Philip Chua Business Blog

Posts Tagged ‘short-covering’

Last week we suggested that EUR/USD might base out in the 1.2150/2200 area and then begin a correction higher and that Elliott Wave projection proved spot on. Market short-covering, spurred on by rumors of intervention (actual in the case of the SNB in EUR/CHF), sparked the move higher, but there's more to it than that. Despite the cacophony of doomsayers predicting the demise of the EUR and an end to the global recovery, markets actually got what they have been demanding for the last several weeks: passage of the peripheral-EU rescue package by Germany and others and a commitment to defend the EUR. A sovereign debt default by Greece, Portugal, or Spain has effectively been forestalled for the next several years, buying those nations time to get their fiscal houses in order.

A 2.1 per cent loss for Hong Kong's Hang Seng Index and a sea of red across Europe when markets there opened in the afternoon meant the local market had to withstand another day of selling. The Straits Times Index, which in the middle of the session enjoyed a bit of support from short-covering, fell for the third consecutive session, this time by 40.87 points to 2,860.31, bringing its three-day lo... more

NOT surprisingly, after losing about 70 points in a two-day sell-off on Tuesday and Wednesday, the Straits Times Index yesterday managed a bounce of 26.97 points to 2,959.01, described as 'technical' in some circles, but more likely due to short-covering. The broad market, however, was marginally firm, recording 226 rises versus 139 falls, excluding derivatives. Turnover was a moderate 1.9 billion... more

The greenback extended its recovery this past week, as a confluence of fundamental factors undermined other currencies and supported the USD. However, we continue to believe the primary driver of USD strength at the moment is ongoing USD short-covering from excessive positioning levels. Sovereign credit concerns out of Europe struck…

STI ends 16.67 points lower but off day’s low on short-covering and mixed Europe opening
THE local stock market suffered from a third consecutive Wall Street-triggered sell-off yesterday, this time resulting in 16.67 points being cut off the Straits Times Index at 2,632.31. This brings the index’s three-day losing streak to 85 points or 3.1 per cent.
It did, however, finish off its low of 2,605 y… more

STOCK markets across Asia staged a modest rebound yesterday, as the wobbly Shanghai market regained its footing, after its eye-watering 5.8 per cent plunge on Monday.
But the rebound was largely attributed to short-covering of sell positions made by traders, as regional bourses came under selling pressure.
Traders were also anticipating more volatility in the days ahead, as the global credit crisi… more