Tuesday, August 30, 2011

Marker Commentary

Today seemed like a good day for carbon. Good volume, some volatility, testing certain lows, but still holding on strong. German power and oil trading higher despite quite bad US Consumer confidence data.

Nevertheless carbon is still approaching considerable resistance @ current levels.

We decided to close our last night long position, take the profit out, and look for further confirmations. We would enter long again on the confirmation of the break above 13.55 EUR or turn bearish if it fails to do so.

Monday, August 29, 2011

Closing Bell with a Trade

Carbon was very sluggish for most of the day, however towards the end it recorded certain gains alongside rising oil prices and German power (German Cal 12 Base load closed €58.60). We have entered with a small long position on the break from 13.25 EUR, however need to watch it closely tomorrow.

Midday Market Update

With the UK having a bank holiday today, the carbon market is very quiet, in terms of the volume traded on the exchanges and volatility of the price - both are very low.

Last Friday's speech by Mr Bernanke, who didnt say "no" to more monetary stimulus by the central bank (when he could have said "No!") left the door open for some action in case another recession looms on the horizon. The echo on the market was that Bernanke was confident about the economy, which could have inspired certain traders to start buying again - at least the main indices ended up on a positive note.

Back to carbon market. Friday late afternoon rise in prices could be attributed to the rise in power price, when it leaped from below 57.50 to 58.00 EUR and continued to rise today above 58.30 EUR.

Technically we could see a bottom and a new support forming now around 13.10 EUR on EUA Dec11, however in the thin market like today, where not even 1m units have traded so far, this can be misleading.

Friday, August 26, 2011

Opening Bell

Carbon prices were very choppy yesterday, sliding from the heights above 13.20 down to around 12.85, back to 13.10 back down to 12.85 - as you can see on a small time frame chart.

We couldn't really identify where it was heading as clearly no trend was visible, therefore we refrained from entering into any new positions.

This morning the jumps continue. We would rather wait for some clarification.

All markets today are waiting to hear the Federal Reserve Chairman Ben Bernanke speech at the Kansas City Fed conference in Jackson Hole and speculate about certain aid to be provided to the markets in a form of bond-buying program by the Federal Reserve — commonly referred to as quantitative easing.

Thursday, August 25, 2011

Morning Commentary

Carbon still showed some strength this morning, however it wasn't sustainable. Carbon broke down the trend line and also fell below 13.12/13.10 level where we decided to close our long position and take the small but still a profit.

We shall watch now the market developing further and look out for entry signals.

Elsewhere, power and oil are trading lower compared to yesterday.

Wednesday, August 24, 2011

Midday Market Recap and Trade cnt'd

Morning trading was somewhat volatile with prices ranging between 12.95 and 13.05 EUR.

Break above 13.10 EUR, on the back of rising power prices and continued rise in oil prices, gave us the signal to enter the market, adding to already existing long position. We are long @ average price of 13.00 EUR.

Opening Bell - Rally continues

Carbon extended its rally this morning breaking above 13.00 EUR on Dec11 contract. It won't be necesarily easy for the price to stay there, as we are still faced with certain resistance level here. We shall watch the market developing during the morning trading and update the post.

Tuesday, August 23, 2011

Closing Bell and a Trade

To exit the position earlier was a too hasty decision. Oil very easily recovered, bouncing off the 84.50 USD line and also continental power prices provided further support for carbon.

Seeing the carbon not trading significantly below 12.65 (each time it rather easily picked up - you can see it 3 times on the chart below), it could have indicated strong support there. Also you could see higher "lows" and higher "highs". All this made us re-enter the market on the break from 12.75 EUR.

Market and Trade Update

The initial morning push lost the momentum around midday, when very little trades happened above 12.80 EUR on the Dec11 EUA.

Also, the rise in oil prices experienced a slowdown, so we decided to close our long position taking out the profit.

Opening Bell

Carbon opened stronger this morning, on the back of stronger oil prices (WTI breaking significantly above 85.00 USD).

We are still long from yesterday, however we might consider taking our profit once the price goes above 12.80 EUR. We would than look for new signals.

Monday, August 22, 2011

Closing Bell and Marker Recap

After morning weakness, carbon prices climbed slowly along a trendline as the day passed, breaking through the 12.50 EUR level with further re-testing (very nicely visible on a short-period charts).

We entered the market with long position on the break above 12.50

Opening Bell

Carbon opened lower from where it settled last Friday. The shy breakout from the bearish trendline is faced now with relatively strong resistance level. We can see a Head and Shoulders forming now, which would indicate a decline in carbon prices. Perhaps we will see the price testing the support @ around 12.15 EUR and anything below that could be a signal of entering into bearish market again.

Friday, August 19, 2011

Trade Idea (1h Chart)

Who has the stomach to have a position over the weekend might consider to go long on this 1h trendline breakout. S/L is bellow the support level around 12.05, T/P is around the latest high at 12.85.

Quick Market Update

DAX is making new low, oil is under heavy pressure, carbon is touching the 12.15 support.

Opening Bell

We can add little to our short term view posted in the Closing Bell yesterday. Perhaps it is worth to look at the 4h chart now. We are facing with strong support and resistance levels at the same time, that makes any trade riskier than usual. Perhaps it is better to stay away from the market until the charts show us somewhat more clear direction.

Thursday, August 18, 2011

Closing Bell

We had a big correction today that we think was driven by the sell-off on the equity markets. The DAX plunged almost 6% which is a decline we haven't seen for a while. We moved our stop to the entry after the usual morning spike, so our long position was taken out at 12.60.

We have to admit that we are a bit split as what to do now. Some of us started to short the market at around 12. 45. Some of us think that we should wait for the confirmation of the reversal and see the 12.15 support broken.

It is worth to note that from a technical point of view the carbon remained relatively strong if we compare it to DAX. The DAX broke key support level and is testing now the recent lows.

It is likely that carbon prices will be driven by the sentiment on the equity markets in the coming days. If the DAX makes a new low then the carbon prices could  really turn south. We expect that reaching the 12.00 level could trigger many long stops so we might see some fierce price action if we get there. 

Those of us who haven't turned bearish so far are watching the short term trendline breakout. Though, it would be somewhat nerve wrecking to stay in any position over the weekend, therefore might stay away from trading tomorrow unless we see some obvious price action. 

Opening Bell

We have a correction this morning after a head and shoulder pattern completion. We are watching  now how things develop and will update the post accordingly.

Wednesday, August 17, 2011

Trade Idea (4h Chart)

We had a few inquiries from clients wish to enter into longer term positions regarding trading signals on higher timeframes . We usually trade on the 15 minutes chart, but decided to post trade ideas we see on the 4 hour chart even if we don't trade them.
Now we have a trendline breakout on the 4 hour chart. The S/L should be around 12.00.

Trade Idea: we bought into the breakout at 12.56

Opening Bell

Carbon is still trading in the 12.15-12.45 sideway range. We are looking for two potential long entry signals:
- breakout from this channel breaking the 12.45 level (or the retest of this after a strong breakout) with a S/L at 12.25
- or retesting and bouncing back from the 12.15 support level with a S/L at 12.05

In both cases the P/T is around 13.10 based on the longer timeframe resistance level.

Monday, August 15, 2011

Opening Bell

Carbon opened higher today but quickly retreated and now is retesting the 12.20-12.25 resistance level.

Looking at the bigger picture we also see a trendline resistance. We think that the market could be somewhat volatile in the coming days. Therefore, the risk/reward doesn't seem to be attractive for any trade, so we stay away from the market today. We will see how it develops and will adjust our strategy accordingly.