After today, the payroll report seems like child's play
The thing about tables is, they ALWAYS turn; the same can be said of market trends.
Just as I was preparing to type the sentence, "In my decade+ experience as a commodity broker, I've never seen anything like what we saw in the euro today", a correspondent on CNBC pointed out the March 2009 euro rally. On March 18th of 2009, the Fed announced a round of Quantitative Easing that sent the dollar reeling and the euro soaring. On that particular day, the euro was up about 3.5%. At the peak of trade today, I believe the euro was up about 3.3%. (I'd to the math, but it won't change anything and I've had a long day).
Ironically, we had been looking for the seasonal euro rally for several weeks with a short put strategy, but couldn't justify holding on to the trade into the ECB meeting. Instead, we decided to buy back our puts and sell strangles; a decision that, and the time, was sound in nature; but in hindsight was horrible. We were bullish, why get into a neutral strategy?
Nevertheless, after a lot of intraday shucking and jiving, we appear to have survived. Unfortunately, I'm not sure many traders survived the day. The way the Euro was running high in clips of 10 to 20 pips at a time, is a clear indication of margin call buying and risk manager liquidation of futures accounts. We suspect the margin calls will continue into the night session and tomorrow (and this includes the ES). So look for another round of selling in the ES, and buying in the euro. We've heard rumours of some big hedge fund blow ups, and I can assure you there are enough retail trader casualties to fill a large graveyard.