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.

Opening Bell - further pressure

Carbon is still hoovering around 11.00 EUR for Dec11 contract, however continued sell-off accross other markets, especially oil, plus weakening Euro and softer power prices send bearish signals.

Friday, September 23, 2011

Opening Bell

Market opened flat to where it settled last night. We tried to rebound from the heavy selling last night (traded towards 11.44 EUR) - as equities, EURUSD and oil are also cautiously trying to bounce off the lows. However the upside is somewhat limited and we dont see much change in the overall big picture.

Thursday, September 22, 2011

The Big Picture

We think it might be useful to take a look at now the broader markets that could have a significant impact on the carbon prices in the coming days.

The FED statement resulted in a sharp fall of the stock indices yesterday. FED said they would replace short-term debt in the central bank’s portfolio with longer-term Treasury bonds in an attempt to further cut borrowing costs. This won’t result in much excess liquidity that the markets hoped for. The FED also said that it was acting in view of “significant downside risks to the economic outlook, including strains in global financial markets.”
The SP500 broke down a trendline support after forming a double top. What is interesting is that this breakdown happened already before the FED statement. We are at a longer term trendline support now. Should this fall the 1130 and 1080 supports will be important levels. It is not unlikely that we would see new lows in the coming days or weeks.

Due to the European problems the DAX has been anyway weaker for a while now relative to the US indices. It has also broken down the trendline support yesterday. The next important level is at around 5000. Breaking this resistance could result in further sharp decline.

Oil has been very volatile since the beginning of August hence very difficult to trade. It is exhibiting also a sort of trendline support breakdown despite the fact that we saw three consecutive sharp declines in crude inventories.

There is no doubt that mainly the European news drive the markets, therefore it is important to watch the EURUSD price development. We saw here a more obvious trendline support breakdown. Now the 1.35 low is the critical support level. We had a few lower highs in a row that suggest that this support level might not be very strong.

The overall picture seems to be pretty bearish which is not a good news for carbon. We are at a critical support level now at around 11.60. If we break below this level we might retest the low around 10.00. 

Summing all this up we don’t think it is wise to take any long position in these instruments now. We watch only short signals now to enter the markets.

Wednesday, September 21, 2011

Closing Bell

Fairly uneventful day on the carbon market. We didnt break the 12.00 EUR but on the other hand the 11.80 EUR proved to be a support for now.

Opening Bell

Market opened strong @ 12.00 but very quickly went down and currently oscilating around 11.85. A failure to break above 12.00 EUR could signal that we have here a "Head and Shoulder" formation - with a lower right shoulder - which could indicate further bearish direction. Let's wait and see.

Tuesday, September 20, 2011

Closing Bell

Carbon was fairly stable today; trading between 11.70-11.80 during most of the session. Breakout above 11.85 at the end of the day, created a long opportunity (with a StopLoss @ 11.65) for those who like to trade on the small timeframe chart.

Opening Bell

Carbon trades above 11.80 EUR, after dipping in the early morning to 11.68 EUR. This can potentially be the test of 11.80 support / resistance. At the moment we need to see which way the price will move from 11.80 EUR.

Monday, September 19, 2011

Market Update

We were stopped out today on the Friday trade. Carbon alongside other markets showed more weakness than strenght today.

Thursday, September 15, 2011

Opening Bell

The 4h long breakout was confirmed yesterday by breaking the 12.15 level. It seems to be a long opportunity with a S/L at 11.45 or at 11.70.

As usual we were looking for entry signal on a shorter timeframe and entered long at 12.25 with a stop at 12.00.

Wednesday, September 14, 2011

Market Update

Welcome back.

After weak opening on Monday carbon recovered quite well and climbed above 12.00 EUR during quite volatile two sessions (Monday and Tuesday).

Few mixed signals and information influenced the market. One of the reported events was an accident in a nuclear facility in France, which was read by the market as a leakage in a nuclear power plant and this sent the power and carbon price higher. It turned out no nuclear power plant was affected but carbon seemed to find a support at 11.80 and traded above that level since than.

The bounce from 11.60 EUR and further support from 11.80 made us close our shorts which we had since Friday, as no "armageddon" came to the market (yet). There seem to be a breakout from the downtrend - somethign which we saw at the beginning of last week also (bounce back from 12.20 and trading up to 12.50 before further slip - compare with the chart).

12.15 EUR for carbon still seem to be a resistance at this point.

Any views and comments are most welcome.

Friday, September 9, 2011

Closing Bell

Weakness accross equities and especially EURUSD pair contributed to today's losses on the carbon market (this eventually means that Euro assets are losing in value).

The very important events today on the markets were:
1. It was reported that ECB Executive Board Member Jurgen Stark has stepped down. The rumours say it was in connection with a disagreement over bond-purchase programme.
2. Germany is preparing to shield its banks from a Greek default.
3. Angela Merkel said it may be necessary to change the EU treaty to preserve Euro and the EU should not be afraid to do that.

This all led to Euro losing value to USD and any events during the weekend that may further undermine the trust in Euro-zone, will weight on how the markets open on Monday.

We stay short on carbon.

Opening Bell + Trade

Market opened lower and gives signs of weakness. Break below 12.15 EUR gave us entry signal to shorten the market.

Thursday, September 8, 2011

Opening Bell

All this week carbon is trading rangebound. It tested and bounced back off the 12.15 EUR levels but seems to be capped with 12.50 EUR resistance.

No strong enough signals for us to enter the market.

Tuesday, September 6, 2011

Opening Bell

Most of the yesterday session, carbon was trading sideways without any excitement and proved to be much stronger than oil and equity markets. In this case, we decided to close our short position and look out for new signals.

This week there are few EUA auctions (by Gremany, Greece and the UK). It has been a while since the last auctions took place - so the outcome in terms of price and submitted volume (in bids) may shed a new light on the near term price development.

Monday, September 5, 2011

Opening Bell

Friday was relatively slow day on carbon market. In the first half of the day, the price barely changed. It seemed like most of the traders were waiting for US job and payroll data. And they came rather bad; however markets didn’t seem to pay any attention to them.

Today is the Labor Day Holiday in the US - which should result in lower liquidity on the markets. Difficult to judge if those in Europe will take advantage of it and which way the markets would go.

We have shortened the market on the break below 12.60 EUR (12.59 EUR) with a SL at 13.00 EUR.

Friday, September 2, 2011

Trade Update

We have added yesterday to our short position, and moved our SL to the average entry - to remove the risk of the increased position. The SL was @ 12.82. The afternoon rally up, triggered the SL and we were closed out flat.

We were too agreesive in both (1) adding to the short, (2) setting the SL very tight.

Thursday, September 1, 2011

Opening Bell

Yesterday we saw a breakout and a new higher high, however this proved to be a false breakout. Quite quickly there was a correction and a trend break-down @ around 13.20 EUR with further confirmation of breaking below 13.10 EUR.

We have entered with short position and a S/L @ 13.15 EUR, trading the break below 13.10 EUR.