At the Open. What was that?

09:20CET

Good morning everyone, hope you are fine. Was it a repetition of the flash crash seen on May 6? Or was it intervention? The latter has been denied by the touted officials (BoJ and MoF, of course), therefore this must've been some little machines conspiring together to crash the market. Indeed, prices went from 1.3975 to 1,3895 in EUR/USD, from 1.6070 to 1.5985 in Cable, from 0.9820 to 0.9880 in the Swissy and (drumbeats....) from 80.10 to 81.50 in USD/JPY! The third, and most likely version of what happened refers to an option-protected barrier @ 80 by China, who would make a killing if that level is not breached, therefore using everything they can to protect the level.

Be it China, the outer space or a monkey computer, the fact is that this start of the week tells us the way things could go till Friday, i.e., very nervous markets all over the place. Let's not forget we have Fed's QE2 later in the week and the usual NFP of the first Friday f the month to conclude it; a very volatile week ahead of us, surely.

Last on this post, the usual recap of how retail losers are positioning at this hour....not nice to see so many USD longs around, but who knows, things ca changed rapidly in a nervous market. Besides, Monday is usually a USD-buying day......

Nov 1, 2010 09:20 GMT+0100
READING: %LONG/%SHORT

   1. AUD/USD
      45.86% 54.14%
   2. EUR/CHF
      57.14% 42.86%
   3. EUR/GBP
      49.01% 50.99%
   4. EUR/JPY
      60.75% 39.25%
   5. EUR/USD
      38.73% 61.27%
   6. GBP/JPY
      66.41% 33.59%
   7. GBP/USD
      33.73% 66.27%
   8. USD/CAD
      60.33% 39.67%
   9. USD/CHF
      74.66% 25.34%
  10. USD/JPY
      84.05% 15.95%

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