11/12/2003
Over the last few weeks the equity markets have been more frustrating than that evening many years ago when I was first confronted with a front loading bra. Poor volume, mixed indicators and more headless chickens than a Colonel Sanders memorial dinner make for difficult times. Fortunately we have the Foreign Exchange markets which due to their massive liquidity and relative transparency are easier to trade. Forex market makers are starting to get nervous. With bonuses already decided and the Chrimbo lunch season firmly upon us any large orders will have a greater effect than usual. There are some very large option related orders to buy dollars if it reaches certain levels, between $2 billion and $3 billion, which if triggered could see a significant rally. I stress the "if triggered" and I will send members the levels which I believe will see this happen and we are placing stop entry orders accordingly. If they are executed I would expect $/Swiss to reach 1.3000 in short order.
Gordon the Grinch has now turned into Gordon the Glutton. Rather than borrowing £27 billion this year, as planned, he is going for a whopping £37 billion. Fortunately many traders used this as an excuse to sell sterling thereby affording us the opportunity to be the "proud pound" at nice levels. We sold Euros against the Sterling as with every muppet imaginable going on CNBC extolling the virtues of buying euros a significant rally can't be far behind. It is always important to remember that most of the people form financial institutions who go on television are the ones deemed too dangerous to be allowed on the dealing floor.
I wish though that CNBC would bring back Frederik Altman from Hornblower Fischer. Frederik was the gentleman who inspired us to introduce the Muppet of the Month awards when he tried to argue that at 60 Euros Deutsche Telekom was a good buy and the then CEO had done a terrific job. Unfortunately for Freddie DT were instead a "goodbye" as the only thing the CEO was good at was destroying shareholder equity. For a whole year Freddie called the market to rally whilst it dropped quicker than a US army helicopter. When he eventually changed his view and said the market would fall further, that was the absolute bottom. Trading is alot harder without our chum to tell us where it isn't going so I am going to start a campaign to get him back on television.
Harry