Rebirth of the Capital Legend

Chapter 282 The long and short stalemate stage!

"A plan to target short-selling capital on Wall Street?" Gu Chijiang was a little shocked when he heard Godfrey's words. He said in disbelief, "Is the Bank of England really going to take action personally?"

"Is this news...true or false?"

While Gu Chijiang was shocked, Sato from Mitsui Yoshitomo Investment Company was also a little shocked.

Same as 'Tianhe Capital'.

Due to the continuous increase in long positions, the large-scale long positions held by the 'Mitsui Yoshitomo Foreign Exchange Investment Hedge Main Fund' product managed by Sato at this time also fell into a state of overall floating losses. Although his mentality seemed to be slightly more stable than Gu Chijiang, the inner pressure was also very great.

After all, this round of heavy speculation on the pound exchange rate.

He went against all odds and took a gamble that risked his career.

Today's market trend is obviously lower than expected, and the financial giants on Wall Street have all begun to turn from long to short. It is hard not to feel heavy pressure.

"Of course it's true." Godfrey smiled and said, "Whether from the perspective of national interests or the monetary policy direction of the Bank of England, in theory, the Bank of England will not allow the pound exchange rate to continue to fall sharply. What's more... except for Goldman Sachs, Bank of New York Mellon, Citibank, and Blackstone Group, a few Wall Street capitals, the vast majority of major institutions in the world still generally tend to be bullish on the trend of the pound exchange rate.

At the same time, according to the preliminary vote counting results of the referendum on the 23rd in the market.

The referendum result on the 23rd is likely to be in favor of continuing to stay in the EU.

Therefore, apart from the fluctuation in market sentiment caused by Goldman Sachs' sudden change from bullish to bearish, there is no problem with the entire fundamentals, news, and capital orientation of the pound exchange rate market, and there is no change in the underlying logic of going long.

We are the fund manager of the main institution.

I think that in terms of market thinking and operational strategies, we should try to eliminate the interference of short-term emotions and see the essence through phenomena. "

"Mr. Godfrey is right." After hearing what Godfrey said, Gu Chijiang hurriedly responded with a smile.

The long position in the pound exchange rate held by the hedge fund "Huifeng Huanyu" is much larger than that of "Tianhe Capital" which he is in charge of.

Since Godfrey could remain so calm and composed, he certainly shouldn't show any panic.

"If you think about it carefully, the logic Mr. Godfrey said is indeed correct." Sato also responded, "It's just that Goldman Sachs' sudden change from long to short still caused a great shock to the market, causing a lot of long funds in the market to cover their positions, and also caused a lot of short funds outside the market to follow suit.

If the Bank of England does not increase its intervention in the foreign exchange market.

It is estimated that before the referendum result is announced on the 23rd, the pound exchange rate will be relatively under pressure. "

"I don't think so." Godfrey smiled and said, "First of all, the one that turned from long to short was only a major hedge fund under the Goldman Sachs Group, not the entire Goldman Sachs investment bank. Also... since the news came out last night, the pound exchange rate has retreated from around 1.5300 points to around 1.5170 points now. It can be said that the market impact caused by this news has been reflected in the market trend.

Subsequently, as the marginal impact of the news gradually decreased, many intraday trades also took profits and stopped losses.

I think that after everyone calms down, the bullish forces on the market will continue to prevail, and there is also a clear demand for a rebound in the pound exchange rate.

not to mention……

As far as I know, major long institutions in the market such as Pacific Capital, UBS International and Vanguard Capital are still continuing to increase their long positions.

In addition, the current ratio of long and short positions in the market still shows a net long position.

And the net long position is still as high as over 70 lots.

In general, the overall trend of the market is still clearly biased towards bulls. We don't need to worry too much, nor do we need to be nervous about Goldman Sachs' sudden turn from bullish to bearish.

After all, based on the actual situation in the UK and various news related to the pound exchange rate.

I would say that Goldman Sachs doesn’t understand it nearly as well as we do.”

"I hope it can rebound." Gu Chijiang exhaled a long breath and said, "After the overall position fell into a floating loss state, I am in a passive situation. I don't dare to continue to increase my long position easily."

"Although we still have a lot of reserve funds in our fund, I dare not increase my position rashly under the current market trend and the situation under the full suppression of short sellers." Sato also responded at this time, "We can only rely on Mr. Godfrey to withstand the pressure of the raging short sellers. When the pound exchange rate rebounds and restores sentiment and returns to the support level of 1.5200, our institution will continue to assist in suppressing the short sellers."

Godfrey sees that the pound exchange rate has not yet shown any signs of an extreme downward collapse.

The two of them immediately became scared.

For a moment, I felt somewhat contemptuous of the two people's actions.

However, he knew that everyone was in the same boat, holding a large number of long positions in the pound exchange rate, and they were all interested parties. It was not easy to express dissatisfaction openly. He could only smile awkwardly and replied: "In this case, our organization can only take the lead."

After saying that, Godfrey turned around and gave trading instructions to the traders to continue to increase their long positions in the pound exchange rate.

Although the long positions in the pound held by their institutions are already huge.

However, due to the huge scale of the fund's asset management, this holding size of nearly 30 still only accounts for less than 20% of the entire fund.

This also means that Godfrey still has a large amount of reserve funds to use.

It can also relatively occupy the initiative in the market.

As the main hedge fund of Huifeng Huanyu continued to increase its long positions in the pound in the Asian session, and as many retail investors in the market took profit and stop loss operations, the pound exchange rate rebounded after a rapid decline in the early Asian session after hitting the lowest point of 1.5142.

"Hehe, I really didn't expect that... Goldman Sachs, this guy with thick eyebrows and big eyes, turned from bullish to bearish yesterday night. This is a great help to us. After all, this institution has a great influence on the global financial market. Once this institution turns bearish, many speculative funds on and off the market will enter a wait-and-see state even if they don't follow suit."

Just as the main hedge fund 'Huifeng Huanyu' continued to increase its long positions and the managers of institutional funds such as 'Mitsui Yoshitomo Investment Company' and 'Tianhe Capital' were uneasy, Meng Shengfei said with a smile in the trading room of the second investment department of 'Huayin International'.

"Goldman Sachs's turn from long to short is indeed a bit surprising." Kong Fansheng from Huayin International's Investment Department responded immediately on the linked communication channel, "I remember that a week ago, this institution was still a firm long institution in the pound exchange rate market. I don't know why it suddenly turned short."

"Not surprising." Su Yi heard Kong Fansheng's question, pondered for a moment, and responded, "As the referendum on the 23rd approaches, more and more people will see the inside story of this Brexit referendum, and more and more smart money groups on and off the market will realize that the Brexit referendum is not only about whether the UK will continue to stay in the EU system, but also about the internal conflicts and economic recession of the UK, a former world hegemon that is now on the decline. As a result, they will find that... regardless of whether there is a Brexit referendum, the long-term downward trend of the pound will not change, nor will it be curbed."

"Yes." Meng Shengfei nodded and said, "Mr. Su's forecast of the trend of the pound exchange rate is indeed very far-sighted, and he is also quite far-sighted in his forecast of the expected changes of major global institutions. The short-selling force in the market is getting stronger and stronger.

With the involvement of Wall Street capitals such as Goldman Sachs, BNY Mellon, Citigroup, and Blackstone Group.

We have completely gotten rid of the situation of fighting alone.

And judging from the market trend...

The trend feedback of the pound sterling exchange rate has also begun to lean towards the short direction.

This makes me feel that we are not far from victory, and it also makes me feel that we are getting closer and closer to a situation where the main long institutions and a large number of long retail investors and speculators in the market trample on each other. "

"Mr. Meng's expectations are probably a bit too optimistic." When Meng Shengfei expressed his views, Frederick, the main hedge fund manager of Aberdeen Asset Management Evolution No. 1, who had been in deep thought, took over and said, "Although Goldman Sachs's reversal from long to short did surprise everyone, it is basically unlikely that this will completely shake the confidence of the bulls in the market, affect the overall long and short expectations of the market, and cause the pound exchange rate to move in a unilateral direction.

In fact, at present, there is only the impact of the news that Goldman Sachs turned from bullish to bearish.

Other market news is generally positive, and I heard that the Bank of England has secretly launched a larger exchange rate market intervention plan.

Plus the expected referendum results on the 23rd.

Judging from the preliminary vote counting results, the result is still leaning towards remaining in the EU.

I estimate that before the 23rd, the trend of the pound exchange rate will fluctuate, at least it will not easily fall below 1.5000 points, which is the psychological defense line that can really shake the confidence of the bulls in the market. "

"I agree with Mr. Frederick," Kong Fansheng responded. "When market news is unclear and expectations are not one-sided, the huge bullish forces accumulated in the market will never surrender easily. Moreover, from the perspective of the interests of the Bank of England and the British government, unless they can no longer support the market, they will never give up the strategy of maintaining the stability of the pound exchange rate easily."

"According to what you said..." Meng Shengfei thought for a moment and said, "At this point, we can't increase our positions and go short, and we can't further suppress the market and give the bulls in the market a final blow?"

Su Yi said: "Of course not. As the saying goes, a spent bow cannot penetrate a withered tree. From last night to this morning, the impact of the unexpected market news of Goldman Sachs turning bearish has already been reflected in the market trend. At this time...if several of our institutions join forces to go short on the market.

It is highly likely that the bullish psychological barrier of 1.5000 points will not be broken through in one fell swoop.

Instead, it will lead to an even more frenzied counterattack from the bulls in the market.

Moreover, many intraday long position holders in the market have generally made stop-loss operations, while profitable intraday short position holders are also making take-profit operations.

Although there are not many on-site funds that dare to actively increase their positions and go long.

However, the potential long force on the market at this time is not weak at all.

If we increase our short positions and suppress the market strongly without effectively breaking through the 1.5000 mark, then when the pound sterling rebounds again, we will be in a more passive situation and lose the initiative in the market. "

"Then according to what you said, Mr. Su..." Meng Shengfei asked, "What is our correct operation strategy at the moment?"

Su Yi smiled and responded, "Let's follow our previous trading strategy. Below 1.5300 points, we will appropriately cover short orders and keep enough reserve funds. Above 1.5300 points, we will continue to add short orders to maintain the balance of the fund's current dynamic positions."

"Mr. Su has a very clear understanding of the trend of the pound exchange rate at this stage." Frederick was very impressed by the strategy Su Yi mentioned and said with a smile, "Indeed, it is not yet time for us to launch the final blow to the main bulls in the market, so we must ensure the vitality of funds in the dynamic position balance and make the best use of the violent fluctuations in the market to reduce our position costs, so as to gain greater initiative in the market."

"Okay." Seeing that the two of them agreed, Meng Shengfei nodded with a smile.

And just as Su Yi and Frederick expected...

As subsequent market trading hours pass.

After reacting to the negative news of Goldman Sachs turning from long to short, the pound exchange rate gradually fluctuated upward under the continued counterattack of the bulls, regaining the 1.5200 and 1.5250 levels.

Of course, when the pound exchange rate fluctuated upward again and gradually recovered its intraday losses.

The main short-selling institutions in the market, such as the main hedge fund "Huayi Chengyuan No. 1" headed by Su Yi, the Investment Department 1 and Investment Department of "Huayin International", and the main hedge fund "Aberdeen Asset Evolution No. ", have completed a lot of intraday short position closing and covering operations, further reducing the overall holding cost of the fund's short positions and recovering more reserve cash flow.

At 4 pm, the pound exchange rate regained the 1.5300 level.

Several major institutions began to add new short positions to make up for the short positions lost at the early morning lows, so as to always maintain the dynamic balance of the fund's holdings.

And when they cover their short positions.

Before we knew it, the pound sterling exchange rate returned to the 1.5300 mark.

The number of open long positions in the market has hit a new high, reaching a huge scale of 430 million lots in one fell swoop.

(End of this chapter)