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$ For The Week of 11/6-With Trade Ideas

  • #41
  • Edited 5:25pm Nov 7, 2006 3:07pm | Edited 5:25pm
Something to ponder:

Quote
[IFR Forex Watch]
[SQUAWK BOX]
[20:49 FOREX: M&A Activity - M&A Inflows Support GBP & CAD] San Francisco,
November 7.
Cross Border M&A Flows: All Cash and Cash and Stock Deals
Year-to-Date ($mln)
Inserted Code
Australian Acquisitions       97,841.9
Australian Targets           110,443.2
Net inflows to Australia      12,601.3

Canadian Acquisitions        142,849.3
Canadian Targets             210,938.0
Net Inflows to Canada         68,088.7

Japan Acquisitions           121,502.1
Japan Targets                111,968.5
Net Outflows from Japan        9,533.6

UK to Eurozone                26,699.0
Eurozone to UK                70,870.5
Net Eurozone to UK            44,171.5

US to Eurozone                74,828.6
Eurozone to US                69,106.6
Net Eurozone to US             5,722.0

UK to US                      33,565.7
US to UK                      57,247.5
Net US to UK                  23,681.8

M&A activity remains strong between the Eurozone and the UK with over $44 bln in net outflows from the Eurozone which remains EUR/GBP bearish. Net outflows from the US to the UK are over $23 bln, with the net flows to the UK from the US and Eurozone over $67 bln and contributing to sterling strength through much of the year. Net Eurozone to the US are over $5 bln for the year. Canadian M&A activity is strong with net inflows going to CAD at over $68 bln and at new highs and contributing to the strength of the currency as emphasized by BoC Dodge recently. Flows for Australia have now reversed from net outflows to net inflows of $12 bln, becoming an AUD positive. Japan continues to be amongst the largest overall M&A activity but with net outflows seen neutral for Japan and the JPY and worth $9 bln so far this year or less than $1 bln per month.

Net outflows from Australia rose from $7 bln in Q1 to over $20 bln at the end of Q2, but have now reversed to net inflows of $12 bln. Canadian inflows have risen from $5 bln in Q1 to $33 bln in Q2 to over $67 bln currently. Japan outflows have risen from over $5 bln in Q1 to over $9 bln in Q2 stabilizing to levels around $9 bln year-to-date. Eurozone flows to the UK have edge up slightly from around $33-$34 bln in Q1 to $38 bln in Q2, and up to $44 bln currently, impacting flows for EUR/GBP. Flows are now moving to the US from the Eurozone at over $5 bln, from inflows to the US of $1.2 bln at the end of Q2 and reversing from net US flows to the Eurozone at $3.4 bln at the end of Q1. US flows to the UK are over $23 bln, up from $19 bln in Q2, underpinning GBP.

[email protected] /rd
Also updated on www.ifrmarkets.com

Interpretation:
More money is pouring into Australia = AUD Bullish
Large Money is pouring into Canada = Very CAD Bullish
Japan is putting their money away from Japan = JPY Bearish
Large Europe investments into UK = very EURGBP Bearish
Europe is net Investing into USA = EURUSD Bearish
Large US investments into UK = very GBPUSD Bullish

Of course this covered from Jan to date so the effect is gradual.
UK is the best performer. Both Eurozone and US are putting their money into UK companies. Japan has been seen acquiring UK companies also. It has been noted that UK currently has the better economic atmosphere while US is falling in the least wanted side.
  • #42
  • Nov 7, 2006 3:35pm Nov 7, 2006 3:35pm
Hey BK-why don't u summarize what all that gobble-de-gook means huh?
  • #43
  • Nov 7, 2006 9:49pm Nov 7, 2006 9:49pm
The dems are getting the house. The senate is too close to call, but likely there isn't going to be a sizable majority either way. Big change in the make-up of our political landscape. Bush has to feel very weakened, as the mid-term election is a reforandum on his policies. The country has spoken and they are not happy with the present administration. The republicans know they are in big trouble politically. They have a lame duck president who has lost the country.

What this all means for the $-well for me it means stay on the sidelines for now, get an assesment of how things are going and how the market percieves this. I would tend to think that like most fundamentals, the effects will fade fairly quickly. How long did the effects of the NFP last, once a new fundamental (the election) came into play? That doesn't mean i'm taking positions, just throwing in my own opinion. As always, the market's perception of the new reality is the final judgement and the faster you can appreciate that perception, the better you'll trade.
  • #44
  • Edited 8:59am Nov 8, 2006 8:33am | Edited 8:59am
The Republicans Are in Big Trouble Now and for 2008

The Bush Administration Ended Last Night


For all intents and purposes, the republicans are out of power. Why? Because the people voted on Iraq and Bush has no choice but to "stay the course" and continue the war effort. Leaving now would be a disaster. Everyone knows that, but that didn't stop the dems from using the issue as political capital and they'll do the same thing in 2008 as well.

Still, as with all fundamental info the immediate fall-out will fade and the markets will move on. We're seeing this happen right now, as traders get out of their positions from yesterday and take their profits. I did the same thing. Yesterday's fundamental (the election effect) fades and the markets get ready to trade off the next fundamentals.

I'm hoping for the GBP to return to the pre-election levels (around 8970), but let's see where it closes in London and NY today. There could be a good chance to get long because of the next fundamental driver-the BoE is raising the rate this time and probably once more, coupled with a Fed policy that is not likely to be raising any time soon.

If you want to trade this, you will have to observe how London trades the GBP in the session tomorrow. If they start buying in again, that will be a strong signal that they expect a hawkish statement and another 25 basis points early next year. Let's see how they trade it.
  • #45
  • Nov 8, 2006 10:50am Nov 8, 2006 10:50am
Guys are any of ya'll in a EUR/USD trade right now? I am and I went short at 1.2750. I think this might be a good trade but I don't know because of what's been going on. I am down currently 25 pips so I don't know if I should leave it open or get out now and short at a better price. What do you all think? My target profit is 1.2690. You think this is possible?
  • #46
  • Nov 8, 2006 10:58am Nov 8, 2006 10:58am
Quoting tremon333
Guys are any of ya'll in a EUR/USD trade right now? I am and I went short at 1.2750. I think this might be a good trade but I don't know because of what's been going on. I am down currently 25 pips so I don't know if I should leave it open or get out now and short at a better price. What do you all think? My target profit is 1.2690. You think this is possible?
Why would you be in a trade if you don't know or feel uncertain about what's been goin on? Not to pick on u man, but this is classic newb bad trading...

If your already down 25 pips-what percentage is that of your account? Getting into a trade when u "don't know"-that 25 pips should not represent more then 2-4% of your account balance
  • #47
  • Nov 8, 2006 11:04am Nov 8, 2006 11:04am
No I'm saying that I think its a good trade, I think I just shorted at a bad price you know. I still have alot to leverage about 80 pips so with the failure of the topside twice I think it's headed lower because it broke through support at 1.2750 but retraced back up so now I think it's headed lower now. I'm just gonna leave it open and see if my target should hit. Do you trade EUR/USD? What do you think about the pair for the short-term/medium term? I guess you can consider me a newbie but I been trading live since June but practicing since February. I'm still learning though as there is alot to know about this, but I think my trade is good just gonna take some time to work. I normally do not like to hold trades over days but I'm converting myself to that type of trader because intraday doesn't work for me.
  • #48
  • Nov 8, 2006 5:48pm Nov 8, 2006 5:48pm
Wow...slow movement down on the EUR/USD and now its hovering around support at 1.2750...Now to me it looks like its gonna bounce back up and try to test 1.2800 again pretty soon...The downward movement has been lacking so they will try to push it up...On FXCMTR.com, they recommend that you go long above 1.2753 with a target of 1.2810...That's short term...Now in the long term, I see the pair edging down trying to test 1.2500 because if you look at the daily chart for the year...You can see that from Jun - present...It has been registering lower highs...What do you guys think about the pair direction tonight?
  • #49
  • Nov 8, 2006 6:00pm Nov 8, 2006 6:00pm
Tremon, are you trading news or are you trading TA after you get the news? Well, if you are trading TA, hope you use good and small leverage, because you are risking alot when TA'ing. As for the news, hope you study more on how news trading works, it seems you still need alot of work at this kind of material. Trading geo-political is VERY hard and shold not be recommended if you are going to use high leverage. Geo-political is good for low-medium leverage trades. Hope you are in the green some time, because right now, you are wishing and playing with emotions, something that always kills a trader in this line of buisness.
  • #50
  • Nov 8, 2006 6:06pm Nov 8, 2006 6:06pm
I use both...I know I haven't quite figured out the news part fully like the TA...But that's why I'm still learning and posting on these threads to get everyone's opinion...Now tomorrow the Trade Balance and U of M Confidence comes out tomorrow morning...what is you guys opinion about that? As far the US economy it seems strong as the unemployment rate fell to 4.4%...Oil below $60, so this to me seems to favor the dollar what do you guys think about the dollar against the EURO? I know Trichet has been saying that rate hikes are expected so that is nothing new so what is your opinion?
  • #51
  • Nov 9, 2006 1:11pm Nov 9, 2006 1:11pm
There is no further fundamentals for the $ this week-except if the PBOC makes some more statements...obviously the statement earlier had a profound effect so expect the same in the future...

As a fundamental trader not only do I trade off the news, but I depend on a schedule to do so...unscheduled PBOC statements are going to make that much more tricky.
  • #52
  • Last Post: Nov 9, 2006 1:15pm Nov 9, 2006 1:15pm
Quoting NewstraderFX
There is no further fundamentals for the $ this week-except if the PBOC makes some more statements...obviously the statement earlier had a profound effect so expect the same in the future...

As a fundamental trader not only do I trade off the news, but I depend on a schedule to do so...unscheduled PBOC statements are going to make that much more tricky.
Yes I think this unannounced statement caught everyone by surprise...This was unannounced right? Where can these announcements and dates be found? Are they on the ForexCalendar on this website also? Wonder why this one was unannounced? That's for the info on NewsStrike, I'm gonna sign up for free...Thanks!!

Oh yeah if your trading the EUR/USD this is something that I have found on FXCMTR.com

EURUSD - The ratio of longs to shorts is -2.88 as 74.2% of the currently open orders are short. Long orders are 26.5% lower than yesterday and 24.2% weaker since last week. Short orders are 34.5% higher than yesterday and 8.2% stronger since last week. Open interest is 10.8% stronger than yesterday and 2.2% below its monthly average. Looking ahead, the SSI signals EURUSD strength.
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