Non Trending Futures

General discussions about futures.
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Chris67
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Non Trending Futures

Post by Chris67 » Wed Sep 07, 2011 9:25 am

So we cannot sell European Indices, we cannot buy the Swiss Franc - how long until the Yen gets clobbered and Q3 artificially supports global stock markets for another 6 months - anyone getting concerned about changing market dynamics and continued government intervention ???
Seems markets are not reflecting supply / demand / Human emotions and thas not good for T/F ?
Lets face it without Govt intervention the Dow is overbought at 5000, Euroswiss would be 85 cents the yen at 150 and most Global stock markets down 30%
all very depressing

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Post by zacharyoxman » Wed Sep 07, 2011 9:57 am

What I'm about to say is complete speculation, but it seems that gold was hammered overnight on nothing. No major news, disruption, margin hike, etc...just nailed down to 1818...now holding a low of 1803. Could it be the next target?

I think we will continue to see more and more price control as governments continue to lose the fiat currency war. What gives me the most pause for the future is the idea of price caps/bands on physical commodities like oil and foodstuffs. That could make trend following difficult, but could give rise to other systematic methods of trading.

It would be extremely interesting to run a simulation of some kind on a market/s under a price control and see what resulted for different system styles.

LeviF
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Post by LeviF » Wed Sep 07, 2011 11:29 am

Currency intervention is certainly nothing new...

Chris67
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Post by Chris67 » Wed Sep 07, 2011 12:06 pm

Levi
You are right and the ERM was the biggest recorded hiotoric example we have of price bands in currencies spectacularly unfolding in central banks faces - in teh long run central banks are playing with fire when they do what they have done with the swiss franc
BUT ,,, it cannot be good - if for example the ECB say the Euro will trade 1.40-1.41 and we will print unlimited money to keep it there - this buggers things for the medium term

I have a nasty suspicion that what the SNB have done could prove to be a massive landmark in Swiss history in that the country may well eventually cause huge ecenomic problems when teh euro finally dies in the next few years and is worth 10 cents of the Dollar
Can anyone else see a reason why you wouldnt be long Euroswiss here with a stop below 1.200 knowing teh SNB will print an unlimited supply of swiss france to keep your stop safe ?

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Post by M20J » Wed Sep 07, 2011 11:44 pm

Although recent days in the Swiss Franc have been a slightly painful end to a great trend, I don't see the recent announcement as heralding a great change. Currency intervention and shadowing was a frequent feature of the heyday of trend following strategies.

Although while the shadowing is successful, the opportunities are limited, the pent-up pressures that build up often seem to lead to a fantastic re-evaluation once the shadowing breaks down. Here's a chart of a classic example I remember well, when Sterling was unofficially linked to the Deutschemark under Geoffrey Howe. There was a similar sharp move when Norman Lamont's policies came a cropper in the 90s.

Moves like these are what fat tails are made of. Happy days!
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LeviF
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Post by LeviF » Wed Sep 07, 2011 11:50 pm

About a month ago I was complaining that my exposure to CHF was very low because I've mostly been long for years. I'm not complaining anymore!

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