Tuesday, June 5, 2012

One step forward - two steps back

One step forward - two steps back

During the Carbon Expo I got a strong and positive feeling the carbon market is not dead yet. Quite the contrary, its alive and kicking despite the regulatory regime 'they' want to put it into - there is still enought interest from utilities and enough interest from financials to make the market - and on top of it there is still a price.

Very interestingly utilities are price sensitive only in the short term. in the long term they are "policy sensitive". They need to know and be assured of the continuous and stable carbon policy, rather than what the price will be in 2020.

Back to the price and technical patterns.

Well 6.61 wasn't much of a support, on our way down it should have been seen as a Profit Take. 6.40 - previous low didn't help either and carbon traded at around 6.20 euro -  close to the all-time lows. 4 days of consecutive decline - not seen for a long time on carbon - must have led to a correction which brought us where we are now - hoovering around 6.50 euro, while UK traders taking their days off still today and Thursday being a day off for Germany. All in all - carbon still is "imprisoned" in the downward trend. Please refer to my previous post http://tradingroom.vertis.com/2012/05/are-we-heading-towards-historical-low.html

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