20DMF

[Pascal]

In order to issue a short signal, we will need to close both distances shown bellow with the pink arrows.
The 20DMF could move very quickly to cover the distance to the short limit, but the Cumulative Tick is mostly influenced by the POMO operations and hence will be slower to move.


Pascal

[Pascal]

I still expect the 20DMF to reach its limit before the Cumulative Tick, especially knowing that we will have a traditional POMO operation at the EOD.

It will be interesting to see if the small money injections will be able to pare a broad sell-off.


Pascal

[Pascal]

And by the way, if we have a short signal, it is better to wait until the close to act, because of the Fed's ramp-up action in the afternoon. Beware of the morning gap-up. It would be wise to take only a small position at the close and then after the morning bounce. Let's not forget that the issue is more political than financial... well, at least if you are not living in Cyprus... and politicians do find "solutions" when under pressure.


Pascal