It’s going to be one long day for the Euro. Several announcements were on the roaster today and everyone was expecting Draghi to announce ABS purchases. But he surprised everyone by just whacking its corridor rates across the board by 10 bps, in the process sending the Deposit Facility rate even further into negative territory, now down at -0.2%.
Weak economy make Draghi aaaangry! Draghi Smaaaasssshhh!!
Here’s what happened (and is still happening):
Ouch, this oughta hurt… unless you somehow short the Euro (snicker)….
And we’re not done yet – we may see a bigger slide later this morning during the announcement of the policy statement and the ensuing press conference.
As you can imagine I’m all smiles down here in the lair – my remaining DX lottery tickets (i.e. 50% of my original position) just exploded higher. I’m tempted to cut the cord but heck – let’s see what happens at 8:30 😉
Meanwhile on the equities front we are clearly continuing to gyrate inside a limbo period – see my pertinent 2012 post on market weather for the definition and most importantly for the implications. In short – play the swings if you can. The rocket is coming for sure but there is no saying which way it’ll take off. We may however risk small R sizes if stopped out when playing the swings at their respective extremes. Meaning – if you are going short and the range extreme based stop is touched then flip with 1/2R and pyramid higher as the position goes your way. Or do nothing – playing limbo periods is not for the faint hearted (and emotionally corruptible).
One measly setup today on the futures side – I’m completely staying out of Forex for the moment. Crude looking like a pretty nice long here – stop below 94.8 and you’re good to go.
This should be a fun day – I’ll check in with you guys later.
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