +0000

**Heavy Sigh**

One of the worst feelings as a trader is having a good idea but executing it poorly. After identifying what we thought was a great setup (original post here) in the Dollar/Peso we were stopped out when a non rate-cut decision by the Mexican Central Bank sent the pair spiking below our stop...

...which naturally was the cue for it to rally:

In our perfect world we'd have reentered the trade around what we thought would be support around 12.8 but didn't get the chance.

If we get any sort of a pullback we're still interested in buying the dollar against the Peso, but we'll not chase... primarily because we are short "risk" in so many other areas that another "risk off" trade will need a better risk/reward before we pull the trigger.

That being said... still watching the pair and here's hoping everyone else traded this breakout more effectively that we did.

Disclosures:
No position in $USDMXN at the time of writing. But definitely long bitterness and trader's remorse.

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

Dollar Index Breakout (or Fakeout)

noreply@blogger.com (Brentwood Global Investment Partners) — Wed, 09 May 2012 11:07:00 +0000

After what appears to be a bear trap with the late April break below rising support, the Dollar Index is now trying to break to the upside:

Of course Bernanke speaks tomorrow (8:30 am CT) and as usual anytime he opens his mouth there is the risk of a dollar sell-off. If the $DX_F can close the week above the $80 level our bias will be a much stronger dollar (and weaker "risk" markets).

If not... you know the drill:

Disclosures:
No position at the time of writing

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

Movin' on up....

noreply@blogger.com (Brentwood Global Investment Partners) — Mon, 07 May 2012 18:06:00 +0000

...to the Eastside.

Lack-of-recent-post syndrome is due to moving of the BGIP blog from Blogger to Wordpress.

It's like moving apartments, but less fun and without the beer and pizza.

Be back soon.

Disclosures:
Long Advil and Short patience

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

Full Calendar

noreply@blogger.com (Brentwood Global Investment Partners) — Mon, 30 Apr 2012 11:05:00 +0000

This week's economic calendar is quite full and as such the main item we're watching is the dollar index:

The dollar suffered a setback last week and it appears that support from the lows has been broken.

However... with so much on the economic docket this is one of those weeks where fundamentals will likely matter more as the wild spikes that occur when a big number is hit or missed tend to pay no attention to trend lines.

A few highlights (all US Central Time):

Note: The best econ data calendar (in our opinion) found here

The main question shall likely be "is bad news good?" While it drives the perma-bears crazy... we are still in a market where bad news = good news because it opens the door for continuing the flow of cheap money. Like it or not, any sign of more QE supports the "risk on" trade.

If we were forced to guess, we'd say the worst outcome for the Bulls would be weak EU data (expected) combined with strong US data that keep QE off the table (or at least on the back burner). Friday's US employment report will be critical - another bad month and the QE discussion shall be on in full force.

Soybeans and Cattle and Corn, oh my.

noreply@blogger.com (Brentwood Global Investment Partners) — Fri, 27 Apr 2012 11:39:00 +0000

A few brief trades we're looking at today... staying light into the weekend but considering a shot at one of these if they reach our buy/sell levels.

December Corn:

Still have the feeling that new crop is headed lower. After failing to take/hold 550 all month, if we get a bounce back to that area we're looking to sell.

July Soybean Oil:

So far 55.5 has held and that's right at 2012 support so we'll likely buy if we get a dip (or perhaps even if we don't at this level).

August Feeder Cattle:

The meats have been pretty untouchable but August has (so far) held 151 post the mad [DAIRY] cow craziness. Have a strange feeling it wants to target the April lows, so we might take a shot buying at 150 with a very tight stop...

July Oats:

The past two days it's looked like we missed our chance to sell at 345 (July), so if we get another opportunity on broader strength in the grains/ag space we might take a shot against the 345 level...

Disclosures:
No positions at the time of writing

FX Outlook (2012-04-24)

noreply@blogger.com (Brentwood Global Investment Partners) — Tue, 24 Apr 2012 11:32:00 +0000

Below is an update of several currency pairs we are watching. Of course... with tomorrow's FOMC statement (12:30pm ET) and Bernanke's press conference (2:15pm ET), given how many are at or near long term support/resistance should any policy changes be announced several of these could change materially.

Our bias is for the language to stay the same with the exception perhaps of a note that employment conditions remain weak, etc, etc, etc. That being said...

Dollar Index:

Before we discuss any pair... much of our bias now is based on the dollar index holding support. The trend line from last year is holding and our bullishness is aided by the series of continuing "higher lows:"

Should this support be taken out, we'd begin to reconsider many of the below opinions.

EURUSD:

Given the dismal Eurozone news last week combined with the fact that we can't find any Euro bulls and the pair still couldn't take out 1.30, we lightened up our short position a bit as we indicated was pending in last week's update.

We haven't even gotten to the part of the "annual Eurozone crisis" yet where the ECB buys bonds, the bailout fund is increased/strengthened, and every government minister in Europe announced that they stand behind the Euro. If the bears can't break 1.30 without those spike-inducing rumors/catalysts then what shall happen when they do start???

We fear that there are now so many stops above the current channel that a spike higher would be pretty brutal, so we remain short with the long term core position that we've no intention of covering. Adding to our conviction (for now) is the fact that the past two rallies (late Feb and late March) have been "lower highs" and as such the line in the sand should now be about 1.325 to 1.33. If it gets there, we'll reassess, but our bias would be to add...

Zooming out to a monthly chart, the longer term picture is quite clear to us. The Euro's best days are far far behind it and as we've stated in our newsletters for two years now... this will be a bumpy road and the Euro was never going straight down:

On the monthly chart we view this as a healthy pause. Greek ~~revolution~~ elections, French elections (and the resulting blowout of French/German spreads), Dutch government turmoil, Spain/Italy yields, Portugal bailout v2.0.... all of these are on the docket for 2012, so our target still remains 1.10 to 1.15 with this next leg down.

GBPUSD:

In the past two weeks' posts we've avoided a position in GBPUSD as 1.58 was holding like a rock. Our fundamental bias was to the downside (broad dollar safety strength) but the technicals were saying "up" so we sat tight. It now appears that a multi-year breakout is in the works...

... however, we're struggling with jumping on board and will leave this for others (for now). Pure technicians can play along, but we struggle to get long this pair in the face of what we feel is a pending escalation of the EU debt crisis and broader market weakness. A panic flight to the [perceived] safety of the dollar has a way of destroying technical trend lines.

BUT, we still respect the recent strength in Sterling. So...

EURGBP:

... we chose to buy it against the Euro, as predicted in our FX Outlooks the prior two weeks. We can see that the pair appears to have broken the neckline of a head and shoulders pattern - but not just any H&S pattern - the always elegant US Capitol building pattern:

When one looks at a multi-year view on the weekly charts, the picture is a bit more clear. After breaking long term support from the '08 and '10 lows, the "head" perfectly retested before the pair resumed the fall:

We don't have a firm target for now... just "lower." If we were forced to guess, perhaps the '08 lows of about 0.77? We'll have to revisit later, but for now we'll keep our stop just above the breakdown of the neckline.

USDJPY:

We had been short the pair for a few weeks, but our trailing stop was hit on the little spike last week so we gave back about a third of our gains. In the near term, the pair sits in a channel that could still be a bull flag:

We're still not a believer that the Yen has fully turned and are looking for 78-79 to revisit as of now.

Zooming out to a monthly chart, the '07 to '12 trend line was clearly broken, but what we have been calling the "post-Lehman Fed" trend line (dotted) looks to have perfectly contained the rally:

Yes, yes, we know, "Japan is an economic and demographic time bomb so how can we be bullish of the Yen?" Our issue is that these are not new revelations - why is this just now on the agenda for discussion? Our bias is still that the Yen's 2012 rally was due to it resuming its decade+ long role as a funding currency. The rally stopped right when the broader "risk" rally across all markets stopped. We think that is no coincidence.

We're sitting on the sidelines for now. The BoJ meets this Friday, so we want to wait and see what (if any) new stimulus measures they announce. We know one thing... in light of Bernanke's never-ending easing and the MASSIVE increase in printing that Europe will have to do to keep Italy/Spain out of hot water... the BoJ had better come out swinging!

AUDUSD:

The recent channel in the Aussie is still pretty clear, and the overnight weakness was from the Aussie CPI number coming in at 0.1% vs expectations of 0.7%:

On a longer term time frame... the pair is testing the trend line from the 2009 lows (bold line):

...However... the AUDUSD pair has broken many trendlines (thin lines above) since the depths of the financial crisis, so it wouldn't shock us if this one goes too. That's what this pair does - it breaks trendlines in panic selling due to carry trades unwinding every year when QE stops... then starts a slow climb back when the next batch of easing is announced.

We're staying on the sidelines for now, not because there are not opportunities, but rather because we are short Copper ($HG_F) as our "global slowdown" vehicle of choice. We'll keep an eye on this, but it would take a break of that channel to get our attention.

USDMXN:

Lastly, as noted in our post late last week, we're becoming quite bearish of the Mexican Peso as a way to play the "global slowdown" trade. After finding a nice base above 12.6 this year, the pair looks to us to be consolidating gains before a move higher:

As of now our stop remains below last week's action on a closing basis below 13.05 with an initial target of 14.

Disclosures:
Short EURUSD, EURGBP
Long USDMXN

Dollar/Peso breakout imminent?

noreply@blogger.com (Brentwood Global Investment Partners) — Thu, 19 Apr 2012 18:45:00 +0000

Taking a shot at a long USD/MXN position today as it looks like a breakout is in the works. We're long from 13.25 for an initial target of 14ish:

We'll only risk it to a close below yesterday's* lows; not gonna get caught in a bull trap with this one. If the pair wants to pull back, we'll revisit again later but this could be an easy "flight to safety trade" if the EU worries speed up...

*corrected typo from "today's"

Disclosures:
Long USDMXN

FX Outlook (2012-04-16)

noreply@blogger.com (Brentwood Global Investment Partners) — Mon, 16 Apr 2012 11:15:00 +0000

No major changes, so this shall be brief...

USDJPY:

We remain short USDJPY and last week the pair broke below the channel that many expected to develop into a bull flag. We're trailing our stop for now...

Should we get down to the 78ish level ("A"), we'll consider taking a shot from the long side. However, switching to a weekly chart we explain our concern/interest:

When the first trend line was broken (solid line), this is what had many calling for a material turning point in the Yen. There is no question that the line was breached, however if one considers that we are in a new "post-Lehman" Fed period where easing and ZIRP are the tone of the day, the "post-Lehman" trendline (dotted line) is still intact and appears to have contained the rally. As such we're happy with our profits, we intend to trail our stops, and will certainly take a shot from the long side at some point.

EURUSD:

Everyone is following the head & shoulders and various longer term trend lines so we'll not spend time there... The neckline appears to have been temporarily breached last night:

In our opinion, the Euro must take out 1.30 to the downside in short order. If it cannot sell off on last week's Eurozone economic news, what then shall it take??? If 1.30 isn't taken today or tomorrow, we'll consider covering some of our short to add back on a bounce (no change yet though). Not an impressive showing from the bears...

GBPUSD:

We are staying on the sidelines with this pair, as a break in either direction of the multi-year trend seems to be drawing near:

If 1.58 can be taken out, we might still consider a short to try to pick up the 300-500 pips that lie between 1.58 and the support at 1.55 or 1.53 (depending on whether one uses absolute lows or weekly closes). In the short run however, we prefer to play Cable via the Euro...

EURGBP:

This pair looks much better to us should one wish to own Sterling:

Another H&S potential that is being put to the test right now. As with the EURUSD pair, bears really need to push here...

AUDUSD:

We took a very short term shot on both the long and short side late last week, both times being taken out with a tiny loss... happily we might add given our indecisiveness. "Idle hands..." and all as the saying goes. For now we're sitting tight:

Our "best guess" is that we still test par, however a rally back to 1.05 or even 1.07 can't be ruled out (and might even be "healthy").

If we must own the Aussie, we're instead considering doing so against the Euro:

On any bounce in the EURUSD, rather than adding to that pair we might sell strength in the EURAUD if we get it. We need to see how the week shapes up first.

That's it for now.

Disclosures:
Short EURUSD, USDJPY

in queue for Apple

noreply@blogger.com (Brentwood Global Investment Partners) — Fri, 13 Apr 2012 19:27:00 +0000

Here's the thing. It's not that this chart is healthy. That's a pretty meteoric rise and could scare anyone:

We took profits twice along the way, partially b/c this was getting to be a larger part of the portfolio than we were comfortable with (started '12 as largest equity position anyway) and partially (in all honesty) b/c we were totally faked out by the big outside reversal on 2/15 and tried to play it cute.

So here we sit with only our small 1/4 "core" position, looking out the window while the cool kids play in the park.

Now... much has been made about the almost unheard of 4 down days in a row.

And the crazy catch is... not only could Apple fall pretty far and not break longer-term (healthy) support, but filling any number of the gaps on the chart would be reasonable as well. Funny thing is, this is one of the few stocks on our watch list where we're more afraid of waiting too long to buy a dip than we are of buying and having it fall further.

Sure, there is a LOT of air in this 2012 chart, and if a sharper sell off starts - especially if coupled with some panic macro-EU type liquidation - it could get ugly fast.

But if we had to guess... we'd say it's not just the products that everyone is in queue for:

Almost everyone we've spoken to that's taken any profit in Apple has the same view. They "will" buy it back. It's just a fear that it will be higher than where they took profits, and they all (us included) seem to be chomping at the bit for a decent dip.

Regardless... when some of the air finally does come out, there could be a bit of panic from those that bought at $500, $550, $600, or $644. It would be natural for some of the late buyers to panic and sell to avoid going underwater.

The real fun will be watching the entire financial community try to bottom pick to guess on the best place to get back in.

Not sure yet where we'll start buying again. What we do know, however, is that we're already in queue...

Disclosure:
long [not enough] AAPL

Interesting Reading (2012-04-13)

noreply@blogger.com (Brentwood Global Investment Partners) — Fri, 13 Apr 2012 13:21:00 +0000

Spain/Italy/EU:

Why next week will be huge for Spain --|-- Business Insider

Outlook for Spanish banks dims --|-- FT

Spain Banks Boost Borrowing From ECB by 50 Percent in March --|-- Bloomberg

Spain emerges as leading candidate for next Eurozone "domino" --|-- Alpha Now

Europe’s future is not up to the Bundesbank (Soros) --|-- FT

Italy forced to pay higher yields on bonds --|-- FT

General/Other:

The Sub-Prime Credit Market Is Making A Comeback --|-- Business Insider

‘Shove It’ Indicator: More People Now Quit Than Get Fired --|-- CNBC.com

Frugality Fatigue Spurs Americans to Trade Up --|-- Bloomberg

EL-ERIAN: Here's Why Central Banks Can't Save The Economy --|-- Business Insider

Sterling sits pretty in land of the ugly --|-- FT

Starting with the Greeks

noreply@blogger.com (Brentwood Global Investment Partners) — Thu, 12 Apr 2012 11:27:00 +0000

So there are a lot of people talking about the Eurozone crisis these days. Politicians, economists, traders, reporters, ~~bands~~. Wait, what?

Oh. So there are no musicians singing about it. Well that is something the BGIP band shall have to remedy...

Starting with the Greeks

(to the tune of Adele's "Rolling in the Deep")

There's a crisis; it started on the edge

Reaching a fever pitch, let's hope that you are hedged

Finally... the risk has moved to Spain

Go ahead, try to ignore - we can't escape the pain

Let's wait and see how Italy's bond sales go

But we don't have too much faith without another L-T-R-O

There's a crisis spreading from the edge

Yields are still spiking, good thing we are hedged

The yields on your bonds are like a time bomb

They keep me thinking that we could have more defaults

The weight of your loans from two Greek bailouts

I can't help feeling…

We could have more defaults

(you're gonna wish you… never lent to me)

Starting with the Greeks

(yields are on the rise, it started with the Greeks)

But we increased the E.F.S.F

(bonds are gonna fall; the canary was poor Greece)

Yet that didn't keep the peace

(problems are not fixed; yet the bailouts are complete)

Draghi, you've got a lot more work to do

Bought a few hundred mil in bonds and you thought you were through

Merkel says to embrace austerity and despair

No matter what is said, fiscal responsibility won't be shared

(you're gonna wish you… never lent to me)

The yields on your bonds… are like a time bomb

(yields are on the rise, it started with the Greeks)

They keep me thinking that we could have more defaults

(you're gonna wish you… never lent to me)

The weight of your loans, Greece is still helpless

(yields are on the rise, it started with the Greeks)

I can't help feeling…

We could have more defaults

(you're gonna wish you… never lent to me)

The bond markets were fleeced

(yields are on the rise, it started with the Greeks)

We had help from the I.M.F.

(you're gonna wish you… never lent to me)

The canary… it was Greece

(yields are on the rise, it started with the Greeks)

We could have more defaults

The problems are so deep

We put cash in your outstretched hand

But that didn't help poor Greece

Bond bears vs governments, this is open war

Count your blessings it hasn't spread to the Core

A larger bailout fund might be on standby

But if Monsieur Hollande wins, France can kiss low yields goodbye

(you're gonna wish you… never lent to me)

We could have more defaults

(bonds are gonna fall; the canary was the Greeks)

We will have more defaults

(you're gonna wish you… never lent to me)

Default… default…default…

(problems are not fixed; yet four bailouts are complete)

We could have more defaults

(you're gonna wish you… never lent to me)

Starting with the Greeks

(bonds are gonna fall; the canary was the Greeks)

Even with the larger EFSF

(you're gonna wish you… never lent to me)

We still couldn't…

...save the Greeks

(yields are on the rise, it started with the Greeks)

We could have more defaults

(you're gonna wish you… never lent to me)

The problems are so deep

(bonds are gonna fall; the canary was the Greeks)

Even with all of the help

(you're gonna wish you… never lent to me)

It didn't…

… it didn't

It didn't save the Greeks

The End.

© 2012 Brentwood Global Investment Partners, LLC

(Back to Karaoke main page)

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

C'mon Euro Bears: Sweep the [Neckline]

noreply@blogger.com (Brentwood Global Investment Partners) — Thu, 12 Apr 2012 10:54:00 +0000

There are a zillion people following the Euro waiting for it to break. The daily pictures still looks clear to us:

Unless the Euro can jump past 1.33ish, our bias is still to the downside. When 1.30 didn't give with Monday and Tuesday's weakness, we thought this might be opening the door for a bounce back to resistance before a larger move down. But the bounces have been, well, weak:

Several attempts at a push to 1.3150 have failed. And yet the Euro bulls are hanging in there.

C'mon bears. What's the deal? They are on the ropes.

Sweep the leg!

Have you got a problem with that?

Disclosure:
Short EURUSD

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

Aussie, Aussie, Aussie. No, No, No.

noreply@blogger.com (Brentwood Global Investment Partners) — Thu, 12 Apr 2012 10:20:00 +0000

We used the spike after the Australian employment data beat (+44k actual vs +6.4k expected. Full data here) to put on a short position in the Aussie/Dollar pair.

We're not taking a long term fundamental position against the Aussie, but rather just a quick shot based on the technical channel in place right now:

This spike puts the pair at the top of a nice clear channel, so we're taking a shot and will bail if we push above 1.04 and hold for a bit.

If we're wrong, we expect to get taken out of this trade pretty quickly. If the pair can't take and hold 104 today, we'll look for the bottom of the channel around 102 as our first target and then reassess...

Disclosure:
Short AUDUSD

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

Random News & Things of Interest (4-11)

noreply@blogger.com (Brentwood Global Investment Partners) — Wed, 11 Apr 2012 12:58:00 +0000

A few things we found interesting the past few days:

German Bonds Uncovered... --|-- WSJ

The Real Threat is Spain not Greece --|-- CNBC.com

All is Quiet --|-- The Reformed Broker

Greece to Hold Vote May 6 --|-- WSJ

...the French are Dozing --|-- The Economist

French youth survey boosts Le Pen --|-- FT

The US Cruises Toward a 2012 Fiscal Cliff --|-- WSJ

Investors Run Scared of Spain's... --|-- CNBC.com

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

EURUSD (are we there yet??????)

noreply@blogger.com (Brentwood Global Investment Partners) — Wed, 11 Apr 2012 03:38:00 +0000

As we noted in our post last week (original here) in which we identified the Thriller H&S formation, it looked like EURUSD was about to break down.

But it hasn't. Yet. Well last night's (US Central Time) pop > 5.9 on Spain's 10yr yield and > 5.5 on Italy's 10 yr shows us that in this post-LTRO world there is only a lack of buyers and (potentially) a few one-off interventions by Draghi's ECB standing between calm and bailout. So we still feel like the tepid bounce that occurred in the 2 days since the US Non-Farm payrolls disappointed should keep the bears motivated:

We've held our core short position in the EURUSD for a while now, added a couple of weeks ago, and added a little bit yesterday where we shall sit tight.

Italy has auctions coming up and a poor showing should be the nail in the coffin for 1.30 on the pair. So we're thinking (hoping???) that the pair breaks tonight so we can get it over with. We've enough alarms set on this and similar pairs during the European session that if the EURUSD triggers sub-1.30 it's going to sound like The Blitz in our room.

But so far it seems like the Euro is just circling the drain, so enough for tonight....

#LookKidsBigBen

Disclosures:
Short EURUSD

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

How Sweet It Is (or Isn't)?

noreply@blogger.com (Brentwood Global Investment Partners) — Wed, 11 Apr 2012 03:12:00 +0000

Well. The second largest loss we've booked all year is in Sugar so we shudder a bit to discuss it at all. We've traded sugar poorly this year, buying in mid-March just above $25 in what would prove to be a second bull trap. We also had a poor exit point, at the time arguing that the upside justified taking on a greater risk. Result, then, is clearly an "F" in Sugar Trading 101. One more bad trade and it goes on the "ex-girlfriend list." You know. The "stay away because only bad things happen" list. Yeah, that one...

That warning having been said, we found ourselves looking once again a chart of the May sugar futures contract. We can't help but note the 2012 support line calling to us at 23 1/2.

So... we'll be watching and shall likely try again on a long at about 23.5ish against probably 23ish (just below the March dip low):

If we zoom out and look at a weekly continuation futures chart... we see the - not one but TWO - bull traps that got everyone (including us.... "suckers!") so excited:

But when one switches to a weekly nearest futures chart, we see that there wasn't a confirmed break:

This is always an issue when dealing with longer term futures charts... the nearest vs the continuation choice. While we won't settle that debate here (**cough** we prefer the nearest **cough**)... as it relates to Sugar, while one could argue for hours on whether or not there was an upside breakout, on both charts we see that support has held (since Apr '11 on nearest and since Apr '10 on continuation) so that has our interest.

We'll admit we are nervous in general about any long "risk" positions given that we're on the doorstep of Eurozone Crisis 3.0 (if one is generous with the count), but we'll watch closely. If we weren't afraid that a crazy-liquidate-everything-margin-clerks-smell-blood-in-the-water kind of day is fast approaching... we'd certainly be looking to buy Sugar at 23.50ish with risk down to about 23 and with a first target of 26, a second of 28, a third of 32, a fourth of... well you get the point.

BUT. (and we mean it this time) If this goes badly... $SG_F goes on the ex-girlfriend list for the rest of 2012.

Done and done.

Disclosures:
No position at the time of writing. Because we were stopped out. Bitterly.

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.

All one needs to know about Apple

noreply@blogger.com (Brentwood Global Investment Partners) — Wed, 11 Apr 2012 02:45:00 +0000

------
edit 2012-04-13: Misprint below - in checking for another post, we sold first block at $515ish. Even worst. Arrrrrgh.
------

This shall be quite brief.

First - Apple 1 yr chart:

Secondly, how are so many traders still trying to fade this? Why? Do you need some glory or bragging rights for calling a top in Apple? Why? Soooo many other things that are breaking (or are broken) if one feels the need to short.

Seriously.Just.Dont.Fight.This.It.Will.Save.You.A.Headache

Here's a different chart of Apple:

So. We currently hold Apple. Sold 1/2 at $550 on big reversal day. Thought we were cute. Then another 1/4 original position at $600.

Now wish we hadn't. Still bitter.

Oh, and it's funds and people like us ready to buy any dip that make it not worth your time to short.

#EndOfRant

Disclosure:
Long AAPL

____________________________

The information contained in this blog post (and on www.BGIP-blog.com) represents an opinion of the writer and does not contain a recommendation for any particular security or investment and is provided on the condition that the reader/recipient will not use this information to form the basis for any investment decision without first consulting a qualified financial advisor. All data/market/price information is believed to be from reliable sources. Should the writer (personally) or Brentwood Global Investment Partners LLC hold a position in any security mentioned, it will be disclosed at the time of writing.