Friday, March 30, 2012

Breakout not sustainable - short opportunity

Carbon did go up touching 7.40sih but this was not sustainable in the short term.















We shorted twice yesterday (intraday): (1) on the break below 7.20 euro with profit target slighlty above 7.00 euro ; (2) break below 7.00 - bought back slighlty above 6.80.















From yesterday and today it seems 6.80 euro is supportive, very likely we will see the market going back to 7.15ish.

Tuesday, March 27, 2012

Bullish

After the EUA Dec12 price fell during the day to as low as 6.62, the market recovered very well towards the close and continues to climb. Most likely these are traders covering their short positions left open from yesterday.















Yesterday's recovery gave a bullish signal to the market. We broke this morning 7.15 which was a resistance in the last few days, and we might well go as high as 7.35 which is the upper band of the bearish tunnel. Break above 7.35 could encourage further rise perhaps even to 7.65.

Wednesday, March 21, 2012

Profit taking and expected correction

Market went down big time last night and stopped at the 7.12 / 7.15 euro level indicated by the Fibonacci retracement levels. This was also our target price for the short position.















Right now market is oscilating around 7.10 euro. Given the big drop yesterday we would expect a short-term correction today, perhaps back even towards 7.60 euro with obstacled around 7.45 euro. To the downside we see a risk towards 6.35 euro.

The biggest disappointment yesterday - for us - was that the meeting of the European Commissions, Council and the Parliament was postponed until 11 April from previously scheduled 26 March.

Tuesday, March 20, 2012

New short opportunity

This morning we had another short signal when the EUA Dec12 price broke below 7.60 euro, form an intraday high of 7.84 euro. Please note this signal would not find a confirmation in the RSI - it is @ 30 , a level which indicates an oversold market - but the decision to sell was / would have been mostly driven by the sentiment and the break to the downside would just confirm the 'feeling'.

Stop-Loss @ 7.80, Target 7.15

Monday, March 19, 2012

Closing the shorts

If you didn't close the short positions last Friday, you should have done it this morning. Gains in German power prompted players to buy emissions too. (15min chart below)

Friday, March 16, 2012

Support broken

Today we had a confirmation on breaking the levels indicated last night and we had two signals to enter short - although the second one must be watched very carefully as it is close to the low of 7.64 which may be (short term) supportive (and perhsps should be an intra-day Profit Take level).















If we look at the prices since the beginning of this year and take 6.35 as min and 9.60 as max we will see that 7.60ish is also a Fibonacci level which can add a mid term support (but we would be more optimistic if it was 8.36 at the beginning of March that could have provided the support).


Thursday, March 15, 2012

Drop and correction

Just like the drop and correction from the first week of March (9.25 - 8.50 - 8.84), in the recent 1.5 weeks the price behaved very similarly (8.84 - 7.65 - 8.25). Yesterday's attack to break above 8.25 - 8.30 and attack 8.39 (next Fibonacci level) failed, but this morning it is continued (although on small volume).

Given the fact that we are approaching the upper band of the channel, in which I see the price moving (also upper Bollinger band) the upside potential can be limited. Althoug to confirm the come back of bears we need new lower low and breaking below 8.00 and 7.93. Please also compare that the volume on red candles is much higher than that on green candles, indicating the upside momentum is slowing down.
















We are now @ 8.11 which is a Fibonacci level. Another Fibonacci level @ 7.93 which gave support this morning.

Even the positive vote (non-legislative) by EU politicians on the ‘set-aside’ didn’t causes any reaction on the market.

Friday, March 9, 2012

You dont jump in front of the high-speed trains

Market broke 8.06 euro (Fibonacci retracement level) - what seemed to be last support or hope for keeping the price above 8.00 figure. Where from here? There seems to be no stopping it now from heading towards 7.58 euro - where it all started just a month ago.



























You dont jump in front of the high-speed trains.

Thursday, March 8, 2012

Bearish end to a moderate day

The UK auction cleared @ 8.55 per EUA when the spot was 8.52 at that time - and this made the day.

One can think that those buyers who needed to buy today got their units on the auction so there were very few reasons left for being bullish. 30 mins before the auction finised, the EUA Dec12 marked the daily high of 8.84 euro and that was it for today.















Closing the gap mentioned in the morning, trading towards Fibonacci retracement at 8.84 euro, sideways moves on light volume after the UK announces the clearing price and ending the day very bearish testing (yet again !) the recent low and support of 8.45 euro and breaking the trendline at the time of writing - this is the day in a nutshell.

Shall we look at the market as per the chart below?















It seems we are moving in a downward channel. It was worth to be long until 8.85 but without a new "high" higher than 8.92 euro, the selling pressure prevailed and the market brokeout of the countertrend towards the lower band of the main downward trend (selling signal in the red circle - probably some stops were triggered here).

Moderate bullish

Market drop was halted at a support of 8.45 euro on Tuesday and the market moved sideways ahead of today events. (1) UK auction of 3.5m EUAs, (2) Greek debt swap agreement.

Having adjusted the trendline with the recent 8.45 euro support (it is slightly less steep now), the prices continue to ride along it. Worth noticing is the gap between Monday closing and Tuesday opening, which the market may want to close.















Given the recent strong support @ 8.45 euro and bullish yesterday closing, we are moderate bulls today with a target for price @ 8.85 - 8.90 euro.

Tuesday, March 6, 2012

Market update - Bearish

Market didnt bounce yesterday off the tradeline on the crossing of 8.85 euro finishing the day with rather negative sentiment.

With weakening EURUSD today, softer German power prices, US market set to open in 'red', European indexes being on average 1.5% down - it all adds to further bearish mood.














As one can see on the chart, the last 4 sessions have drawn a 'head-and-shoulders' formation with the right shoulder closing today. Market is now close to recent low of 8.45 euro.

We see a range for today between 8.36 and 8.71 (ignoring the opening @ 8.80 euro)

Monday, March 5, 2012

Stabilization

As the ITRE approved the proposed amendments into the Energy Efficiency Directive - the market cheered for a moment. With no sudden buying spree on the market, those who went long before the vote started to empty their inventory.

Please compare how the open interest decreased by some 6m units on just after the vote.
End of business on 27 Feb the Dec12 EUA OI was 642,537,000 units on ICE, whereas on 28 Feb it was 636,841,000 units.

Dec12 EUA finished that day slightly above 9.00 euro, after a high of 9.63 and a low of 8.88.

Last week EUA Dec12 traded down to 8.55 - bouncing of the lower Bollinger band and up to 9.22 euro - upper Bollinger band plus a 23.60 Fibonacci retracement resistance level.















Today we do not foresee much upside potential for the prices. We see the EUA Dec12 trading within a range of 8.61 - 8.94