Monday, 25 July 2011

Hedge Funds (in general) Lack Trading Ability to Trade EUR/USD

SS says

Please see chart below


Pls see middle portion of chart

This line in BLUE is the hedge fund buy / sell activity on EUR

When EUR was at 149 this year - HFs were crazy and in love with EUR and most bullish

This love and bullishnes was even above 2009 when EUR was at 150

At the peak in EUR in 2009 and in 2011 - HFs were massively long EUR

We can see how it turned out in 2009

EUR went from 150 to 118 in 2010 and HFs lost money on that trade

The same is about to happen again

EUR peaked at 149 and HFs were most bullish

Now I think EUR is own its way down and slowly trade out at a loss and will be most bearish at the bottom

When the time to buy is at hand - near a bottom - they will be scared and most bearish and will not participate in that trade

This happened in summer 2010  - when EUR was at 118 - they called for the end of EUR and were most bearish

As we can see they were short EUR in summer 2010 at 118 and lost money when EUR surged from 118 to 149


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