Friday, December 9, 2011

Closing Bell

Carbon continued to rise gradually, "banging" on the resistance of 7.70 EUR for most of the day today. Squeeze towards the close probably took out further stop-loss orders but didnt break 8.00 EUR.

Wednesday, December 7, 2011

Closing Bell

Late last night carbon rebounded from the lows to close flat on a day. This could have made the traders think that going short big time at these levels is not a good idea anymore. This morning we had a big jump, and a lot of stops were taken out. If you had a short below 7.20 - your stop should have been taken out as well.

Previous short term support - 7.70 EUR - proved to be resistance for now (see the chart at the bottom of the post). However carbon found a floor @ 7.20 and may continue to rise tomorrow. We are seeing a textbook example of testing the 7.20 support - resistance at the end of the day.













We would recommend to limit short positions size and perhaps tighten the stops. Large volume traded @ 7.10ish could indicate accumulation on the market with possible upside for prices.

ECB is expected to announce another rate cut tomorrow, which can spark buying accross markets (similarily as happened when the USD rate cuts were announced) providing short term support also for carbon (along the support line).

Tuesday, December 6, 2011

Market Commentary

Carbon broke below 7.80 this week and with no real support in between 7.80 and 6.90 is penetrating now the "all-time-lows". We still don't recommend to go long on carbon.











Friday, December 2, 2011

Market Commentary

8.60 EUR proved to be resistance and prices went back to around 8.00 EUR. Last two days carbon trading sideways. It didnt stay in the marked corridor, nevertheless 7.80 still provides some support.












"The European Commission today delivered 300 million phase 3 allowances to the European Investment Bank (EIB). 200 million allowances need to be monetised within 10 months from the date of delivery, i.e. by 2 October 2012, in order to allow the Commission to adopt award decisions for successful bidders in the second half of 2012."

This implies an indicative volume of sales of 20 million allowances per month. Actual monthly volumes of monetisation will be set with a view to minimise any impact on the secondary market. In mature markets this should be already reflected in price, as NER 300 sale is old news, however the belief is that it will put further downward pressure on prices.

Wednesday, November 30, 2011

BREAKING

As global banks including Bank of Canada, Bank of England, ECB and Fed all agreed to lower the cost of borrowing USD, allowing more dollars to access the market and ease the tension on the financial markets, EURUSD rallied from just under 1.33 to 1.35.

This also helped EUA to gain ground and jump to nearly 8.50 EUR on Dec11 Futures after morning sideways trading. Part of the jump was also due to short-covering.























Carbon exited the channel and the sideways movement and turned higher. We see 8.50 -8.60 EUR as a significant resistance level to be tested.

Opening Bell

After sideways movement within tight range 7.75 - 8.00 carbon is approaching the upper band of the channel, which can spark a short-term bull-bear battle.












With a set of macroeconomic data to be published today (German retail sales, German unemployment, French Consumer Spending, Italian Monthly Unemployment) we may see some nervous movements on the market if the data are mixed (positive and negative).













At the moment there still is support at around 7.70 with a resistance at 8.15.

Monday, November 28, 2011

Closing Bell

Carbon moved within the channel which we showed on the chart earlier today, which can mean we are still in a very strong bearish trend.












We failed to get even close to 8.90 EUR which could signal end to this trend, however there is a possibility to see a reverse Head-and-Shoulders bouncing off 8.00 EUR which could be read as a (at least short term) breakout from the downward movement.

Black Friday

"Black Friday" in retail and shopping indicates the point at which retailers begin to turn a profit, or are "in the black".

In carbon market this would mean quite the opposite. A day in November 2011 when the price plummeted below 7 EUR. It could have been hardly called "trading", it more like a sale-off, with large volumes traded on the red candles (big turnover on the slide, adding to the momentum) and low volumes on green and short candles (few traders buying-back) - compare with chart. Short-covering on Friday helped to get the carbon out of the abbys.













Today, we are higher on the back of rising EURUSD and rising hopes on the progress with EFSF. However we are struggling to mark new high (at or above 8.20 EUR) which can push us back below 8.00 EUR again.

Wednesday, November 23, 2011

Falling out of bed

EUA fell sharply today - more than 8% intraday - as growing fears or recession in Euro-zone plus poor German bond auction results weighted heavily on investors moods.

Shortening strategy can be continued.

Morning Commentary

When the reading of the Manufacturing and Service PMIs in France, Germany and Euro-zone were being published - and they proved to be "not-so-good-and-encouraging" - carbon slided to hit new low.

* Purchasing Managers Index in the manufacturing and service industry. Above 50.0 indicates industry expansion, below indicates contraction. It's a leading indicator of economic health.

Depending on how aggresive the trading strategy is, we may have now a new short opportunity or a Profit Target for previous shorts and entering with new short below 8.75 EUR.

Tuesday, November 22, 2011

UPdate

Higher timeframe charts may signal breaking up higher, with a green candle closing the day. Tigheting the Stop Loss - or reducing the position size may be advisable.







Shorts still good

EUA bouncing off the new lows but not breaking yet previous breakdown at around 9.20 EUR.













One could have set a Profit Target at 9.00 EUR if went short last night, but all shorts from previous breakdowns should be still good, with Stop Loss around 9.25 / 9.28 EUR . If we close above 9.15 we might have strong opening tomorrow.

Monday, November 21, 2011

Concerns of oversupply prevail

After "toying", on Frday and today, with the most recent low of 9.35 EUR (marked in the first half of November 2011) the marked turned lower mostly over the concerns of oversupply.






















Technically the possible trade is to go short on each breakdown after the market "stabilizes" with a Stop Loss above each previous breakdown.

Wednesday, November 16, 2011

Market Update

Carbon failed to break significantly above 10 EUR and stay there, traded lower to break 9.90 EUR and is holding now at 9.80 EUR. Looks quite similar situation as it was yesterday.












9.80 EUR seems to be support for now, however with new "lower low" marked now and little chances for climbing back up to 10.00 EUR we could expect further falls.


Tuesday, November 15, 2011

Marker Commentary

EUA Dec11 trading lower today. In the morning there were still some positive signs, however lack of buyers lead to carbon falling first below 10.00 EUR and after breaking also 9.90 EUR.












Technically we see a downward breakout out of the triangle meaning very little support at current levels. Next possible support between 9.80 nad 9.65 EUR.

Monday, November 14, 2011

EUA Dec11 trading above 10.00 EUR for the second time this month. Last Fridays and todays bullish run stopped with oil (WTI) reversing from nearly 100.00 USD a barrel.

Barclays cut its 2012 EUA price forecast and places the average price now at 12.00 EUR level.

Technically, as there was a breakout from the bearish trend, we could still see the carbon trading higher. Seems we are testing now 10.00 EUR support, next possible test would be 9.90 EUR level. Below that bearish sentiment could prevail.























Fundamentals are still bearish, with more supply coming in and rather sooner than later, we should hear about th first auction from NER300.

Tuesday, October 25, 2011

Closing Bell

EUAs were trading sideways, which can be explained by the market awating for the big news from Merkel-Sarkozy tandem leading the EU into the brigher future (or not).

Strong closing should provide good support for tomorrow.












If there is any good news from EU, and market continues to rise, we could see it going towards (breaking) 10.90 (recent resistance) which could create a nice double bottom.







Monday, October 24, 2011

Opening Bell

Carbon marked a breakout at the end of last week, despite the "threat" of fresh supply coming in from the sale of EUAs by EIB from NER300. Merkel-Sarkozy being closer and closer on agreeing a broad rescue plan sends some positive sentiment across all markets.

Tuesday, October 11, 2011

Monday, October 10, 2011

Market Close

Carbon had a good day today, so had all other markets cheering French-German agreement on supporting European banks. EUR gained to USD which could have given support to carbon, but also the cold weather outside created good demand for power.

Technically carbon still follows the upward trend and since last Tuesday (this years lows @ 9.80 EUR) gained some 9%.












All the conditions (oil, EURUSD, power demand) signal continuation of a bullish trend tomorrow. Strong opening tomorrow morning can lead to the break of today's resistance @ 10.72 Let't see.

Friday, October 7, 2011

Midday Market Update

Today carbon is nowhere close to yesterday's excitement. Low volumes and low volatility. Friday mood is in the air. Other markets are waiting for US data about Non-Farm Employment Change and Employment Rate.

Carbon is still following a light upward trend.



Thursday, October 6, 2011

Opening Bell

Carbon bounced back off its lows this week and we could see a tradable short-term break out.













However, the last night announcement by EIB that it could start auctioning Phase III EUA from the NER300 reserve as early as mid-November and todays EUA auction by the UK government has somewhat limited the upward trend.

Looking at the bigger picture (1hr chart), the price failed to break the trend-line. If the price forms a new higher low today, we might see another break-out attempt.

Monday, October 3, 2011

The Big Picture: We are at important levels

More than a week passed since we last posted our broader view on the markets. Unfortunately the sentiment didn't change much, the bears still controll the markets.  What is very important to note that many instruments are approaching key support levels. Should these levels fail we might see some more sell of. So this week might be critical and we can hope that the old saying, that prices don’t go straight up or down, holds true and we see at least some correction in the coming days.

SP500
The index is at the 1,115 support where we see some signs of potential bounce back . The next critical level  is at 1,080 that is a lowest low now. Should that break, markets could switch to a freefall mode.

DAX
The German index bounced back last week from the 5,000 level which is a critical support. Suprisingly it had somewhat better relative performance last week than its US piers. Though, the bounce back trendline support was broken down again so we might see again a retest of the magic 5,000 level.

OIL
The WTI is still very volatile and difficult to reed its chart. The critical support is at 76.00.

EURUSD
Despite to the small correction later last week EUR felt to a new low this morning.

CARBON
Carbon had a terrible month in September. The price is retesting twice now the 10.25 lowest low we saw back in August. The chart is still really very bearish and we should wait and see how this 10.25 holds this week.

In general we might say that it is better to look for short opportunities once critical levels fall. Trying to catch the bottom is a very difficult and risky exercise.

Friday, September 30, 2011

Opening Bell

Carbon opened strong, but gave away the gains very quickly. Seems like we are testing now the yesterday breakout, although very thin volume makes it difficult to judge the direction for today.












We entered with a small long position @ 10.80 with a SL @ 10.48.

Thursday, September 29, 2011

Closing Bell

Carbon traded higher as most of the markets cheered when Germany agreed to increase in the eurozone bail out (as if they had an alternative).

Technically we could see a breakout from a downtrend, however met with somewhat strong resistance around 10.90 EUR.












Tomorrow could be a very interesting day as further break higher could prove to be a strong buy signal. Also we could see some short covering ahead of the weekend. Stay tuned!

Opening Bell

Carbon is close to the lows from August, testing 10.25 EUR. The difference between now and August is that there is no panic sale (yet?), it is a steady decline - but we shouldn't take comfort in that. Despite a small rebound this morning, the outlook remains bearish.

Wednesday, September 28, 2011

Opening Bell

Carbon continues to slide and dont seem to care about yesterday rises in equity and oil markets. It is on a good track to re-test this year's lows of 10.25 EUR for Dec11 EUA.










Monday, September 26, 2011

Closing Bell - already a bargain ?

Carbon traded lower, especially towards the end of the session, testing 10.70 EUR - levels which were last seen at the beginning of August. It followed the "ups and downs" in the EURUSD, but didnt take any upside direction from oil, when it recovered from the lows of 78 USD to trade slightly above 80 USD. Initial optimism in the stock market was short-lived as well.












The market continues to be volatile, there can be some rebound and positive days, as the downtrend which we are seeing since 16 September, in the eyes of some trades could have led to a point where the current EUA price is a bargain for them and they will come in and buy it. However until the situation with Greece being given more money or they default is clear - it will be difficult to see any real signs of recovery.