My Christmas present to you — short Eurodollars
- Posted by PeterLBrandt
- on December 23rd, 2011
There is a very strong chance the Fed has lost control of short-term interest rates.
The BOGI trio (Bernanke Obama Geithner Incompetency) has thrown everything it can at the Zero Interest Rate Policy. The chart structure in Eurodollar interest rates indicates that market forces could be taking over. QE3 will unravel.
Following are two charts I have posted before — the monthly and weekly charts of Eurodollar interest rates (not the Euro currency). Eurodollar futures is a HUGE market, trading close to two million contracts per day at the the CME. The monthly chart shows the strong trending nature of the Eurodollars, both up and down.
The weekly chart displays a complex “M” pattern that has been forming for the past 30 months. I am 75% certain this is a top and 75% certain the high is in place. I am 50% certain we are embarking on the completion of this pattern NOW! A close by the near contract under 99.00 (1% interest rate) will complete the top. The top will show Bernanke and Geithner to be the fools they are.
Unfortunately we cannot trade the nearby continuation chart, although in my opinion it is the best chart to analyze in most markets.
Fortunately a clearly defined and very rare pattern is developing in the December 2013 contact. This pattern appears to be a continuation H&S — and there is a 25% chance this could occur, leading to one more move toward the BOGI’s ZIRP prior to the collapse of the financial world as we know it.
But, in my judgement, we will experience a H&S failure by closing below the exiting right shoulder low at 98.995 and then below the head at 98.77. The risk for a short position at current levels is 99.31.
OK, that’s it folks. I doubt I will post next week, but we will see. The stock market is getting very interesting.
On my way to Minnesota.
By the way, if this is my last post of the year let me end with these notes:
- The Fat Lady will probably be back next year luoder and more often than before, as will the dead cat cartoon
- Silver bulls who only think one way, believe the market is out to get them, don’t have the guts to stand for delivery and believe the ratio of Silver to Gold as set by a 16th Century Spanish king are still idiots. However, there are some thoughtful longs in Silver who understand macro economics in a rationale way and who know that even bull trends go up and down along the way.
- I am a long-term bull on Gold
- Markets are for trading, not for understanding.
- An opinion is not a position
- I believe in strong opinions, weakly held
- The H&S in the Russell and NYSE Index will remain the top until it is negated
- Be prepared to pay more at the pump
- Sugar will make it to 50 cents, I am just not sure when or how
- There are two parts to a successful trade — direction and timing. Get one wrong and the trade is wrong
- Jon Corzine needs to go to jail
- Stock, mutual fund, life insurance, annuity investors and the like have no idea how contagious the MF Global default really is
- George Soros has the money MF Global segregated account holders lost and BOGI do not have the guts to get it back. After all, Soros donates to the Ds. If you don’t know, his non-profit Open Society foundation also receives hundreds of millions of U.S. taxpayer dollars each year. Bet you didn’t know that. This is a subject for another time
- The upper 1% need to be turned upside down and shaken. I am in favor of a wealth tax
- The “up-yours Wall Street” movement had the right idea — it just got co-opted by the unions, radical libs, U.N. NGOs, enviromental wackos and lazy college kids. The movement is not dead, it just needs some wise leadership
- The jobs lost in this country are never coming back
- Obama, in his jobs bill, wants to give $60 billion to trade unions. Talk about the big “I” in BOGI.
- The CFTC is MIA and always has been. They were the get-away drivers in the MF Global heist
- BOGI needs to have the “I” in 60 point bold type
- Politics are not the answer to anything. We would all be better off if Washington DC was shut down. The Rs are no better than the Ds. The whole lot (with a few exceptions) need to be taken out behind the barn
- Oh, did I mention anything about Silver bulls (not all of them, just the idiots — and you know who you are)
- I am no longer short AAPL (I made money), but I will get grief from the fruities for the next five years. For me, AAPL was a trade. For some, AAPL is a religion. Not a religion I want to worship
- Using stops is the definition of risk management for some. Using stops is 10th grade risk management
- Prediction: My public blogging and Tweeting days will end sometime in 2012. We will see if my prediction holds true. I will continue to blog and email traders who “get it” and want to learn. This is you, my Boot Camp friends
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Peter Brandt entered the commodity trading business in 1976 with ContiCommodity Services, a division of Continental Grain Company. From his start in the commodity industry, Peter's goal was to trade proprietary funds. But, he first needed to learn the business. More »