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.