Bulls Capitulate in Early June, Bears in Late June

By Roger Baettig | June 29 2012 10:15 AM

I didn't expect the rally we saw today but such moves are often a surprise. As mentioned yesterday, the only thing keeping me from getting aggressive on the short side is that weekly seasonality tendencies favor a Friday high with the Monday low in place. I am short the AUDUSD but not as short as I want to be. Phew. Here we are at new highs for not just the week but the month (monthly seasonality does it again...6/1 low to 6/29 high). This move does nothing to alter the bigger picture (bearish risk trends). In fact, the move may be a blessing to bears that were worried about the market getting away from them on the downside.

Sponsorship Link

Think back to early June. Bulls capitulated after the awful NFP release on June 1 and the USD hasn't traded higher since! The current situation is the exact opposite. CME volume (see charts below) is suggestive of capitulation by bears as 'Europe is saved' for the 20th or so time in the last 3 years. I'm not buying it.

THE MARKET(S) a.k.a. RISK SNAPSHOT - 60 Minute Closes

Bulls_Capitulate_in_Early_June_Bears_in_Late_June_body_all.png,

Prepared by Jamie Saettele, CMT

SPX 500 - Daily Bars

Bulls_Capitulate_in_Early_June_Bears_in_Late_June_body_spx.png,

Prepared by Jamie Saettele, CMT

EURUSD - Daily Bars

Bulls_Capitulate_in_Early_June_Bears_in_Late_June_body_eurusd.png,

Prepared by Jamie Saettele, CMT

AUDUSD - Daily Bars

Bulls_Capitulate_in_Early_June_Bears_in_Late_June_body_audusd.png,

Prepared by Jamie Saettele, CMT

Euro Futures (CME) and Volume - 60 Minute Bars

Bulls_Capitulate_in_Early_June_Bears_in_Late_June_body_eur.png,

Prepared by Jamie Saettele, CMT

Red bars indicate that at least 66000 contracts traded for that hour. Volume for the hour that ended at 9 am est is the highest since the hour of the low on June 1.

Australian Dollar Futures (CME) and Volume - 60 Minute Bars

Bulls_Capitulate_in_Early_June_Bears_in_Late_June_body_AUD.png,

Prepared by Jamie Saettele, CMT

Red bars indicate that at least 28000 contracts traded for that hour. Volume of this magnitude has indicated short term pivots throughout June.

To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter @JamieSaettele

To be added to Jamie's e-mail distribution list, send an e-mail with subject line Distribution List to jsaettele@dailyfx.com

Eurozone Crisis Hinges on Structural Reforms, Says Draghi and Weidmann

Eurozone Crisis Hinges on Structural Reforms, Says Draghi and Weidmann

Alibaba Subsidiary Lets Small And Medium Sized-Companies Hedge Against Fluctuating Yuan

Alibaba Subsidiary Lets Small And Medium Sized-Companies Hedge Against Fluctuating Yuan

Eurozone Leaders Try to Tackle Tax Evasion

Eurozone Leaders Try to Tackle Tax Evasion

Radical AfD Political Party Could Disrupt German Elections

Radical AfD Political Party Could Disrupt German Elections

In Depth

3D Printing Risks: Not Just Plastic Guns, But Military Parts, Drugs And Chemical Weapons

3-D Printing: Plastic Guns Should Be The Least Of Our Worries

Whatever Happened To Libyan Oil? For Western Oil Giants, The Crude Is Sweet But China And Russia May Get The Biggest Taste

Two Years After Revolution, Whatever Happened To Libyan Oil?

The Euro Zone Economies Are Spiraling Down But By The Social Progress Index European Nations Beat The US For The Top Spots [CHART]

In Providing Basic Needs, Europe Bests The US

Africa's Economic Future Depends On Local Ownership, Entrepreneurship & Big Ideas

Africa's Economic Future Depends On Big Ideas

web counter