How to play CHINA WEAKNESS and USD devaluation simultaneously
thanks for the compliments in all the other posts, shomari.
on the WHY and WHEN...you are right. i dont really have much to add.
SHOMARI, i want your thoughts on the currently developing fundamental situation....
#1. CHINA bad numbers = WEAK comm dolls. we know this.
#2. USD relentless QE = WEAK USD = short USD...(bernanke promised $40 billion buying of mortgage back securities EVERY MONTH...yes, that is EVERY MONTH...till the end of the year.....in addition to $85 billion in new assets) = short USD.
obviously, this creates a "conflict"...on one hand, case #1 =weak china = short AUD,NZD, SGD, HKD, TWD, etc.... on the other hand, case #2 = short USD = bullish for AUD, NZD, SGD, HKD, TWD...etc...so, we have short AUD...then long AUD...so to speak.....
and since currencies are traded from the majors(USDXXX or XXXUSD)...that creates a "conflict"....
the only thing i can think of right now is to use something that benefits from short comm dolls and short USD = XAG, XAU.
any other ideas? i will really appreciate it.
thanks for the compliments in all the other posts, shomari.
on the WHY and WHEN...you are right. i dont really have much to add.
SHOMARI, i want your thoughts on the currently developing fundamental situation....
#1. CHINA bad numbers = WEAK comm dolls. we know this.
#2. USD relentless QE = WEAK USD = short USD...(bernanke promised $40 billion buying of mortgage back securities EVERY MONTH...yes, that is EVERY MONTH...till the end of the year.....in addition to $85 billion in new assets) = short USD.
obviously, this creates a "conflict"...on one hand, case #1 =weak china = short AUD,NZD, SGD, HKD, TWD, etc.... on the other hand, case #2 = short USD = bullish for AUD, NZD, SGD, HKD, TWD...etc...so, we have short AUD...then long AUD...so to speak.....
and since currencies are traded from the majors(USDXXX or XXXUSD)...that creates a "conflict"....
the only thing i can think of right now is to use something that benefits from short comm dolls and short USD = XAG, XAU.
any other ideas? i will really appreciate it.
DislikedGuys, Sky pointed it out best, technicals can get you all confused if you don't know the fundamentals, the WHY, of why you are trading a certain pair.
For example when someoe asks me, "Shomari why are you shorting a/j ?" My answer will sound something like.."Because Chinese manufacturing is down due too low U.S. consumer demand."
You see, a seasoned market veteran will understand exactly what I'm saying. A half assed trained trader will not even understand the significance of what I just said. (Hence, if you feel me
on what I just said,...Ignored
" It may mean something. It may mean nothing at all "