Quote:
Originally Posted by auxesis When large orders come into the market and there are not enough counterparty orders to fill, price must go to the level where there?s enough to cover.... |
auxesis,
This is an addition to what you stated (bold marked by me).
MMers' moves are crystal clear. We don't have access to trading positions (OTC nature - even if we had it would be of small help) while they have.
I paint two possibilities:
1. Eur and GBP longs have not liquidated their positions. Mmers are not interested in keep buying Eur and GBP until the high levels are reached. Whatever is happening is to force them to opt out of longs. At the same time they are not dipping too much, (catch-22 situation) leaving not much profit scope for short sellers. Cresendo build up (gradual up and gradual down) is being faked by them to give a feeling that the market is not liquid. Actually, they are buying and selling to themselves and wear the longs off. How long they will do it? They have ample time, resources and experience to handle such situation.
2. While they are doing this, they have engineered short sale setup in Euro/GBP which should happen this week or may use FOMC as the trigger point.
Why I get this signal? MMers floated rumour in the market (rumour agency is IFR which instantly puts up a signal as well) a huge M&A deal in Euro/GBP is happening tempting everybody to take a ride to the high. 0.85 to 0.88 ride in 10 days with no letup. Even at 0.88 people are jumping on the train. Last Friday another rumour (courtsey IFR again) that the deal is off the card. So you find the first pullback on Friday. Highs are lower but lowers are high. Have they achieved their object of uninterrupted short selling peak time? This week will give some idea. Possibility is they might show it as a pullback rather than trend reversal and aim for 0.90. If longs have liquidated by Friday and taken their profit their strategy will change.
IFR signal says they will still go long aiming for 0.90 which means it was a pullback and they will wait for a better position to enter longs.
So longs at 0.88 will not be liquidated with buyers hoping for 0.90. New longs will join the train journey.
3. MMers have three switches - euro, gbp, jpy to regulate Eur/GBP. Whether they are using them for strategy 1, strategy 2 or both is unclear to me. We really have no idea about longs and shorts volumes. It would have given some kind of help to come to some conclusion but is no match to MMers machinations.