Rebirth of the Capital Legend

Chapter 279 The net long position increased dramatically again!

"Hey, I told you this was a short trap."

Seeing that the pound sterling exchange rate rebounded sharply after entering the European trading session and returned to the 1.5300 mark, Godfrey chuckled in the trading room of 'Huifeng Huanyu Hedge Fund' in Hong Kong City and said, "The stronger the short-selling counterattack, the more violent the rebound will be. Now that the preliminary voting results for the referendum on the 23rd have come out, everything is in line with expectations. As the market trading time goes on, the main short-selling institutions in the market will have nothing to do but struggle to stop losses, and will no longer have any chance of a strong counterattack."

"Mr. Godfrey's judgment is indeed accurate." Hearing Godfrey's words, Sato of Mitsui Yoshitomo Investment Co., Ltd. said with a smile, "It seems that there will be no surprises in the referendum results on the 23rd. It is estimated that under the influence of this preliminary voting result, several major Wall Street short-selling institutions such as Bank of New York Mellon, Citigroup, and Blackstone Group will not dare to continue to increase their short positions."

"I estimate that these major short-selling institutions are most likely to stop losses and close their positions." Gu Chijiang of Tianhe Capital, who is also linked with Huifeng Huanyu Hedge Fund on the pound exchange rate, also smiled and said, "In terms of news, it is not only the expectations about the referendum result on the 23rd that are rapidly leaning towards the bullish direction, but also the expectations about the subsequent monetary policy of the Bank of England are rapidly leaning towards the bullish direction."

"The involvement of major Wall Street capitals such as Bank of New York Mellon, Citigroup, and Blackstone Group in the pound exchange rate market should not be too deep at present, right?" Gerald, the head of the trading team of Huifeng Global Hedge Fund, thought for a moment and said, "At this time, when market sentiment, expectations, news, and funding are all leaning towards the direction of consistent bullish expectations, it is definitely not too late for these major short capitals to withdraw immediately."

"As long as these major short-selling capitals change their trading strategies and start to stop losses and close their positions..." Sato said, "the short-selling power in the market will inevitably collapse and form a stampede."

"In fact, no matter what trading strategies these major Wall Street short-selling capitals, such as BNY Mellon, Citigroup, and Blackstone Group, choose next, they can't change the trend of the market's increasingly consistent bullish expectations." Godfrey said confidently, "In fact, among the entire Wall Street capital, except for BNY Mellon, Citigroup, Blackstone Group, Aberdeen Asset Management, most other institutions are also bullish."

"Mr. Sato, the net long position in the market has broken through to 90 lots again." During the discussion, Yamamoto Kyuichi, a core trader of Mitsui Yoshitomo Investment Co., Ltd., who had been keeping an eye on the trend of the British pound exchange rate, reported, "And the number of open short positions in the market has dropped by more than 7 lots in the past half hour, which shows that the existing short positions in the market are being covered in large quantities."

"Yeah." Sato nodded slightly, "The market situation is becoming clearer and clearer."

"We hope that before the referendum day on the 23rd, we can take advantage of this wave of changes in market news expectations and push the pound exchange rate above 1.5500 in one fell swoop." Gu Chijiang said with a smile, "Only by quickly pushing the exchange rate above 1.5500 can we cause panic among the short-selling capital led by institutions such as Huayi Capital, Huayin International, and Aberdeen Asset Management, and truly force the main short-selling institutions in the market into a desperate situation."

"I think it shouldn't be a problem to achieve this goal," Godfrey responded.

"Mr. Godfrey, the latest market news from headquarters." Just as Godfrey was thinking about the future trend of the pound exchange rate, Ernest, the head of the market research department, knocked on the door and walked into the trading room, reporting with a smile, "I heard that the Bank of England is planning to formulate a strategy to increase the intensity of open market operations."

"Okay!" Godfrey was in a good mood and smiled, "Then let's get on with it."

Having said that, he quickly gave instructions to Gerald, asking him to direct the trading groups in the trading room to continue to open long positions around 1.5300 points and increase the fund's long positions.

At the same time, when he issued the trading order.

The 'Mitsui Yoshitomo Foreign Exchange Investment Fund' headed by Sato, and the main fund 'Tianhe Capital' headed by Gu Chijiang, also increased their positions simultaneously, forming a continuous short squeeze on the short positions in the market.

And at the same time...

The hedge fund trading department of Pacific Capital, the foreign exchange trading department of BNP Paribas Investment Bank, the foreign exchange trading center of Hashimoto Asset Management... and many other large global asset management institutions are also doing the same operations as institutions such as Huifeng Global Hedge Fund, Mitsui Yoshitomo Investment Fund, and Tianhe Capital.

This is thanks to the increased long positions by a number of institutions.

At 6 p.m. Yanjing time, the pound sterling exchange rate effectively broke through the 1.5300 mark, refreshing the intraday high to around 1.5320, rebounding more than 100 points from the intraday low.

Moreover, due to the induction of news and the stimulation of the actual market trend.

The numerous retail investors and speculators gathered on the foreign exchange investment exchange platform across the entire network have also begun to generally cut their losing intraday short orders and aggressively open long positions.

"This rebound is really fierce, it's easily 100 points."

"The 1.5300 level was lost and regained. The shorts were precisely targeted by the bulls!"

"I originally thought that the fall of the pound below the 1.5300 mark, especially this morning when it rebounded sharply and fell back to around 1.5200, was the beginning of the collapse of the bulls. I didn't expect that... this was actually a huge trap to lure shorts. All my short orders were stopped out during the day. It was a huge loss!"

"After entering the European trading session, the existing short positions in the market have dropped sharply!"

"Otherwise, how can you say it's a short trap?"

"In the past two hours, the pound sterling exchange rate has rebounded so sharply. Is there some news that stimulated it?"

"I heard that the preliminary vote count for the referendum on the 23rd has come out, but this news... has no accurate disclosure channel, it just keeps spreading."

"The preliminary vote count results are out so early?"

"Thursday is the referendum day on the 23rd. It's not too early, is it?"

"Although this news is just a rumor, it is definitely not groundless. After all, a lot of long positions have been added in the past two hours."

"It feels like all the long institutions in the market are increasing their positions."

"If the preliminary vote count shows that the majority of voters support staying in the EU, does that mean the result of Thursday's referendum will not change?"

“It is highly unlikely that there will be any change.”

"If that's the case, then the short-selling institutions in the market that have heavily shorted the pound exchange rate are doomed, right?"

“It’s too early to say it’s over, but it’s definitely not going to be easy to get out.”

"Alas, it seems that the battle over the pound exchange rate is really going to be Mr. Su's 'Waterloo'. I wonder how Mr. Su's main foundation, 'Hua Yi Cheng Yuan No. 1', will deal with this situation?" "It's not just 'Hua Yi Capital' that is involved."

"Yes, according to current market news, the three core short-selling capitals, Huayi Capital, Huayin International, and Aberdeen Asset Management, have a combined short position of more than 70 lots. This scale... already accounts for nearly 22% of the market's existing short positions. Even if we want to stop losses in a concentrated manner, it is quite difficult."

"Don't be bullish when the price goes up and bearish when the price goes down, okay? The current trend of the pound exchange rate has not deviated from the volatile situation. The main short-selling institutions in the market, led by Huayi Capital headed by President Su, do not seem to have been forced into a serious blow by the bulls. It feels that the long and short positions in the market are still undecided. The uncertainty of which direction the pound exchange rate will break through next... is still very high."

"Although the current trend is still volatile, the market's expected trend has changed!"

"Yes, prices reflect expectations. Since expectations are tilted towards the bullish direction, it is highly likely that the price trend will break through to the bullish side."

"I don't think so. I still believe in President Su."

"Didn't they say that the vote counting results in many places in Scotland haven't come out yet? Isn't it a bit too early to draw conclusions now?"

"The market's net long position is approaching 100 million lots again."

“Although it’s not the last moment, the market trend is already clear. Anyway, I don’t dare to hold the short position in my hand anymore, and I have already stopped the loss.”

"Let's see how the U.S. market performs."

"It is estimated that during the U.S. trading phase, the market trend will still maintain a bullish trend."

"Why do I feel that the probability of an unexpected outcome in the referendum on the 23rd is still quite high?"

"The intraday trading in the market, especially the funds that just rebounded, have already made a lot of floating profits, right? Will there be profit-taking and pressure to cover the intraday long positions?"

This is accompanied by heated discussions among retail investors at domestic and foreign online investment exchange forums.

It can be seen that...

The market's bullish and bearish sentiment is indeed tilting towards the bullish direction.

However, in terms of bullish and bearish views, although the bullish view occupies a dominant low position, the bearish view still exists, and there are still many differences in market sentiment.

Similarly, when the pound exchange rate crosses the 1.5300 mark.

As trading time goes on, the upward pressure becomes greater and greater as the rebound continues.

This shows that the inertial thinking of intraday traders in the market still exists. A large group of intraday speculators, with floating profits in hand, generally believe that the pound exchange rate is in a huge range of fluctuations. They do not think that before the referendum results on the 23rd are actually announced, the huge group of main long and short funds deposited in the market will be able to fight to the death and trigger an extreme one-sided market.

Moreover, when the market trading hours shift to the US trading session.

Stimulated by news and sentiment, the pound sterling rebounded strongly in the European session and struggled to rise above 1.5350.

With the full fermentation and reaction of intraday news and emotions.

The trend of the pound sterling exchange rate did not follow the general expectations of many major bullish institutions in the market. With the help of active funds in the US market, it further recovered the 1.5400 point. Instead, it showed a relatively weak trend of rising and falling. At the beginning of the US market, it fell back to around the 1.5300 point mark.

"What's going on? Market news and sentiment are all supportive, so why can't it go up?"

Seeing the trend of the British pound exchange rate, after entering the US trading session, it not only did not continue to rise strongly, but instead showed a trend of rising and falling. At this time, on Wall Street in New York, at the 'Vanguard Capital' Group, 'Amanda' hedge fund trading department, fund manager Cedric frowned obviously and couldn't help complaining.

"The impact of the favorable factors is not enough, and the main short sellers in the market have not covered their positions on a large scale. This has caused the market trend to be difficult to break away from the volatile pattern." Guy, the head of hedge fund asset management business, was quite calm at this time. He smiled and said, "Cedric, don't be so anxious. As long as the market is developing in the direction we have expected, then the final victory will definitely belong to us."

"Mr. Guy..." Just as Guy was comforting Cedric, Bella, a researcher from the Market Information Department, hurriedly reported, "According to the latest news we have obtained, Mr. Humphrey from the Blackstone Group not only did not cover his previous short position, but is continuing to increase his position."

"This guy..." Guy sighed, "Just like Frederick from Aberdeen Asset Management, he's a gambler."

"What about Citibank?" Cedric asked.

Bella responded: "There has been no movement from Citibank yet. They are probably still waiting and watching."

"Could it be that... these institutions think that there will be unexpected circumstances in the referendum result on the 23rd?" Cedric wondered. "That shouldn't be the case. According to our expectations, Humphrey should have covered his position and stopped losses immediately. Could it be that he really wanted to follow Frederick of Aberdeen Asset Management and make an unrealistic gamble in the pound exchange rate market?"

"It's a bit surprising that Citibank didn't close its positions." Guy frowned and said, "Mr. Enoch of Citibank has always been known for his prudent investment style in the foreign exchange market. Why did he insist on shorting this time? What is he worried about?"

"I heard that the current First Minister of Scotland, Salmond, is planning a referendum on Scottish independence."

Just when Guy was frowning and confused, the reminder from trader Caroline suddenly broke through the dark sky like a fierce flame, which shocked Guy's heart and made his confused thoughts suddenly become clear.

"I see." Guy's eyes became sharp again. "I had the honor of meeting Salmond. He is indeed a stubborn old man and difficult to deal with. Judging from this logic... it seems that Enoch of Citibank's concerns do have some truth."

(End of this chapter)