Institutional Technical Analysis

Libero wrote:

diver993 wrote: Hi Libero,

I'd appreciate a translation of this if you could.....

 Buy AUDUSD 3m RKI 1x2x1 put butterfly struck 0.86 – 0.83 – 0.80, where the 0.83
strike puts the investor sells knock in only if 0.80 is touched. The structure is
indicatively offered for 0.5% (spot ref 0.9050), close to a 40% saving to the vanilla
0.86 – 0.80 put spread.

Cheers,

Diver

Cricky Diver!

You're not asking for much are you!

R/C is of course correct. This is Options speak.

*AND* this trade isn't for everyone either (aimed without any disrespect).

I'm not going to go through the trade, but I'll try to explain some terminology if it helps any.


A Butterfly (no, not that kind of butterfly!), is a non-directional strategy used by options traders when the underlying volatilty < the implied (i.e. a future looking view, rather historical, against historical inputs, through pricing models such as Black-Scholes which is popular); and this usually (i.e. a good chance but not always) yields an artibtrage trade.

I never said this was easy!

Vanilla is more straight forward, and in this context, it is the most basic 'version' of an option; i.e. a 'normal' put / call with no fancy (i.e. exotic) features.

The above trade is suggestive of a non-vanilla options put, where the probability of a successful trade is higher, perhaps implied by a narrower spread when dealing with an exotic vs vanilla options variant.

If you don't have knowledge of options or mathematical models (such the monte-carlo method, or black-scholes), I'd stay well away from this stuff - unless you have an interest, in which case, try to get hold of a copy of John Hull's seminal book on options, furtures first.

Disclaimer: I'm not advocating trading options or any other trade for that. I think I have to add DYOR as per Remo, because this stuff can lose you not just your shirt, but your soul too!

Maybe in the future CV will host other derivatives to trades, but for now, there's enough risk with conventional T/A!

waaaa....thats a different language sounds to complicated for me. I prefer when its a bull or a bear

remo wrote: waaaa....thats a different language sounds to complicated for me. I prefer when its a bull or a bear

Same here Remo, honest! Anyway, the options, warrants and other derivatives markets can sometimes be overcrowded, and the "choice" trades are not always available.

Straight bull/bear, T/A (maybe with a dash of level 2?) is just better, and clearer to navigate.

waverider2 wrote: HI Libero - please can you re attach the latest equity market TA update? I tried opening a few attached files but they all relate to metals or FX...

cheers matey

Hiya WaveRider,

Alas, I couldn't get hold of the usual UBS Market T/A - I think there was a note on the previous one that read:

"Due to traveling, the next regular weekly comment will be published on September 10. However, in case of a significant change in market direction and/or our strategy, a short update from us will be sent out."

So I think we'll get on from Tuesday 10th hopefully!

Be well folks!

Folks,

Please find attached UBS' much coveted (can't think why! ) Technical Analysis on the markets.

CV Patrons,

Please find attached UBS' T/A take on the markets.

Highlights include, SPX to re-test highs, Europe is in Wave 5 (looking at Germany's DAX, with its absurdly high P/Es I'm surprised it got this high!), and on gold there's an interesting take too.

Good luck people!

Good Folks,

Here's Credit Swiss' F/X Weekly take:


Trade One: Short USDJPY

Trade Two: Long AUDUSD

Trade Three: Long GBPUSD

Trade Four: Short USDBRL

Trade Five: Short USDMYR

At the risk of repeating myself, can I just add that I'm not advocating any trades etc... However, if anything, it is worth comparing their take on fellow chartists take.

Recently, Remo destroyed Soc Gen's view of Anglo American, and if I recall correctly, Red Chilly was right about the Cable trade, whilst Credit Swiss might have got it wrong. So, to this end it is worth checking out how things are perceived from CV and from Institutions.

Good luck people!

Folks,

Please find attached UBS' Weekly T/A take. Highlights include:

1. Views on the S&P

2. USD heading into key support.

3. New Pivotal Low for Gold

It is an interesting read...

Enjoy!

p.s. The charts from the PDF are by MetaStock