Rebirth of the Capital Legend

Chapter 271 The short sellers’ counterattack!
"However, it is not easy for us to hold on to the main bulls in the market and suppress the pound exchange rate at the 1.5300 mark." Kong Fansheng, manager of Huayin International's Institutional Investment Department, responded, "In the current pound exchange rate market, even though international capital institutions such as Citigroup, Blackstone Group, and Bank of New York Mellon have begun to turn from long to short, the overall market expectations and the dominant direction of the market sentiment are still fully biased towards the long direction.

In addition, we do not have an advantage in terms of capital, and market news cannot stimulate short-selling sentiment in the market for the time being.

Simply by continuously investing funds, the number of short positions can be increased.

I’m afraid it will be difficult to resist the counterattack of the main bulls in the market and the continuous short squeeze! ”

"Of course, it won't just be a counterattack on the market." Su Yi said, "In terms of market news, we must also continue to guide, continue to capture negative news, and use the power of the media to continue to amplify emotions. Only by attacking from multiple aspects of the market, news, and emotions can we truly shake the confidence of the main long institutions in the market, as well as other groups of investors who follow suit or speculate, and truly resist the counterattack of the longs."

"We really need to attack from multiple fronts." Frederick nodded and said, "However, the change from long to short by institutions such as Blackstone Group, Citibank, and Bank of New York Mellon will probably have a great emotional impact on the market without much publicity. At the same time, since these institutions have already entered the market to short, the corresponding short-side analysis reports will probably be released soon. After all... these institutions are very familiar with the method of using news to stimulate emotions as President Su mentioned.

Of course, we have many media outlets and analysis teams under our organization.

Under the publicity of short-selling reports and negative news, efforts will also be intensified to attract more short-selling funds, short-selling investors and speculators.

At the same time, we also hope to shake the confidence of the long positions in the market and intensify the liquidation and covering of long positions by the long investors in the market. "

"Then I'll have to trouble you, Mr. Frederick." Su Yi said with a smile, "In short... our current strategy is to do our best to resist the bulls' counterattack and suppress the pound exchange rate at 1.5300. Only by attracting the main bull institutions in the market to continue to invest funds and thus raise their overall holding costs can we achieve more and greater results in the subsequent forced long strategy."

"Let's start now." Meng Shengfei's face showed excitement.

After saying that, without waiting for Su Yi to issue a new trading order, he turned around and instructed the traders from the Investment Department 1.5300 behind him to continue investing funds in the pound exchange rate market, and against the volatile upward pound exchange rate, to suppress the pound exchange rate back to the point line by continuously adding short orders.

And when he gives corresponding trading strategy instructions to traders.

Kong Fansheng, Su Yi and Frederick also quickly issued corresponding trading instructions to their respective trading teams, asking everyone to continue to invest in short positions to hit the pound exchange rate that was rising again on the market.

When several joint short-selling institutions including Huayi Capital, Huayin International and Aberdeen Asset Management began to increase their short positions in the pound exchange rate market.

The trend of the pound sterling exchange rate also changed instantly.

As the market trading hours went by, the pound exchange rate formed a violent shock pattern around 1.5300 points. At the same time, the market's intraday trading volume also increased significantly compared with the past. It seemed that the main long and short institutions in the market were fighting fiercely for this important pass.

"Compared to yesterday, the volume has almost doubled!"

Seeing that the changes in long and short transaction volumes in the pound exchange rate trading market are almost the same as in the European trading stage, some of the many speculators and investors gathered in the domestic foreign exchange investment forum were surprised.

"The trend of the pound exchange rate is getting more and more weird."

"Looking at the market trend, the short position in the pound exchange rate market is still very strong. I personally think that above the 1.5300 point, the long position may not be able to gain much advantage. Moreover... I heard that Blackstone Group and Citigroup have significantly reduced their long positions in the pound and are turning from long to short."

"It's not just hearsay, it's true."

"Why did these two major institutions suddenly turn from bullish to bearish?"

"I just read the bearish reports on the pound exchange rate from these two institutions. I feel that many of the views in them coincide with the bearish views in the articles that Mr. Su published online before. This indirectly shows that some of Mr. Su's views are indeed correct."

"Well, considering the short-selling reports from Blackstone Group and Citibank, the more I think about it, the more I feel that what Mr. Su said makes sense. The more I think about it, the more I feel that the pound exchange rate cannot hold up at this level."

"Since the Blackstone Group and Citigroup released their bearish reports last night and publicly shorted the pound exchange rate... it is obvious that the short positions in the pound exchange rate market are increasing rapidly, while... the growth rate of long positions has obviously declined."

"From the market perspective, the bears have once again taken the initiative."

“But the net long positions that have not been closed in the market are still very scary.”

"The change in trend will not happen overnight. I think as long as the number of net long positions in the market continues to decrease, it is enough to show that the market trend and expectations are gradually changing."

"The influence of 'Citibank' and 'Blackstone Group' is still huge!"

"Of course. These are the top ten asset management institutions in the world. Once these large institutions clearly take a bearish view, their influence on the market trend cannot be underestimated."

"I originally thought that President Su would not be able to escape unscathed this time, but I didn't expect that... this is a great assist for the main hedge fund 'Hua Yi Cheng Yuan No. 1' headed by President Su!"

"It's not just Citibank and Blackstone Group that are assisting, but also Aberdeen Asset Management, Huayin International and other related institutions."

"Hehe, the shorts in the market are making such a strong counterattack. Maybe... President Su will be able to escape unscathed this time."

"If the bulls fail and a stampede occurs, I'm afraid that Mr. Su will not only be able to escape unscathed, but will also be able to reap a lot of profits from the extreme volatility of the pound exchange rate."

"With so many net long positions in the market, once a stampede occurs, the consequences will be disastrous."

"Given the current number of long and short positions in the pound exchange rate market, whether it is a stampede on the long side or the short side, it will have an extreme impact on the trend of the pound exchange rate."

"Hehe, it feels like market expectations are clearly changing."

"You said that the pound exchange rate market has started to release such a large amount of energy during the Asian session. Could it be that Mr. Su has been secretly increasing his short positions?"

"It's possible. It's entirely possible." "By establishing a short position at this point, I think we've already copied Mr. Su's bottom line, right?"

"From the information released by the market, the holding cost of the large number of short orders held by Mr. Su is definitely below 1.5000 points. Entering the market to short at this time is indeed copying Mr. Su's bottom."

"Anyway, I am firmly bearish on the pound exchange rate."

"It feels like the longer the market trading time goes, the higher Mr. Su's winning rate becomes."

"I never thought that the main short sellers in the market would have such a strong counterattack force. It seems that... God will not let President Su go!"

"At 1.5300, the success rate of shorting is obviously higher than that of longing."

"I have already opened a short position. Hehe... I am just waiting for the pound exchange rate to fall."

"Anyway, this is definitely an unprecedented long-short drama. Such a huge number of long and short positions in the market... This is really the first time I have seen it."

Accompanied by heated discussions among many investors and speculators.

At the same time, it is also accompanied by the further advancement of market trading hours.

The number of unclosed short positions in the market is still increasing, and the number of net long positions is also continuing to decrease sharply.

"Ah...why do I feel like this trend isn't good?"

At 10 o'clock in the morning, in Hong Kong, inside the main fund trading room of Tianhe Capital, Gu Chijiang saw that the pound exchange rate was about to fall below the 1.5300 mark, and the string in his heart instantly tightened again.

"The net long position in the market is decreasing sharply." Xie Hongxing, manager of the trading team, responded, "It seems that since the big institutions such as Blackstone Group and Citigroup issued short reports last night, many long position holders in the market have been covering their positions this morning."

"That's true, what do you think?" Gu Chijiang nodded and asked.

Xie Hongxing thought for a while and said: "Judging from the underlying logic, the expectation of the continued rise of the pound exchange rate still exists. At this time, many of the long orders we increased above 1.5350 points have fallen into a floating loss state. I think since the underlying logic has not changed, and other long main institutions in the market have no signs of large-scale covering positions, then... I judge that the pound exchange rate will fluctuate violently at this position.

After a group of long positions were covered and the main short positions counterattack ended.

The pound sterling exchange rate will definitely rise again.

I think if we want to reduce our positions appropriately and cover some of our long positions, then that should be the right time. Covering and reducing positions now... may be exactly what the main short sellers in the market would like to see most.”

"You're right." Gu Chijiang nodded slightly, and continued to focus on the British pound exchange rate market. After thinking for a while, he said, "In that case, let's wait and see how the British pound exchange rate will change after the European trading session. At the same time, pay special attention to the news from the UK."

"Okay." Xie Hongxing nodded.

Just when the two were considering adjusting their trading strategies based on the current trend of the pound exchange rate.

At the same time, in the trading department of Hong Kong City's 'Huifeng Universal Hedge Fund', fund manager Godfrey was staring at the trend of the pound sterling exchange rate. Although he was a little surprised by the short-selling counterattack, he still did not give up on the trading strategy of continuing to increase long positions and squeeze out the shorts.

"Mr. Godfrey, the pound exchange rate is at 1.5300, and it seems that we can't hold it!"

As Godfrey continued to instruct traders to increase their long positions, Sato, the asset manager of Sanjin Jiayou Investment Company, frowned and reminded, "Once this barrier is broken, the pound exchange rate will fall back to its low point in recent days, which may further encourage the main bears in the market, thus forming a stronger suppression on the pound exchange rate trend."

"Mr. Sato, don't worry." Godfrey said confidently, "According to the information we received, according to the preliminary voting results of the British government agencies, less than 40% of people are in favor of Brexit. Coupled with the continued public operations of the Bank of England, in my opinion... all temporary declines are inducements to sell."

"I fully believe in your information channel advantage," Sato said, "but the counterattack of the short sellers in the market is really unexpected, especially the bearish and short selling behavior of institutions such as Citibank, Blackstone Group, and Bank of New York Mellon, as well as the continued rapid increase in positions by Aberdeen Asset Management... These superficial market information all indicate that the short sellers in the market continue to increase significantly, which is completely different from our previous expectations."

"The shift from long to short positions of these institutions has indeed caused some interference to the short-term trend of the pound exchange rate market." Godfrey said, "But the main positions of institutions such as Pacific Capital, Barclays Bank Foreign Exchange Trading Department, Vanguard Capital, UBS International Capital, Nomura Bank Investment Department, and Goldman Sachs Capital... have already been biased towards the long direction, and are still in a state of continuous increase. Moreover... although the net long position in the market is decreasing, the number of long positions that have not been closed is still increasing.

in my opinion……

This is nothing more than short-selling capital institutions with relatively large floating losses such as Huayi Capital and Aberdeen Asset Management, which are using bearish reports from institutions such as Citigroup, Blackstone Group, and Bank of New York Mellon, and using part of their funds to stimulate the potential short-selling power in the market and guide the market's short-selling sentiment.

In other words, this is just an ineffective counterattack by the short sellers in the market.

As long as the short-term emotional impact is over, the marginal effect of the capital guidance of the main short-selling forces will decrease.

Then, the market trend will soon return to the correct trend and track.

After all, the underlying logic behind the continued appreciation of the pound sterling exchange rate has not changed. The overall strategy of major long-term institutions in the market to squeeze out Chinese capital, explode short positions in the market, and force the main short-term sellers in the market to stop losses and cover their positions has not changed.

On the contrary, the more money the main short-sellers in the market invest, the more difficult it will be to reverse the defeat.”

"Well, I hope so." Sato listened to Godfrey's analysis, thought for a moment, and responded, "Now, our institution's long positions are already quite large, and we can't continue to increase our positions. We just hope that the subsequent trend of the pound exchange rate will be as Mr. Godfrey said, and it will be able to quickly recover the lost ground and set a new high."

"That's for sure," Godfrey said with a smile. "No matter how the major short-selling institutions in the market struggle, they will all be dead when the referendum results come out on June 6."

(End of this chapter)