T Squared's Market Commentary

[T Squared Trading]

Inner Workings Of Our Strategies

Daily Commentary for August 10th, 2006

Inner Workings Of Our Strategies

Good Wednesday Evening/Thursday Morning,

As the market appears hung over after a few days of economic data and volatility, we wanted to take this opportunity to share a few thoughts with regard to our strategies. A few nights ago we shared with you why it’s so important to manage your risk correctly through our drawdown example. Tonight we want to give you a basic understanding on why drawdowns occur, namely in our strategies.

Our strategies are based on mathematical algorithms that adapt to markets behavior. After a certain behavior is identified, our algorithms are able to recognize market inefficiencies within that behavior and capitalize on them. If this does not make sense, please let us know and we will be happy to explain it further.

A drawdown occurs when the “certain behavior” is not recognized, basically creating a series of continuous market inefficiencies. This is essentially what has happened the past 10 days to our strategies. They have not been able to adapt to this changing environment, and consequently have produced continuous losing trades. Again, if this is at all confusing to you, please let us know.

Technical Indicators

Eur/Usd
Look for the ECB monthly bulletin to provide some potential movement to the Euro. After making up most of the loss from yesterday’s trading, expect another test of the .2900 level if the data is positive and the US trade balance report is negative. Look for the .2825 level as near term support.
Usd/Jpy
The BOJ has started their meeting and will be announcing their rate decision tomorrow night. We will be including our analysis of the possible outcomes in tomorrow’s commentary. Expect a 50 pip range for the next 24 hours prior to tomorrow evening with 115.50 providing the resistance and 115 providing very near term support.
Usd/Chf
Our Swiss strategies took the day off today to lick their wounds. Look for the consumer climate data tonight to be basically a non event in taking this pair out of the .2200-2300 range we have noted as of late.

What Our Strategies Are Telling Us as of 8/9, 9:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Short Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Neutral Bias

No change in our biases since our last report. Participation is still anemic, around 50%. Indecisiveness still rules.


T2

 

[T Squared Trading]

Terrorist Plot, Although Sniffed Out, Brings Volatility to the Market

Daily Commentary for August 11th, 2006

Terrorist Plot, Although Sniffed Out, Brings Volatility to the Market

Good Thursday Evening/Friday Morning,

Investors did some quick portfolio adjustments after an apparent future terrorist attack was foiled. The attack was to occur just days from now, and details included blowing up 10 jets from the UK to the US using liquid explosives. The news caused a flight to safety of Dollar buying and as a result, the Pound, Euro, and Swiss Franc suffered.

It’s amazing to see how weak the Dollar was looking going into today on a technical level, and how quickly this news changed everyone’s views on the greenback. Tomorrow’s US retail sales number will most likely provide the trading direction for the day. Logic says to look for increased strength in the Dollar as a strong report should reflect heat induced buying, i.e. gas, air conditioner, servants to fan you with an ostrich feather, etc.

Our strategies overall did well today, as they seemed to be able to recognize some inefficiencies within the overall trend. Check below for updated biases. Please have a great weekend and enjoy the somewhat cooler temperatures.

Technical Indicators

Eur/Usd
It seems like when there is market moving news like there was this morning, all bets are off in terms of support and resistance levels. The Euro dipped in sympathy to the British Pound, reaching the .2750 level. What is interesting to see is how a pair reacts after reaching the extreme point after a news event. Does it bounce back quickly, or does it stay around the level? In this instance it has essentially remained close to this level, so look for new support around .2730 or so. Look for plenty of data tomorrow morning including EuroZone CPI.
Usd/Jpy
This pair has bounced around in a range a bit more than the 50 pips we mentioned last night, but has settled right back in the 115-115.50 area. All eyes are on the BOJ later tonight as an interest rate decision will be announced. The general notion is that they will leave rates unchanged, but will be making hawkish comments. Look for further strengthening of the Yen against most currencies except for the Dollar, as geopolitical events still take precedence.
Usd/Chf
Our Swiss XL was tired of getting beat up and came out swinging today, capitalizing on the Franc weakness, and is sitting on an open 120 pip profit. We couldn’t live with ourselves if we didn’t point out that the .2200 support level we noted all week withstood another test by Franc lovers and was the bottom level of this 150+ pip spike. Look to see if this pair bases above .2300.

What Our Strategies Are Telling Us as of 8/10, 10:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Long Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

As you can plainly see above, this move by the Dollar has convinced our strategies that there may be some additional strength in the ol’ Dinero. As noted in the opening, our strategies did well today, and are sitting on a nice opened profit. We haven’t seen a net long Dollar bias in about a month, so let’s keep an eye to see how long it lasts. Participation has moved up to around 75%.

T2

 

[T Squared Trading]

Dollar Gets Stronger, But The Move Seems Lazy

As always, we sent this to our email subscribers last evening, but unfortunately we are a bit late with releasing it to the public. Our apologies.

T2

Daily Commentary for August 14th, 2006

Dollar Gets Stronger, But The Move Seems Lazy

Good Sunday Evening/Monday Morning,

As we noted on Friday, strong US consumer data did indeed move the Dollar higher across the board. The move didn’t seem to have much “oomph” to it, as the follow through from the number lacked conviction. The cause of this could be the fact that traders might not really believe the economy is as strong as these numbers lead us to believe. On one side of the coin, the Fed stopped hiking rates, but on the other side, the economy is still apparently white-hot.

The data for the week ahead should shed some additional light on the future direction of many of the Dollar denominated pairs. We have Housing Starts and the Philly Fed data, just to name a few, on the slate for this week. Our strategies spent much of the day Friday long the Dollar causing a few of our profit targets to be hit. While we’re still in the red for the month of August, we feel that a move out of the current overall range could prove to be beneficial for our clients. Please have a profitable week, and thank you for your continued support.

Technical Indicators

Eur/Usd
The .2730 level we noted on Friday did provide some level of support, as it was only breached by about 20 pips, reaching a low of .2709. As of writing this, the Euro is making about a 40 pip comeback. The dose of strong EuroZone data on Friday perhaps kept this pair from dropping further as a result of the strong US data. Look for additional EuroZone data this week to continue to support a ECB rate hike later this year. Keep the .2730 as the support, and .2800 as a near term resistance.

Usd/Jpy
On Friday we wrote, “The general notion is that they will leave rates unchanged, but will be making hawkish comments. Look for further strengthening of the Yen against most currencies except for the Dollar, as geopolitical events still take precedence.” We were 1/3 correct, in that the unchanged rate decision was followed by dovish comments by the BOJ, the Yen did indeed weaken against the Dollar, but also against other currencies as well. The pair was finally able to break out of the 115 price range, but it will need to reach the 117 area to recoup the losses since late July. Look for 116.50 to provide a temporary ceiling and 115.50 for support.

Usd/Chf
This pair not only based above .2300, but reached as high as .2434 on Friday. Our Swiss XL was loving this, and apparently still is, as it’s holding on to a very nice profit. With the absence of news, this pair will continue to be driven by the US data. It’s very hard to say what a support would be, but if we had to make an educated guess, the .2320 level might be it. Use the high on Friday as a near-term top.

What Our Strategies Are Telling Us as of 8/13, 10:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Neutral Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

Our Euro strategies were able to book some nice profits on Friday, but are currently undecided in terms of bias. Our Yen and Swiss strategies are still long the Dollar, as they have not been convinced that the 2 day Dollar strength is over. Participation is still around 75%, so there isn’t a great deal of overall conviction. We have more Euro strategies than Yen and Swiss strategies, so the fact that they are neutral might be telling us something.


T2

 

[T Squared Trading]

Good News Everywhere While the Dollar Consolidates

Daily Commentary for August 15th, 2006

Good News Everywhere While the Dollar Consolidates

Good Monday Evening/Tuesday Morning,

Today’s trading activity was a great example why things are not always as they seem. Let’s look at the movement by the Eur/Usd. If you look at the high/low of the day, you’ll see there was only a 60 pip trading range. It’s only after you look at the actual trading within that range, that you’ll see there was an opportunity to make 180 pips in 3 definitive moves. Obviously, it would be almost impossible to catch every pip in these moves, but this is one of the many reasons why trading the currency market is so exciting. There are always opportunities to make profitable trades….even during a lazy, Monday morning.

It was also a very good day from a geopolitical standpoint. Talks intensified of a possible cease fire in the Middle East. In addition, oil prices are dropping as British Petroleum says they will be quick in fixing the corroded pipelines in Alaska. The market is taking all of this news in stride as the overall ranges were somewhat narrow in most of the majors. Look for US PPI and the Treasury Survey to dictate market movement in the morning.

Technical Indicators

Eur/Usd
The .2700 level was tested again this morning, but withstood any further downward pressure. It will be interesting to see if the 3rd time will be a charm if this area is tested once more. The move lower was odd, simply because the EuroZone data from the early morning was the strongest so far this decade. In our opinion, it would be no surprise at all if we look back a few months from now, and see the Euro much higher. All of this positive data will most likely provide many reasons for further rate hikes by the ECB later this year; the economy is just too strong not to.

Usd/Jpy
The 116.50 resistance was breached by about 20 pips, but is currently settling back down to that level. It looks that the Yen might be a bit oversold in this pair, but with the lack of interest in supporting the Yen, this pair will most likely be driven by US data. Watch for consolidation in the current level of 116.50-116.60 before the next direction is decided.

Usd/Chf
There must be something to that .2434 level we noted last night, as this pair was once again turned away at this exact level today. There were 50 pips to be made twice today in this pair, as it had an “up and down” trading range. The recent Swiss weakness should be coming to an end soon, as Swiss National Bank President Roth provided additional bullish statements on the economy, stating that it wouldn’t be too much of surprise to have a few more rate hikes this year. We still maintain the .2434 ceiling until otherwise noted.

What Our Strategies Are Telling Us as of 8/14, 7:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
Slight $ Short Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

As the market consolidated, our strategies basically did the same. We had a small profit. We booked a nice profit on one of our shorter term Euro strategies on the short side. Participation is still in the 75-80% range, as the movement today didn’t do much to convince our strategies to participate on a larger scale.

T2

 

[T Squared Trading]

Dollar Consolidation Results In Weakness, Is There More To Come?

Daily Commentary for August 16th, 2006

Dollar Consolidation Results In Weakness, Is There More To Come?

Good Tuesday Evening/Wednesday Morning,

Bad things usually occur in threes, and today’s US economic was no exception. The Producer Price Index (PPI), Empire State manufacturing survey, and NAHB (Housing Market Index,) all came in weaker than expected. This somewhat validates the Fed’s decision not to raise interest rates last week, as the economy appears to be cooling off. The fear is that the US CPI data tomorrow morning will provide additional motivation for people to continue to dump Dollars. Other economies, such as the EuroZone and Swiss appear to be strengthening as the US is declining. Most of the major currency pairs are stuck in ranges, so it will be interesting to see if a poor CPI number tomorrow provides the “kick in the pants,” they need to break out.

Geopolitical news continued to be positive as word out of the Middle East is Israel forces are beginning to pull out of Lebanon. As a result, oil dropped to around $73/barrel. Our strategies booked another nice day, as some of our strategies were able to capitalize on the Dollar weakness. In addition, our technical analysis was eerily correct last night. Maybe August will wind up being profitable after all, after a rough start.

Technical Indicators

Eur/Usd
The .2700 level we’ve referred to as near term support was not approached as the Euro was impacted positively by the weak US data. .2800 was touched briefly but failed to breach that level. What was good to see for Euro backers was, as of me writing this, the Euro hasn’t retreated much from the highs of the day. There’s been about a weeks worth of consolidation in the .2700-.2800 level, so an extension of this move wouldn’t be surprising, as consolidation usually leads to defined moves. .2750 should be support to see if this move has any strength to it.


Usd/Jpy
As noted last night, the Yen appeared oversold, but due to the lack of data would be moved by the Dollar. This pair consolidated in the 116.50 area, and dropped down, albeit not as dramatic as the Swiss below, but still a 60 pip Yen gain. It appears to have based in the 116 area for now. The BOJ minutes later this evening should provide little clarity on future rate hikes, so use the same game plan tomorrow….watch the US data. We maintain the 116.50 area as resistance, but are unsure of a support level right now. Our Yen strategies had a mixed bag today in terms of winning trades.

Usd/Chf
With no intention to brag, we have been dead on with our “educated guesses,” with respect to Swiss direction lately. Last night we re-emphasized our faith in the .2434 level as being the top side resistance point. Well, we were about 7 pips off, as .2441 was the high print. We also noted last night essentially that the recent Swiss weakness should be coming to an end soon….this happened very quickly. It’s tough to say if the strength was due to SNB President Roth’s bullish comments, or combination of that and the weak US data. Regardless of the reason, the Swiss strength provided enough reason for our Swiss strategy to take profits. Look for a bottom of .2320 and the same .2434 high.

What Our Strategies Are Telling Us as of 8/15, 7:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Short Bias
Usd/Jpy
Slight $ Short Bias
Usd/Chf
$ Short Bias

As noted in the opening paragraph, the action today made our open profits become closed profits. Apparently our strategies see some potential in the Dollar weakness as participation is around 100% with a strong Dollar short bias. It will be interesting to see if they maintain this bias overnight into the next batch of US data.

T2

 

[T Squared Trading]

Additional Dollar Weakness Did Occur Despite Strong CPI Report

Daily Commentary for August 17th, 2006

Additional Dollar Weakness Did Occur Despite Strong CPI Report

Good Tuesday Evening/Wednesday Morning,

Positive CPI data wasn’t enough to keep the Dollar from dropping for a second straight day. A weak housing report apparently took precedence as the Dollar bears appeared to just be looking for any negative data to drive it lower. Most of the major pairs are still within longer term ranges, and the lack of any major data the remainder of the week could cause some consolidation, as it should be a challenge to move the Dollar any lower. Of course this is what should happen, but always keep on your toes as the market seems to always surprise us when our guard is down. The ever changing environment in the Middle East along with dropping oil prices are also worth keeping an eye on.

Our strategies continue to have a good week. It appears they are finding the current market movement to their liking, as the % of winning trades is fairly high. Please see what our strategies are telling us for further details on the bias. Thank you for your continued support.

Technical Indicators

Eur/Usd
We noted last night that an extension of the Euro strength wouldn’t be surprising. The Euro did indeed gain value against the Dollar, as the US data provided a catalyst for this to occur. The rock solid .2900 is currently about 60 pips away. It’s going to take some work to even get up to that area, as not much is expected by the upcoming EuroZone data the next few days. Look for .2800 as support to see if this move will continue.

Usd/Jpy
Last evening we reported we were unsure of the near term support and we maintain the indecisiveness. This pair seems to still be in consolidation mode. Since the longer duration of consolidation usually leads to a pretty large move, keep a close eye on this pair. We still are looking at topside resistance of 116.50. The BOJ minutes last night showed that 3 of the members wanted to raise rates by 50 bp last month. No Japanese economic numbers due later this evening.

Usd/Chf
The Swiss gained another 100+ pips today as a result of the Dollar weakness. Our Swiss strategies are still holding open short positions. We were incorrect in choosing the bottom of .2320, so we’ll look near today’s low as the new support, .2240. No Swiss economic news is due, so look again for the Dollar lover/haters to dominate the movement.

What Our Strategies Are Telling Us as of 8/16, 7:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Short Bias
Usd/Jpy
$ Short Bias
Usd/Chf
$ Short Bias

Our strategies are maintaining their negative Dollar bias. It was strange to see that some of the strategies hit profit targets, flattened out, then quickly reestablished their respective Dollar short positions. It was almost like they were saying they didn’t think the Dollar weakness is done yet, and they still want to be involved. Participation is still around 100%.

Thank you for your continued support, and keep track of our strategy progress at.

T2

 

[T Squared Trading]

Philly Fed Report Manages To Save The Day For The Dollar

Daily Commentary for August 18th, 2006

Philly Fed Report Manages To Save The Day For The Dollar

Good Thursday Evening/Friday Morning,

The Dollar started the day weaker, but quickly strengthened after a positive manufacturing report. This move might be temporary though, as the week was dominated by negative US economic news. With the absence of any major economic news sans the French Non-Farm Payroll, tomorrow could be a yawner. But again, as noted last night, most exciting things usually happen when we least expect it as traders, so stay somewhat alert.

Our strategies had a nice week of trading, as they seemed to be able to identify the ranges with accuracy. Some of the strategies, namely the Euro long strategies, were not convinced to take profits yet, so that could say something about the overall direction of the market for next week. With that said, have a great weekend, and look for our weekly preview on Sunday evening ET.

Technical Indicators

Eur/Usd
Last night we noted it would take some work to get up back up in the .2900 area, and it was oh so close to reaching it, stopping short at .2885. The EuroZone CPI was a bit weaker than expected, but this most likely was not the cause of the downward movement; the US data was. Look for French Non-Farm Payroll data to be essentially a non-event, as most traders will probably be looking at a nice 3 day weekend with the absence of any major data. Let’s see if the .2800 area provides support, then we will officially be in a tighter range, which will most likely be good for the Euro backers.

Usd/Jpy
Similar to the rest of the major pairs, the Yen lost about 100 pips after starting the morning on s strong note. Overall, the consolidation we noted last evening continues. The Department Store Sales data later this evening should be able to confirm the continued strength in the overall Japanese economy. 116.50 should still provide the resistance. Our Yen strategies are now net long, but it will be interesting to see how long that lasts.

Usd/Chf
We’ve been pretty accurate the past 2 weeks picking tops and bottoms of this pair, as our .2240 level was pretty much near the dead bottom, before the 100 pip move higher. The move was enough to convince our Franc strategies to take profits, and now are Dollar long. No Swiss or US data tomorrow, so an uneventful day might be on the horizon. As of now, the .2240-.2340 range should stay in tact.

What Our Strategies Are Telling Us as of 8/17, 6:30 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
Slight $ Short Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

Our strategies were looking good in terms of paper profit this morning as the Dollar weakness continued. After that, however, it was a mixed bag, as some of them took profits, some held on to their positions as the Dollar strengthened, but a majority of them reversed course and switched to Dollar lovers. As noted above, there is now a net Dollar bias being exhibited. Just a hunch, but it doesn’t seem like a wholehearted bias, as participation has dropped to around 75%.

If you would like to receive our commentary before it is released to the public for free in PDF format, please send us your e-mail, and we will gladly include you on the subscribers list.

T2

 

[T Squared Trading]

Friday’s Market Movement Was As Expected…Silly, News Ahead

Daily Commentary for August 21st, 2006

Friday’s Market Movement Was As Expected…Silly, News Ahead

Good Sunday Evening/Monday Morning,

There are few things that irritate me more than the pointless market activity on Friday. Bad shots on the golf course, being sick, and the Philadelphia Eagles football team, are among them. It was a lazy summer Friday with no noteworthy economic news, but the “powers that be,” managed to whipsaw the market in 30-40 pip violent moves. The moves didn’t affect our mid and longer term strategies, but managed to trick more than a few of our shorter term algorithms.

The upcoming week is dominated by non-US economic news. All 3 of the counter parties we cover have 2-3 major economic numbers. A few things to keep in mind: 1. It’s still the summer, meaning volume might still be light during the next 2 weeks. 2. Overall we’re still range-bound, as some pairs are still in the midst of consolidation. 3. The situation in the Mid-East is still a volatile one, so continue to expect the unexpected. Everyone please enjoy your week, and as always, please use proper risk management and position sizing regardless if you follow our market calls or not.

Technical Indicators

Eur/Usd
Even though there was some mild volatility on Friday, the .2800 provided the support we noted. This is lending to a narrower trading range, thus consolidating, thus looking more and more positive for the Euro on a technical basis. If this doesn’t make sense, please contact us, and we’d be happy to explain it further. Keep the .2800-.2900 within your sites.

Usd/Jpy
As expected, the Department Store Sales were stronger than expected, providing yet another reason why we should expect further rate hike(s) by the BOJ later this year. Similar to the Franc, the Yen will be subject to economic news of its own, as Japanese CPI and trade balance data are to be released this week. 116.50 continues to be the top, and 115.20 is worthy of looking at as a bottom.

Usd/Chf
The .2340 level was unconvincingly breached on Friday by roughly 30 pips, before settling back down to its current rate of .2325. This week could prove to be an important one for the Franc, as there are 3 important pieces of economic data due, the first being producer and import prices Monday morning. Traders seem to think the data will prove to further the bullish trend in the Swiss economy. Keep an eye on the .2240 level we’ve noted quite a few times last week for support.

What Our Strategies Are Telling Us as of 8/20, 6:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
Slight $ Short Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

The biases remained intact from Thursday evening. As noted in the opening paragraph, our shorter terms strategies were faked out a few times in the nonsensical movement on Friday. Participation is still about 75%. It will be interesting to see how long our strategies maintain their net Dollar long bias, especially since there is a lack of any major US data to provide any positive influence to bring the Dollar higher.

Thank you for your continued support, and keep track of our strategy progress.

T2

 

[T Squared Trading]

Old Lessons Revisited

Daily Commentary for August 22nd, 2006

Old Lessons Revisited

Good Monday Evening, Tuesday Morning,

It’s always nice to see how some things I learned when I first started trading always seem to come to the surface. What I’m referring to was the Dollar’s relative weakness against almost all currencies except for the Japanese Yen today. When I was a beginner trading Forex, I remember thinking to myself, self, if the Dollar is weak, it should be weak against every currency. As soon as I saw the Dollar was weak against the Euro or Swiss, I would immediately get short the Usd/Yen, or the Usd/Cad, thinking I was “going to be on the ground floor of a big move.” Of course, this usually resulted in the Dollar actually strengthening, and I would almost always lose money. The lesson I learned was to treat each currency pair independently, and never assume anything.

We’ve fielded quite a few questions lately; how can we be long and short the Dollar in our portfolios at the same time using different strategies. A perfect example was today, when we were net long the Usd/Jpy and long the Eur/Usd. The Eur/Usd long worked out, and we’re still long the Usd/Jpy as the Dollar stayed very strong in this pair. As always, if this doesn’t make sense, please contact us, and we’d be happy to explain it further.

Technical Indicators

Eur/Usd
Euro lovers are getting more excited as consolidation keeps occurring higher and higher. While this pair is currently about 60 pips off of its high of .2930, it still is looking bullish for this pair. Trade balance data can be thanked for providing the push this morning, and look for a bunch of EuroZone data to provide more of this same in the early morning. We maintain .2800 as near term support. To quote the famous movie, resistance could be futile!

Usd/Jpy
As we pointed to in the introduction, the Dollar performed relatively well against the Yen compared to other currencies. After careful examination it appears this was most likely due to horrible convenience store data released last evening. Our low support of 115.20 wasn’t tested, so keep looking at the 116.50 level we constantly are referring to as a ceiling. Supermarket sales data later this evening should be a bit more positive.

Usd/Chf
If you were keying on the strong .2240 we’ve been noting lately, most likely you were stopped out this morning, as this pair managed to fake out quite a few traders, and ironically is currently settled at .2260. The reason for the move had little to do with overall Dollar weakness, but rather strong Producer and Import Prices data released earlier. Look for durable goods data tomorrow to reaffirm strong Swiss economy. Believe it or not, focusing on how long this pair settles at or below the .2240 level is important to watch.

What Our Strategies Are Telling Us as of 8/21, 9:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
Slight $ Short Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Neutral Bias

Our strategies were able to squeak out a small profit overall today. Some of our longer term Euro strategies did well, as are our Yen Strategies. The lone loser was one of our sensitive Franc strategies. Participation has dropped to an anemic 60%, as our strategies are obviously not feeling the current market movement is worthy of activity. Let’s see if the low participation continues.

Thank you for your continued support, and keep track of our strategy progress.

T2

 

[T Squared Trading]

So Close But Yet So Far

Daily Commentary for August 23rd, 2006

So Close But Yet So Far

Good Tuesday Evening, Wednesday Morning,

Where the heck did that come from? That’s the question many Euro lovers were asking themselves after a terrible German Zew report early this morning. For those not familiar with this report, it measures economic sentiment, or how German citizens feel about the current and future state of the economy. Apparently high gas prices and rising interest rates resulted in giving the German’s that “not so fresh feeling,” as it was the lowest reading in over 5 years.

The news was discouraging on a technical basis as well, as a nice base was forming and 1.3000 was well within trader’s crosshairs. It’s not to say that this level can’t be reached, but this move south will make it that much longer. This is yet another example of how anything can happen in this crazy market, as almost every piece of data and chart was pointing to a positive Euro. Our Euro strategies were mixed in their expectations, so they were basically unaffected by this surprise.

Technical Indicators

Eur/Usd
Resistance actually was indeed futile, as the .2930 area was not reached, and this pair dropped to our noted support level of .2800. It currently is relaxing in that area, so let’s see how long it rests before the next move. All might not be lost for the Euro, as the IFO report is due on Thursday. Traders are expecting this report to be much more positive than today’s Zew, so this might be a saving grace. Keep the .2800 support level, and the high yesterday of .2930 as the resistance.

Usd/Jpy
Weak supermarket sales might or might not have been the reason for the Yen weakness, as the writing might have been on the wall according to previous sessions. The worries are that the Japanese economy might not be as strong it appears on the surface. 116.50 provided somewhat of a ceiling today as it was only breached by about 30 pips, and is currently exactly at 116.50. Looking a bit more long term, this pair has plenty of room for Dollar strength as it’s been consolidating the past month or so in a 250-300 pip range. Keep an eye on the CPI report later this week, and notice if near-term consolidation takes place at the current level.

Usd/Chf
Oh boy, that magical .2240 level was indeed the bottom again this morning, as this pair moved up about 120 pips from that area. Today was unfortunate for Swiss backers, as the Trade Balance data wasn’t all that bad, but this pair was much more influenced by the weak European number and the bullish comments by the US Fed. As has been the case recently, note the .2240 support, and a new .2400 near-term resistance.

What Our Strategies Are Telling Us as of 8/22, 6:30 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
Slight $ Long Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Neutral Bias

Our strategies performed relatively well today, as they were able to capitalize on the Dollar strength. As exhibited above, there is now a net Dollar long bias. Participation is still low, around 60%. This could be interpreted that the major pairs “range-boundness” as of late are making some of the strategies hesitant from establishing new positions, or they might be taking a break before an active Fall. In all seriousness, though, as was evident today…stay alert!

Thank you for your continued support, and keep track of our strategy progress at..

T2

 

[T Squared Trading]

Tomorrow Should Provide Some Movement…Maybe?

Daily Commentary for August 24th, 2006

Tomorrow Should Provide Some Movement…Maybe?

Good Wednesday Evening, Thursday Morning,

If you didn’t trade today, you didn’t miss much as the market essentially ran in place. Most of the major pairs currently sit at almost the exact level they were at last evening. This situation should change tomorrow, however, as there is both European & US data due. Expectations are not very high for either set’s of data. The data we’re referring to is the Europeans IFO report which measures the business climate, and the US Durable Goods report which measures such factors as automobiles sales. The consensus is that the Dollar will rally if its numbers are “less bad,” than its European’s counterpart.

As always before a number, we stress to you to not alter your trading strategy just to capitalize on what you expect to happen. Please use proper risk management and position sizing, so you’re able to trade future news events.

Technical Indicators

Eur/Usd
Even though the Euro rose to .2860 during the day, it quickly moved back to .2800 like a little baby running back to its mommy. It’s almost like the .2800 level is a magnet the last few days. The hope is that the data tomorrow will break this pair out of its current sleep. It’s anyone’s guess as to which direction, as our Euro strategies are currently Dollar neutral.

Usd/Jpy
The 116.50 level remained the top, even though this pair is starting to base around that area. This appears to be bullish for the Dollar, as the consolidation keeps occurring higher and higher. Even though this pair will be affected by tomorrow’s US data, look ahead to Thursday evening for the always important Japanese CPI. 116.50 is both the resistance and support…weird isn’t it?

Usd/Chf
Similar to the above pairs we analyze, there was not much learned today based on the market movement. We maintain the .2400 as resistance and the .2240 as support. Employment data tonight could show more about strong the Swiss economy actually is.

What Our Strategies Are Telling Us as of 8/23, 6:30 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Neutral Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

Our participation has increased to about 80%, even though the market essentially is in the same place that it began the day. We had some executions, mostly a mixed bag. The only bias that changed was our Euro strategies turning neutral. This just goes to show how dull this market has been the past few days, as our Euro strategies almost always have a definitive bias.

Thank you for your continued support, and keep track of our strategy progress at:

T2

 

[T Squared Trading]

Market Continues To Be Dull…Is Summer Over Yet

Daily Commentary for August 25th, 2006

Market Continues To Be Dull…Is Summer Over Yet?

Good Thursday Evening, Friday Morning,

Even though there was slight market volatility due to the combination of US and European data, most of the majors returned to there opening price. This scenario has played out a few times during this week. Unfortunately, there is a strong possibility of this occurring next week as well, as the summer comes to an end. This type of market movement has been indicative of previous summers, even though this summer has been unique due to the geopolitical events, i.e. Middle East tension, oil prices, etc.

Be watchful of a tropical storm brewing near Jamaica, as these storms usually provide volatility to the currency market. Please have a nice weekend, and thank you to our clients for their continued questions and comments.

Technical Indicators

Eur/Usd
The Euro showed some strength during the European session this morning after a better than expected IFO index data was released. Corporate bigwigs are finding the current state of the economy is fine, but may be a bit worried about the future. A few hours later, however, the Euro gave up all of its gains, and then some. It’s tough to say the reason for the loss in value today, after a strong morning. Look to see how long this pair stays below the .2800 to gauge actual weakness. Watch for German GDP tomorrow morning.

Usd/Jpy
Care to guess what level the Usd/Jpy is currently settled at? If you guessed 116.50, you are correctomundo. In last night’s commentary we referred to this level as being both the support and resistance; this resulted in receiving some feedback from our clients as to how this was possible. This pair, similar to a rubber band, has stretched as high as 116.80 and as low as 116.10, but consistently has returned to the 116.50 level. Hopefully tonight’s CPI data will be enough to break the rubber band in one direction or the other. Our Yen strategies are showing a slight Dollar long bias as we approach the number.

Usd/Chf
The .2400 resistance level we noted during this week was rock solid on two occasions this past trading session. It was tested once after the European data was released, and then again during the afternoon trading session. It’s currently hovering around that level, so the only way to tell how strong the Dollar really is in this pair is to measure the length of time it stays this high. If this is a confusing concept, please contact us and we’d be happy to assist you further. Also, we erroneously reported last night the Employment data was to be released today (Thursday), when in reality the release is tomorrow (Friday.)

What Our Strategies Are Telling Us as of 8/24, 6:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
Slight $ Short Bias
Usd/Jpy
Slight $ Long Bias
Usd/Chf
$ Short Bias

Our strategies seemed to be a bit confused by the movement today, as there were some stop outs and paper losses. However, some of the losses were offset, as we did have success in some of our shorter term Euro strategies. Participation stayed consistent with most of this week…low: around 70%.

Thank you for your continued support, and keep track of our strategy progress

T2

 

[T Squared Trading]

The Week Ahead Should Mark The End Of The Summer Doldrums

Daily Commentary for August 28th, 2006

The Week Ahead Should Mark The End Of The Summer Doldrums

Good Sunday Evening, Monday Morning,

Wake Up! If the last few weeks of trading have made you sleepy, this upcoming week should provide you with stimulation equivalent to 10 shots of espresso. The excitement this week most likely will be due to a plethora of economic data, and a hurricane approaching the Gulf of Mexico. We have Consumer Confidence and the FOMC minutes released on Tuesday (29th), Chicago PMI and ECB’s interest rate decision on Thursday (31st), and Friday (1st) brings us the always entertaining US Non-Farm Payrolls.

If all of this isn’t enough to provide a high degree of volatility to the markets, Hurricane Ernesto is due to reach landfall either Wednesday or Thursday. As always, the major concern for traders is how the hurricane will affect oil refineries in the Gulf.

The market has been in a tight range the past few weeks. As we have noted in the past, larger, violent moves usually occur after a prolonged amount of consolidation. There is a good chance of this happening as this week unfolds.

Technical Indicators

Eur/Usd
We suggested keeping an eye on the .2800 level to gauge the relative strength or weakness in this pair. Well, this pair spent much of the trading day Thursday, and all day Friday in the mid .2700’s. This likely comes as a disappointing turn of events for Euro bulls, as this pair reached .2940 early last week. The ECB decision on Thursday will be a driving force to the Euro this week. The general consensus is they won’t hike rates, so as usual, Trichet’s accompanying comments will be key. Look for .2700 as near term support.

Usd/Jpy
Hooray! The Usd/Jpy finally broke free of the 116.50 stranglehold, as this pair moved higher as a result of poor Japanese consumer data. On a technical basis, this pair looks extremely Dollar bullish, as 118 is a key level of resistance. Similar to the other majors, there is a bunch of Japanese data this week, including housing starts and industrial production

Usd/Chf
Last week we referred to a certain level in the Usd/Jpy as being both the support and resistance. The same could be said about the .2400 level the Franc currently is settled at. Despite the positive Swiss data the past month, this pair is still dangerously close to passing through this important level, which would be near-term bearish for the Franc. Obviously key on .2400, and we will point out some economic data due later this week tomorrow.

What Our Strategies Are Telling Us as of 8/27, 6:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Neutral Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

Participation is around 80%. Our Yen and Franc strategies appear to be agreeing with the Dollar bullishness exhibited on the charts. Please have a great week.

Thank you for your continued support, and keep track of our strategy progress at:

T2

 

[T Squared Trading]

All Quiet On All Fronts

Daily Commentary for August 29th, 2006

All Quiet On All Fronts

Good Monday Evening, Tuesday Morning,

Last night we told you to wake up, well, in reality you could have slept an extra day, as today was essentially a non-event. The big move was in oil, as Hurricane Ernesto is supposed to hit the east coast of Florida, sparing the Gulf of Mexico. This caused a barrel of oil to drop to around $70, almost $2. This got me to thinking, that an intelligent weather forecasters could probably make a fortune trading oil around hurricane season.

Traders are expecting the upcoming data this week to be relatively Dollar bearish. As usual, what is expected normally doesn’t occur, so do not have any preconceived notions prior to the data. Follow your trading plans and rules.

Technical Indicators

Eur/Usd
The Eur/Usd gravitated back to the .2800 level again today. It’s tough to say whether this is really bullish or not for the Euro. The US data starting tomorrow, will be the key driver of this pair up until Thursday when the ECB’s decision will play the lead role. Our strategies are currently neutral in bias.

Usd/Jpy
This pair is consolidating comfortably above the 117 level, which is of course bullish for the Dollar. Jobless rates and household spending data kick off a busy week of data for the Japanese economy. While we may have to wait for additional data later in the week to define how the economy truly is, tonight’s data might cause some volatility in the Yen. We should be able to see if this rise above 117 is real or not…our strategies currently think that it is. We maintain 118 as the resistance level.

Usd/Chf
Bullish comments by Swiss National Bank President Roth was enough to strengthen the Franc today. It’s currently about 50 pip under the magical .2400 level, and spent most of the day here. The Dollar weakness in this pair wasn’t enough to convince our Swiss strategy to abandon it’s long Dollar bias, so we’re still not convinced yet that the Franc weakness is over. Key on the .2300 level as support. UBS Consumption Indicator will be released tomorrow.

What Our Strategies Are Telling Us as of 8/28, 6:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Neutral Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

As you can plainly see, our biases remain the same from yesterday’s report. The market movement today was enough to trigger some trades in our Euro strategies, but that was about it. Participation remains around 80%

Thank you for your continued support, and keep track of our strategy progress at:

T2

 

[T Squared Trading]

I'm Starting To Hear Some Rumbling

Daily Commentary for August 30th, 2006

I’m Starting To Hear Some Rumbling

Good Tuesday Evening, Wednesday Morning,

I’m starting to hear some rumbling, and it’s not just thunder from the impending tropical storm. Even though there is not much change in terms of prices from last night compared to tonight, the market movement is starting to become a bit more volatile. As we note in our strategy section, participation is around 100%, so obviously their microchip brains see some opportunities to make some money in the next few days.

The positive reaction by traders to the FOMC minutes this morning was quickly erased after the consumer confidence data came in a bit weaker than expected. There is much concern that the US economy may be losing its mojo. Housing is slumping (I guess that’s what happens when you raise rates 18 straight times), and the fear is that consumers will slow their overall spending. Look for GDP data tomorrow as an appetizer for the main dishes on Thursday and Friday.

Technical Indicators

Eur/Usd
The Euro showed resiliency most likely due to the weaker US consumption data, bouncing off .2750, again. We’re still within a 100 pip range since early last week. Even though our Euro strategies are decidedly short the Dollar, technically its not as convincing. Obviously they see something in the movement of this pair that is not so evident according to the charts. The stage is basically set for the ECB to make some hawkish comments on Thursday, to propel this pair to the magical .3000 level. Whether it will occur or not, is the question. You might as well use that .2750 as the near term support and .2900 as the continued resistance.

Usd/Jpy
The Yen gained on the Dollar today, but it wasn’t enough to convince our strategies to switch bias. Technically, it’s still anyone’s guess as to the next direction. As we usually mention, keep an eye on how long this pair stays below the current 117 level to gauge weakness. Tonight’s retail sales are supposed to be positive, but will most likely have an impact on this pair if they are negative.

Usd/Chf
This pair is definitely showing a Franc long bias now. Well below the .2400 level, it’s now approaching our friend from 2 weeks ago….2240. Our Swiss strategies have been stopped out a few times the last week from long positions, so apparently they are trying the short side now. Even though this morning’s Consumption Indicator was a bit weak, the Franc still rallied. Look for positive data from tomorrow’s Leading Indicator report. .2240 support is back in effect.

What Our Strategies Are Telling Us as of 8/29, 8:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Short Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Short Bias

Participation has boomed to almost 100% today. Our strategies are showing a net Dollar short bias. The lone dissenter is our Yen strategies, which are still fond of the Buck. Most likely participation will stay high as there should be plenty of money making opportunities the next few days.

Thank you for your continued support, and keep track of our strategy progress at:

T2

 

[T Squared Trading]

Hopefully Tomorrow's ECB Decision Packs A Bigger Punch Thank Ernesto

Daily Commentary for August 31st, 2006

Hopefully Tomorrow’s ECB Decision Packs A Bigger Punch Than Ernesto

Good Wednesday Evening, Thursday Morning,

Tropical Storm Ernesto proved to be not much more than a typical Florida rainstorm. Unfortunately the same can’t be said for Hurricane John, which is currently ravaging Mexico as a Category 4 storm. It’s not expected to affect the US, so don’t expect much influence on the major pairs.
The real news of the day is the continued consolidation in all the majors in anticipation of our old friend Trichet’s comments tomorrow. As we always note, consolidation is usually a precursor to a pretty violent move. We really haven’t had a large move in a few months, so it wouldn’t surprise us one bit to see this occur either today or tomorrow.

Technical Indicators

Eur/Usd
As mentioned above, the ECB decision tomorrow will be the primary driver in this pair. While the speculation is that they won’t raise rates now, they are expected to raise them once again in the fall. Trichet’s comments on the state of the economy, as always, will be what traders key on. EuroZone officials have been mum the past month on the state of inflation, but the assumption is that inflation still exists. .2750-.2900 is still the range to key on.

Usd/Jpy
Last night we noted that the only way the Japanese Retail Data would have any affect, would be if it was weak. This is what occurred, sending this pair higher. 116.50 was the magnet last week, and 117 seems to be the magnet so far this week. Housing starts and business confidence data is due later this evening. The data is expected to be weak, so let’s see if this pair is able to base higher. Our strategies are net long the Dollar in this pair.

Usd/Chf
Not much change in the Swiss strength today. A tiny bit of consolidation is occurring before the next move. Again, technically the Dollar looks very week in this pair, and the strong Swiss economic data is helping things along. The .2240 level of support is still on our radar. There is no data tomorrow, so most likely this pair will be affected by the ECB comments.

What Our Strategies Are Telling Us as of 8/30, 6:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Short Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Short Bias

Overall biases have stayed the same. With the exception of a tidy profit in a shorter term Euro strategy overnight, not much in terms of closed trades. Participation still hovers around 100%. It will be interesting to see if the Euro strategies stay Dollar short going into the ECB number tomorrow morning.

Thank you for your continued support, and keep track of our strategy progress at:

T2

 

[T Squared Trading]

Traders Six Favorite Letters: N-F-P, I-S-M

Daily Commentary for September 1st, 2006

Traders Six Favorite Letters: N-F-P, I-S-M

Good Thursday Evening, Friday Morning,

Tomorrow brings the two most popular market moving US economic numbers: The ISM Manufacturing Index and The Non-Farm Payrolls. It’s just a hunch, but there’s a good chance that there might not be that large of an impact in terms of major market movement this time around. The NFP is supposed to come in weaker than expected, so logic would say the only chance of some major volatility would be if the number is actually stronger than the 120k estimate.

Our strategies are finishing the week off on a high note, after some pretty sluggish days. As we always stress before the Non-Farm-Payroll release, please don’t deviate from your trading plan. Don’t try to make up for a few bad months, by going crazy on one day. Even if it works, it will give you a false sense that you can do this every time, and believe me…you can’t. Enjoy your weekend, and to our US clients, enjoy your holiday.

Technical Indicators

Eur/Usd
It looked as if this pair had a good head of steam after Trichet’s “vigilant,” comments. This momentum was quickly negated as the US post manufacturing data came in much stronger than expected. It’s pretty interesting to see that a pretty minor US number, could trump somewhat bullish comments by the ECB! .2750-.2900 remains the zone until further noted.

Usd/Jpy
Housing Starts and Industrial Production were weak, as we expected in last evenings commentary. This pair seems to be building up momentum for a strong Dollar move against a continuously weakening Yen. Of course all bets are off leading up to the US NFP tomorrow. 117 continues to be the support and 118 the resistance.

Usd/Chf
As we noted last night, .2240 was indeed the support level. We’ve noted this level a few times the past 2-3 weeks, and almost every time it has been strong. Not only does it provide support, but it essentially acts as a springboard, as this pair continues to bounce off this level and move north 100+ pip…it’s uncanny! Just as this pair was starting to appear Franc bearish, this move occurs. Our strategies are now net short the Swiss in this pair, so keep the, you guessed it, .2240 as the near-term support.

What Our Strategies Are Telling Us as of 8/31, 6:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Long Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Long Bias

A few of our Swiss and Euro strategies were able to take some profits in the brief Dollar weakness following the ECB comments this morning. The quick reversal after the positive US post manufacturing data into Dollar strength was enough to give our strategies an overall net Dollar long bias. Let’s see if this is maintained before or after the NFP tomorrow.

Thank you for your continued support, and keep track of our strategy progress at:

T2

 

[T Squared Trading]

Autumn Brings Football, Kids Back To School, And Hopefully Profits

Daily Commentary for September 4th, 2006

Autumn Brings Football, Kids Back To School, And Hopefully Profits

Good Sunday Evening, Monday Morning,

Friday’s market movement was indicative of the overall malaise enveloping trading the past few weeks. What appeared to be a rather decisive move following the Non-Farm Payroll, turned out to be another disappointing “fake-out,” as the move was quickly retraced following the disappointing ISM number. We still have a mixed bag as far as what economy/currency is strong, and which is weak. What we do know is the EuroZone and Swiss economy is performing very nicely, while the US and Japanese data is showing a bit of weakening. Whether the currency pairs will react accordingly, is obviously the $64,000 question.

As the title of this commentary states, it is indeed time for Autumn in the US. This marks the start of every gambler’s favorite sport, football. It also means the children go back to school giving parent’s much needed peace and quiet. More importantly, historically speaking, it usually marks a period of profitable trading in our strategies. We’ll be posting historical monthly profits and losses later this week on the website, so you’ll be able to get a better idea of how our strategies make money in clusters. You’ll see that summers have been, for the majority of time, rather slow in terms of making profitable trades.

Technical Indicators

Eur/Usd
Retail Sales and PPI are the key EuroZone data releases this week. Similar to the other majors, this pair is still mired in its respective trading range, .2750-.2900. Until this pair stays above the .2900 level for any extended period of time, or below the .2800 level, we’re going to continue to stay range-bound. The current sentiment is Euro bullish, so the chances are we’ll see the .2900 scenario sooner rather than later.

Usd/Jpy
This week, the Bank of Japan will release their monthly report, so look for that to be a sign if the Japanese is indeed as weak as last week’s reports exhibited. Obviously, the powers that be are doing their best to keep this pair in the 117-117.50 range. This ever increasing tight consolidation lends itself to an even more violent move, than exhibited last week. Our Yen strategies maintain their bearish bias.

Usd/Chf
Our Swiss strategies took profits in the Dollar strength, and are now neutral in bias. Now that most of the US data is out of the way, this pair might be dominated by the fact that the Swiss Purchasing Manager’s index, released Friday was so strong. This strong data has put the notion into many traders’ heads that we could be seeing a 50 basis point increase by the SNB later this month. .2240-.2400 are important levels to watch.

What Our Strategies Are Telling Us as of 9/3, 5:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Short Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Neutral Bias

The movement post NFP and ISM caused a major change in bias, as our strategies were net Dollar long heading into the numbers. Participation has dropped to around 70%, from the near 100% number heading into the data. Most likely, the participation will remain low leading into tomorrows US holiday, but we look for increased participation beginning mid-week.

Thank you for your continued support, and keep track of our strategy progress at:

T2

 

[T Squared Trading]

Yen Gains Some Temporary Strength & R.I.P. Croc Hunter

Daily Commentary for September 5th, 2006

Yen Gains Some Temporary Strength & R.I.P. Croc Hunter

Good Monday Evening, Tuesday Morning,

We hope all of our US clients enjoyed their Labor Day holiday. Unfortunately, yours truly didn’t do much in terms of barbequing, playing horseshoes, etc. I spent the day “Laboring.” As depressing as that sounds, it was even more depressing for Usd/Jpy bulls after some unexpected Japanese data helped the Yen rally against the buck. We examine the move more in depth in our Technical Indicators section.

In unrelated trading news, our sympathies to our Australian clients, as they lost a dynamic individual in the “Croc Hunter,” Steve Irwin. Ironically enough Irwin was killed by a stingray off the coast of Queensland while filming a documentary on dangerous aquatic animals…you just never know!

Technical Indicators

Eur/Usd
Inch by inch, life’s a cinch, yard by yard, life is hard. It appears that the Euro is following that motto, as it spent today creeping closer to the .2900 level and beyond. As of writing this commentary, this pair is settling comfortably above the .2850 level. Look for EuroZone PMI data tomorrow morning. Similar to the suggestions in the Yen below, let’s watch carefully to see how long this pair stays above the .2850-.2900 area.

Usd/Jpy
This pair was the season’s first big mover, as the Yen gained about 100 pips overnight against the Dollar. The move was due primarily to bullish second quarter capital spending data. This data shows that businesses are having excess profits to invest back into the company. This is a positive sign for the Japanese economy, but only will be validated if the consumer has the same type of excess, so they can essentially invest some of their own capital (i.e. spend money.) Let’s see how long this pair stays in the 116-116.50 area before we make up our minds as to the next direction.

Usd/Chf
This pair barely budged today as there were no driving factors from either Swiss or US data. The same can not be said about tomorrow, as Swiss CPI is due in the morning, and is expected to be a bullish bit of data. Look for the .2240 support level to possibly be tested.

What Our Strategies Are Telling Us as of 9/4, 6:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Short Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Neutral Bias

Other than one of our Yen strategies becoming a victim of a stop out during the Dollar weakness, there was not much of a change in positioning. Participation remains in the 70-80% range. As we noted in the opening paragraph, market conditions are likely to become a bit more volatile as traders are beginning to trickle in from their summer vacation.

Thank you for your continued support, and keep track of our strategy progress at:

T2

 

[T Squared Trading]

Japanese Baby Helping Economy

Daily Commentary for September 6th, 2006

Japanese Baby Helping Economy?

Good Tuesday Evening, Wednesday Morning,

Apparently many traders took an extra vacation day, as volatility was relatively low today. After a few weak days, the Dollar managed to gain some strength. Frankly, there was no explanation for the Dollar move other than we’re still within a relatively tight range, and it was time for the inevitable rebound. Oil continues to drop ($68.70) which is good for us Premium gas purchasers, and the price of Gold is rising ($639.20), which is good for the value of my Grandmother’s expensive jewelry collection.

News out of Tokyo is Princess Kiko is due to have a child tomorrow. Conservatives are hoping for a boy, as it would mark the first time in over 40 years there would be a male heir for the Chrysanthemum Throne. A female baby would present problems as the succession laws perhaps would need to be changed to pave way for a “feminine touch,” to the male dominated throne. Regardless of the sex of the child, all the baby talk is causing infant related stocks to rise, and hopes that a declining birthrate will be a thing of the past. To quote the late Marvin Gaye, “Let’s Get It On,” citizens of Japan!

Technical Indicators

Eur/Usd
EuroZone PMI data was strong, as a result the Euro weakened. Yes, that doesn’t make sense, but in a range bound market, unfortunately it’s common place. Look for some additional minor EuroZone data tomorrow morning. .2775-.2900 is a decent range for now.

Usd/Jpy
We had some questions in regards to last night’s commentary why it was important to see if this pair stayed in the 116-116.50 in order to see if the current move south was real. If the move out of the 116-117.50 range was in fact legit, it would not keep spending time in the above mentioned area, it would be staying in the 115’s. Our strategies apparently agree with us, as they maintain their Dollar long bias.

Usd/Chf
Swiss CPI was inline with consensus estimates, but that wasn’t enough to keep the recent Franc strength flowing. Range-bound trading is still evident. With the absence of any major data tomorrow, look for these pointless moves to continue. .2240-.2400 is our range.

What Our Strategies Are Telling Us as of 9/5, 7:00 PM ET:
We have 10 strategies that we will report to our clients on a daily basis in regards to their respective dollar bias. Our intent is not to provide investment advice to those who read this following section. We are merely reporting the biases that our strategies are exhibiting.

Eur/Usd
$ Neutral Bias
Usd/Jpy
$ Long Bias
Usd/Chf
$ Neutral Bias

Not much in terms of executions today. Our Usd/Chf strategies have established a bias and our Yen strategies maintain their belief that the Dollar will rise again to last weeks levels. Our Euro strategies are confused again, as some are long and some are short. Participation is still around 70%

Thank you for your continued support, and keep track of our strategy progress at:

T2